Coal Ministry Launches ₹37,500 Crore Coal Gasification Scheme

The Ministry of Coal has launched a ₹37,500 crore scheme to promote surface coal and lignite gasification projects. The scheme, approved by the Union Cabinet in May 2026, aims to accelerate the development of these projects and support the production of high-value downstream products.

The Ministry of Coal conducted a pre-application conference on July 20, 2026, to outline guidelines and timelines for applicants. The conference was well-attended by public sector enterprises, private companies, technology providers, and prospective applicants.

The scheme aims to catalyse investments of around ₹2.5-3 lakh crore, facilitate the utilisation of nearly 75 million tonnes of coal annually, and generate about 50,000 employment opportunities. It also aims to significantly reduce India's dependence on imports of energy and chemical products.

The Ministry of Coal has set a deadline of September 7, 2026, for the submission of applications. The ministry has provided detailed clarifications on scheme guidelines, eligibility criteria, evaluation methodology, financial incentives, and the application process.

The scheme is expected to play a crucial role in promoting cleaner and value-added utilisation of domestic coal. Coal gasification enables the conversion of coal into syngas, which can be used for the production of ammonia, methanol, hydrogen, synthetic fuels, and other value-added products.

The Ministry of Coal had earlier organised a BRICS side event on clean coal technologies, which highlighted the role of coal gasification in strengthening India's energy security and supporting industrial development.

The scheme is a significant step towards reducing India's dependence on energy imports and promoting the use of clean coal technologies. It is expected to have a positive impact on the environment and the economy, and generate significant employment opportunities.

The Ministry of Coal has urged all eligible entities to submit their proposals within the prescribed timeline. The scheme is a major initiative by the government to promote the use of domestic coal and reduce dependence on imports.

In recent years, the government has been promoting the use of clean coal technologies to reduce the environmental impact of coal mining and usage. The scheme is a significant step towards achieving this goal and promoting sustainable development.

The success of the scheme will depend on the participation of public and private sector enterprises, as well as the effective implementation of the scheme guidelines and timelines. The Ministry of Coal has taken a significant step towards promoting the use of domestic coal and reducing dependence on imports, and it remains to be seen how the scheme will be implemented and its impact on the environment and the economy.