Six years after launching the coal-to-gas mission, and four years away from the 2030 target of 100 million tons of coal-to-gas, India has little to show for it – a gap that seems particularly stark at a time when the war in West Asia has affected India’s energy supply.
It is certain that the government has increased the budget for the coal-to-gas mission by more than 1,075%. $3,525 crore in 2026-27 from $300 crore in 2025-26, but almost the entire 2025-26 allocation remained unspent till January 2026, according to official records.
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Amid the current global energy crisis, the mission has once again come into focus as one of the measures to reduce India’s dependence on energy imports, said people aware of the development, requesting anonymity. India is the world’s third-largest importer of crude oil after the United States and China, importing more than 88% of the crude oil it processes.
Although the government launched the coal-to-gasification mission in 2020, with the goal of converting 100 million tons of coal into gas by 2030, commercial production is still a long way off, the people added. A Ministry of Coal statement issued on July 24, 2024 said that coal gasification is a thermochemical process that converts coal into syngas or “syngas” (SNG), consisting mainly of carbon monoxide and hydrogen.
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However, while China has developed its own coal-to-gasification program – it processes hundreds of millions of tons of coal into gas every year – reducing its dependence on LNG imports, India’s progress has been slow.
A little over two years after launching the coal gasification mission, Coal India Ltd (CIL), a state-owned enterprise, signed MoUs in October 2022 with GAIL, for a coal-to-CNG project in Burdwan district of West Bengal, at a cost of the project. $13,052.81 crore, BHEL has proposed for coal to ammonium nitrate project in Odisha an investment of Rs. $Rs 11,782.05 crore.
But it took till January 2024 for the Union Cabinet to approve CIL’s equity investments in these joint ventures with two state-owned entities.
“Coal India Limited (CIL) will set up two coal gasification plants with an aim to achieve the coal gasification target of 100 metric tons by 2030 and achieve India’s twin goals of self-reliance and energy independence,” the Cabinet Committee on Economic Affairs (CCEA) said in a statement at the time.
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The Coal Ministry, CIL, GAIL India and BHEL did not respond to email queries on the progress of the mission.
“It seems like it’s almost the whole thing $Rs 300 lakh crore estimated in the 2025-26 Budget Estimates (BE) remained unspent due to lack of progress in coal gasification projects in the previous fiscal. However, this financial year’s BE is ambitious $“Rs 3,525 crore,” said one of the people cited above. “As per government records, the BE allocation for 2025-26 has been reduced to $Rs 285 crore has been spent in the renewable energy phase (revised estimate) and ‘no spending’ till January-end.
Replying to a question on coal gasification at the Joint Ministerial Conference on Energy Supply Situation Amid the Ongoing War in West Asia on April 8, Sanjeev Kumar Kasi, Joint Secretary in the Coal Ministry, said coal gasification is the next step to maximize the use of the abundantly available energy source. India has the fourth largest coal reserve in the world, estimated at 401 billion tons.
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“The next route available to us is coal gasification where we produce gas to convert those gases into chemicals. In that case, we will first try to set up a fertilizer plant… The Talcher Fertilizer plant is already there, and I believe the plant will be ready by FY December 27,” he said.
The plant is expected to use gas extracted from coal as fuel and feedstock for fertilizer production.
Prime Minister Narendra Modi, on September 22, 2018, unveiled a plaque marking the commencement of work to revive the Talcher Fertilizer Plant. The project was expected to be ready by September 2024, but it missed the target for various reasons, including the Covid-19 pandemic.
In addition to the fertilizer project, the government in 2024 approved seven major projects related to coal gasification, according to Kasi. “Foundation has been broken for four projects. So, we are actually very close to the gasification process. These are all surface gasification operations,” he said.
In a social media post on
“In 2020, the Coal Gasification Mission was launched, with an aim to gasify 100 million tons of coal by 2030, thus maximizing the value and utility of this vital resource as well as embracing clean energy solutions and ensuring sustainable use of coal. In line with the vision of Hon’ble Prime Minister Shri @narendramodi, financial outlay has been allocated for the Coal Gasification Initiative $Rs 8,500 crore through a transparent process for both the private sector and PSUs, he added.
The vision drawn up for coal gasification is coming to fruition, the minister said, as he participated with the Maharashtra Chief Minister in the foundation stone laying ceremony at Bhadrawati Industrial Estate, Chandrapur, Maharashtra, for the first projects under the scheme which he detailed in the circular. One of the projects is produced by Greta Energy and Metal Pvt Ltd and another by New Era Cleantech Solution Pvt Ltd.
