Ministry of Coal Launches ₹2,366 Crore Incentive Round for Coal Gasification Projects

NEW DELHI | December 26, 2025 — The Ministry of Coal has officially opened the second round of applications for financial incentives aimed at accelerating Coal and Lignite Gasification projects across India. This initiative is a critical pillar of the National Coal Gasification Mission, which targets the gasification of 100 million tonnes of coal by the year 2030 to enhance India's energy security and industrial self-reliance.

With a remaining financial outlay of ₹2,366.94 crore available for this round (from the total approved budget of ₹8,500 crore), the government is looking to catalyze technology-driven projects that convert domestic coal into high-value chemical products.

Key Project Categories for Incentives

The ministry has structured the second round to support both large-scale commercialization and indigenous technological innovation:

Category II (Private Sector & Government PSUs): This category is designed for large-scale, commercially viable gasification plants. It is open to both private enterprises and Public Sector Undertakings (PSUs).
Category III (Demonstration / Small-Scale Plants): This category focuses on "Demonstration Projects" and small-scale product-based plants. The objective is to support the testing of indigenous technologies and specialized chemical outputs before scaling them to a national level.

Strategic Objectives of Gasification

The government's push for gasification is driven by the need to utilize India's vast coal reserves in a more environmentally sustainable and economically diverse manner:

Import Substitution: By converting coal into Synthetic Gas (Syngas), India can produce Chemicals like Methanol, Ammonia, and Urea domestically, significantly reducing the massive import bill for these commodities.
Clean Energy Transition: Gasification is a cleaner alternative to traditional coal combustion, as it allows for the removal of pollutants (like sulfur and mercury) before the gas is utilized, significantly reducing the environmental footprint.
Hydrogen Production: These projects are also seen as a potential source for "Blue Hydrogen," which is a vital component of the global shift toward a hydrogen-based economy.

Application and Bid Timeline

Interested entities must submit their proposals through the MSTC e-commerce portal. The Ministry has emphasized a transparent and competitive bidding process to ensure the selection of high-impact projects.

Bid Due Date: January 28, 2026.
Documentation: Request for Proposal (RFP) documents are currently available on the Ministry of Coal's official website and the MSTC portal.
Submission Mode: All proposals must be submitted online through the MSTC portal following the detailed RFP guidelines.