PIB TrackerCoal Ministry opens ₹37,500 crore scheme to promote surface coal and lignite gasification
The Ministry of Coal issued the Request for Proposal under its ₹37,500 crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects — turning coal into 'syngas' to cut imports of urea, ammonia, methanol and LNG and advance the 100-MT-by-2030 gasification target.
What happened
- The Ministry of Coal is inviting applications under its Scheme for Promotion of Surface Coal/Lignite Gasification Projects — outlay ₹37,500 crore, approved 13 May 2026.
- It aims to enhance value addition, reduce import dependence and boost self-reliance in energy and chemicals.
- The Request for Proposal was published on 7 July 2026; a Pre-Application Conference is on 20 July and applications close 7 September 2026.
- Gasification converts coal/lignite into synthesis gas (syngas), a feedstock for fuels and chemicals that can substitute imported urea, ammonia, methanol and LNG.
- The scheme advances the national target of gasifying 100 million tonnes of coal by 2030.
For Prelims
- Coal gasification: A process that reacts coal with oxygen/steam to produce syngas (mainly CO + H₂), used to make fertilisers, chemicals and fuels rather than burning the coal.
- 100 MT by 2030: India's National Coal Gasification Mission target — to gasify 100 million tonnes of coal a year by 2030.
- Import substitution: Syngas can replace imports of ammonia (~100%), methanol (~80–90%), urea (~20%) and LNG (>50%), aiding the trade balance and energy security.
- Surface vs. underground: This scheme targets surface gasification (above-ground plants), distinct from Underground Coal Gasification (UCG) done in-situ.
- Emissions caveat: Gasification is cleaner than direct burning but is still coal-based; carbon capture is needed to make it low-carbon.
- Lignite: A low-grade 'brown coal' (e.g. from Neyveli/Tamil Nadu, Gujarat, Rajasthan) — also covered by the scheme.
For UPSC: Frame this as energy-and-chemical self-reliance and import substitution — monetising domestic coal into high-value feedstock (fertilisers, methanol) instead of importing them. Anchor the 100-MT-by-2030 mission, syngas chemistry, the fertiliser/energy-security angle, and the sustainability caveat that coal gasification still needs carbon management.
What it is NOT: This is the launch of an incentive scheme (RFP stage), not a commissioned plant or production. Coal gasification reduces import dependence but is not a renewable or zero-carbon technology; the ₹37,500 crore is government support to promote projects, not the total investment.
For Mains
Syllabus: GS3.9 · GS3.8 · Linkage L2
Anchor
Energy and chemical self-reliance — converting abundant domestic coal into syngas feedstock to cut high-value imports and strengthen supply-chain security.
Substantiation (data)
₹37,500 crore Surface Coal/Lignite Gasification scheme (approved 13 May 2026; RFP 7 July 2026) advancing the 100-MT-by-2030 gasification target; syngas substitutes urea, ammonia, methanol, LNG.
Exemplification
Syngas-to-chemicals routes replacing imported ammonia/methanol/urea; surface gasification plants as the delivery mechanism.
Problematisation
High capital costs, technology and water intensity, and the carbon footprint of coal-based syngas (needing CCUS) temper the environmental case.
Way-forward
Incentivise viable projects, pair with carbon capture, and target the highest-value import-substituting outputs (fertilisers, methanol).
Position
Government stance: monetise domestic coal for energy and chemical self-reliance while managing the emissions trade-off.
Deploys into: Infrastructure — energy (GS3.9 — coal gasification, feedstock security) · effects of industrial policy and liberalisation on growth (GS3.8 — import substitution in chemicals) · the National Coal Gasification Mission, syngas value chains, and the CCUS/sustainability caveat.
Ministry of Coal · 2026-07-08 · PRID 2282578 · PIB source ↗