The Union Cabinet has approved a scheme with a financial outlay of Rs 375 billion for promotion of surface coal and lignite gasification projects selected through a competitive bidding process.
Under the scheme, around 75 million tonnes of coal and lignite are targeted to be gasified, contributing towards India’s overall goal of 100 million tonnes of coal gasification by 2030. The scheme provides financial incentives of up to 20 per cent of plant and machinery cost for eligible projects, with disbursement linked to project milestones in four equal instalments. The scheme caps incentives for a single project at Rs 50 billion, for a single product category (excluding synthetic natural gas and urea) at Rs 90 billion, and for a single entity group across all projects at Rs 120 billion. The government has also extended coal linkage tenure to 30 years for coal gasification projects.