The Ministry of Coal has established a bold objective to accomplish the gasification of 100 Million tonnes (MT) of coal by the fiscal year 2030, showcasing the government’s unwavering dedication to leveraging the potential of coal gasification. This groundbreaking proposal aims to drive the nation’s progress by capitalizing on natural resources, demonstrating financial and technical feasibility, and meeting the future energy needs of the country while stimulating other sectors.
Coal Gasification Revolutionizes the Coal Sector and Fuels Self-Sufficiency
The adoption of gasification technology in India has the potential to revolutionize the coal sector and reduce the country’s dependence on imported Natural Gas, Methanol, Ammonia, and other essential products. Currently, India relies significantly on imports for its Natural Gas, Methanol, and Ammonia consumption, hindering its self-sufficiency. By implementing coal gasification, India aims to achieve its vision of becoming self-reliant (Aatmanirbhar) and seize new employment opportunities. This initiative, aiming to reduce imports by 2030, not only has the power to alleviate the environmental burden but also to decrease carbon emissions and promote sustainable practices, aligning with global commitments for a greener future.
Comprehensive Scheme to Promote Coal/Lignite Gasification Projects
To accelerate the development of coal gasification projects, the Ministry is considering a comprehensive scheme with an outlay of Rs 6,000 crores. The initiative aims to promote and incentivize Coal/Lignite gasification projects, encompassing entities from both the Government Public Sector Undertakings (PSUs) and the Private Sector. The selection of entities for participation in the scheme will undergo a competitive and transparent bidding process. Budgetary support may be provided to eligible Government PSUs and the Private Sector, enabling them to undertake coal gasification projects. The scheme’s segments include support for Government PSUs, support for both the Private Sector and Government PSUs through tariff-based bidding, and support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants.
Incentives and Collaborative Efforts to Propel Surface Coal Gasification Projects
The Ministry is contemplating a potential incentive to provide reimbursement for the Goods and Services Tax (GST) compensation cess on coal used in gasification projects. This reimbursement would be applicable for a duration of 10 years following the commercial operational date (COD), contingent upon the extension of the GST compensation cess beyond FY27. The aim of this incentive is to alleviate the burden faced by entities that are unable to claim input tax credits.
Moreover, the Ministry underscores the significance of collaborative endeavors in advancing Surface Coal Gasification (SCG) projects across the coalfields managed by Coal India Limited (CIL). These endeavors involve the execution of strategic bilateral agreements aimed at fostering cooperation and leveraging expertise to drive the successful implementation of SCG projects.
The CIL Board has demonstrated its commitment by accepting pre-feasibility reports for various projects and subsequently granting approval for pre-project activities such as conducting topography surveys, soil investigations, and assessing water availability. Concurrently, tendering activities are in progress to facilitate the preparation of Detailed Feasibility Reports (DFRs). Additionally, the Ministry is actively pursuing the formation of Joint Ventures, with negotiations and finalization of agreements currently underway.
