- Wed. Jan 7th, 2026
Report on Stakeholders consultation on Coal Gasification in the Ministry of Coal on 25th November 2022
Ministry of Coal had invited the stake holders for their last opportunity for their views and suggestions on few specific issues presented by ministry besides suggestions to promote coal gasification. The meeting was held in a hybrid mode. Specific suggestions on following points were sought:
- Inputs on coal gasification financial support policy
- Do the scheme’s evaluation criteria need to be changed?
- Indigenous Technology: Give suggestions on how to support pilot scheme operation to develop indigenous technology
- Suggest any other method for providing financial assistance
- Is Rs 600 crores sufficient to make the project viable?
- Suitability of tariff-based bidding similar to power sector
- VGF for PSUs similar to provisions in TLF model
Proposed qualification criteria (same for PSU’s & Private Companies):
- Preference will be given to manufacturers based on weightage. Maximum weights will be in the ratio of 35% for plant capacity, 35% for investment and 30% for viability amount sought.
- The entity will have to set a manufacturing plant of minimum output 0.4MT/annum
- The selection of entities will be based on RPF details
- The entity will have to arrange a minimum investment of 4000 crores
Process of Bidding
- Request for proposal (RFP) will be published and interested party can show its intent. Then they will give proper financial and technical analysis of their project
- Based on the project information received by different parties MoC will then evaluate and announce the successful party.
Provision for Giving Fund to Government PSUs
- The selection of the company/bidder is based on 1st come 1st serve basis
- The fund will be given time to time against actual disbursement / expenditure on the plant and machinery of the project i.e., the fund will be adjusted as per regular project expenditure o plant and machinery
- Govt PSUs to seek financial assistance based on PFR approved by their Board.
Qualification Criteria for the Govt PSU’s :
- The PSU or a JV of PSU will have to set up a manufacturing plant of minimum output of 0.4MT/annum
- The PSU will have to arrange a minimum investment of Rs 4000 crores
Proposed policy for Coal Gasification: Financial Support Proposal:
A financial support of Rs 6000 crores is proposed to incentivize the scheme. This includes Rs 3000 crores for Govt PSU’s. The conditions for payment of 1st and 2nd Installments are:
1st Installment : After disbursal of loan by the bank or 30% equity contribution of the project
2nd Installment : After achieving minimum 50% of the production capacity and 1 year of continued production
Conditions precedent :
- To be given against the actual disbursement made on plant and machinery of the project
- Maximum amount of 15% of capex or Rs 600 crores to be paid
- PFR must be submitted by the party
Discussions :
The meeting was opened for views, suggestions from the participants. Following main comments/views/suggestions were made by the participants:
- This opportunity requires high investment /capex. There should be some subsidy. The coal pricing should be specific to the project. There should be no royalty or revenue sharing. (Adani Group)
- Reliance has developed indigenous solid catalysis process which uses coal and biomass. This should be promoted as indigenous technology. Besides focus should be on carbon capture & utilization (CCUS) application in the project. (Reliance Group)
- Project should be extended a 20% viability gap funding. Thermax would be willing to set up a 60 KTA coal to methanol plant on its own technology. (Thermax)
- Deepak Fertilizers would examine the project.
- BHEL suggested that they have pilot project operating on its technology and would like to offer the technology for projects.
- L&T wanted to know about the long-term road map for coal gasification
- CGAI suggested that potential investors would be the Producer Gas Producers in the country. They have gained experience over the decade and would be willing to expand /invest. Govt may consider implementation on PPP model.
a. CGAI is informing all its members and is seeking their inputs for which it requires more time to respond. Ministry gave a weeks’ time to respond.
b. Coal pricing should be attractive & specific to project similar to the power sector
c. The government should make all approvals for coal, project implementation and land for the plant as art of offer.
d. Viability gap funding would be necessary in view of the developmental nature of the project and large capex.
e. Government to consider buy back arrangement for the targeted end product of coal gasification for long term (5 to10 years) for sustainability of project - JSPL requested for project specific pricing on the lines of regulated power sector. Same priority may be given to these project as in case of power sector for both rail & road transport. The existing operators including PGP players be given some preference may be given some eligibility preference. It was requested that a long-term demand projection for products like methanol and other chemicals may be shared. The subsidy grant may be increased to Rs 1000 crores from Rs 600 crores. This may give more confidence to banks to disburse loans
- The Sponge & Iron Manufacturers Association suggested that govt may consider selling of syngas on merchant basis. Also, an increase in subsidy to Rs 1000 crores is desirable for the project.
10.Shri J. Panigrahy of Hindalco, Aman Sharma of Air Products, Shri Rakesh of NLC and CMD, Coal India also gave positive feedback and assured all support
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