The Union Cabinet approved a ₹37,500 crore coal and lignite gasification scheme aimed at reducing dependence on LNG, urea, ammonia
May 13, 2026: The Union Cabinet on Wednesday approved a ₹37,500 crore coal and lignite gasification scheme as part of India’s larger plan to gasify 100 million tonnes of coal by 2030. The initiative is aimed at boosting energy security, reducing dependence on imported fuels and chemicals, and strengthening domestic manufacturing under the Atmanirbhar Bharat mission. The government noted that India’s import bill for LNG, ammonia, methanol, coking coal and related products touched nearly ₹2.77 lakh crore in FY2025.
The new scheme builds upon the National Coal Gasification Mission launched in 2021 and an earlier ₹8,500 crore package approved in January 2024. Coal gasification converts coal into synthesis gas, which can then be used for producing downstream products such as methanol, ammonia and synthetic natural gas. The government plans to support around 25 projects targeting gasification of nearly 75 million tonnes of coal and lignite.
Under the scheme, companies will receive incentives of up to 20% of plant and machinery costs through a competitive bidding process. Financial assistance for a single project has been capped at ₹5,000 crore. The Centre said the initiative is expected to create nearly 50,000 direct and indirect jobs in coal-bearing regions while helping India reduce exposure to global supply-chain disruptions and geopolitical risks.