Coal and Lignite Gasification Initiative
The Indian government has announced a significant initiative to bolster coal and lignite gasification projects, allocating ₹8,500 crore to support both public sector undertakings (PSUs) and private enterprises. This initiative, approved on January 24, 2024, aims to enhance energy production and promote sustainable practices in the coal industry. The government has also established joint ventures between Coal India Limited and other major companies to facilitate these projects, marking a strategic move towards cleaner energy solutions.
Incentive Scheme Details
The newly approved incentive scheme is structured into three categories, each designed to cater to different types of projects. The first category, with an allocation of ₹4,050 crores, is exclusively for PSUs, allowing them to apply for government assistance. Three projects have already received approval under this category, each granted ₹1,350 crores in support. The second category, which has a budget of ₹3,850 crores, is open to both private and public sectors. Three private sector projects have been approved under this category, amounting to a total government assistance of ₹1,983.06 crores. Lastly, the third category, allocated ₹600 crores, is aimed at demonstration or small-scale projects, with one private sector project receiving ₹100 crores in government support.
Joint Ventures and New Policies
In a bid to enhance the effectiveness of coal gasification, the government has approved investments by Coal India Limited in joint ventures with Bharat Heavy Electricals Limited and Gas Authority of India Limited. These partnerships are expected to drive innovation and efficiency in coal gasification projects. Additionally, a new sub-sector focused on “Production of Syngas leading to coal gasification” was established in 2022 under the Non-Regulated Sector linkage auctions policy. This move aims to streamline the process and encourage more investments in coal gasification initiatives.
Support for Gasification Projects
To further support coal gasification projects, the government has implemented several measures. Coal supply for these projects will be available under the Non-Regulated Sector auction, with a floor price set at the regulated sector’s notified price for projects commissioned within the next seven years. Moreover, a 50% rebate in revenue share for coal used in gasification has been introduced during commercial coal block auctions, provided that at least 10% of the total coal production is allocated for gasification purposes. This financial incentive is expected to stimulate interest and investment in coal gasification.
Technology Transfer and Future Prospects
The government has also established a framework to grant waivers from registration for Transfer of Technology (ToT) from countries sharing land borders, allowing for more flexible collaboration on technology transfer. So far, one application has received a waiver, indicating the government’s commitment to facilitating technological advancements in the sector. Union Minister of Coal and Mines, Shri G. Kishan Reddy, shared this information in a written reply to the Rajya Sabha, highlighting the government’s proactive approach to promoting coal and lignite gasification as a crucial component of India’s energy strategy.
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