Government to initiate financial support for coal gasification project
The Indian Government is planning to roll out a policy to provide financial support for coal gasification projects for higher production in 2024. In addition to this, efforts will be made to bring more captive and commercial coal mines into operation with improvement in the quality of the dry fuel and transporting infrastructure for a sustainable environment. Digitisation of mine records will also be done.
As per the government's official record, it has already notified two policies concerning coal gasification and to provide financial support as well as tax incentives for such projects. In line with this project assesments, the government has mandated a grant of green clearance which in return will address the environment suitability and impact assesment studies to further, prepare an environment management plan.
The Ministry of coal has set a target to gasify 100 million tonnes[MT] of coal by FY 2030 in line with its energy transition plans. Coal gasification is expected to reduce carbon emissions and foster SDGs [Sustainable Development Goals] led by the United Nations.
The central ministry has also formulated a policy which makes a provision for 50 percent rebate in revenue share for all future commercial coal block auctions for the fossil fuel used for gasification, which accounts the quantity used for gasification to be atleast 10 percent of the total production. As per official data, out of total 91 commercial blocks and 55 captive mines, 51 mines are currently operational. The blocks are currently producing 116 MT of coal in the last financial year and the target is 162 MT for the upcoming fiscal year.
The government aims to scale up coal production from underground mines to 100MT by 2030 by deploying mass production technology. India's coal sector is the second largest in the world with production rising 14.8 percent to 893 MT in 2022-2023 financial year. To achieve self-reliance in coal production and to reduce imports, the government is working towards increasing the domestic coal production output to over 1 billion tonnes in FY24 and further increasing it to 1.5 billion tonnes by FY30.
Currently, India is surfacing its global commitment of achieving a 50 percent power demand by non-fossil fuels by 2030 during COP28 event. The present use of biomass around 5-10 percent will make 50-100 MT of coal to be replaced by biomass by 2030 which is equivalent of reducing 90 to 180 million of CO2 emissions.