The coal ministry confirmed that Talcher Fertilisers Limited (TFL) and NTPC have submitted applications through the online portal for the government’s Scheme for Promotion of Surface Coal/Lignite Gasification Projects. The clarification comes amid reports suggesting that the ₹37,500-crore scheme had received limited interest. The coal ministry said the scheme remains at an early stage of implementation and that the first application window will remain open until September 7, 2026. The final number of applications will be determined after the prescribed application process and subsequent rounds are completed.
₹37,500 Crore Coal Gasification Scheme
The Union Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026, with a total financial outlay of ₹37,500 crore. Through the initiative, the government aims to catalyse investments of approximately ₹2.5 lakh crore to ₹3 lakh crore across nearly 25 projects. In addition, the scheme is expected to generate around 50,000 direct and indirect jobs and support the development of 100 million tons of coal gasification capacity by 2030. The government plans to complete the targeted 25 plants within five years. Meanwhile, four projects that are already under construction are expected to be completed within a year.
Eight Companies Exploring Syngas Production
Coal Minister G. Kishan Reddy said on August 13 that eight companies, including Coal India, are exploring opportunities to produce synthesis gas (syngas). According to the minister, activity in this area is expected to accelerate over the coming months. The government currently provides incentives for surface coal gasification, while similar incentives are not yet available for underground coal gasification.
Coal Gasification to Produce Value-Added Products
Coal gasification converts coal into synthesis gas, or syngas, which can then serve as a feedstock for producing several value-added products. These include methanol, urea, ammonium nitrate, Ammonia and synthetic natural gas.
Other chemical feedstocks
Coal gasification can enable greater utilisation of India’s domestic coal and lignite resources while supporting the production of strategically important chemicals and fuels. The government has designed the scheme to accelerate the development of coal and lignite gasification capacity in India. By converting domestic resources into higher-value products such as syngas, methanol, ammonia and urea, the initiative aims to strengthen domestic manufacturing capabilities. Furthermore, greater use of domestic coal and lignite could help reduce the country’s dependence on imported feedstocks. However, the government has not yet provided an estimate of the potential import substitution of LNG or LPG through coal gasification.
Outlook for India’s Coal Gasification Industry
With applications now submitted by TFL and NTPC and several other companies exploring syngas production, the government expects participation in the coal gasification programme to gather momentum. As reported by cnbctv18.com, the success of the ₹37,500-crore coal gasification scheme will depend on the number of projects that qualify, the scale of investment mobilised and the pace at which plants move from development to commercial operation.
