Rs 37,500-crore coal gasification scheme finds no applicants so far: Sources

New Delhi: No company, public or private, has applied under the Rs 37,500-crore financial incentive scheme for surface coal and lignite gasification projects, according to sources. The window closes on September 7, and the absence of applications has raised questions about the Coal Ministry's plan to gasify 75 million tonnes of coal and lignite under the programme, they said.

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In an emailed response, the Coal Ministry said it would not be possible to state the number of applications until the September 7 deadline passes, since the whole process is online. It has received communication from several industries expressing interest in participating, the ministry said.

The timeline comes from a ministry notice, which said that "the Request for Proposal (RFP) dated July 7, 2026, issued under the Rs 37,500 crore financial incentive scheme for promotion of surface coal/lignite gasification projects, wherein the last date for submission of applications is September 7, 2026."

The ministry also pointed to the size of the projects. Given the scale of funds involved in coal gasification, preparing pre-feasibility reports (PFRs) and project proposals takes time, it said. Application rounds are envisaged every two months, which gives industry repeated opportunities to take part, it added.

What the scheme is meant to do

The Union Cabinet, chaired by Prime Minister Narendra Modi, cleared the scheme on May 13 with a financial outlay of Rs 37,500 crore. It is aimed at lifting clean energy production and cutting reliance on imports of liquefied natural gas (LNG), urea and methanol, which drain foreign exchange. The government has also positioned it as a buffer against swings in global prices and disruptions to supply chains. The 75 million tonnes the scheme targets feeds into a wider national objective of 100 million tonnes by 2030.

Gasification turns dry fuel into synthetic gas, or syngas, which serves as an alternative fuel and helps lower carbon emissions. That syngas in turn feeds the production of methanol, fertilisers, hydrogen and chemicals, reducing what the country has to buy abroad.

The government describes the scheme as a major step towards accelerating India's coal gasification programme, strengthening energy security and cutting dependence on imports of LNG, urea, ammonia and methanol.

Reserves at 401 bn tonnes, imports at Rs 2.77 lakh crore

India's coal reserves, at 401 billion tonnes, are among the largest in the world, and its lignite reserves add another 47 billion tonnes. Coal accounts for over 55 percent of the country's energy mix.

Converting that coal or lignite into syngas gives producers a versatile feedstock for making fuels and chemicals domestically. The intent is to let India substitute high-value imports and insulate itself from global supply disruptions and price volatility.

The import bill for the products the scheme is designed to displace, like LNG, urea, ammonium nitrate, ammonia, coking coal, methanol, dimethyl ether and others, stood at roughly Rs 2.77 lakh crore in FY25. The ongoing geopolitical situation in West Asia has exposed that vulnerability further.

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Builds on a Rs 8,500-crore scheme from 2024

The incentive sits on top of the National Coal Gasification Mission announced in 2021 and a Rs 8,500-crore scheme cleared in January 2024. Eight projects worth Rs 6,233 crore are under implementation under that earlier scheme.

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