New Era Cleantech Solution Pvt Ltd has approached the government seeking policy alignment between coal-based urea projects and conventional gas-based plants. The company has urged authorities to introduce offtake assurance mechanisms and earmark production capacities for coal gasification-based urea.
Push for Feedstock Diversification Gains Momentum
The appeal comes at a time when policymakers are actively working to diversify feedstock sources for urea production. The broader objective is to reduce India’s dependence on imported natural gas while leveraging abundant domestic coal reserves through Coal Gasification technologies. In a communication addressed to the Ministry of Coal, the company emphasised that coal-based urea plants should receive treatment on par with gas-based facilities, particularly in terms of policy support and market access.
Higher Capital Costs Demand Fiscal Support
However, coal-based projects face a significant cost disadvantage. According to the company, these plants require substantially higher capital investment compared to gas-based units. A considerable portion of the expenditure is driven by GST and customs duties on imported equipment. Therefore, New Era Cleantech has sought targeted fiscal incentives and policy backing to improve project viability and attract private sector investment.
Major Investment Plans in Maharashtra
The company is currently developing a 5 MMTPA coal gasification project in Chandrapur. As part of this initiative, it plans to set up a 1.27 MMTPA coal gasification-based urea plant at Bhadravati. Notably, the company recently initiated work on what it describes as India’s first greenfield integrated coal gasification and carbon capture complex in the region, with a proposed investment of ₹20,000 crore.
Heavy Reliance on Imported LNG
At present, imported LNG remains the primary feedstock for domestic urea production. The fertiliser sector alone accounts for nearly 50% of India’s imported natural gas consumption and about 28% of total gas usage. As a result, reducing dependence on LNG imports has become a strategic priority for the government.
Demand-Supply Gap Drives Policy Urgency
India continues to be one of the world’s largest consumers of urea. Annual demand stands at approximately 40 MMTPA, while domestic production is around 29 MMTPA. This leaves a shortfall of nearly 11 MMTPA, which is currently met through imports. Given this gap, industry players argue that promoting alternative production routes—such as coal gasification—could play a crucial role in enhancing self-sufficiency.
Policy Support Key to Scaling Coal-Based Urea
As reported by energywatch.in, the success of coal-based urea projects will depend on supportive policies, cost competitiveness, and assured market mechanisms. If implemented effectively, such measures could not only reduce import dependence but also unlock the potential of India’s coal resources while strengthening fertiliser security.
