India has taken a significant step toward its coal gasification targets with the Ministry of Coal floating a request for proposal (RFP) on Wednesday, inviting companies to set up projects under the government's Rs 37,500-crore incentive scheme, according to Business Today.
Scheme Background and Targets
The scheme, launched in May and approved by the Union cabinet, aims to support the gasification of 75 million tonnes (MT) of coal and lignite by 2030 to produce syngas, thereby reducing dependence on imports of LNG, urea, ammonia and methanol and promoting self-reliance in the energy and chemicals sectors. Officials expect to select companies under the scheme within the next four months, as per the report.
RFP and Application Process
The RFP follows the issuance of operational guidelines on June 25. To facilitate stakeholder participation and provide clarity on scheme provisions and the application process, the ministry will hold a pre-application conference on July 20. Companies interested in coal gasification projects are invited to participate.
Import Dependency and Substitution Potential
India currently imports nearly 85% of its crude oil requirement, around 90% of its methanol requirement and 13-15% of its ammonia requirement. The country's import bill for key substitutable products — including liquefied natural gas, urea, ammonium nitrate, ammonia, coking coal, methanol and dimethyl ether (DME) — stood at nearly Rs 2.8 lakh crore in FY25, according to the source.
DME is considered a promising cleaner-burning substitute for LPG, with blends of up to 20% already permitted by the Bureau of Indian Standards for domestic, commercial and industrial use.
Investment and Project Scale
| Parameter | Detail |
|---|---|
| Scheme outlay | Rs 37,500 crore |
| Target gasification volume | 75 MT coal/lignite by 2030 |
| Expected investments | Rs 2.5-3 lakh crore |
| Expected number of projects | ~25 |
| Key products substituted | LNG, urea, ammonia, methanol, LPG (via DME) |
| Pre-application conference | July 20, 2026 |
The government expects the scheme to attract investments of Rs 2.5-3 lakh crore across around 25 projects in coal-rich regions to gasify 75 MT of coal over the next five years.
Outlook
With the RFP now open, the next four months will be critical for selecting the companies that will drive India's coal gasification push. Successful implementation could significantly cut India's import bill for energy and chemicals, while promoting domestic syngas production and cleaner fuel alternatives like DME.
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