New Delhi, May 13 (IANS). The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the scheme to promote coal/lignite gasification projects. Its financial outlay was fixed at Rs 37,500 crore.
According to the official statement, the scheme is expected to generate about 50,000 (direct and indirect) jobs in 25 projects in coal producing areas.
Under the scheme, the Government has extended the period of coal linkage in the sub-sector “Production of synthetic gas leading to coal gasification” to 30 years under the Non-Regulated Sector (NRS) linkage auction framework, thereby ensuring long-term policy certainty for investment in coal gasification projects.
This scheme is an important step towards accelerating India’s coal/lignite gasification programme. This will help achieve the national target of gasification of 100 million tonnes of coal by 2030, strengthen energy security and reduce import dependence on key products like LNG (more than 50 per cent imported), urea (about 20 per cent imported), ammonia (100 per cent imported) and methanol (80-90 per cent imported).
The objective of the scheme is to encourage new coal/lignite gasification projects for production of synthetic gas and its products with a target to gasify approximately 7 crore tonnes of coal/lignite.
Other features of the scheme include financial incentives up to a maximum of 20 per cent of the cost of plant and machinery; Selection through a transparent and competitive bidding process with an evaluation framework benchmarking project cost, coal input and synthetic gas output; and involves distribution of incentives in four equal installments linked to the goals of the project.
“The maximum limit of financial incentives for a single project is Rs 5,000 crore; the maximum limit for a single product (except synthetic natural gas and urea) is Rs 9,000 crore; and the maximum limit for all projects for a single unit group is Rs 12,000 crore,” the official statement said.
The gasification of 75 million tonnes envisaged under the scheme is expected to generate annual income of Rs 6,300 crore from the use of coal/lignite, along with revenue from GST and other taxes.
India has one of the world’s largest coal reserves (401 billion tonnes) and lignite reserves (47 billion tonnes). The share of coal in the country’s energy mix is more than 55 percent.
According to the statement, India’s import bill for key substitutable products – LNG, urea, ammonium nitrate, ammonia, coking coal, methanol, DME and others – was about Rs 2.77 lakh crore in FY2025.
–IANS
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