Reinforcing the government’s commitment towards green initiatives in the coal sector, state-run public sector undertakings (PSUs) Coal India (CIL) and Bharat Heavy Electricals (BHEL) will collaborate for coal gasification as the Ministry targets 100 million tonnes (MT) by the end of this decade.

“Coal Ministry aims to have 100 MT coal gasification by 2030 through sustainable utilisation. For this, CIL has taken up four projects, which were announced in the Union Budget for 2022-23 to help firm up technical and financial viability of these projects. Experts said that for coal gasification and carbon capture, India should bank on indigenous technology to make it reliable and affordable,” the Ministry said in a statement.

Project implementation

In August 2020, Coal Minister Pralhad Joshi said that India aims for 100 MT coal gasification by 2030 with ₹4 lakh crore investments. Setting up a plant is capital-intensive, and requires at least 48 months. With the limited experience, its crucial to ensure the success of initial projects for the national mission.

To implement the project, it has been planned to set up gasification projects in phases. In phase I, the project based on low ash coal available in CIL will be taken up. The mining giant will take care of mining of coal and marketing and the gasification and product conversion plant will be set up on BOO/BOM/LSTK contract basis.

Considering the low availability of low ash coal, gasification plants will be set up based on high ash coal. With concessions given for commercial mining of coal, it is expected to reach the goal of 100 MT gasification by 2030.

Coal reserves

India has a huge reserve of about 344 billion tonne (BT) of non-coking coal, out of which about 163 BT are proven reserves. With the current rate of consumption, it is expected to last for over five decades. About 80 per cent is used in thermal power plants, accounting for around 55 per cent of the power generated. With environmental concerns and development of renewable energy, diversification of coal for its sustainable use is inevitable.

Cleaner fuel

Coal gasification is considered a cleaner option compared to burning of coal. Syngas, produced from gasification, can be used to produce gaseous fuels such as hydrogen, substitute natural gas (SNG or Methane) and Di-Methyl Ether (DME).

It can also be used to produce liquid fuels such as methanol, ethanol, synthetic diesel as well as chemical and petrochemicals like methanol derivatives, olefins, propylene, mono-ethylene glycol (MEG), nitrogenous fertilisers including ammonia, DRI, industrial chemicals along with power generation.


To incentivise coal gasification, the Ministry has formulated a policy, wherein a provision has been made for 50 per cent rebate in revenue share for all future commercial coal block auctions for the coal used for gasification purpose, provided the quantity used for gasification is at least 10 per cent of total coal production.