Centre poised to clear fresh incentive package to boost coal gasification projects
New Delhi: The Centre is likely to approve a fresh package of financial incentives this month to boost coal gasification projects with an estimated outlay of over Rs 35,000 crore, according to reliable sources.
The Cabinet proposal drawn up by the Ministry of Coal will scale up the earlier Rs 8,500 crore incentive programme approved in January 2024, which laid the foundation for coal gasification in India.
The proposed scheme, to be taken up by the Union Cabinet, is aimed at accelerating surface coal and lignite gasification projects across the country, promoting self-reliance by reducing import dependence on LNG, urea, ammonium nitrate, and ammonia. The scheme also aims to accelerate the progress to meet the ambitious national target of 100 million tonnes of coal gasification capacity by 2030.
The move to step up coal gasification comes in the backdrop of the supply chain disruptions in LNG, fertiliser and fertiliser feedstock due to the Middle East conflict.
The Ministry of Coal had, in February this year, announced that it had issued Letters of Award (LOAs) to applicants selected under Category II of the Rs 8,500 crore Coal Gasification Incentive Scheme aimed at reducing the country’s carbon emissions and strengthening energy security.
The awardees, under the scheme’s Category II, include private companies and public sector undertakings (PSUs) for the allocation of Rs 1,000 crore per project or 15 per cent of the capital expenditure (capex), whichever is lower.
Jindal Steel and Power Limited’s 2 MMTPA coal gasification project at Angul in Odisha has been awarded Rs 569.05 crore in financial incentives. The Rs 3,793 crore project will convert coal into Direct Reduced Iron (DRI) through coal gasification.
New Era Cleantech Solution Private Limited has been given a financial incentive of Rs 1,000 crore for its coal gasification project in Bhadravati, Chandrapur, Maharashtra. With a total project cost of Rs 6,976 crore, it aims to produce 0.33 MMTPA of ammonium nitrate and 0.1 MMTPA of hydrogen.
Similarly, Greta Energy Limited has been awarded Rs 414.01 crore of financial incentive for its coal gasification project at MIDC Bhadravati, Chandrapur, Maharashtra.
The coal gasification initiative is designed to accelerate technological advancements in coal gasification, significantly reduce carbon emissions, bolster energy security, and create a foundation for a more sustainable energy landscape.