It is commendable that the government has committed a sizeable Rs 37,500 crore from the Budget to promote surface coal gasification projects despite mounting fiscal pressures. Gasified coal has the potential to emerge as an important and viable source of cleaner energy for India. Its uses range from fertiliser feedstock to a substitute for natural gas, helping reduce the country’s import dependence.
While coal remains a fossil fuel, India possesses abundant and extractable reserves, unlike crude oil and natural gas, where proven domestic resources remain inadequate. New oil and gas discoveries are increasingly scarce and commercially underwhelming, dampening investment enthusiasm. In contrast, India holds nearly 400 billion tonnes of coal reserves — the world’s fifth largest, accounting for almost 10% of global reserves. The country also has another 47 billion tonnes of lignite deposits, which are suitable for syngas production through thermo-chemical conversion.
An added attraction for investors is the versatility of syngas, a mixture of carbon monoxide, hydrogen, and carbon dioxide that supports multiple industrial applications. Producing these critical inputs from domestically available minerals presents a major opportunity for India, particularly given its vulnerabilities in external energy sourcing that have become starkly evident amid today’s complex geopolitical environment.
India occupies a uniquely delicate position among major economies, balancing an ambitious development agenda with equally demanding climate commitments. Although the country is the world’s third-largest greenhouse gas emitter in aggregate terms, its per capita emissions remain low by global standards — at 2.19 tonnes, India ranks 121st globally. Even so, it has largely played a constructive and responsible role in adhering to the goals of the Paris climate accord.
Syngas Solution
Several policy initiatives are already underway to reduce the emission intensity of economic activity, though their scale may still fall short of the challenge ahead. In this context, incentives for syngas projects appear pragmatic and rational, helping India pursue self-reliance while meeting rapidly rising power demand and industrial input requirements over the medium to long term.
Gasified coal can potentially support both electricity generation and industrial production while significantly curbing the release of hazardous emissions. Supported by reforms in recent years, India’s coal output has accelerated, crossing 1 billion tonnes annually in each of the last two fiscal years. More than a fifth of production now comes from captive and commercial mines, a share that is expected to rise further as private investment gathers pace.
Beyond the Surface
India had initiated early efforts to develop indigenous syngas capabilities, with state-run entities such as Coal India, ONGC, GAIL, and the Fertiliser Corporation of India taking the lead. However, these initiatives remain confined largely to surface gasification. Under the new scheme, which the government expects will catalyse investments of Rs 2.5-3 lakh crore, gasification of only 75 million tonnes of coal has been envisaged.
The ambition now needs to expand towards underground gasification. Much of India’s coal reserves are deep-seated, dispersed, and located beneath forested regions, making conventional mining difficult. The focus should therefore shift towards forging partnerships with other coal-rich nations to acquire technologies that enable in situ conversion of non-mineable coal and lignite into combustible gas. The Asia-Pacific region is already the world’s largest syngas market, led by China’s large-scale syngas-to-liquid facilities. India should also seek collaborations in emerging technologies such as syngas-to-sustainable aviation fuel, zero-carbon hydrogen production, and renewable syngas derived from biomass and sewage sludge.
Coal gasification incentives are well-timed, scaling up will require multiple foreign tech alliances
It is commendable that the government has committed a sizeable Rs 37,500 crore from the Budget to promote surface coal gasification projects despite mounting fiscal pressures. Gasified coal has the potential to emerge as an important and viable source of cleaner energy for India. Its uses range from fertiliser feedstock to a substitute for natural gas, helping reduce the country’s import dependence.
While coal remains a fossil fuel, India possesses abundant and extractable reserves, unlike crude oil and natural gas, where proven domestic resources remain inadequate. New oil and gas discoveries are increasingly scarce and commercially underwhelming, dampening investment enthusiasm. In contrast, India holds nearly 400 billion tonnes of coal reserves — the world’s fifth largest, accounting for almost 10% of global reserves. The country also has another 47 billion tonnes of lignite deposits, which are suitable for syngas production through thermo-chemical conversion.
An added attraction for investors is the versatility of syngas, a mixture of carbon monoxide, hydrogen, and carbon dioxide that supports multiple industrial applications. Producing these critical inputs from domestically available minerals presents a major opportunity for India, particularly given its vulnerabilities in external energy sourcing that have become starkly evident amid today’s complex geopolitical environment.
India occupies a uniquely delicate position among major economies, balancing an ambitious development agenda with equally demanding climate commitments. Although the country is the world’s third-largest greenhouse gas emitter in aggregate terms, its per capita emissions remain low by global standards — at 2.19 tonnes, India ranks 121st globally. Even so, it has largely played a constructive and responsible role in adhering to the goals of the Paris climate accord.
Several policy initiatives are already underway to reduce the emission intensity of economic activity, though their scale may still fall short of the challenge ahead. In this context, incentives for syngas projects appear pragmatic and rational, helping India pursue self-reliance while meeting rapidly rising power demand and industrial input requirements over the medium to long term. Gasified coal can potentially support both electricity generation and industrial production while significantly curbing the release of hazardous emissions. Supported by reforms in recent years, India’s coal output has accelerated, crossing 1 billion tonnes annually in each of the last two fiscal years. More than a fifth of production now comes from captive and commercial mines, a share that is expected to rise further as private investment gathers pace.
India had initiated early efforts to develop indigenous syngas capabilities, with state-run entities such as Coal India, ONGC, GAIL, and the Fertiliser Corporation of India taking the lead. However, these initiatives remain confined largely to surface gasification. Under the new scheme, which the government expects will catalyse investments of Rs 2.5-3 lakh crore, gasification of only 75 million tonnes of coal has been envisaged.
The ambition now needs to expand towards underground gasification. Much of India’s coal reserves are deep-seated, dispersed, and located beneath forested regions, making conventional mining difficult. The focus should therefore shift towards forging partnerships with other coal-rich nations to acquire technologies that enable in situ conversion of non-mineable coal and lignite into combustible gas. The Asia-Pacific region is already the world’s largest syngas market, led by China’s large-scale syngas-to-liquid facilities. India should also seek collaborations in emerging technologies such as syngas-to-sustainable aviation fuel, zero-carbon hydrogen production, and renewable syngas derived from biomass and sewage sludge.