New Delhi: Coal India Ltd (CIL) has issued Letters of Intent (LoIs) for a total quantity of 1.45 million tonnes (MT) of coal to consumers procuring fuel through the Non-Regulated Sector (NRS) Linkage Auction Scheme, specifically under the sub-sector “Production of Syngas – leading to coal gasification,” the government informed Parliament on Tuesday.
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The disclosure was made by Coal Minister G Kishan Reddy in a written reply to a question raised in Lok Sabha on the status of coal gasification and coal-to-chemical projects in the country.
The minister said the government has launched the National Coal Gasification Mission to promote coal and lignite gasification projects for cleaner utilisation of coal and to substitute imports of chemicals, petrochemicals and fertilisers. At present, one operational coal gasification project is running at Angul in Odisha, set up by Jindal Steel Limited.
Coal India is implementing four coal gasification projects in partnership with other Central Public Sector Undertakings (CPSUs). These include the Talcher coal-based ammonia-urea complex in Odisha, expected to be commissioned in FY 2027-28, and three other projects — at Lakhanpur in Odisha, Bardhaman in West Bengal, and Chandrapur in Maharashtra — scheduled for commissioning in 2029-30.
In addition, four coal gasification projects are being set up by private entities, largely in Odisha and Maharashtra, covering applications such as direct reduced iron, ammonium nitrate, hydrogen and ethanol, with commissioning timelines extending to 2029-30.
The minister informed the House that Coal India has also allocated provisional coal linkages of 3.9 MT to its joint venture companies. The coal gasification plants of private entities will meet their coal requirement from allocated captive mines as well as linkages from CIL mines.
To accelerate adoption, the Ministry of Coal approved a financial incentive scheme in January 2024 with an outlay of Rs 8,500 crore, covering PSU, private sector and demonstration-scale projects. According to the government, coal gasification projects supported under this scheme have the potential to substitute imports worth around Rs 16,000 crore of chemicals such as ammonium nitrate, natural gas and ethanol.
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The issuance of LoIs under the NRS auction scheme comes amid a broader policy push to scale up coal gasification in India. The government has amended coal allocation norms to introduce a separate, dedicated auction window for coal gasification projects, aimed at improving fuel security and project viability. Finance Minister Nirmala Sitharaman has also stated that India plans to set up coal gasification and liquefaction capacity of 100 million tonnes by 2030 as part of efforts to reduce import dependence and add value to domestic coal.