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POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

competitive, technologically advanced and inclusive energy system,” he said. He invited industry
stakeholders and global investors to participate in the upcoming Renewable Energy Global Investors Meet
scheduled later this year.

Shri Joshi concluded by expressing confidence that with continued focus on scale, speed, skill and
Aatmanirbharta, India will not only achieve its clean energy targets but also emerge as a global benchmark
for sustainable industrial transformation.

6. Cabinet approves Scheme for Promotion of Surface Coal/Lignite Gasification Projects with a
financial outlay of Rs.37,500 crore

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved a Scheme for
Promotion of Surface Coal/Lignite Gasification Projects with a financial outlay of Rs.37,500 crore.

The Scheme marks a major step towards accelerating India’s coal/lignite gasification programme,
advancing the national target of gasifying 100 Million Tonnes (MT) of coal by 2030, strengthening energy
security, and reducing dependence on imports of key products such as LNG (more than 50% imported),
urea (~20% imported), ammonia (~100% imported), and methanol (~80–90% imported).

In a significant accompanying reform, the Government has also extended coal linkage tenure up to 30
years under the “Production of Syngas leading to Coal Gasification” sub-sector in the Non-Regulated
Sector (NRS) linkage auction framework, providing long-term policy certainty for investment in coal
gasification projects.

Salient Features of the Scheme:

? Total financial outlay of Rs.37,500 crore to incentivize new surface coal/lignite gasification
projects for production of syngas and its downstream products, targeting gasification of
approximately 75 million Tonne of coal/lignite.

? Financial incentive provided at a maximum of 20% of the cost of Plant and Machinery.

? Selection through a transparent and competitive bidding process, with an evaluation framework
benchmarking project cost, coal input, and syngas output.

? Incentive disbursed in four equal instalments, linked to project milestones.

? Financial incentive for any single project capped at Rs.5,000 crore; for any single product (except
Synthetic Natural Gas and Urea) capped at Rs.9,000 crore; and any single entity group capped
at Rs.12,000 crore across all projects.

? Incentive under this Scheme is in addition to, and does not restrict access to, incentives under the
commercial coal mining regime or schemes of other Central/State Government ministries.

? The Scheme is technology-agnostic; adoption of indigenous technologies is encouraged.

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