The total outlay of Rs85.0bn will be divided into three categories, India’s Cabinet Committee on Economic Affairs (CCEA) announced on 24 January.
In the first category, Rs40.5bn will be provided to state-owned companies, also known as public sector undertakings (PSU), wherein the government will support up to three projects.
In the second category, Rs38.5bn is earmarked for both private sector and PSUs; while the third category with a Rs6.0bn aid will be provided for projects using indigenous technology and small-scale product-based gasification projects.
Separately, two CIL coal gasification projects were approved by the government.
“CIL will set up the two coal gasification plants with a view to achieve the target of 100m tonnes/year coal gasification by the year 2030 and to fulfil India’s dual objectives of self-reliance and energy independence,” the CCEA said.
The first project is a Rs130.5bn coal-to-synthetic gas joint venture between CIL and Gas Authority of India Ltd (GAIL) at Burdwan in the eastern West Bengal state.
The government intends to use the synthetic gas output from the project in state-owned fertilizer plants which will allow it to reduce gas imports, according to media reports quoting India’s coal minister Pralhad Joshi.
CIL also plans to build a Rs117.8bn coal-to-ammonium nitrate project in eastern Odisha state through a joint venture with Bharat Heavy Electricals Ltd (BHEL), another state-owned firm.
Both projects are expended to become operational by 2030. Details on capacities of the proposed projects were not disclosed in the recent announcement.
In 2020, the Indian government had estimated that it would require an investment of more than Rs4tr to gasify 100m tonnes/year of coal by 2030.
So far, four state-owned firms have announced plans to build coal-to-chemical projects by 2030.
The companies plan to produce dimethyl ether (DME), ammonium nitrate and synthetic natural gas through these projects.
