India Approves Massive $37.5B Scheme for Coal Gasification

The Union Cabinet has given its approval to a significant Rs 37,500 crore scheme aimed at promoting the gasification of surface coal and lignite. This strategic move is designed to accelerate India's coal and lignite gasification program, targeting the gasification of approximately 75 million tonnes of coal annually by the year 2030. This aligns with the nation's ambitious goal of gasifying 100 million tonnes of coal by 2030.

The scheme aims to bolster India's energy security and substantially decrease its reliance on imported products such as liquefied natural gas (LNG), urea, ammonia, and methanol. With India possessing vast reserves of coal and lignite, this initiative seeks to leverage domestic resources more effectively. The program is projected to mobilize between Rs 2.5 lakh crore to Rs 3 lakh crore in investments and generate around 50,000 direct and indirect jobs.

Financial incentives of up to 20 percent of the plant and machinery cost will be provided for new projects through a competitive bidding process. Furthermore, reforms include extending coal linkage tenure to 30 years, offering long-term policy certainty. This move is also expected to insulate the Indian economy from volatile global energy prices and supply chain disruptions, especially given the current geopolitical climate.