New Delhi: A private company, New Era Cleantech, which has bagged financial incentives from the government for its coal gasification project, has approached the government seeking policy alignment between coal-based urea projects and conventional gas-based plants, including the creation of offtake assurance mechanisms and earmarked capacities for the coal-gasification route.
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The appeal comes as policymakers push to diversify feedstock sources for urea production, reduce dependence on imported natural gas, and tap into India’s coal reserves using gasification technologies.
In a letter addressed to the Ministry of Coal, New Era Cleantech Solution Pvt Ltd, which is developing a 5 MMTPA coal gasification project in Chandrapur, Maharashtra, said coal-based urea projects should be treated at par with gas-based plants, including suitable offtake assurance mechanisms and capacity allocation.
The company highlighted that coal-based plants involve significantly higher capital costs compared to gas-based units, with a large share of the expenditure linked to GST and customs duties on equipment.
It has sought fiscal incentives and policy support to improve project viability and attract private sector participation.
New Era Cleantech Solution Pvt Ltd is planning to establish a 1.27 MMTPA coal gasification-based urea plant at Bhadravati in Chandrapur district of Maharashtra.
The company had last month initiated development of what it described as India’s first greenfield integrated coal gasification and carbon capture complex at Bhadrawati in Chandrapur, with an investment of Rs 20,000 crore.
According to the company’s letter, imported LNG currently serves as the primary feedstock for domestic urea production. The fertiliser sector accounts for nearly 50 per cent of total imported natural gas consumption and about 28 per cent of India’s overall gas usage.
India remains among the world’s largest consumers of urea. Annual demand stands at around 40 MMTPA, while domestic production is approximately 29 MMTPA, leaving a shortfall of nearly 11 MMTPA that was met through imports last year.
The company said the persistent gap between demand and domestic supply underscores the need to build additional urea capacity within the country.
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The letter stated that the demand-supply imbalance is fundamentally linked to feedstock security challenges.
“India’s reliance on imported natural gas for urea production exposes it to global disruptions, price volatility, and geopolitical risks. Transitioning to domestic coal-based feedstock ensures a reliable supply, reduces import dependence, stabilises costs, and strengthens both fertiliser security and agricultural resilience,” it said.
