Adani Enterprises Ltd has distinguished itself as the leading contender in the initial phase of the government’s flagship initiative, which has an allocation of Rs 37,500 crore aimed at fostering projects related to the gasification of surface coal and lignite. The company has submitted applications for three out of the seven projects currently under consideration.
Other participants from the private sector include Gallantt Ispat Ltd and Shyam Sel & Power Ltd, each of which has sought financial backing for one individual project. Additionally, state-owned entities NTPC Ltd and Talcher Fertilisers Ltd—formed through a collaboration among four government-run firms, namely GAIL, Coal India Ltd (CIL), Rashtriya Chemicals and Fertilizers Ltd (RCF), and Fertilizer Corporation of India Ltd (FCIL)—have also lodged applications for one project each.
The Ministry of Coal has confirmed that all three projects proposed by Adani Enterprises are focused on establishing coal-to-urea gasification facilities. Similarly, Talcher Fertilisers has put forth a proposal for a coal-to-urea initiative, while Gallantt Ispat’s project is intended to generate direct reduced iron (DRI) along with syngas. NTPC and Shyam Sel & Power are working on projects aimed at producing synthetic natural gas (SNG) and syngas, respectively.
The applications submitted during this first round will be subjected to a thorough assessment in accordance with the guidelines of the scheme and the Request for Proposal (RFP), as indicated by the ministry. Furthermore, the government has initiated the second round of applications starting from September 8.
The ministry noted, “Following the RFP, application windows will remain open at two-month intervals, thus ensuring ongoing opportunities for eligible applicants. Many potential applicants are currently in advanced stages of project development and are anticipated to submit their proposals in future rounds.”
This scheme received approval from the Union Cabinet in May, with the RFP subsequently issued in July.
The Rs 37,500 crore initiative aims to support the establishment of 25 projects focused on syngas production and related products, with a target of gasifying approximately 75 million tonnes (mt) of coal and lignite.
This new scheme complements an existing viability gap funding initiative valued at Rs 8,500 crore, which was approved in 2024 to incentivize coal and lignite gasification projects. According to government sources, eight gasification projects are already in progress under the previous scheme.
While unveiling the new scheme in May, the government emphasized that the selection of projects will occur through a fair and competitive bidding process. Financial incentives will be available, covering up to 20% of plant and machinery costs, disbursed in four equal payments.
The cap for financial assistance for any individual project is set at Rs 5,000 crore, while for any specific product (excluding Synthetic Natural Gas and Urea), the limit is Rs 9,000 crore. Additionally, any single group of entities can receive up to Rs 12,000 crore across all projects submitted.
Coal gasification is a thermochemical process that converts coal into synthesis gas (syngas), composed of various fuel-rich gases such as carbon monoxide (CO), carbon dioxide (CO2), hydrogen (H2), and methane (CH4). This syngas can be utilized for producing Synthetic Natural Gas (SNG), generating electricity, and creating energy fuels like methanol and ethanol, as well as ammonia for fertilizers and other chemicals.
The gasification process entails oxidizing coal at elevated temperatures and pressures to yield syngas. There are primarily two forms of gasification: surface gasification and underground coal gasification (UCG), with the current scheme concentrating on surface gasification initiatives.
The government’s drive to promote coal gasification primarily seeks to bolster energy security and lessen reliance on imports of essential products such as LNG, urea, ammonia, and methanol. This objective has gained urgency amidst increasing apprehensions regarding potential disruptions in global energy supplies due to the ongoing crisis in West Asia.
It is important to note that India has limited crude oil and natural gas reserves and relies heavily on imports, rendering it susceptible to fluctuations in global prices and supply chain interruptions. Conversely, the country possesses the fourth-largest coal reserves in the world, totaling approximately 389 billion tonnes (bt), with 212 bt being classified as proven reserves, indicating they can be economically extracted with a reasonable degree of certainty based on detailed preliminary feasibility studies.
