Coal Gasification Promotion Scheme

• 16 May 2026

On 13th May 2026, the Union Cabinet approved a ₹37,500 crore scheme to promote surface coal and lignite gasification projects in India for improving energy security, reducing import dependence, and achieving the target of gasifying 100 million tonnes of coal by 2030.

Key Points

• Coal Gasification: The process converts coal or lignite into synthesis gas (syngas), used for producing fuels and chemicals.
• Target: The scheme targets gasification of around 75 million tonnes of coal/lignite.
• Financial Incentive: Companies can receive incentives up to 20% of plant and machinery costs, with a maximum cap of ₹5,000 crore per project.
• Investment Potential: The scheme is expected to mobilise investments worth ₹2.5-3 lakh crore.
• Employment Generation: Around 50,000 direct and indirect jobs are expected to be created in coal-bearing regions.
• Policy Reform: Coal linkage tenure under the Non-Regulated Sector framework has been extended up to 30 years for coal gasification projects.