Coal gasification projects valued at more than ₹65,000 crore are currently under execution across India, marking a decisive shift in the government's strategy to convert coal into chemicals, fuels, and industrial feedstock — from policy blueprint to on-ground reality, according to a senior official. The scale of activity signals that India's coal gasification ambitions are gaining commercial traction ahead of a 2030 target to gasify 100 million tonnes of coal.

Key Developments

Coal Secretary Vikram Dev Dutt, speaking at a recently organised industry event, said the sector has witnessed an encouraging response from industry. He noted that eight projects are already under implementation under the ₹8,500-crore incentive scheme approved in January 2024. These projects have collectively received incentive support of ₹6,233 crore and span a wide range of output categories, including coal-to-synthetic natural gas (SNG), ethanol, hydrogen, acetic acid, ammonium nitrate, DRI-based steel, and sustainable aviation fuel.

Larger Incentive Programme in the Pipeline

The government is also finalising the request for proposal (RFP) under a larger ₹37,500-crore incentive programme, after placing a draft document in the public domain for stakeholder consultations. Together, the two schemes represent a substantial public commitment to de-risking private investment in what has historically been a capital-intensive and technically complex sector.

Maharashtra Emerges as a Hub

Union Coal Minister G. Kishan Reddy said Maharashtra has emerged as a key centre for coal gasification, with five projects already under development in the state. He attributed this to coal availability through Western Coalfields Ltd, along with strong industrial infrastructure and enabling policy support. Maharashtra Chief Minister Devendra Fadnavis said the state is committed to building an investment-friendly ecosystem for the sector and highlighted Mumbai's historical association with coal gasification technology.

Investment and Strategic Goals

The government expects the coal gasification initiative to catalyse total investments of approximately ₹2.5–3 lakh crore across nearly 25 projects. The programme is a core component of India's broader strategy to reduce import dependence in fertilisers, chemicals, and fuels, while simultaneously strengthening domestic industrial capacity and energy security. This comes amid sustained pressure on India's import bill from petrochemical and fertiliser feedstock, areas where domestic coal-based alternatives could provide structural relief.

What Comes Next

With the RFP for the larger incentive window nearing finalisation, industry bodies are expected to submit bids that could significantly expand the project pipeline beyond the current eight. Analysts note that the 2030 gasification target of 100 million tonnes will require a sharp acceleration in project approvals and commissioning timelines. The coming months will test whether the policy momentum translates into bankable, operational capacity at scale.