Speedy Project Approvals, Assured Buyers Key to India’s 100 MT Coal Gasification Target by 2030

New Delhi, October 22, 2026: India’s ambition to gasify 100 million tonnes (MT) of coal by 2030 will depend on faster project approvals, assured buyers, suitable technology and efficient execution, according to a new industry report released by global professional services firm Alvarez & Marsal (A&M).

The report, titled Coal Gasification for ‘Atmanirbhar Bharat’: Shaping the Next Industrial Revolution, was launched at the Gasification Summit in New Delhi on Thursday. It highlights the need for coordinated policy action and long-term commercial arrangements to translate India’s coal gasification ambitions into operational projects.

According to the report, the Ministry of Coal estimates that achieving the target will require investments of approximately ₹2.5 lakh crore to ₹3 lakh crore across around 25 projects.

Single-Window Clearances Needed to Accelerate Projects

The report identifies lengthy approval processes as a key obstacle to the timely development of coal gasification facilities. Projects often require clearances from multiple authorities, increasing the risk of delays and higher development costs.

To address this challenge, A&M has recommended a single statutory approval window with fixed timelines and provisions for deemed approval. The proposed mechanism aims to improve coordination between government departments and help developers move more quickly from project planning to implementation.

The report also emphasises the importance of accountability among contractors, reliable utilities and effective project management to prevent construction delays and cost overruns.

Assured Buyers Could Improve Project Viability

Securing long-term buyers for gasification products is another major requirement. Coal gasification converts coal into synthesis gas, or syngas, which can be processed into chemicals, fertilisers, methanol, synthetic natural gas and other industrial products.

Because these projects require substantial upfront investment, long-term offtake agreements can provide revenue visibility and strengthen their ability to secure financing.

The report points to India’s ethanol programme as an example of how structured purchasing arrangements can support investment. It also highlights the planned purchase of ammonium nitrate from Bharat Coal Gasification and Chemicals Limited’s Lakhanpur project by Coal India for use in mining operations.

Such arrangements could help connect coal gasification facilities with established industrial customers and reduce uncertainty over future sales.

Reducing Dependence on Imported Energy and Chemicals

India possesses the world’s fifth-largest coal reserves, yet it continues to depend heavily on imports for several products that could potentially be manufactured using domestic coal resources.

The A&M report states that imports accounted for approximately 94% of India’s methanol consumption and around 50% of its natural gas consumption in FY2025. During FY2026, natural gas imports were valued at approximately ₹1.18 lakh crore, while urea imports amounted to around ₹46,000 crore.

Expanding coal gasification could help diversify domestic production and reduce exposure to international price volatility and supply-chain disruptions. It could also create opportunities for downstream industries, including chemicals, fertilisers and industrial fuels.

Government Announces ₹37,500 Crore Support Scheme

The government has approved a ₹37,500 crore scheme to promote surface coal and lignite gasification projects. The programme is intended to support projects that collectively utilise approximately 75 million tonnes of coal and lignite, contributing substantially to the national target.

Eligible projects can receive financial incentives of up to 20% of the cost of plant and machinery, subject to scheme conditions. The government has also extended coal linkage tenure to as much as 30 years for the relevant gasification category, providing greater certainty for long-term investments.

These measures are designed to encourage private investment, strengthen domestic technology capabilities and accelerate project development.

Technology and Environmental Safeguards Remain Critical

India’s coal gasification strategy faces technical challenges because much of its coal has high ash content. Gasification technologies must be adapted to domestic coal characteristics to achieve reliable performance and competitive operating costs.

The report recommends additional research and development, pilot projects and integrated industrial hubs with shared infrastructure. These measures could improve efficiency and reduce the cost of developing individual facilities.

At the same time, large-scale coal gasification requires careful consideration of emissions, water consumption, waste management and the environmental impacts of downstream processes. Strong safeguards will be important to ensure that industrial expansion does not undermine broader environmental objectives.

Talcher Project Offers Lessons for Execution

The report highlights the Talcher coal-to-urea project in Odisha as an important reference for future developments. The project was reported to be 72.56% complete as of June 2026.

Its progress underscores the importance of reliable utilities, technology suited to Indian coal and clear accountability among contractors. Lessons from projects already under implementation could help improve the planning and delivery of subsequent developments.

Outlook: Execution Will Determine Success

India’s 100 MT coal gasification target represents a major industrial investment opportunity, with potential benefits for energy security, chemical manufacturing and domestic supply chains.

However, the target’s achievement will depend on more than government incentives or access to coal. Projects must secure financing, obtain approvals, establish long-term buyers and demonstrate that their technology and operating economics are viable.

Faster clearances and assured demand could provide the foundation for investment, while strong execution and environmental safeguards will be essential to building a sustainable domestic gasification industry.