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Coal
India's newest coal policy is not about burning it. A ₹37,500 crore scheme approved by the Cabinet in May 2026 pays companies to turn coal and lignite into syngas in reactors above ground, and the first round of applications closed in September 2026 with seven takers. It carries most of the National Coal Gasification Mission's target. The aim is import substitution, not lower carbon.
UPSC has asked
- Prelims 2025: what coal gasification technology can produce
How coal is gasified
Coal or lignite
Domestic coal or lignite as feedstock
Surface gasification
Partial oxidation with oxygen and steam at high temperature and pressure
Syngas
Mainly carbon monoxide and hydrogen
Products
Synthetic natural gas, methanol, ammonia and urea, hydrogen, direct reduced iron
- Coal gasification is thermochemical, not biochemical.
- The scheme supports surface gasification in a reactor above ground, not gasification within the seam.
The scheme
₹37,500 croreOutlay, approved by the Cabinet in May 2026
100 MT by 2030National Coal Gasification Mission target, in million tonnes, with 75 MT under this scheme
Why it matters
- It aims at import substitution of liquefied natural gas (LNG), urea, ammonia and methanol.
- Gasification is not low carbon, though its concentrated carbon dioxide is easier to capture than flue gas.
What has happened
8 Sep 2026
Round 1 of the gasification scheme closed with seven applications, the Ministry of Coal said, days after rejecting a claim that the scheme had found no takers.
- The applicants came from both the public and private sectors, the state owned power producer NTPC among them.
PIB, 8 Sep 2026: Round 1 of Scheme for Promotion of Surface Coal/Lignite Gasification Projects Concludes with Overwhelming Response Receiving Seven Applications from Leading Public and Private Sector Companies (opens in a new tab) · The Hindu, 5 Sep 2026: Coal Ministry rejects 'No Takers' claim, says TFL, NTPC apply for gasification scheme (opens in a new tab)