Coal Gasification Scheme: Adani Enterprises, NTPC Among Applicants for Rs 37,500-Crore Programme

The Centre's Rs 37,500-crore coal gasification scheme has received seven applications in its first round, including proposals from Adani Enterprises, NTPC, Talcher Fertilisers, Gallantt Ispat and Shyam Sel & Power, the Ministry of Coal said on Tuesday.

Adani Enterprises has submitted three separate applications, all for urea projects. NTPC has applied for a synthetic natural gas project, while Gallantt Ispat has proposed a project for producing direct reduced iron (DRI) and syngas. Shyam Sel & Power has applied for syngas production and Talcher Fertilisers has submitted a proposal for a urea project.

The seven applications will now undergo detailed evaluation in line with the scheme guidelines and the Request for Proposal (RFP), the ministry said. The first application window closed on September 7, while the second round opened on September 8. Further application windows will open at two-month intervals.

The first round comes as the government looks to build a domestic coal gasification industry and use locally available coal and lignite to produce higher-value products. Coal gasification converts coal into syngas, which can then be used to manufacture products including urea, methanol, ammonia, hydrogen and synthetic natural gas.

A senior Ministry of Coal official told Moneycontrol that reports suggesting there were no takers for the scheme were premature, pointing to the seven applications received in the first round. The official said several prospective applicants were already at advanced stages of project preparation and could submit proposals in subsequent rounds.

Rs 37,500-crore scheme targets import substitution

The Union Cabinet approved the scheme on May 13 with a total financial outlay of Rs 37,500 crore. The government is targeting 75 million tonnes of coal gasification capacity under the programme as part of its broader goal of reaching 100 million tonnes by 2030.

The scheme is expected to catalyse investments of Rs 2.5 lakh crore to Rs 3 lakh crore and provides financial incentives of up to 20% of the eligible cost of plant and machinery, subject to prescribed limits.

The government is also looking to reduce India's dependence on imported products such as LNG, urea, ammonia and methanol, which together accounted for imports worth around Rs 2.77 lakh crore in FY25, according to the Ministry of Coal.

The latest programme builds on the National Coal Gasification Mission and the Rs 8,500-crore financial incentive scheme approved in January 2024. Eight gasification projects are already under implementation under the earlier programme, the ministry said.

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