Seven Firms Enter First Round of ₹37,500-Crore Coal Gasification Scheme
By Antara Tripathy | IBG NEWS
New Delhi, September 8, 2026: India’s ambitious push to expand coal and lignite gasification has received a strong response from industry, with seven applications submitted in the first round of the Centre’s ₹37,500-crore financial incentive scheme for surface coal/lignite gasification projects.
The applicants include major industrial groups as well as public sector enterprises, signalling growing interest in converting domestic coal and lignite into higher-value products and reducing dependence on imported energy and industrial feedstocks.
Seven Applications Submitted
According to the Ministry of Coal, the first round has attracted proposals from:
| Applicant | Proposed Product |
|---|---|
| Adani Enterprises Ltd – Project 1 | Urea |
| Adani Enterprises Ltd – Project 2 | Urea |
| Adani Enterprises Ltd – Project 3 | Urea |
| Gallantt Ispat Ltd | Direct Reduced Iron and Syngas |
| NTPC Ltd | Synthetic Natural Gas |
| Shyam Sel & Power Ltd | Syngas |
| Talcher Fertilisers Ltd | Urea |
The three separate proposals submitted by Adani Enterprises are listed as individual applications, taking the total number of applications to seven.
The Ministry of Coal has described the response as an indication of industry confidence in the government’s coal-gasification programme and its wider objectives of strengthening energy security and promoting domestic production.
Focus on Higher-Value Products
Coal gasification converts coal or lignite into syngas, which can subsequently be used to produce products such as urea, methanol, ammonia, hydrogen and synthetic natural gas.
The government intends to use the programme to encourage domestic coal utilisation beyond conventional combustion and create an ecosystem around gasification-based industries.
The ₹37,500-crore scheme was approved by the Union Cabinet in May 2026. The Ministry’s scheme documents provide for financial support for new surface coal/lignite gasification projects, with project selection taking place through a bidding process.
Import Reduction a Major Objective
A central objective of the initiative is to reduce India’s dependence on imports of products such as LNG, urea, ammonia and methanol.
The government has set a broader national ambition of reaching 100 million tonnes of coal-gasification capacity by 2030, with substantial capacity expected to emerge through the new incentive programme.
The scheme is also expected to encourage large-scale private and public investment across the gasification value chain, while creating employment opportunities associated with project construction, technology, operations and downstream manufacturing.
Building on Earlier Gasification Programme
The latest initiative expands on an earlier ₹8,500-crore financial incentive scheme for coal gasification. The Ministry of Coal has said that eight projects supported under the earlier programme are already under implementation.
The government has been promoting coal gasification as part of its broader strategy for energy security, import substitution and development of domestic clean-coal technologies. The Ministry maintains a dedicated coal-gasification programme and has been issuing RFPs and conducting consultations with potential project developers during 2026.
Round 2 Opens
With the first round now closed, the Ministry has announced the opening of Round 2 from September 8, 2026.
Under the proposed process, fresh application windows are expected to open at two-month intervals, giving additional eligible companies and public-sector entities opportunities to submit projects.
The applications received in Round 1 will now go through detailed evaluation under the applicable scheme guidelines and the Request for Proposal.
The Ministry’s current website also shows that the government has been actively progressing the scheme through application guidelines, RFPs, pre-application consultations and related implementation documents.
The strong initial participation marks an important step in India’s effort to develop a domestic coal-gasification industry and convert indigenous coal and lignite resources into commercially valuable products while supporting the country’s longer-term energy-security goals.
© IBG NEWS
