Coke Gas
New Delhi: The Coal Ministry is considering a comprehensive scheme to promote coal gasification projects with an outlay of Rs. 6000 crore. The focus is on achieving 100 million tonnes of coal gasification by 2030.
The Ministry said the proposal incorporates a comprehensive set of measures that capitalize on natural resources and demonstrate the financial and technical feasibility of coal gasification. “This initiative is set to meet the future energy needs of the country while stimulating other sectors,” it stated today. It claimed that the adoption of gasification technology in India will revolutionize the coal sector, reducing reliance on imports of natural gas, methanol, ammonia and other essential product.
Currently, India imports approximately 50% of its natural gas, over 90% of its total methanol consumption and around 13-15% of its total ammonia consumption to cater to the domestic demand. With coal gasification, such imports will considerably reduce by 2030. “This initiative holds the potential to alleviate the environmental burden by reducing carbon emissions and fostering sustainable practices, contributing to our global commitments towards a greener future,” the Ministry said. It said it was taking “innovative measures” to accelerate the development of coal gasification projects. In line with this objective, the Ministry is considering a comprehensive scheme to promote coal/lignite gasification projects for both government public sector undertakings (PSUs) and the private sector with an outlay of Rs 6,000 crores.
The selection of entities for the coal/lignite gasification scheme will be carried out through a competitive and transparent bidding process, the Ministry said. Furthermore, the government is considering providing budgetary support to eligible PSUs, and Private sector enabling them to undertake coal gasification projects. In the first segment, the government will provide support to government PSUs. The second segment encompasses both the private sector and PSUs, with a budget allocation granted to each project. The selection of at least one project under this segment will be determined through a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog. Lastly, the third segment involves the provision of budgetary support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants.
In addition to the aforementioned scheme, the Ministry is also considering an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilized in gasification projects for a period of 10 years after the commercial operational date (COD), provided that the GST compensation cess is extended beyond FY27. This incentive aims to offset the inability of entities to claim input tax credits for the same.
Furthermore, the Ministry highlighted collaborative efforts in advancing Surface Coal Gasification (SCG) projects across Coal India Limited (CIL) coalfields. In October 2022, strategic bilateral agreements were executed, including a Memorandum of Understanding (MoU) between Bharat Heavy Electricals Limited and CIL, as well as a memorandum of understanding between Indian Oil Corporation Limited, the Gas Authority of India Limited and CIL. These collaborations aim to foster cooperation and expertise in driving the implementation of SCG projects, the government said.
The CIL Board has accepted the pre-feasibility reports for three projects which includes Eastern Coalfields Limited, Mahanadi Coalfields Limited and Western Coalfields Limited and has approved the initiation of pre-project activities, such as topography survey, soil investigation and water availability studies. Tendering activities are also being undertaken to arrive at firm prices required for the preparation of a Detailed Feasibility Report (DFR) for the respective projects. The CIL Board has also given ‘in-principle’ approval for the formation of joint ventures as envisaged above. Currently, negotiation and finalization of the Joint Venture agreement are in progress.
– global bihari bureau
