Hyderabad: The Union coal ministry is looking to invite Indian and foreign private investments worth Rs 4 lakh crore for coal gasification projects to reduce India’s import dependence and strengthen the country’s energy security, coal minister G Kishan Reddy said Monday.
The ministry is organising road shows for private investors and institutions in the second week of June at Hyderabad, Mumbai, and New Delhi, the minister said on the sidelines of a press conference in Hyderabad.
Coal gasification projects could help substitute imports of up to Rs 3 lakh crore in the next five years, and aid in meeting India’s target of gasifying 100 million tonnes (MT) of coal by 2030. To help India meet its target and make surface coal and lignite gasification a viable business alternative, the government has promised tax and import duty incentives worth Rs 46,500 crore.
Other policy sweets include a 50% rebate in the government’s revenue share for private players bidding in commercial coal block auctions, provided they use at least 10% of the block’s coal for gasification. The government has also approved investment by Coal India Limited (CIL) along with BHEL and GAIL to undertake coal gasification projects.
“The cabinet approved the coal gasification project in March and has agreed to assist the private sector in creating an industrial value chain. Private-sector participation will be merit-based, and we believe the incentives will provide immense long-term policy certainty for massive foreign direct investment (FDI) timelines,” Kishan Reddy said.
Gasification is a key transformative technology that converts coal into syngas, which can be further used to produce downstream products, cleaner fuels, chemicals, fertilisers, and hydrogen. India has vast coal reserves, nearly 400 billion tonnes, qualifying it as one of the largest coal holders in the world. To use these resources judiciously, the government has extended the coal linkage tenure up to 30 years under the ‘Production of Syngas leading to coal gasification’ sub-sector.
According to government data, nearly 85% of India’s crude oil requirements, 50% of natural gas, and more than 90% of methanol and fertilisers come from overseas, making India’s energy security a top priority.
To hasten the gasification initiative, advanced technologies such as Underground Coal Gasification (UCG) would be highlighted for their potential to tap previously inaccessible reserves while reducing environmental impact, coal ministry officials present at the conference said.
Closing of coal blocks
Almost 150 mines in the country that have been de-coaled will be closed by 2028 using scientific mine closure techniques, the Union coal minister said. Non-governmental organisations, local bodies, and CIL subsidiaries will ensure that post-mining reclamation is aligned with international norms and the guidelines of the environment and coal ministries.
According to the guidelines, both coal PSUs and private developers have to undertake afforestation activities to ensure mined land is brought under green cover and create a carbon sink. Companies have been encouraged to prioritise planting native species instead of monoculture planAtations.
“Directors of coal companies and the local panchayat bodies have been jointly tasked with this responsibility of closing coal blocks and using the District Minerals Fund for laying roads and creating infrastructure to make these areas arable and livable,” Kishan Reddy said.
(Edited by Gitanjali Das)
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