NTPC Sole Applicant in Second Round of ₹37,500 Crore Coal Gasification Scheme, Submits Two Project Proposals
New Delhi, November 11, 2026: State-owned power giant NTPC Limited emerged as the only applicant in the second round of the Centre’s ₹37,500 crore coal and lignite gasification incentive scheme, highlighting both the company’s growing interest in the sector and the challenges of attracting wider private-sector participation.
According to the Ministry of Coal, the second round concluded on November 10, receiving two applications, both submitted by NTPC. The proposals aim to manufacture urea, methanol and dimethyl ether (DME) using coal gasification technology.
The development comes as the government seeks to expand domestic coal utilisation, strengthen industrial production and reduce India’s dependence on imported fuels and chemical feedstocks.
NTPC Proposes Two Coal Gasification Projects
The two applications submitted by NTPC cover different industrial products.
First project: Production of urea, a key agricultural fertiliser.
Second project: Production of methanol and dimethyl ether (DME), which have applications in the chemical and energy industries.
Coal gasification converts coal or lignite into synthesis gas, commonly known as syngas. This gas can subsequently be processed into several industrial products, including fertilisers, chemicals, hydrogen and synthetic natural gas.
The Ministry of Coal said the proposals demonstrate the potential of gasification technology to support domestic manufacturing and diversify the use of India’s indigenous resources.
Private Sector Participation Remains Limited
The second-round outcome is significant because the first round attracted seven applications from five companies.
These included NTPC, Adani Enterprises, Talcher Fertilisers, Gallantt Ispat and Shyam Sel & Power.
Adani Enterprises submitted three proposals for urea production, while other companies proposed projects involving fertilisers, synthetic natural gas, direct reduced iron and syngas.
The absence of private-sector applicants in the second round has raised questions about the commercial viability and financing challenges associated with large-scale coal gasification projects.
Industry experts have highlighted the need for stronger financial mechanisms, credit guarantees, reliable technology and long-term purchase agreements to encourage private investment.
Government’s ₹37,500 Crore Coal Gasification Mission
The Union Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026, with a total financial allocation of ₹37,500 crore.
The initiative is designed to accelerate the development of coal and lignite gasification projects across India.
The government aims to support 75 million tonnes of coal and lignite gasification capacity through the programme, contributing to the broader national target of achieving 100 million tonnes of coal gasification capacity by 2030.
The scheme is also expected to attract investments of approximately ₹2.5 lakh crore to ₹3 lakh crore and create employment opportunities across the mining, energy, fertiliser and chemical industries.
India Looks to Reduce Import Dependence
India imports substantial quantities of liquefied natural gas (LNG), urea, ammonia and methanol to meet its domestic industrial and agricultural requirements.
According to government-linked industry reporting, imports of these products together amounted to approximately ₹2.77 lakh crore in FY2024-25.
Coal gasification could help India use its abundant domestic coal reserves to manufacture these products locally, potentially reducing import expenditure and strengthening energy security.
The technology could also support the development of domestic chemical and fertiliser manufacturing capabilities.
Third Round Opens, Applications Invited Until January 11, 2027
Alongside the announcement of the second-round results, the Ministry of Coal launched the third round of the scheme on November 10, 2026.
Eligible public- and private-sector companies can submit proposals for establishing coal and lignite gasification projects.
The last date for submitting applications is January 11, 2027.
The government hopes the new application window will attract more industrial players, encourage investment and accelerate the adoption of gasification technologies.
Outlook: NTPC’s Participation Offers Momentum to India’s Gasification Push
NTPC’s continued participation provides momentum to the government’s coal gasification programme. However, the limited response from other companies highlights the importance of making projects commercially attractive and financially sustainable.
Access to financing, technological reliability, assured demand for end products and competitive production costs will be crucial to the success of the initiative.
As India targets 100 million tonnes of coal gasification capacity by 2030, the third round will be an important opportunity to bring more private-sector companies into the country’s emerging coal-to-chemicals industry.