Govt Mulls Rs 6,000 Crore Scheme To Promote Coal Gasification Projects

In a bid to achieve its goal of gasification of 100 million tonne (MT) of coal by 2030, the government is considering a comprehensive scheme to promote coal/lignite gasification projects for both Public Sector Undertakings (PSUs) and the private sector with an outlay of Rs 6,000 crore, an official statement said on Friday (14 July).

The selection of entities for coal/lignite gasification scheme will be carried out through a competitive and transparent bidding process, the Coal Ministry said in a statement.

Furthermore, government is considering providing budgetary support to eligible government PSUs, and private sector, enabling them to undertake coal gasification projects, the ministry said.

In first segment, the government will provide support to government PSUs, it added.

The second segment encompasses both the private sector and government PSUs, with a budget allocation granted to each project, the ministry said, adding that the selection of at least one project under this segment will be determined through a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog.

"Lastly, the third segment involves the provision of budgetary support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants," the ministry said.

The Ministry of Coal has set a target to achieve coal gasification of 100 Million Tonne (MT) coal by FY2030.

In addition, the ministry is also considering an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilised in gasification projects for a period of 10 years after the commercial operational date (COD), provided that the GST compensation cess is extended beyond FY27.

This incentive aims to offset the inability of entities to claim input tax credit for the same, the ministry said.