National Coal Gasification Mission

Under the vision of Atmanirbhar Bharat, the Government of India has set an ambitious target of gasifying 100 Million Tonnes of coal by 2030, positioning coal and lignite gasification as a strategic pillar of the nation's energy security, industrial growth and import substitution strategy.

To accelerate commercial deployment, the Government has introduced dedicated policy reforms and financial incentive schemes that support the development of coal and lignite gasification projects across the public and private sectors.

Financial Incentive Scheme – Tranche I (₹8,500 Crore)

The "Scheme for promotion of Coal/Lignite Gasification" was approved by the Indian government with a total outlay of ₹8,500 crore. This scheme aims to incentivize both public sector undertakings (PSUs) and private sector companies to invest in coal and lignite gasification projects. The scheme is structured into three categories, with financial incentives provided to projects under each category.

Targeted Entities:
The scheme is open to both Government PSUs and private sector companies.

Categories:
Category I: Focuses on Government PSUs, with a provision of ₹4,050 crore, supporting up to 3 projects with a lump-sum grant of ₹1,350 crore or 15% of the capital expenditure (capex), whichever is lower.

Category II: Provides ₹3,850 crore for for Joint Ventures (JVs) between Government PSUs and/or the Private Sector, rather than simply any PSU or private company applying independently.

Category III: ₹600is specifically meant for Demonstration Projects and Small-scale Product-based Projects, aimed at encouraging indigenous technology development and innovation.  

₹37,500 Crore Scheme for Promotion of Surface Coal & Lignite Gasification Projects

To accelerate the commercial deployment of coal and lignite gasification technologies, the Government of India approved the ₹37,500 crore Scheme for Promotion of Surface Coal & Lignite Gasification Projects in May 2026. The scheme marks the second phase of India's Coal Gasification Mission, building on the earlier ₹8,500 crore incentive programme and encouraging large-scale investments by both public and private sector companies.

The scheme aims to facilitate the gasification of approximately 75 Million Tonnes (MT) of coal and lignite through financial assistance of up to 20% of the eligible plant and machinery cost, with incentives of up to ₹5,000 crore per project. It is expected to attract investments of around ₹2.5–3 lakh crore, generate significant employment and strengthen India's energy security through the production of syngas and its downstream products.

The initiative is expected to accelerate the development of commercial-scale projects for the production of Synthetic Natural Gas (SNG), Methanol, Hydrogen, Ammonia, Urea, Direct Reduced Iron (DRI) and other value-added chemicals. Together with the earlier ₹8,500 crore scheme, it reinforces India's commitment to achieving the national target of 100 Million Tonnes of coal gasification by 2030.

- GEMS OF आत्मनिर्भर भारत

Reliance Industries Limited, Jamnagar - Worlds Largest Petcoke Gasification Project

Jindal Steel Limited, Angul - World's First and Largest Coal Gasification-Based Syngas DRI Plant

Current Project in Executions Phase

Jindal Steel Limited

Coal Gasification for DRI | Odisha

  • Home to the world's largest coal gasification facility for steel making, producing syngas for Direct Reduced Iron (DRI) with CCUS integration.
  • Status: Operational & Expansion Underway

Talcher Fertilizers Ltd.

Coal to Urea | Odisha

  • India's flagship coal gasification-based fertiliser project designed to produce 1.27 MMTPA of Neem-Coated Urea using domestic coal.
  • Status: Advanced Construction

Bharat Coal Gasification and Chemicals Limited

Coal to Ammonium Nitrate | Odisha

  • India's first commercial coal gasification project based on indigenous technology. The ₹11,768 crore project will produce 0.66 MMTPA Ammonium Nitrate.
  • Status: Under Implementation

Coal Gas India Ltd. (CGIL)

Coal to Synthetic Natural Gas (SNG) | West Bengal

  • A joint venture of Coal India and GAIL developing a 1.83 MMSCMD Coal-to-SNG plant to reduce dependence on imported natural gas.
  • Status: Under Implementation

NLC India Limited

Lignite to Methanol | Tamil Nadu

  • A ₹4,400 crore project to establish a 1,200 TPD Lignite-to-Methanol Plant, supporting import substitution and value-added utilisation of lignite.
  • Status: Tendering & Pre-Construction

New Era Cleantech

Coal to Chemicals | Maharashtra

  • Integrated coal gasification project producing Hydrogen, Ammonium Nitrate and Methanol, with Carbon Capture, Utilisation & Storage (CCUS).
  • Status: Under Implementation

Greta Energy Limited

Coal Gasification for Green Steel | Maharashtra

  • Coal gasification-based project to produce 0.5 MTPA Direct Reduced Iron (DRI) for low-carbon steel production.
  • Status: Under Implementation

Eastern Coalfields Limited (ECL)

Underground Coal Gasification | Odisha

  • Developing the Burapahar Coal Block for Underground Coal Gasification to utilise deep coal resources.
  • Status: Resource Development

Reliance Industries – NLC India

Underground Lignite Gasification | Gujarat

  • Joint initiative to evaluate Underground Lignite Gasification (ULG) for the production of syngas and downstream chemicals.
  • Status: Feasibility Stage

Coal India Ltd. – Niljai SNG Project

Coal to Synthetic Natural Gas | Maharashtra

  • Coal India Limited's proposed Coal-to-SNG project with a production capacity of 1.83 MMSCMD.
  • Status: Planning & Engineering

Coal India – BPCL

Coal to Synthetic Natural Gas (SNG) | Majri, Maharashtra

  • Coal India Limited (51%) and Bharat Petroleum Corporation Limited (49%) have formed a joint venture to develop a ₹12,214 crore Coal-to-Synthetic Natural Gas (SNG) project at the Majri area of Western Coalfields in Maharashtra. The project aims to produce indigenous SNG as a cleaner alternative to imported natural gas, strengthening India's energy security and expanding the country's commercial coal gasification capacity.
  • Status: Joint Venture Formed | Engineering & Project Development

Karthikeya Green Fuels

Coal to DME | Maharashtra

  • Proposed coal gasification project focused on producing Dimethyl Ether (DME) as a cleaner alternative fuel.
  • Status: Project Development

Balaji Amines Limited

India's First Commercial DME Plant | Maharashtra

  • Balaji Amines has commissioned India's first commercial-scale Dimethyl Ether (DME) plant with a capacity of 100,000 TPA at Solapur, Maharashtra. DME is a clean-burning fuel and a strategic downstream product under India's Coal Gasification Mission, with applications as an LPG substitute and in the chemical industry.
  • Status: Commercial Production Commenced (2026).

NTPC Limited

Coal to Synthetic Gas (Syngas)

  • NTPC has announced plans to establish coal gasification facilities capable of producing 5–10 million tonnes of synthetic gas annually over the next few years. The syngas will be used in NTPC's gas-based power plants and supplied to industrial consumers, marking the company's entry into India's coal gasification sector.
  • Status: Announced | Project Development & Technical Consultancy Phase.

Gujarat Mineral Development Corporation (GMDC)

Underground Coal Gasification (UCG) | Burapahar, Odisha

  • GMDC is developing the Burapahar Coal Block in Odisha for Underground Coal Gasification (UCG) to unlock deep, unmineable coal reserves through in-situ gasification. The project is expected to demonstrate the commercial viability of UCG technology and support India's long-term clean coal utilisation strategy.
  • Status: Project Development

Mahanadi Coalfields Limited (MCL)

Project Infrastructure & Coal Supply | Odisha

  • MCL is facilitating India's flagship Lakhanpur Coal Gasification Project by providing land, coal linkage and infrastructure support. The company plays a pivotal role in enabling commercial coal gasification projects in the Talcher–Ib Valley region.
  • Role: Strategic Project Partner

Central Mine Planning & Design Institute (CMPDI)

Technology, Mine Planning & Project Consultancy

  • CMPDI is the technical and engineering arm of Coal India Limited, providing geological exploration, mine planning, feasibility studies, DPR preparation and engineering consultancy for coal gasification and downstream projects. Its expertise is supporting the planning and implementation of India's National Coal Gasification Mission.
  • Role: National Technical & Engineering Partner

Projects & Development India Limited (PDIL)

Engineering & Technology Consultancy

  • Projects & Development India Limited (PDIL), a Government of India enterprise under the Department of Fertilizers, is a leading engineering and consultancy organisation for fertiliser, petrochemical, refinery and coal gasification projects. PDIL provides feasibility studies, process engineering, detailed engineering, project management and technical consultancy, supporting the successful implementation of India's coal gasification and downstream chemical projects.
  • Role: National Engineering & Technology Consultant

Policy Reforms & What's Next

India's Coal Gasification Mission continues to evolve through progressive policy reforms aimed at accelerating commercial deployment, strengthening downstream industries and enhancing the utilisation of domestic coal resources. Several new initiatives are expected to further improve project viability and expand investment opportunities across the gasification value chain.
National Investment Policy for Urea (NIPU-2026)

The Union Cabinet has approved NIPU-2026 to encourage investments in 8–9 new urea manufacturing plants, strengthening India's fertiliser security. The policy complements the coal gasification mission by creating long-term demand for syngas-based ammonia and urea production.

Coal Gasification-Based Urea Policy

The Government is finalising a dedicated policy to promote coal gasification-based urea manufacturing, providing a framework for projects using indigenous coal as feedstock and reducing dependence on imported natural gas.

Coal Gasification-Based Urea Policy

The Government is finalising a dedicated policy to promote coal gasification-based urea manufacturing, providing a long-term framework for domestic fertiliser production using indigenous coal resources.

Commercialisation of the ₹37,500 Crore Scheme

Following the approval of the ₹37,500 crore incentive scheme, the Ministry of Coal has issued guidelines and invited project proposals, marking the transition from policy announcement to commercial implementation.

Underground Coal Gasification (UCG)

The Ministry of Coal has notified comprehensive 2026 Guidelines for Underground Coal Gasification, paving the way for commercial development of deep and unmineable coal reserves across India.

Competitive Bidding Framework

The Ministry of Coal has operationalised the incentive schemes through a competitive bidding process, linking financial assistance to project performance and timely execution.

Long-Term Coal Linkages

To improve investor confidence, coal linkage tenure for syngas-based projects has been extended up to 30 years, ensuring long-term feedstock security for commercial coal gasification projects.

Technology Development

NITI Aayog and the Ministry of Coal continue to support the development of high-ash Indian coal gasification technologies, encouraging indigenous innovation and commercial deployment.

Emerging Downstream Opportunities

Future policy support is expected to accelerate investments in Methanol, Dimethyl Ether (DME), Hydrogen, Synthetic Natural Gas (SNG), Sustainable Aviation Fuel (SAF), Ammonia and other coal-derived chemicals, creating a diversified downstream manufacturing ecosystem.

With strong policy support, record financial incentives and a growing pipeline of commercial projects, India is entering a new era where coal gasification will play a pivotal role in strengthening energy security, reducing import dependence and building a globally competitive downstream chemicals industry.

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