Whalesbook
India's Strategic Shift to Syngas
India is making a strategic move towards surface gasification of its abundant coal reserves. This process converts solid coal into synthetic gas, known as syngas, marking a significant step in clean coal technology. The aim is to improve national energy security by reducing reliance on foreign energy sources.
Adding Value to Coal Byproducts
The gasification technique extracts value from low-grade coal, producing syngas. This syngas can then be processed into essential products like hydrogen, urea, ammonia, and liquid fuels, offering domestic alternatives to materials India currently imports. This initiative is projected to significantly decrease India's estimated annual spending on energy feedstock imports, which was ₹2.77 lakh crore for fiscal year 2025.
Government Support and Investment
The Indian government strongly supports this energy strategy. A key development was the 2018 announcement of India's first coal gasification-based fertilizer plant in Talcher. By August 2020, the country set a goal to gasify 100 million tonnes of coal by 2030, expecting investments of over ₹4 lakh crore.
More recently, in May 2026, the Union Cabinet approved a ₹37,500 crore scheme to promote surface coal and lignite gasification projects. This includes securing mining rights, with the coal ministry finalizing agreements for commercial mines suitable for underground coal gasification.
Key Players and Economic Impact
Major companies leading this sector include Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL). Another is Coal Gas India Limited (CGIL), a CIL and GAIL (India) Limited partnership. NLC India Limited is active in lignite-to-syngas conversion, and Indian Oil Corporation Ltd is exploring syngas applications.
Industry experts view gasification as a crucial transitional technology. It offers a cleaner-burning option than direct coal use, significantly cutting emissions in heavy industries. At a commercial level, domestically produced syngas is expected to be up to twenty times cheaper than imported natural gas. However, challenges remain regarding substantial water usage and managing wastewater from the process.