The Ministry of Coal has closed the first application round of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects, receiving seven applications from major industrial companies and public sector undertakings. The scheme, backed by ₹37,500 crore in central funding, aims to convert coal and lignite into higher-value chemicals and fuels while reducing India’s import burden.
Key Details of the Scheme
The Union Cabinet approved this scheme on 13 May 2026. Seven companies submitted applications in Round 1, which closed in early September 2026:
- Adani Enterprises Limited (three projects producing urea)
- Gallantt Ispat Limited (direct reduced iron and syngas)
- NTPC Limited (synthetic natural gas)
- Shyam Sel and Power Limited (syngas)
- Talcher Fertilisers Limited (urea)
The scheme seeks to build 75 million tonnes of new coal gasification capacity by 2030, as part of a national target of 100 million tonnes. It builds on an earlier ₹8,500 crore scheme approved in January 2024, under which eight projects are already running.
India currently imports roughly ₹2.77 lakh crore worth of liquefied natural gas, urea, ammonia and methanol annually. By converting coal into these products domestically, the scheme aims to cut these imports and boost self-reliance. The gasification projects are expected to require total private investment of ₹2.5 to 3 lakh crore and create widespread employment.
The Ministry of Coal stated that Round 2 opened on 8 September 2026. Application windows will open every two months, allowing companies regular chances to apply. The Round 1 applications will now undergo detailed evaluation according to scheme rules.
What This Means for You
The projects may eventually produce cheaper urea and other chemicals in India instead of importing them, which could lower prices for farmers and industries. The scheme will also create jobs across manufacturing, construction and related services. However, these are long-term projects requiring years of development, so benefits will not be immediate. The regular two-month application windows mean more companies can enter the scheme, potentially widening the impact.