Rs 37,500 crore coal gasification scheme receives seven bids in 1st round: Ministry

The Centre’s Rs 37,500-crore coal and lignite gasification scheme received seven applications in its first round from major companies and PSUs. The initiative aims to promote domestic coal conversion, reduce imports, boost energy security and create investment and employment opportunities

New Delhi: The first round of the Centre’s Rs 37,500 crore scheme to promote surface coal and lignite gasification has received seven applications from major corporates and public sector undertakings, an official statement said on Tuesday.

According to the Ministry of Coal, the applications include three proposals from Adani Enterprises Ltd for urea production, while Gallantt Ispat Ltd has applied for a project producing direct reduced iron and syngas.

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NTPC Ltd has submitted an application for synthetic natural gas, Shyam Sel & Power Ltd for syngas and Talcher Fertilisers Ltd for urea, according to the ministry. The ministry said the response demonstrates growing industry confidence in coal gasification as a tool for strengthening energy security, reducing imports and supporting industrial development.

“When we said reports of ‘no takers’ were premature, we were confident that industry would respond and it has, decisively. Seven applications in the very first round, including from some of India’s largest industrial houses and public sector undertakings, are a clear vote of confidence in the scheme and in India’s coal gasification mission. The market has spoken and it has spoken loudly,” a senior Ministry of Coal official said.

The scheme — approved by the Union Cabinet in May — has a total financial outlay of Rs 37,500 crore and aims to promote the conversion of domestic coal and lignite into higher-value products such as syngas, methanol, ammonia, urea and hydrogen.

It seeks to reduce India’s dependence on imports of LNG, urea, ammonia and methanol, which together were valued at around Rs 2.77 lakh crore in FY25, the ministry said. The scheme also supports India’s target of achieving 100 million tonnes of coal gasification capacity by 2030, including 75 million tonnes of capacity under the scheme.

It is expected to catalyse investments of up to Rs 3 lakh crore and generate direct and indirect employment opportunities. The latest scheme builds on the Rs 8,500 crore financial incentive scheme approved in January 2024 under which eight gasification projects are currently under implementation.

Moreover, the government opened the second round of the scheme on Tuesday. As per the RFP, application windows will open at two-month intervals, providing eligible entities with further opportunities to submit proposals. The first-round applications were submitted after the RFP was issued on July 7, according to the government.