Coal Gasification: Why Fast Approvals and Assured Buyers Are Key to India's 100 MT Target by 2030
A new industry report titled "Coal Gasification for Atmanirbhar Bharat" says India can reach its target of gasifying 100 million tonnes (MT) of coal by 2030 only if projects get quick approvals and assured buyers (offtakers) for their products.
The report notes that the Ministry of Coal expects investment of about ₹2.5 to 3 lakh crore across about 25 projects to reach the target.
An "assured buyer" means a firm that signs a long-term deal to buy the plant's output, such as gas, methanol or fertiliser. Without such buyers, banks hesitate to lend for these costly plants.
The push comes after the Union Cabinet approved a ₹37,500 crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects on 13 May 2026, which aims to support gasification of about 75 MT of coal and lignite.
The first bidding round under that scheme closed on 7 September 2026, and the Ministry of Coal opened a second round on 8 September 2026.
Coal Gasification and the National Coal Gasification Mission
Coal gasification is a way of turning solid coal into a gas instead of burning it. Coal is heated to a very high temperature with a small, controlled amount of oxygen and steam. It does not catch fire fully. Instead, it breaks down into a fuel gas called syngas (synthesis gas), which is mainly carbon monoxide (CO) and hydrogen (H₂). This syngas can then be made into fertiliser, methanol, fuels, hydrogen and even steel.
The report says the 100 MT target set under the National Coal Gasification Mission is reachable only if around 25 projects worth ₹2.5–3 lakh crore actually get built. That needs fast approvals and assured buyers, because gasification plants are costly and lenders want guaranteed sales. The ₹37,500 crore scheme supplies the capital help; approvals and buyers are the missing pieces.
Coal Sector in India: Structure and Policy
Coal is a black rock that burns and gives energy. It formed over millions of years from buried plants. In India, coal is the biggest single source of energy and runs most of the country's power plants. The coal sector is the system of laws, companies and rules that decides who can mine coal, how it is sold and how it reaches power plants, steel plants and factories.
The coal gasification push rests on this sector structure. The large domestic reserves make gasification possible, commercial auction rules give gasification a revenue-share rebate, and coal linkages of up to 30 years assure feedstock. Turning more of India's high-ash coal into chemicals, rather than burning it, is the government's way of using coal while cutting imports.
- National Coal Gasification Mission target: 100 MT of coal gasified by 2030
- Expected investment to reach the target: about ₹2.5–3 lakh crore across about 25 projects
- ₹37,500 crore surface coal/lignite gasification scheme: approved 13 May 2026; supports about 75 MT; up to 20% of plant and machinery cost; ₹5,000 crore cap per project
- First bidding round closed 7 September 2026; second round opened 8 September 2026
- Earlier ₹8,500 crore gasification scheme: approved 24 January 2024
- Revenue share rebate for gasification in commercial auctions: 50% (if at least 10% of output gasified)
- Expected jobs: about 50,000 direct and indirect
- India's coal production 2024-25: 1,047.57 MT; coal imports 243.62 MT
- India's coal resources: about 389 billion tonnes (1 April 2024)