The government is set to auction coal blocks that have the potential for coal gasification, according to a senior official on Friday. This initiative is particularly significant as it aligns with the government’s goal to gasify 100 million tonnes of coal over the next five years.
“Very soon, we would auction the coal blocks that have potential for coal gasification,” stated Coal Additional Secretary Rupinder Brar during a roadshow focused on coal gasification, jointly organized by the coal ministry and the Federation of Indian Chambers of Commerce and Industry (Ficci).
Coal gasification is a process that transforms coal into synthetic gas (syngas)—a mixture of gases such as carbon monoxide and hydrogen—by reacting coal with oxygen and steam at high temperatures. This synthetic gas can subsequently be utilized to create various downstream products, including fertilizers, methanol, and synthetic natural gas, offering a cleaner and more diversified application of coal compared to traditional combustion.
These coal blocks will be auctioned under the commercial coal mining framework, according to a ministry official. Brar also indicated that the government plans to issue a request for proposals to allocate the remaining ₹2,500 crore under the financial incentive scheme for coal gasification projects. Approximately ₹6,000 crore has already been allocated under this scheme.
Last year, the government approved an ₹8,500 crore financial incentive scheme aimed at promoting coal and lignite gasification projects by both public-sector undertakings and private firms. The initiative seeks to convert coal into valuable products, such as synthetic natural gas and various chemicals, effectively reducing reliance on imports.
The scheme is categorized into three segments, with Letters of Award (LOAs) issued to selected applicants, including joint ventures focused on coal-to-synthetic natural gas (SNG) and coal-to-ammonium nitrate projects.
Published on September 26, 2025.
