Government Commits to Boosting Coal Gasification for Import Substitution

The government is dedicated to advancing coal gasification projects, which can convert coal into valuable products and reduce import reliance. This process, turning coal into 'syngas', could conserve foreign exchange by substituting oil and gas imports. Incentives include revenue share rebates and long-term coal allotments.

The government on Friday announced its unwavering commitment to advancing coal gasification projects, highlighting their vast potential for converting coal into valuable products.

Coal gasification is a thermo-chemical process that transforms coal into synthesis gas or 'syngas', primarily made up of carbon monoxide and hydrogen.

Currently, India imports around 83 per cent of its oil, over 90 per cent of its methanol, and 13-15 per cent of its ammonia. Coal gasification presents an opportunity to diminish import dependence and conserve foreign exchange, benefiting the oil, gas, fertilizer, and petrochemical sectors.

According to the coal ministry, these gasification projects will foster partial import substitution for oil and gas and ensure cleaner utilization of India's vast coal reserves.

To bolster coal gasification, the government is providing a 50 per cent revenue share rebate in commercial auction policies for gasification coal, has set up a new sub-sector for syngas production, and offers long-term coal allotments to gasification plants.

Launched in 2020, the Coal Gasification Mission aims to gasify 100 million tonnes of coal by 2030.

(With inputs from agencies.)