The Government of India has accelerated efforts to achieve its ambitious target of 100 Million Tonnes (MT) of coal gasification capacity by 2030 under the National Coal Gasification Mission, backed by a new ₹37,500 crore financial incentive scheme aimed at boosting investments in the sector.
At present, around 22.6 Million Tonnes Per Annum (MTPA) of coal gasification capacity is either operational or under implementation across the country.
The current capacity includes:
- Jindal Steel Limited (JSL): Approximately 8 MTPA (Operational)
- Talcher Fertilisers Limited (TFL): Approximately 2.6 MTPA (Under implementation)
- Eight projects approved under the earlier ₹8,500 crore Financial Incentive Scheme: Approximately 12 MTPA (Under implementation)
₹37,500 Crore Scheme to Add 75 MTPA Capacity
To bridge the gap towards the 100 MT target, the Government approved a new Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026, with a financial outlay of ₹37,500 crore.
The scheme is expected to facilitate the utilisation of approximately 75 MTPA of coal, significantly expanding India’s coal gasification capacity and helping achieve the national target by 2030.
Higher Financial Incentives for Investors
The Government has substantially enhanced financial support under the new scheme to attract both public and private sector investments.
Under the earlier ₹8,500 crore scheme, approved on January 24, 2024, eligible projects received financial assistance of 15% of capital expenditure (CapEx), subject to prescribed limits.
The newly approved ₹37,500 crore scheme increases the incentive to up to 20% of the eligible Plant and Machinery cost, again subject to prescribed ceilings. The enhanced support is expected to improve project viability and accelerate investments in coal gasification infrastructure.
Focus on Coal-to-Chemicals, Methanol and Synthetic Natural Gas
The Government is promoting the production of:
- Coal-to-Chemicals
- Methanol
- Synthetic Natural Gas (SNG)
through coal gasification as part of its strategy to diversify coal utilisation and reduce dependence on imported fuels and feedstocks.
To support the sector, the Government is also:
- Providing financial incentives for new projects.
- Ensuring adequate coal availability.
- Strengthening the regulatory framework.
- Simplifying approval processes.
- Promoting indigenous gasification technologies.
- Creating an enabling policy environment for investment.
These initiatives are aimed at enhancing India’s energy security, promoting value-added utilisation of domestic coal resources, and supporting the country’s long-term industrial and clean energy transition.
