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Coal Gasification Incentive Scheme

April 5, 2026

Recently, the Union Minister unveiled India’s roadmap to reduce dependency on imported petroleum, ammonia, and fertilizers, highlighting the ₹8,500 crore coal gasification incentive scheme.

About Coal Gasification Incentive Scheme

  • It was approved in 2024, for promotion of coal and lignite gasification projects for PSUs and private sector.
  • It aims to achieve 100 million tonnes of coal gasification by 2030, leveraging India’s abundant domestic coal reserves to promote sustainable industrial development.
  • It encourages participation from both public and private sector players to establish coal gasification projects across the country.
  • This initiative is a key component of India’s clean coal transition strategy.
  • Significance: It is expected to reduce environmental impact, enhance energy security, and drive economic growth through technological innovation and infrastructure development.
  • Category of Projects
    • Category I:PSU-led projects
    • Category II: Private and PSU projects
    • Category III: Demonstration and small-scale projects

What is Coal Gasification?

  • It is a thermo-chemical process that converts coal into syngas,
    • A synthetic gas composed mainly of carbon monoxide (CO), hydrogen (H₂), carbon dioxide (CO₂), methane (CH₄), and water vapour (H₂O).
  • Coal is reacted at high temperatures (1000–1400°C) with a controlled amount of oxygen and steam, producing syngas.
  • Process of Coal Gasification
    • Preparation: Coal is finely crushed to increase surface area.
    • Gasification reactor: The powdered coal is fed into a reactor with limited oxygen/air and steam.
    • Chemical reactions: Coal breaks down into syngas components due to partial oxidation.
    • Gas cleaning: Impurities like tar, sulfur, and dust are removed from raw syngas.

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