The Ministry of Coal has set a target to achieve coal gasification of 100 Million Tonne (MT) coal by FY 2030 reflecting the government’s commitment to harnessing the power of coal gasification. The Ministry is taking innovative measures to accelerate the development of coal gasification projects. In line with this objective, the Ministry is considering a comprehensive scheme to promote Coal/Lignite gasification projects for both Government Public Sector Undertakings (PSUs) and the Private Sector with an outlay of Rs 6,000 crores.
The selection of entities for coal/lignite gasification scheme will be carried out through a competitive and transparent bidding process. Furthermore, government is considering providing budgetary support to eligible Government PSUs, and Private sector enabling them to undertake coal gasification projects. In first segment, the government will provide support to Government PSUs. The second segment encompasses both the Private Sector and Government PSUs, with a budget allocation granted to each project. The selection of at least one project under this segment will be determined through a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog. Lastly, the third segment involves the provision of budgetary support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants.
The Ministry is also considering an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilized in gasification projects for a period of 10 years after the commercial operational date (COD), provided that the GST compensation cess is extended beyond FY27. This incentive aims to offset the inability of entities to claim input tax credit for the same.
