On 18 June 2026 the Union Cabinet approved a ₹37,500 crore financial support programme for surface coal and lignite gasification, bringing cumulative incentive support to ₹46,000 crore when combined with a ₹8,500 crore scheme from January 2024.
Key financials
- New scheme (18 Jun 2026): ₹37,500 crore for surface coal and lignite gasification projects.
- Earlier incentive (Jan 2024): ₹8,500 crore; total government initiatives now ₹46,000 crore.
- Projects under execution: ~₹65,000 crore worth of coal gasification projects reported by Ministry of Coal.
- Sanctions under Jan 2024 scheme: ₹6,233 crore for eight projects (as of 19 Jun 2026).
Targets & projects
- National target: Gasify 100 million tonnes of coal annually by 2030 (National Coal Gasification Mission).
- Lakhanpur, Jharsuguda (Odisha): ₹25,016 crore project; Bharat Coal Gasification and Chemicals Ltd (BHEL + CIL JV); first commercial-scale coal-to-ammonium nitrate facility.
- Pilot UCG: Underground Coal Gasification pilot commissioned at Kasta, West Bengal (Eastern Coalfields).
Technology & end-products
- Surface coal gasification: Partial oxidation of coal/lignite to produce syngas (mainly CO + H2) at elevated temperature.
- Underground coal gasification (UCG): In-situ conversion of coal seam to syngas without full mining.
- Derivable products from syngas: Methanol, hydrogen, ethanol, urea, ammonium nitrate, synthetic natural gas (SNG), sustainable aviation fuel (SAF).
IASPOINT Booster Facts
- Ministry & mission: Ministry of Coal implements the National Coal Gasification Mission and incentive schemes.
- Syngas composition: Primarily carbon monoxide (CO) and hydrogen (H2); feedstock for chemicals and fuels.
- Commercial pathway: Gasification enables coal-to-chemicals routes (e.g., ammonia/urea, methanol) using Fischer–Tropsch or catalytic synthesis.