Context:
The Union Cabinet has approved a ₹37,500-crore incentive package to promote coal gasification projects in India. The scheme aims to reduce import dependence on products such as LNG, methanol, ammonia, and urea while supporting the target of 100 million tonnes of coal gasification by 2030
- Coal gasification is a process in which coal or lignite is converted into syngas (synthetic gas) through partial oxidation at high temperatures.
- Syngas mainly contains carbon monoxide, hydrogen, carbon dioxide, and methane and can be used to produce methanol, ammonia, synthetic natural gas (SNG), fertilizers, and chemicals.
- India possesses large coal reserves but depends heavily on imports of LNG, coking coal, methanol, ammonia, and urea, affecting energy security and foreign exchange reserves.
- Surface coal gasification is considered a cleaner alternative compared to direct coal combustion because pollutants can be removed during processing.
- The scheme provides financial incentives, extended coal linkage tenure, and support for downstream industries to encourage private investment.
- Coal gasification is linked to India’s goals of energy security, import substitution, industrial growth, and diversification of the energy mix.
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