Coal gasification: ₹37,500 crore scheme draws 7 bids from Adani, NTPC and others; ₹3 lakh crore investment in sight

India’s push to turn domestic coal and lignite into value-added fuels and industrial feedstock has gathered momentum, with the Centre’s ₹37,500 crore coal gasification scheme receiving seven applications in its first round from major private companies and public sector undertakings.

Adani Enterprises has submitted three proposals for urea production, while NTPC has bid for synthetic natural gas. Talcher Fertilisers has also proposed a urea project, with Gallantt Ispat seeking to produce direct reduced iron (DRI) and syngas and Shyam Sel & Power proposing a syngas project, according to the Ministry of Coal.

Coal gasification targets import substitution

The response comes against the backdrop of the government’s efforts to use coal gasification to reduce India’s dependence on imported LNG, urea, ammonia and methanol. These commodities together accounted for imports worth around ₹2.77 lakh crore in FY25, according to the ministry.

The scheme, approved by the Union Cabinet in May 2026, aims to promote the conversion of domestic coal and lignite into products including syngas, methanol, ammonia, urea and hydrogen. The government expects the programme to catalyse investments of ₹2.5 lakh crore to ₹3 lakh crore and contribute to its target of 100 million tonnes of coal gasification capacity by 2030. Of this, 75 million tonnes is envisaged under the new scheme.

Coal gasification converts coal or lignite into synthetic gas, or syngas, which can subsequently serve as a feedstock for producing fertilisers, chemicals, fuels and other industrial products. India has an estimated 401 billion tonnes of coal reserves and 47 billion tonnes of lignite reserves, while coal accounts for more than 55% of the country’s energy mix.

Second round opens as government seeks more projects

The Ministry of Coal said the seven first-round applications will now undergo detailed evaluation under the scheme guidelines and the Request for Proposal. The first RFP was issued on July 7, 2026.

The government has simultaneously opened the second round of applications from September 8. Under the RFP, application windows will open every two months, allowing other eligible companies to submit proposals. Several prospective applicants are already at advanced stages of project preparation, the ministry said.

The latest scheme builds on the ₹8,500 crore financial incentive programme approved in January 2024, under which eight gasification projects are already under implementation.

“When we said reports of ‘no takers’ were premature, we were confident that industry would respond and it has, decisively,” said Alok Kumar Singh, Advisor (Projects), Ministry of Coal. He described the seven applications as a “clear vote of confidence” in the scheme and India’s coal gasification mission.