India clears US$3.9 billion push to turn coal into gas to reduce imported fuel reliance

[NEW DELHI] India’s Cabinet approved a US$3.92 billion scheme to boost coal gasification projects, reducing reliance on imported fuels and channelling domestic coal into cleaner industrial uses, Information Minister Ashwini Vaishnaw said.

The Cabinet decision seeks to encourage the conversion of coal into synthetic gas that can be used to produce power, fertiliser, petrochemical among other industrial applications.

That, in turn, would help reduce India’s imports of liquefied natural gas (LNG), urea, ammonia and methanol, Vaishnaw said on Wednesday (May 13). The scheme comes as India’s gas imports have been impacted by the Middle East crisis.

Several countries, including the United States and China, are also exploring coal gasification technologies as part of efforts to cut emissions while continuing to rely on coal for energy security.

India, which has one of the world’s largest coal reserves of 401 billion tons and 47 billion tons of lignite, aims to gasify about 75 million metric tons of coal annually, Vaishnaw said, with the scheme expected to bring investments of about 3 trillion rupees (S$39.9 billion).

Under the plan, the government will provide financial assistance of around 20 per cent of the cost of plant and machinery. Interest in the sector is expanding among power producers. State-run power producer NTPC is looking to enter the coal gasification business, with plans to produce between 5 million and 10 million tonnes per annum of synthetic gas over the next three to four years, Reuters reported last year.

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India had in 2024 approved an 85-billion-rupee coal gasification incentive scheme. REUTERS