Government Approves Rs 8,500 Crore for Coal, Lignite Gasification Projects

In a significant move to promote coal and lignite gasification projects, the Indian government has approved an outlay of Rs 8,500 crore as financial assistance. This decision aims to reduce the import of chemicals that can be derived through coal gasification, thereby enhancing self-reliance and energy independence.

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Scheme for Promotion of Coal/Lignite Gasification Projects

The Cabinet, chaired by Prime Minister Narendra Modi, approved the scheme for the promotion of coal/lignite gasification projects of government PSUs and the private sector. The scheme includes an outlay of Rs 8,500 crore towards incentives for coal gasification projects under three categories.

The government will provide viability gap funding to projects set up by PSUs, joint ventures of PSUs, the private sector, and R&D organizations. The incentives are categorized as follows:

• Category One: Rs 4,050 crore
• Category Two: Rs 3,850 crore
• Category Three: Rs 600 crore

Coal-to-SNG and Coal-to-Ammonium Nitrate Projects

In addition to the scheme for coal/lignite gasification projects, the Cabinet Committee on Economic Affairs (CCEA) approved proposals for equity investment by Coal India Limited (CIL) in two joint ventures.

CIL will collaborate with GAIL to establish a coal-to-SNG (Synthetic Natural Gas) project in the ECL command area. The estimated equity investment by CIL in this joint venture is expected to be in the range of Rs 3,651-3,800 crore.

Furthermore, CIL will partner with BHEL to set up a coal-to-ammonium nitrate project in the MCL command area. The estimated equity investment by CIL in this joint venture is also expected to be in the range of Rs 3,651-3,800 crore.

CIL's Role in Coal Gasification

CIL, the state-owned coal mining company, will play a crucial role in implementing these coal gasification projects. The company has signed Memorandums of Understanding (MoUs) with GAIL and BHEL for the establishment of the coal-to-SNG and coal-to-ammonium nitrate projects, respectively.

These projects align with CIL's target of achieving 100 MT coal gasification by 2030, contributing to the nation's goal of self-reliance and energy independence.

The government's approval of financial assistance for coal and lignite gasification projects, along with the establishment of coal-to-SNG and coal-to-ammonium nitrate projects, marks a significant step towards reducing chemical imports and enhancing India's energy independence. These initiatives will not only boost the domestic coal industry but also contribute to the country's overall economic growth and development.