Ministry Of Coal Opens Applications For ₹37,500 Crore Coal Gasification Scheme

The Ministry of Coal has opened the application window for its ₹37,500 crore scheme to promote surface coal and lignite gasification projects, with proposals being invited from eligible entities following the publication of a request for proposal (RFP) on 07 July 2026.

The scheme was approved by the government on 13 May 2026 and scheme guidelines were issued on 25 June. Applications must be submitted by 07 September, with bids opening the following day on 08 September.

The selected applicant will be announced on 21 October. The Letter of Award will be issued on 4 November, and the project agreement will be signed on 4 January 2027.

A pre-application conference will be held on 20 July 2026 to clarify scheme provisions and the application process. Queries from prospective applicants must be submitted by 25 July, with the ministry responding by 03 August.

What The Scheme Is Targeting

Coal gasification converts dry fuel into syngas, which can be used as an alternative fuel or as a feedstock for downstream chemical production. The scheme is designed to support production of:

• Synthetic natural gas

• Urea and ammonium nitrate

• Methanol and dimethyl ether

• Hydrogen

• Other value-added chemicals

The broader objective is to reduce India's dependence on imported fertilisers, chemicals and energy products by converting domestic coal and lignite resources into higher-value outputs rather than burning them for power generation alone.

The Timeline At A Glance

• Request for Proposal issued: 07 July 2026

• Pre-application conference: 20 July 2026

• Last date for queries: 25 July 2026

• Ministry responds to queries: 03 August 2026

• Application deadline: 07 September 2026

• Bid opening: 08 September 2026

• Selected applicant declared: 21 October 2026

• Letter of Award: 04 November 2026

• Project agreement signing: 04 January 2027

Industry View

The scheme has been described by industry participants as a landmark reform for India's coal sector. Former coal secretary and Gasification Technologies and Research Council of India Chairman Amrit Lal Meena said the programme will unlock economic value from domestic coal, improve resource efficiency and spur industrialisation through downstream chemical industries.

The scheme is also expected to strengthen investor confidence and position India as a hub for coal-to-chemicals manufacturing.

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