Govt sees good response to pre-application conference for Rs 37,500-cr coal gasification scheme

New Delhi, The government on Monday held the pre-application conference for its flagship Rs 37,500 crore scheme for promotion of surface coal gasification projects, which saw keen participation from public sector undertakings, private companies, technology providers and prospective applicants.

This assumes significance in the wake of rising import bill for critical chemical feedstocks, growing policy emphasis on energy security and Make in India plan along with the recent global supply-chain disruptions that have highlighted the need for domestic alternatives.

The conference was chaired by Additional Secretary in the coal ministry Sanoj Kumar Jha.


"The conference witnessed enthusiastic participation from public sector enterprises, private companies, technology providers, and prospective applicants, reflecting strong industry interest in the government's flagship initiative to promote cleaner and value-added utilisation of domestic coal," the coal ministry said in a statement.

During the session, the ministry provided clarifications on the Scheme Guidelines and the Request for Proposal (RFP), covering eligibility criteria, evaluation methodology, financial incentives, and the application process, while comprehensively addressing queries raised by the participants.

Approved by the Union Cabinet in May, the scheme aims to accelerate the development of surface coal, lignite gasification projects and support the production of high-value downstream products such as synthetic natural gas, ammonia, methanol, DRI, synthetic fuels, and chemicals.

Coal gasification converts coal into synthesis gas (syngas), and steelmakers use this as a cleaner fuel and chemical reducing agent.

It replaces imported natural gas and is injected into blast furnaces to reduce reliance on expensive, imported coking coal.

Former steel secretary Nagendra Nath Sinha said the scheme is a significant step towards strengthening the foundations of 'Atmanirbhar Bharat' in the steel sector.

The reform is equally significant from the perspective of decarbonisation and technological transformation. It creates an enabling ecosystem for advanced technologies such as coal gasification and facilitates easier integration of Carbon Capture, Utilisation and Storage (CCUS), paving the way for production of cost-competitive green steel. This will strengthen India's preparedness for emerging global carbon regulations, including the European Union's Carbon Border Adjustment Mechanism (EU CBAM), while enhancing the export competitiveness of Indian steel.

"Most importantly, the announcement has generated renewed confidence across the steel industry. It sends a clear policy signal that India is committed to simultaneously advancing raw material security, industrial competitiveness and sustainability. Such forward-looking measures will encourage fresh investments, accelerate technology adoption and capacity expansion, and reinforce India's position as a globally competitive steel manufacturing powerhouse," he said.

As India advances towards its target of 300 million tonnes of steelmaking capacity by 2030, securing critical raw materials will be indispensable. With nearly 90 per cent of the country's coking coal requirement met through imports, the steel industry remains exposed to global supply disruptions and price volatility.