Coal Gasification Scheme: NTPC Leads Round 2 of Bids as Round 3 Opens
The second round of applications under the government's ₹37,500 crore scheme for coal and lignite gasification has closed with NTPC (India's largest power producer, a central public sector company) submitting two applications, the most by any company in this round.
The scheme runs on a rolling window: a new application round opens soon after the earlier one closes and stays open for about two months. The third round opened on November 10, 2026.
The first round, which closed on September 7, 2026, drew seven applications: three from Adani Enterprises (all for urea), and one each from NTPC (synthetic natural gas), Gallantt Ispat (direct reduced iron and syngas), Shyam Sel & Power (syngas) and Talcher Fertilisers (urea).
The Union Cabinet approved the scheme in May 2026. It gives money support to projects that turn coal into gas and then into products like urea, methanol, ammonia and synthetic natural gas, which India now imports in large amounts.
All applications are checked by the Ministry of Coal under the scheme rules and the request for proposal (the official bid document) before any support is given.
Coal Gasification and the National Coal Gasification Mission
Coal gasification turns solid coal into a gas instead of burning it in the open. Coal is heated to a very high temperature with a small, controlled amount of oxygen and steam, so it does not catch fire fully. It breaks down into syngas (synthesis gas), mainly carbon monoxide and hydrogen. Syngas can be used as fuel or turned into chemicals and fertilisers. India's National Coal Gasification Mission, launched by the Ministry of Coal in 2021, aims to gasify 100 million tonnes (MT) of coal by 2030.
NTPC's two applications in round 2, after one in round 1, show that the biggest coal user in India wants to move from only burning coal for power to also turning it into gas and chemicals. Each round brings India closer to the 100 MT target and cuts dependence on imported LNG and urea.
Coal Sector in India: Structure and Policy
Coal is India's biggest single source of energy and runs most of its 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 is used. Coal mining was nationalised in the early 1970s, and Coal India Limited became the main producer. Since 2020, private companies can also mine coal and sell it in the open market, which is called commercial coal mining.
Because India now produces over a billion tonnes of coal a year, the government wants to use some of it to make products it currently imports. The gasification scheme is one route for this, and public sector firms like NTPC are leading the early bids.
- Scheme outlay: ₹37,500 crore for surface coal and lignite gasification; approved by the Union Cabinet in May 2026
- Round 1 closed September 7, 2026: 7 applications (Adani Enterprises 3, NTPC 1, Gallantt Ispat 1, Shyam Sel & Power 1, Talcher Fertilisers 1)
- Round 2 opened September 8, 2026; NTPC filed 2 applications, the most in this round
- Round 3 opened November 10, 2026; rounds open at about two-month intervals
- Per-project cap: ₹5,000 crore; per-entity/group cap: ₹12,000 crore
- National Coal Gasification Mission (2021): 100 MT coal gasification by 2030
- India's coal output in 2024-25: about 1,047 MT, the first time above 1 billion tonnes