Govt considering Rs 6,000 crore coal gasification scheme: Coal Ministry

Govt considering Rs 6,000 crore coal gasification scheme: Coal Ministry

The government is considering a Rs 6,000 crore scheme to promote coal gasification in India, an official statement said on Friday.

The adoption of gasification technology in India will revolutionise the coal sector, reducing reliance on imports of natural gas, methanol, ammonia and other essential product, the Ministry of Coal said.

"The ministry is considering a comprehensive scheme to promote coal/lignite gasification projects for public and the private sectors with an outlay of Rs 6,000 crore," it added.

The selection of entities for the coal/lignite gasification scheme will be carried out through a competitive and transparent bidding process, as per the statement.

The plan has two segments. In the first segment, the government will provide support to PSUs, while the second segment includes the private sector and PSUs both, 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.

The third segment involves the provision of budgetary support for demonstration projects, utilising indigenous technology and/or small-scale product-based gasification plants, the statement said.

The ministry further said it is also "considering an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilised 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 the input tax credit for the same, it noted. The ministry has set a target to achieve coal gasification of 100 million tonne (MT) coal by FY 2030.

"This initiative holds the potential to alleviate the environmental burden by reducing carbon emissions and fostering sustainable practices, contributing to the country's global commitments towards a greener future," the ministry said.