In a major policy push, the government is preparing a Rs 50,000 crore incentive scheme to promote coal gasification projects across the country, according to an ET Now report citing official sources. The initiative is part of India’s broader energy diversification plan aimed at reducing carbon emissions, reviving idle gas-based power plants, and targeting 100 million tonnes (MT) of coal gasification by 2030.
Incentives and structure
The proposed incentives will be provided through Viability Gap Funding (VGF), helping offset high project costs and making coal gasification financially viable. The Ministry of Coal has already initiated inter-ministerial consultations on the draft Cabinet note and forwarded the proposal to the Finance Ministry for comments. The final Cabinet approval is expected within the next 3–4 months.
Key details of the proposal
- The Coal Ministry has completed stakeholder consultations and finalised its plan.
- Coal gasification projects are expected to be set up near gas-based power plants to ensure cost-efficient fuel supply.
- The government plans to revive around 20,000 MW of gas-based power capacity using gas derived from coal.
- An earlier Rs 8,500 crore incentive scheme for coal gasification has already been approved.
Strategic goals
The proposed scheme aims to make India a global leader in clean coal technologies by producing synthetic gas (syngas) that can be used for power generation, chemicals, and fertilizers. The move also aligns with India’s goal to achieve 100 MT of coal gasification by 2030, reducing reliance on natural gas imports and supporting domestic industries.
Stocks to watch
Shares of Coal India and GAIL (India) Ltd are likely to remain in focus following this development, as both companies are expected to play a key role in implementing the government’s coal gasification roadmap.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Investors are advised to perform their own due diligence before making investment decisions.
