Union Cabinet clears ₹37,500 crore package to boost coal gasification

New Delhi: The Union Cabinet on Wednesday approved a ₹37,500 crore package to promote coal gasification, aiming to advance sustainable alternate mining and cut import dependence on key chemicals.

The package supports surface coal gasification, a process that converts coal into syngas. The syngas can then be used to produce downstream products such as urea, methanol, ammonia, synthetic natural gas, and fertilisers.

India currently imports about one-fifth of its urea requirement and 80 to 90 percent of its methanol. The country is fully dependent on imports for ammonia.

Officials said the push for coal gasification will help build domestic capacity, reduce the import bill, and provide a cleaner way to utilize coal reserves.