India approves multibillion-dollar initiative to convert coal into gas

India’s cabinet has approved a 375 billion rupee ($3.92 billion) initiative to promote coal gasification projects, aiming to reduce reliance on imported fuels and channel domestic coal into cleaner industrial applications, Information Minister Ashwini Vaishnaw said, according to Reuters.

The decision is intended to accelerate the conversion of coal into synthetic gas that can be used in power generation, fertiliser production, petrochemicals, and other industrial applications.

Vaishnaw said the program would help reduce India’s imports of liquefied natural gas (LNG), urea, ammonia, and methanol.

The scheme comes as India’s gas imports have been affected by the ongoing Middle East crisis.

Several countries, including the United States and China, are also exploring coal gasification technologies as part of efforts to reduce emissions while maintaining coal as a source of energy security.

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India, which has one of the world’s largest coal reserves at 401 billion tons, along with 47 billion tons of lignite reserves, aims to gasify around 75 million metric tons of coal annually, Vaishnaw said. The scheme is expected to attract investments of about 3 trillion rupees.

Under the plan, the government will provide financial assistance covering around 20% of plant and machinery costs.

Interest in coal gasification is also growing among power producers. State-owned power utility NTPC is seeking to enter the coal gasification business, with plans to produce between 5 million and 10 million tonnes per year of synthetic gas over the next three to four years, Reuters reported last year.

India had previously approved an 85-billion-rupee coal gasification incentive scheme in 2024.

Editing by Reiner Simanjuntak