Coal Ministry Signs Agreement to Develop and Operate Coal Gasification Plant.

On May 8, 2025, the Ministry of Coal (MoC) signed the Coal Gasification Plant Development and Production Agreement (CGPDPA) with selected applicants under Category II of the Coal Gasification Financial Incentive Scheme (FIS). The agreement aims to promote coal gasification as a cleaner and more sustainable energy option in India.

      - The chosen applicants include both private sector companies and Public Sector Undertakings (PSUs). These are: Jindal Steel and Power Limited (JSP) based in New Delhi, New Era Cleantech Solution Private Limited based in Mumbai, Maharashtra, and Greta Energy and Metal Private Limited based in Chennai, Tamil Nadu.

      - Coal gasification is a process that converts coal and other carbon-rich raw materials into fuel gas or synthesis gas (syngas). It is considered environmentally cleaner than directly burning coal, thus aligning with India's push toward sustainable industrial practices.

      - The agreement was signed in the presence of Sanoj Kumar Jha, Additional Secretary of the Ministry of Coal, along with Asheesh Kumar, Officer on Special Duty (Technical), and BK Thakur, Director (Technical), MoC.

Main Point :-   (i) The Financial Incentive Scheme (FIS) Launched in 2024 with a total outlay of Rs 8,500 crore, the Financial Incentive Scheme (FIS) for Coal Gasification aims to achieve 100 million tonnes of coal gasification by 2030. The scheme promotes both public and private sector participation to set up coal gasification plants across India, driving cleaner and sustainable energy development.

      (ii) The scheme is divided into three categories. Category I, allotted Rs 4,050 crore, supports up to 3 projects by government PSUs with a grant of Rs 1,350 crore or 15% of capital expenditure (Capex)—whichever is lower—disbursed in two equal instalments. Category II, with a provision of Rs 3,850 crore, includes both PSUs and private companies. Under this, at least one project is selected through a tariff-based bidding process, with design inputs from NITI Aayog, and offered a grant of Rs 1,000 crore or 15% of Capex, whichever is lower.

(iii) Category III is focused on demonstration projects using indigenous technology or small-scale product-based gasification plants. It has a total budget of Rs 600 crore. Selected entities under this category receive Rs 100 crore or 15% of Capex, whichever is lower, with a minimum capex requirement of Rs 100 crore and minimum gas production capacity of 1500 Nm³/hr. All categories follow a transparent bidding process to ensure fair selection of applicants.
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