The incentive, launched in May this year, is aimed at promoting surface coal/lignite gasification for the production of syngas and downstream value-added products such as synthetic natural gas (SNG), urea, ammonium nitrate, methanol, DME and other chemicals, thereby enhancing the country’s energy security, reducing import dependence, and facilitating utilisation of domestic coal and lignite resources.
“The Ministry of Coal is inviting applications under the Scheme for Promotion of Surface Coal/Lignite Gasification Projects, approved by the Government on 13 May 2026 with a total financial outlay of Rs 37,500 crore,” the statement said.
According to the coal ministry, the request for proposal (RFP) was issued on July 7, with a pre-application conference scheduled on July 20. The last date for receipt of queries has been fixed for July 25, while the ministry will respond to queries by August 3.
The application window will close on September 7, and the opening of bids is slated for September 8. The selected applicant is expected to be declared on October 21, followed by issuance of the Letter of Award (LoA) on November 4.
The signing of the project agreement will take place on January 4, 2027, the coal ministry said.
Coal gasification refers to the process of converting dry fuel into synthetic gas (syngas), which is used as an alternative fuel and helps reduce carbon emissions. This process supports production of methanol, fertilizers, hydrogen and chemicals, cutting reliance on imports.Balasaheb Darade, Founder and Managing Director of New Era Cleantech Solutions, had earlier said coal gasification is not just an industrial opportunity, but a strategic imperative for achieving energy security, import substitution and true economic self-reliance under Atmanirbhar Bharat.
New Era Cleantech is a Maharashtra-based company which is developing a 5 MMTPA coal gasification project in Chandrapur.
The Gasification Technologies & Research Council of India (GTRC-India) Chairman Amrit Lal Meena, who is also a former coal secretary, said the coal gasification scheme will unlock greater economic value from domestic coal, improve resource efficiency, strengthen energy security and spur industrialisation through downstream industries.
The industry sees the coal gasification scheme as a landmark reform that will strengthen investor confidence, reduce import dependence and position India as a global hub for coal-to- chemicals manufacturing, he said.