Centre Floats RFP To Finalise Financial Support For Setting Up Coal Gasification Units

In an effort to boost coal gasification in India, the Ministry of Coal on Wednesday (6 March) issued three requests for proposals (RFPs) to identify the interested players for the establishment of coal gasification plants in the country. 

India has one of the world’s largest reserves of coal, and in order to utilise coal optimally and reduce carbon gas emissions in the economy, the Ministry of Coal is implementing a new scheme on financial support for coal/lignite gasification projects under three categories

The scheme, with a budget of Rs 8,500 crore, envisages setting up of coal gasification plants in the country by providing financial incentives to such projects to ensure they are viable.

The selected bidders have the sole authority to decide the downstream products they want to produce through coal or lignite gasification.

Category I of the scheme allocates Rs 4,050 crore to public sector undertakings (PSUs) to support up to three projects, offering a lump-sum grant of Rs 1,350 crore or 15 per cent of the capital expenditure, whichever is lower.

In Category II, Rs 3,850 crore is earmarked for both the private sector and PSUs, providing each project with a lump-sum grant of Rs 1,000 crore or 15 per cent of the capital expenditure.

Additionally, at least one project in this category will undergo a tariff-based bidding process.

Category III includes Rs 600 crore for demonstration projects and small-scale gasification plants, offering a lump-sum grant of Rs 100 crore or 15 per cent of the capital expenditure to entities with a minimum capex of Rs 100 crore and minimum production of 1,500 normal meter cubed per hour of synthesis gas (syngas).

The ministry has set a target to achieve coal gasification of 100 million tonne coal by FY 2030. The adoption of gasification technology in India will revolutionise the coal sector, reducing reliance on imports of natural gas, methanol, ammonia and other essential product, the Ministry of Coal said.