Cabinet Approves Coal Gasification Package

CABINET APPROVES COAL GASIFICATION PACKAGE

Why in the News?

  • Cabinet Approval: The Union Cabinet approved a ₹37,500-crore package to promote coal gasification projects in India.
  • Import Reduction: The scheme aims to reduce dependence on imports of LNG, urea, methanol, ammonia, and coking coal.
  • 2030 Target: India targets gasification of 100 million tonnes of coal by 2030, with 75 million tonnes planned under this package.

Cabinet Approves Coal Gasification Package

Key features of the scheme

  • Financial Incentive: Projects will receive incentives up to 20% of plant and machinery cost.
  • Project Cap: Financial assistance is capped at ₹5,000 crore per project and ₹9,000 crore for SNG and urea projects.
  • Entity Limit: A single entity can avail a maximum incentive of ₹12,000 crore across categories.
  • Long-term Linkage: Coal linkage tenure has been extended up to 30 years for investment certainty.
  • Downstream Products: Syngas produced through gasification can generate urea, ammonia, methanol, and synthetic natural gas.

Coal gasification: Important facts

  • Conversion Process: Coal Gasification converts coal into synthetic gas (syngas) using controlled oxygen and steam.
  • Syngas Composition: Syngas mainly contains carbon monoxide, hydrogen, and methane.
  • Industrial Utility: The process supports production of fertilisers, chemicals, fuels, and power generation inputs.
  • Cleaner Alternative: Coal gasification is considered relatively cleaner than direct coal combustion technologies.
  • Energy Security: It helps utilise India’s large domestic coal reserves while reducing import dependence.

Underground Coal Gasification

●      Underground Coal Gasification is an in-situ process converting coal into gas without extracting it physically.

●      The process involves injecting oxygen and steam into underground coal seams to generate combustible gases.

●      It enables utilisation of deep or uneconomical coal reserves unsuitable for conventional mining.

●      Major products include hydrogen, methane, carbon monoxide, and synthetic fuels.

●      Challenges include groundwater contamination, carbon emissions, and technological complexity.