Ministry of Coal In an official statement released on Friday, it was announced that the government is contemplating a scheme worth Rs 6,000 crore to promote coal gasification in India. The introduction of gasification technology in India is expected to bring about a revolutionary change in the coal sector, reducing the dependence on imports of natural gas, methanol, ammonia, and other vital products, as stated by the Ministry of Coal. "The ministry is actively considering a comprehensive scheme to encourage coal/lignite gasification projects in both the public and private sectors, with an allocated budget of Rs 6,000 crore," the statement added.

The selection process for entities participating in the coal/lignite gasification scheme will be conducted through a competitive and transparent bidding process, according to the statement. The scheme consists of two segments. The first segment involves providing support to public sector undertakings (PSUs), while the second segment encompasses both the private sector and PSUs, with a dedicated budget allocation for each project. At least one project from this segment will be selected through a tariff-based bidding process, with the criteria developed in consultation with Niti Aayog.

The third segment focuses on budgetary support for demonstration projects that employ indigenous technology and/or small-scale product-based gasification plants, as mentioned in the statement. Additionally, the ministry is considering an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilized in gasification projects for a period of ten years after the commercial operational date (COD), subject to the extension of the GST compensation cess beyond FY27. This incentive aims to offset the inability of entities to claim input tax credit for the same.

The ministry has set a target to achieve coal gasification of 100 million tonnes (MT) of coal by FY 2030. "This initiative holds tremendous potential to alleviate the environmental burden by reducing carbon emissions and promoting sustainable practices, aligning with the country's global commitments towards a greener future," expressed the ministry.

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