Gurdeep Singh, Chairman and Managing Director, NTPC Limited
The global coal gasification market is undergoing a strategic transformation, driven by the twin imperatives of energy security and the low carbon transition. Valued at $13.87 billion in 2024, it is projected to reach $22.44 billion by 2032, growing at a CAGR of 6.25 per cent, according to Allied Market Research. Coal gasification converts coal into synthetic gas (syngas), which is a mixture of hydrogen, carbon monoxide and carbon dioxide, alongside contaminant gases (NH3, H2S, COS, HX, etc.), through controlled partial oxidation. This syngas can be reformed to produce various hydrocarbons, such as synthetic natural gas (SNG), methanol, ethanol, urea and acetic acid, and blue hydrogen, when integrated with carbon capture, utilisation and storage (CCUS). The Asia-Pacific region dominates the coal gasification market with an over 70 per cent share, led by China’s industrial-scale deployment of 272 plants, gasifying more than 100 million tonnes of coal annually.
South Africa’s Sasol and the US Great Plains Synfuels Plant have demonstrated the commercial viability of large-scale coal gasification to liquid hydrocarbon, while Japan and Indonesia are adapting the technology for hydrogen and SNG production respectively. Rising global natural gas prices are also influencing market dynamics. The broader gasification market, which also includes biomass and waste feedstock, could grow to $544 billion by 2032, propelled by CCUS adoption and integrated chemical production.
India’s energy landscape presents a significant opportunity for coal gasification. As of August 2025, the country’s installed capacity has reached 496 GW, including 242 GW from renewable sources, and it is on track to achieve 500 GW of non-fossil capacity by 2030.
India’s electricity grid is witnessing increasing pressure due to rising peak power demand, which is projected to reach 273 GW in 2025-26 and further escalate to about 380 GW by 2031-32. However, the average power demand remains around 75-80 per cent of the peak, resulting in a significant variation between base and peak load periods. Due to the increasing penetration of renewables and the absence of adequate storage capacity, the downward and upward margin requirements during solar and non-solar hours have become grossly inadequate. Moreover, in recent times, the instantaneous power generation met from non-fossil fuel sources has become as high as 40 per cent. To meet such varying power loads, flexible generation sources that are capable of rapid ramp-up are essential for maintaining grid safety and reliability. Incidentally, India has an installed capacity of 20 GW of gas-based power plants. These plants are designed for quick-start operation and can provide peaking power support. But utilisation has remained low due to limited availability and the high cost of natural gas.
Imported LNG prices have been highly volatile, ranging from $6 to $8 per mmBtu in early 2021 to peaks of $70 per mmBtu in 2022, and stabilising at $10-$15 per mmBtu in 2024. Such volatility has rendered gas-based generation financially unviable and unpredictable, despite its technical suitability for peak load operation.
With 378 billion tonnes (bt) of total coal reserves, 199 bt of viable coal reserves and 89 per cent non-coking coal, coal gasification offers a strategic pathway to reduce dependency on imported oil, gas and petrochemicals for supporting domestic industrial growth. The National Coal Gasification Mission aims to gasify 100 mt of coal by 2030, backed by Rs 8,500 crore of financial incentives and Rs 4 lakh crore of potential investment opportunities. Coal gasification-based synthetic natural gas offers a compelling domestic alternative. With government support, production costs can be reduced to $12 per mmBtu, enabling peaking power generation at below Rs 10 per kWh, competitive with spot market prices during high demand periods.
Two deployment models are viable: in situ generation at gasification sites using gas turbines or engines, and grid delivery via an integrated gas pipeline to existing gas-based plants. Beyond electricity, CG-SNG has the potential to reduce LNG import dependence, stabilise domestic gas pricing, provide a reliable feedstock for fertiliser production, avoid overreliance on lithium-intensive battery storage, and generate skilled employment opportunities across the value chain. If adopted, coal gasification has significant potential to reduce import dependency on LNG and at the same time, help meet peaking load requirements by using gas engines.