Coal ministry plan a scheme for coal gasification projects worth 6,000 cr

The Coal Ministry revealed that it is preparing a comprehensive plan to support coal gasification projects for both public and private sector Public Sector Undertakings (PSUs) with an outlay of Rs 6,000 crores. To lessen India's dependency on imports of natural gas, methanol, ammonia, and other critical goods, it has set a target to achieve coal gasification of 100 million tonnes (MT) of coal by fiscal year 2030.

"To meet domestic demand, India now imports roughly 50% of its natural gas, 90% of its total methanol consumption, and 13-15% of its entire ammonia use. By lowering imports by 2030, the deployment of coal gasification is anticipated to significantly contribute to the development of the country. 

The initiative will be divided into three parts to give qualifying businesses both PSUs and private entities budgetary support. The second portion will deal with both public and private sector initiatives, while the first segment will be for government-owned organisations. The third sector includes businesses using homegrown technology as well as modest-sized product-based gasification facilities.

The ministry is also thinking on a promotion that would reimburse the Goods and Services Tax (GST) compensating cess on coal used in gasification projects under specific conditions. The government wants to counterbalance the incapacity of firms to claim input tax credit for the same with this incentive.

A few significant bilateral agreements were signed in October 2022 as part of Surface Coal Gasification (SCG) projects. These include an MoU between IOCL, GAIL, and CIL as well as an MoU between BHEL and Coal India Limited.