The ministry of coal has issued a Letter of Award (LoA) under Category III of Round II of the ₹8,500 crore financial incentive scheme aimed at promoting coal gasification projects in India. This move reinforces the government’s commitment to advancing coal-to-chemicals technologies.
Project Awarded for Coal-to-Acetic Acid Plant
The LoA has been granted to Kartikay Vayunandana Private Limited for setting up a coal-to-acetic acid plant in Gadchiroli. The project entails an investment of ₹793 crore and will feature a production capacity of 75,900 tonnes per annum (TPA) of acetic acid. As a result, it is expected to strengthen domestic manufacturing of key industrial chemicals.
Incentive Scheme to Drive Gasification Adoption
The incentive scheme focuses on promoting coal and lignite gasification, particularly through demonstration and small-scale, product-based projects. Under Category III, the government provides financial assistance of up to ₹100 crore per project or 15% of capital expenditure, whichever is lower. This structured support encourages industry participation while reducing financial risks.
Expanding Investment and Industry Participation
The ministry highlighted that seven projects are already under implementation under the first round of the scheme. Building on this momentum, Round II has attracted fresh proposals across multiple categories, aiming to drive further investments in the sector.
Boosting Domestic Chemicals and Reducing Imports
The project is expected to enhance value-added utilization of domestic coal resources. At the same time, it will contribute to reducing import dependence for downstream chemicals such as acetic acid. In addition, the initiative will support industrial development by promoting alternative and more efficient uses of coal.
Advancing India’s Coal-to-Chemicals Vision
As reported by knnindia.co.in, the issuance of the LoA marks another step forward in India’s strategy to diversify coal usage beyond power generation. By encouraging coal gasification technologies, the government aims to build a more self-reliant and sustainable chemical industry while unlocking new economic opportunities.
