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Centre Likely to Approve Rs 35,000 Cr Incentive for Coal Gasification Projects

The Centre is poised to approve a fresh financial incentive package of over Rs 35,000 crore to boost coal gasification projects. This scales up the earlier Rs 8,500 crore scheme approved in January 2024. The initiative aims to reduce import dependence on LNG, urea, and other commodities while strengthening energy security. Key beneficiaries include Jindal Steel and Power, New Era Cleantech, and Greta Energy, with projects in Odisha and Maharashtra.

Key Points: Rs 35,000 Cr Coal Gasification Boost by Centre

  • New Rs 35,000 crore incentive package for coal gasification likely this month
  • Scheme scales up earlier Rs 8,500 crore programme approved in January 2024
  • Aims to reduce import dependence on LNG, urea, ammonium nitrate, and ammonia
  • Target is 100 million tonnes of coal gasification capacity by 2030
2 min read

Centre poised to clear fresh incentive package to boost coal gasification projects

Centre to approve over Rs 35,000 crore incentive package for coal gasification projects, scaling up earlier Rs 8,500 crore scheme to reduce import dependence and meet 2030 target.

"The proposed scheme is aimed at accelerating surface coal and lignite gasification projects across the country, promoting self-reliance by reducing import dependence on LNG, urea, ammonium nitrate, and ammonia. - Ministry of Coal"

New Delhi, May 3

The Centre is likely to approve a fresh package of financial incentives this month to boost coal gasification projects with an estimated outlay of over Rs 35,000 crore, according to reliable sources.

The Cabinet proposal drawn up by the Ministry of Coal will scale up the earlier Rs 8,500 crore incentive programme approved in January 2024, which laid the foundation for coal gasification in India.

The proposed scheme, to be taken up by the Union Cabinet, is aimed at accelerating surface coal and lignite gasification projects across the country, promoting self-reliance by reducing import dependence on LNG, urea, ammonium nitrate, and ammonia. The scheme also aims to accelerate the progress to meet the ambitious national target of 100 million tonnes of coal gasification capacity by 2030.

The move to step up coal gasification comes in the backdrop of the supply chain disruptions in LNG, fertiliser and fertiliser feedstock due to the Middle East conflict.

The Ministry of Coal had, in February this year, announced that it had issued Letters of Award (LOAs) to applicants selected under Category II of the Rs 8,500 crore Coal Gasification Incentive Scheme aimed at reducing the country's carbon emissions and strengthening energy security.

The awardees, under the scheme's Category II, include private companies and public sector undertakings (PSUs) for the allocation of Rs 1,000 crore per project or 15 per cent of the capital expenditure (capex), whichever is lower.

Jindal Steel and Power Limited's 2 MMTPA coal gasification project at Angul in Odisha has been awarded Rs 569.05 crore in financial incentives. The Rs 3,793 crore project will convert coal into Direct Reduced Iron (DRI) through coal gasification.

New Era Cleantech Solution Private Limited has been given a financial incentive of Rs 1,000 crore for its coal gasification project in Bhadravati, Chandrapur, Maharashtra. With a total project cost of Rs 6,976 crore, it aims to produce 0.33 MMTPA of ammonium nitrate and 0.1 MMTPA of hydrogen.

Similarly, Greta Energy Limited has been awarded Rs 414.01 crore of financial incentive for its coal gasification project at MIDC Bhadravati, Chandrapur, Maharashtra.

The coal gasification initiative is designed to accelerate technological advancements in coal gasification, significantly reduce carbon emissions, bolster energy security, and create a foundation for a more sustainable energy landscape.

- IANS

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Reader Comments

P
Priya S
Rs 35,000 crore is a huge outlay! Let's hope this actually creates jobs and not just benefits for big corporates. JSPL and Greta Energy getting crores of incentives - but what about the local communities near these projects? We need proper rehabilitation plans and pollution controls.
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Vikram M
Good to see India taking energy security seriously, especially with the Middle East tensions affecting LNG supply. But 100 million tonnes target by 2030 seems ambitious given current infrastructure. Let's see if the private sector can deliver. Also, where's the push for renewable alternatives alongside this? 😕
A
Ananya R
This is exactly what we need - Atmanirbhar Bharat in energy! Instead of begging other countries for LNG, we can use our abundant coal reserves. But I'm worried about the carbon emissions even with gasification. Hope they invest in carbon capture too. Jai Hind! 🇮🇳
J
James A
As an environmental engineer, I see both promise and risk here. Coal gasification can produce syngas for fertilisers and reduce import bills, but the water usage and ash disposal are serious concerns. India should learn from China's mistakes - they pushed gasification hard but faced pollution issues. Hope our regulations are stricter.
S
Siddharth J
The Rs 8,500 crore scheme was a good start, but ramping up to Rs 35,000 crore shows the government means business. My concern is transparency - will these incentives be distributed fairly? And what about the coal blocks allocated? We need to ensure this doesn't lead to mining mafias or environmental degradation in places like Odisha and Maharashtra.

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