Big boost to India’s COAL GASIFICATION quest: Coal Ministry awards new projects under incentive scheme

The Ministry of Coal announced that it has reached a significant milestone in India’s Coal Gasification Initiative with the issuance of Letters of Award (LOAs) to the selected applicants under Categories I and III of the ₹8,500 crore Coal Gasification Incentive Scheme. Secretary, Ministry of Coal, Vikram Dev Dutt presented the LOAs in the presence of Additional Secretary, Vismita Tej, and Advisor (Projects), Anandji Prasad, OSD (Technical), Asheesh Kumar, Director (Technical), BK Thakur, Ministry of Coal.

Under Category I, government PSUs and their joint ventures are eligible for allocation of Rs 1,350 crore per project or 15% of capex, whichever is lower. Hence, Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture of CIL-BHEL has been awarded ₹1,350 crore of financial incentive under the Scheme for its coal gasification project in Lakhanpur, Orissa. With a total investment of ₹11,768 crore, the project aims to produce 0.66 MMTPA of Ammonium Nitrate.

The Coal India Limited (CIL – GAIL Consortium) project in Sonepur Bazari, West Bengal, has been awarded ₹1,350 crore of financial incentive under the Scheme. This project, costing ₹13,052.81 crore, will focus on converting coal into Synthetic Natural Gas (SNG) with a production capacity of 1.83 MMSCMD.

Coal India Limited’s coal-to-SNG project in Niljai Ext. OC Wani Area, Maharashtra, has been awarded ₹1,350 crore of financial incentive under the Scheme. The project, with a total cost of ₹12,214.86 crore, aims for a production capacity of 1.83 MMSCMD of Synthetic Natural Gas.

In Category III, demonstration projects or small-scale product based plants are eligible for allocation of Rs 100 crore per project or 15% of capex, whichever is lower. In this category, New Era Cleantech Solution has been awarded ₹100 crore of financial incentive under the scheme for its coal-to-ethanol demonstration project in Chandrapur, Maharashtra. With a total investment of ₹667 crore, the project will utilize Carbon Capture, Utilization, and Storage (CCUS) technology, capturing approximately 20,144 MT of CO2 annually while producing 18 KTPA of ethanol.

The Coal Ministry has held that ‘Coal Gasification Incentive Scheme’ is integral to India’s goal of achieving 100 million tonnes of coal gasification by 2030. This initiative is designed to drive innovation in coal gasification technology, reduce carbon emissions, enhance energy security, and contribute to a sustainable energy future.

“These projects exemplify India’s unwavering commitment to clean energy innovation and sustainable development,” said the Coal Ministry.