The Union Cabinet is expected to approve a major ₹37,500 crore incentive package to accelerate coal and lignite gasification, marking a significant step in India’s energy transition strategy. The proposed policy aims to ramp up coal-to-gas conversion capacity and reduce reliance on imported natural gas, aligning with broader goals of energy security and self-reliance.

Government sources indicate that the initiative will support both public and private sector participation, with viability gap funding and financial incentives to make gasification projects commercially feasible. The plan targets the creation of 100 million tonnes of coal gasification capacity by 2030, a substantial scale-up from current levels.

Coal gasification converts solid coal into syngas, which can be used for producing chemicals, fertilizers, and cleaner fuels, offering a more efficient and less polluting alternative to direct coal combustion. The move is also expected to boost domestic coal utilization while lowering the import bill.

If cleared, the policy could catalyse fresh investments in the sector and reshape India’s long-term energy mix.