{"id":103328,"date":"2026-05-14T11:08:22","date_gmt":"2026-05-14T05:38:22","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=103328"},"modified":"2026-05-14T11:08:22","modified_gmt":"2026-05-14T05:38:22","slug":"coal-gasification-scheme","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/coal-gasification-scheme\/","title":{"rendered":"Cabinet Approves Rs. 37,500 Crore Coal Gasification Scheme"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><strong>Coal Gasification Latest News<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union Cabinet has approved a Rs. 37,500 crore scheme to promote surface coal and lignite gasification projects, aimed at boosting domestic syngas production.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>About Coal Gasification<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coal gasification is a <\/span><b>thermo-chemical process<\/b><span style=\"font-weight: 400;\"> that converts coal or lignite into synthesis gas, commonly known as syngas, a mixture primarily composed of <\/span><b>carbon monoxide (CO)<\/b><span style=\"font-weight: 400;\"> and <\/span><b>hydrogen (H\u2082)<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike direct combustion, gasification allows controlled conversion of coal into a clean and versatile industrial feedstock.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Working of Coal Gasification<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In coal gasification, coal or lignite reacts with oxygen and steam under high temperature and pressure conditions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This controlled reaction breaks down the carbon-rich material into its gaseous components.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The syngas produced is then cleaned of impurities such as sulphur and particulates before being processed for industrial use.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Applications of Syngas<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Syngas is a versatile feedstock that can be used to produce:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Power and Synthetic Natural Gas (SNG)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Fertilisers such as urea and ammonia<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Chemicals, including methanol, dimethyl ether (DME), and ammonium nitrate<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Liquid fuels through further conversion processes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Hydrogen for industrial and energy applications<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Why Coal Gasification is Important<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India holds one of the world&#8217;s largest reserves of coal and lignite, approximately 401 billion tonnes of coal and 47 billion tonnes of lignite.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coal currently contributes more than 55% of India&#8217;s energy mix. Despite this abundance, India imports large volumes of high-value chemicals and fuels.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coal gasification offers several strategic benefits:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Cleaner utilisation of coal compared to direct combustion, with lower emissions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Import substitution for LNG, urea, ammonia, methanol, and coking coal.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Energy security by reducing exposure to global price volatility and geopolitical disruptions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Industrial diversification in coal-bearing regions, creating new economic opportunities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Alignment with Atmanirbhar Bharat and Make in India initiatives by strengthening domestic capabilities.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India aims to gasify 100 million tonnes of coal by 2030, and the new scheme is a significant step toward this national target<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>News Summary<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a major scheme to accelerate surface coal and lignite gasification across the country.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme, titled &#8220;Scheme for Promotion of New Surface Coal\/Lignite Gasification Projects for Production of Syngas and Downstream Products,&#8221; marks one of the most significant initiatives toward building a domestic syngas ecosystem.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Key Features of the Scheme<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Total Financial Outlay<\/b><span style=\"font-weight: 400;\">: Rs. 37,500 crore.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Gasification Target<\/b><span style=\"font-weight: 400;\">: Approximately 75 million tonnes of coal and lignite.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Project Selection<\/b><span style=\"font-weight: 400;\">: Through a transparent and competitive bidding process, with an evaluation framework benchmarking project cost, coal input, and syngas output.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial Incentives<\/b><span style=\"font-weight: 400;\">: Up to 20% of the cost of plant and machinery, disbursed in four equal instalments linked to project milestones.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Incentive Caps<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To ensure equitable distribution, the scheme has set the following caps:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Rs. 5,000 crore per single project.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Rs. 9,000 crore per single product category (excluding Synthetic Natural Gas and Urea).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Rs. 12,000 crore per single entity or group across all projects.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The incentives under this scheme are additional and do not restrict access to other Central or State Government schemes, including those under the commercial coal mining regime.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Structural Reforms<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A major accompanying reform is the extension of coal linkage tenure to 30 years under the <\/span><i><span style=\"font-weight: 400;\">&#8220;Production of Syngas leading to Coal Gasification&#8221;<\/span><\/i><span style=\"font-weight: 400;\"> sub-sector in the Non-Regulated Sector (NRS) linkage auction framework.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This provides long-term policy certainty for investments in coal gasification projects.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Strategic and Economic Benefits<\/strong><\/h2>\n<ul>\n<li aria-level=\"1\"><b>Investment Mobilisation<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The scheme is expected to attract investments worth Rs. 2.5-3 lakh crore across the value chain, creating significant industrial activity.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Import Substitution<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">India&#8217;s import bill for key substitutable products, including LNG, urea, ammonium nitrate, ammonia, coking coal, methanol, and DME, stood at approximately Rs. 2.77 lakh crore in FY2025.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The ongoing West Asia geopolitical situation has further exposed vulnerabilities in global supply chains.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Coal gasification will help insulate India from global price volatility and geopolitical supply-chain disruptions.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Employment Generation<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The scheme is projected to create around 50,000 direct and indirect jobs across 25 projects in coal-bearing regions, providing significant employment opportunities.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Revenue Generation<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Coal and lignite utilisation under the scheme is expected to generate Rs. 6,300 crore annually from 75 million tonnes of gasification, in addition to downstream revenue from GST and other levies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Source:<\/b><strong> <a href=\"https:\/\/www.thehindu.com\/business\/Industry\/govt-approves-incentive-for-coal-gasification-projects-with-outlay-of-37500-crore\/article70973990.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a> | <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/cabinet-okays-rs-37500-crore-coal-gasification-scheme-to-boost-syngas-production\/articleshow\/131062237.cms\" target=\"_blank\" rel=\"nofollow noopener\">TOI<\/a> | <a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2260621&amp;reg=3&amp;lang=1\" target=\"_blank\" rel=\"nofollow noopener\">PIB<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Coal gasification scheme worth Rs. 37,500 crore approved by the Cabinet aims to convert 75 million tonnes of coal into syngas.<\/p>\n","protected":false},"author":21,"featured_media":103347,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[493,60,22,59],"class_list":{"0":"post-103328","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-coal-gasification","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs-tag","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/103328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=103328"}],"version-history":[{"count":3,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/103328\/revisions"}],"predecessor-version":[{"id":103355,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/103328\/revisions\/103355"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/103347"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=103328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=103328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=103328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}