India’s Energy Push: Govt Launches ₹37,500 Cr Scheme as Coal Gasification Targets Surge Towards 100 MT
The government has significantly boosted incentives and expanded support mechanisms to accelerate coal gasification projects across the nation. The National Coal Gasification Mission has set an ambitious target of achieving 100 Million Tonnes (MT) of coal gasification capacity by the year 2030, underscoring a strong commitment toward enhancing India’s energy security.This critical infrastructure development is designed to promote the production of vital commodities such as coal-to-chemical products, methanol, and Synthetic Natural Gas (SNG). By streamlining regulatory support and ensuring robust financial backing, the government aims to strengthen the domestic industrial base.
National Mission Targets 100 MT Coal Gasification by 2030
As part of the national push, projects across both the private and public sectors are steadily increasing operational capacity. Currently, approximately 22.6 Million Tonnes Per Annum (MTPA) of coal gasification capacity is either operational or actively under implementation.This existing base comprises notable contributions from key players including Jindal Steel Limited (JSL), which has about 8 MTPA operating capacity, and Talcher Fertilisers Limited (TFL), contributing around 2.6 MTPA while undergoing implementation. Additionally, eight projects approved under the prior ₹8,500 crore Financial Incentive Scheme contribute approximately 12 MTPA toward this goal.
New ₹37,500 Crore Scheme Accelerates Project Development
To dramatically close the gap between current capacity and the ambitious national target, a new scheme was approved on May 13, 2026, dedicated to the Promotion of Surface Coal/Lignite Gasification Projects. This initiative carries a substantial financial outlay of ₹37,500 crore.The newly launched program is anticipated to utilize approximately 75 MTPA of coal and lignite, providing a massive thrust toward achieving the overall mission goal of 100 MT tonnes of gasification capacity by 2030. This decisive action aims to rapidly scale up the country's resource utilization in the energy sector.
Incentives Boost Private Investment in Energy Security
The government has markedly strengthened the incentive framework under this new scheme to successfully attract greater public and private sector investment. The incentives provided are designed to de-risk these large-scale industrial projects.Under the previous scheme, approved on January 24, 2024, eligible companies could receive a financial incentive equivalent to 15% of the capital expenditure (capex). The new scheme offers significantly improved support, providing financial incentives up to 20% of the eligible Plant and Machinery cost, subject to prescribed ceilings.
Union Minister of State for Coal and Mines Shri Satish Chandra Dubey highlighted these efforts in a written reply to the Rajya Sabha, stating that this policy framework is key to strengthening India's energy security through maximized coal gasification.
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