The Ministry of Coal has concluded Round 2 of its Rs 37,500 crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects, receiving two applications from NTPC Limited. The proposed projects cover the production of urea, methanol and dimethyl ether (DME), highlighting the potential of coal gasification to support domestic manufacturing of critical industrial products.
Building on the progress made in the first two rounds, the Ministry of Coal has opened Round 3 of the scheme from November 10, 2026. Eligible entities can submit proposals to establish surface coal and lignite gasification projects across the country until January 11, 2027.
Through successive application rounds, the ministry aims to encourage wider industry participation, attract investment and accelerate the adoption of coal gasification technologies. The initiative also seeks to diversify the utilisation of India’s domestic coal and lignite resources and support the national target of achieving 100 million tonnes of coal gasification capacity by 2030.
Rs 37,500 Crore Coal Gasification Scheme to Promote Investment
The Union Cabinet approved the scheme on May 13, 2026, with a total financial outlay of Rs 37,500 crore. It aims to accelerate the development of surface coal and lignite gasification projects in India by encouraging investment and participation from eligible entities.
Coal gasification converts coal and lignite into synthesis gas, which can be used to manufacture products such as chemicals, fertilisers and other industrial materials. The proposed NTPC projects covering urea, methanol and DME highlight the potential of this technology to support domestic industrial production.
NTPC Applications Mark Progress in Coal Gasification Programme
The conclusion of Round 2 with two applications from NTPC follows the ministry’s efforts to expand industry participation in the programme.
In September 2026, the Ministry of Coal had rejected reports claiming that the scheme had attracted no applications, describing such reports as premature and incorrect. At the time, the ministry clarified that Talcher Fertilisers Limited and NTPC Limited had submitted applications through the online portal. It also said discussions were underway with other prospective applicants who were at different stages of project preparation and application finalisation.
The ministry explained that projects under the scheme require substantial preparation because of their scale and technical complexity. This includes preparing Pre-Feasibility Reports, assessing technology options, identifying coal, lignite and other feedstock arrangements, evaluating project economics and developing detailed project proposals.
Round 3 Applications Open Until January 11, 2027
With Round 3 now open, the ministry is inviting further participation from eligible companies to expand the project pipeline and advance India’s coal gasification programme. The latest application window provides another opportunity for companies to invest in surface coal and lignite gasification projects.
With a financial outlay of Rs 37,500 crore and a target of 100 million tonnes of gasification capacity by 2030, the scheme seeks to promote investment, strengthen domestic industrial production and diversify the use of indigenous coal resources.
