Talcher Fertilisers Limited (TFL) and NTPC Limited have submitted applications under the Centre’s Rs 37,500-crore coal and lignite gasification incentive scheme, the Coal Ministry has said, rejecting reports that the programme had failed to attract applicants. The Ministry said the first application window remains open until September 7 and that any assessment of participation before the deadline would be premature. It is also in discussions with other prospective applicants who are at different stages of preparing projects and finalising their proposals. “The assertion that the Scheme has received ‘no takers’ is factually incorrect,” the Ministry said, pointing to the applications submitted by TFL and NTPC.
Rs 3 lakh crore investment
Approved by the Union Cabinet on May 13, the Scheme for Promotion of Surface Coal/Lignite Gasification Projects aims to accelerate conversion of domestic coal and lignite into higher-value products such as syngas, methanol, ammonia and urea.
The government expects the scheme to mobilise investments of around Rs 2.5 lakh crore to Rs 3 lakh crore across nearly 25 projects and generate about 50,000 direct and indirect jobs. It forms part of the Centre’s broader target of achieving 100 million tonnes of coal gasification capacity by 2030.
Under the scheme, financial incentives can cover up to 20 per cent of the cost of plant and machinery, with support for an individual project capped at Rs 5,000 crore. The government expects projects supported by the programme to gasify around 75 million tonnes of coal and lignite.
The initiative is also aimed at reducing India’s dependence on imported LNG, urea, ammonia, methanol and other products. India has around 401 billion tonnes of coal reserves and 47 billion tonnes of lignite reserves, while coal accounts for more than 55 per cent of the country’s energy mix.
More applications expected
Following the Cabinet approval, the Ministry held roadshows in New Delhi, Hyderabad and Mumbai to attract project developers, technology providers, investors and financial institutions. The request for proposals was issued on July 7, followed by a pre-application conference on July 20.
The Ministry said large coal gasification projects require substantial preparatory work, including pre-feasibility studies, technology assessment, identification of coal and other feedstock arrangements, evaluation of project economics and preparation of detailed proposals. It expects more applicants to submit proposals as the deadline approaches.
To provide companies additional time, the scheme has been designed with rolling application rounds. Once the current window closes, the next round will open the following day and remain available for two months.
The government has argued that coal gasification can help India use its large domestic coal reserves to produce fuels, fertilisers and chemicals while reducing exposure to volatile international commodity prices and supply disruptions. The country’s import bill for products that could potentially be substituted through gasification — including LNG, urea, ammonia, coking coal and methanol — stood at about Rs 2.77 lakh crore in FY25.