National Coal Gasification Mission

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National Coal Gasification Mission

(100 MT Coal Gasification by 2030)
Mission Document
Ministry of Coal
Government of India
New Delhi
September, 2021
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Foreword
India has a reserve of 307 Billion tonnes of thermal coal and about 80% of coal produced is
used in thermal power plants. With environment concerns and development of renewable
energy, diversification of coal for its sustainable use is inevitable. Coal gasification is
considered as cleaner option compared to burning of coal. Gasification facilitates utilization
of the chemical properties of coal. Syn Gas produced from Coal gasification can is usable in
producing Synthetic Natural Gas (SNG), energy fuel (methanol & ethanol), ammonia for
fertilizers and petro-chemicals. These products will help move towards self-sufficiency
under Atmanirbhar Bharat Abhiyaan. In line with the above objective, Ministry of Coal has
taken initiative for utilizing coal through coal gasification and as such this Mission document
has been prepared to achieve 100 MT coal gasification by year 2030.
I am thankful to Shri Pralhad Joshi, hon’ble Minister for Coal, Mines and Parliamentary
Affairs for encouraging the Ministry in this endeavor. I am indebted to Dr Anil Kumar Jain,
Secretary Coal for his keen guidance in making the Mission document and Dr V. K. Saraswat,
NITI Aayog for his unstinted support in gasification efforts. I would also like to appreciate
the contributions made by Technical Division of MoC, CMPDI Delhi, CIL, CIMFR, M/S PDIL,
M/S Delloitte and Shri Ripunjay Bansal, Consultant to Secretary Coal through their timely
inputs. I also take this opportunity to thank Shri Peeyush Kumar, Director (Technical), MoC
who made invaluable contribution in finalizing this report. I hope this document which set
the roadmap for country in achieving the Mission will be useful in meeting the coal
gasification objectives.
(Vinod Kumar Tiwari)

Chairman, Implementation Committee and
Additional Secretary
Ministry of Coal
Government of India
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Mission Document of National Coal Gasification Mission
Table of Contents
List of Figures.................................................................................................................................. 4
List of Tables ................................................................................................................................... 4
List of Annexures ............................................................................................................................ 4
List of Abbreviations ....................................................................................................................... 5
1. Introduction ............................................................................................................................ 7
1.1. Need for Coal Gasification ................................................................................................. 7
1.2. Atmanirbhar Bharat Abhiyaan: ........................................................................................... 7
2. Coal Resources in India..................................................................................................... 10
2.1. Category Wise Breakup of Coal Resources ................................................................... 10
2.2. Depth wise Breakup of Coal Resources ......................................................................... 11
2.3. Grade wise Breakup of Non-Coking Coal ....................................................................... 12
2.4. R/P Ratio of Different Countries as of 2020 .................................................................... 12
3. Gasification Potential Study of Indian Coal ................................................................... 13
3.1. Important Coal Properties in View of Gasification .......................................................... 13
3.2. Experimental Methodology ............................................................................................... 14
3.3. Recommendations ............................................................................................................ 14
4. Gasification Technology.................................................................................................... 19
4.1. Coal Gasification Process ................................................................................................ 19
4.2. Categories of Coal gasification Technologies ................................................................ 20
5. Coal Gasification Products: Sectoral Potential ............................................................ 23
5.1. Chemicals and Petro-chemicals ...................................................................................... 23
5.1.1. Methanol......................................................................................................................... 23
5.1.2. Ethanol ........................................................................................................................... 24
5.1.3 Olefins (Primarily- Ethylene and Propylene) ............................................................... 25
5.1.4 DME, Acetic Acid and Formaldehyde .......................................................................... 25
5.2 Fertilisers and NH3 based products ................................................................................ 26
5.2.1 Urea ................................................................................................................................ 26
5.2.2 Di-Ammonium Phosphate (DAP) ................................................................................. 26
5.2.3 Ammonium Nitrate (AN) ................................................................................................ 27
5.3 Hydrogen ........................................................................................................................... 27
5.4 Steel Making ...................................................................................................................... 27
5.5 Pharmaceutical Sector...................................................................................................... 28
6 Global Experience in Coal Gasification .......................................................................... 29
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6.1 China .................................................................................................................................. 29

6.2 United States ..................................................................................................................... 31
6.3 Japan.................................................................................................................................. 31
7 Indian Efforts in Coal Gasification................................................................................... 32
7.1 Coal Gasification: Past Indian scenario .......................................................................... 32
7.2 Existing Coal Gasification Plants in India ........................................................................ 32
7.3 Ongoing Surface Coal Gasification Projects ................................................................... 33
7.3.1 Talcher Fertiliser Plant .................................................................................................. 33
7.3.2 Dankuni Coal to Methanol Plant ................................................................................... 33
7.3.3 Other proposed projects ............................................................................................... 34
8 Indian Strategy for the Future of Coal Gasification ..................................................... 35
8.1 Challenges ......................................................................................................................... 35
8.2 Setting up of National Coal Gasification Mission ............................................................ 36
8.3 Organisational Structure ................................................................................................... 36
8.3.1 Steering Committee....................................................................................................... 36
8.3.2 Implementation Committee........................................................................................... 37
8.3.3 Resource Group ............................................................................................................ 37
8.4 Research and Development ............................................................................................. 38
8.4.1 Indigenous Gasifier Development Programs .............................................................. 38
8.4.2 Other efforts for Pilot and demonstration project ........................................................ 40
8.5 Implementation Strategy................................................................................................... 40
8.6 Infrastructure Requirement............................................................................................... 41
8.7 Generating Local Interest ................................................................................................. 42
8.8 Funding Requirement and Business Models .................................................................. 42
8.9 Inter-Ministerial Collaboration .......................................................................................... 42
8.10 Policy Decisions and Statutory Approvals ...................................................................... 43
8.11 Institutional Integration...................................................................................................... 43
9 Policy Supports in Coal Gasification Sector and Way Forward ................................ 44
9.1 Way ahead for taking up Mission ..................................................................................... 44
9.1.1 Allocation & Linkages .................................................................................................... 45
9.1.2 Gasification Technology Adoption ............................................................................... 45
9.1.3 Downstream Products ................................................................................................... 45
9.1.4 Business Model for Surface Coal Gasification Projects ............................................. 46
9.2 Incentives, Policy Enablers .............................................................................................. 47
9.3 Other Incentives / Policy Measures for Coal Gasification .............................................. 48
9.4 Way Forward ..................................................................................................................... 49
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List of Figures
1. Figure 2.1: R/P Ratio of Different Countries as of 2020

2. Figure 3.1: Coal Characterization Matrix
3. Figure 5.1: Status of Methanol in India
List of Tables
1. Table 2.1: Break-up of Coal Resources (MT) in India – Category wise as of

1.04.2020
2. Table 2.2: Break-up of Coal Resources (MT) in India – Depth wise as of 1.04.2020
3. Table 2.3: Break-up of Non-coking Coal Resources (MT) in India – Grade wise as of
1.04.2020
4. Table 5.1: Ethanol Demand Projection in India
5. Table 5.2: Urea demand-supply projections in India for FY25
6. Table 5.3: Production, Import and Consumption of Urea
7. Table 5.4: Production, Import and Consumption of DAP
List of Annexures
1. Annexure I
2. Annexure II
3. Annexure III
4. Annexure IV
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List of Abbreviations
1. AFT – Ash Fusion Temperature

2. BHEL – Bharat Heavy Electronics Limited
3. BP – British Petroleum
4. BT – Billion Tons
5. CAGR – Compounded Annual Growth Rate
6. CAPEX – Capital Expenditure
7. CCL – Central Coalfields Limited
8. CEA – Central Electricity Authority
9. CIL – Coal India Limited
10. CMPDI – Central Mining Planning and Design Institute
11. CSR – Corporate Social Responsibility
12. CSIR-CIMFR – Council of Scientific and Industrial Research – Central Institute of
Mining and Fuel Research
13. CTL – Coal-to-Liquids
14. CTO – Coal-to-Olefins
15. DAP – Di-Ammonium Phosphate
16. DME – Di-methyl Ether
17. DMF – District Mineral Fund
18. DOE – Department of Energy (Government of US)
19. DRI – Direct Reduced Iron
20. DST – Department of Science and Technology
21. ECL – Eastern Coalfields Limited
22. EFG – Entrained Flow Gasifier
23. EIA – Energy Information Administration
24. FBG – Fluidised Bed Gasifier
25. FCIL – Fertilizer Corporation of India Limited
26. GAIL – Gas Authority of India Limited
27. GST – Goods and Services Tax
28. GW – Gigawatt
29. IEA – International Energy Agency
30. IEEFA - Institute of Energy Economics and Financial Analysis
31. IGCC – Integrated Gasification Combined Cycle
32. IRR – Internal Rate of Return
33. JKM – Japan Korea Marker
34. JSPL – Jindal Steel and Power Limited
35. KWh – Kilowatt-hour
36. LBNL - Lawrence Berkeley National Laboratory
37. LCOE – Levelized Cost of Electricity
38. LNG – Liquified Natural Gas
39. LPG – Liquified Petroleum Gas
40. LSTK – Lump-sum Turnkey
41. MBG – Moving Bed Gasifier
42. MEG – Mono-Ethyl Glycol
43. MEITY – Ministry of Economy, Industry and Trade (Government of Japan)
44. MT – Million Tons
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45. MTO – Methanol-to-Olefins

46. MTPA – Million Tons Per Annum
47. MW – Megawatt
48. NETL – National Energy Technology Laboratory
49. NIT – Notice Inviting Tender
50. NITI – National Institution for Transforming India
51. NLC – Neyveli Lignite Company
52. NMET – National Mineral Exploration Trust
53. NSP – National Steel Policy
54. OPEX – Operational Expenditure
55. PDIL – Projects & Development India Limited
56. PM – Particulate Matter
57. PMC - Project Management Consultant
58. R/P Ratio – Reserve –to-Production Ratio
59. RCF – Rashtriya Chemicals Fertilizers
60. SCCL – Singareni Collieries Limited
61. SCG – Surface Coal Gasification
62. SECI – Solar Energy Corporation of India
63. SECL – South Eastern Coalfields Limited
64. TFL – Talcher Fertilizers Limited
65. TWh – Terawatt-hour
66. WCL – Western Coalfields Limited
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1. Introduction
Coal is the most abundant and important fossil fuel in India. The coal production in
India touched 730 MT in the financial year 2019-20 (provisional) & 716MT in the
financial year 2020-21 (provisional)1 despite the downturn in demand due to COVID-
19 pandemic. 80% of the coal produced is consumed in thermal power plants 2
representing about 55% of the total fuel source for power in India3 along with lignite.
1.1. Need for Coal Gasification
The world moves towards cleaner forms of energy, India, being a signatory to the
Paris Agreement, 2016 has declared three quantitative climate change goals as its
Nationally Determined Contribution (NDC)4:
a) Reduction in emissions intensity of Gross Domestic Product (GDP) by 33 to 35

percent by 2030 from 2005 level
b) Achieving about 40 percent cumulative electric power installed capacity from

non-fossil fuel-based energy resources by 2030
c) Creating an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide

equivalent through additional tree & forest cover by 2030
1.2. Atmanirbhar Bharat Abhiyaan:
Honourable Prime Minister of India in his 75 th Independence Day speech has

mentioned that India will have to pledge to become energy independent before its
100 years of Independence. At present India is heavily dependent on imports for its
oil and gas needs. For the steel making process through blast furnace route requires
coking coal which is mostly imported from Australia, USA and other countries.
Hydrogen produced from Syn gas will also help in meeting the energy need of the
country.
In the past, number of efforts has been made to gasify coal in India. Fertiliser plant at
Sindri used to gasify coal for production of fertiliser in 1960s (now closed). JSPL in
its Angul plant is operating gas based DRI plant by domestic coal. Talcher Fertilizer
Limited (TFL) is also going ahead with mixing of pet coke in high ash domestic non-
coking coal for urea production.
In order to achieve 100 MT coal gasification projects in India by 2030, Ministry of

Coal has taken several steps. All coal companies have been advised to appoint a
1
Production and Supplies, Ministry of Coal Website
2
Year End Review 2020 - Ministry of Coal, Press Information Bureau
3
Power Sector at a Glance – All India, Ministry of Power Website
4
Key Declaration on Climate Change to be signed at the India CEO Forum on Climate Change, Press Information Bureau
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nodal officer and to prepare an action plan for gasifying at least 10% of their coal
production. Further, in all future commercial coal block auctions, a provision has
been made for 20% rebate in revenue share for the coal used for gasification
purpose provided the coal quantity used for gasification is at least 10% of total coal
production.
On the request of Ministry of Coal, NITI Aayog had constituted a Steering Committee
under the Chairmanship of Member, NITI Aayog. A technical standing committee of
experts constituted by NITI Aayog assists this steering committee. MoC has also
constituted an implementation committee involving all industry stake holders under
the chairmanship of Additional Secretary, Ministry of Coal. Further, a resource group
consisting of experts from CIMFR, IIT Bombay, IIT ISM Dhanbad and IIT Madras has
been constituted to take care of research need for the gasification mission.
Setting up of coal gasification plant is a capital-intensive work and will require at

least 48 months of time. Further, the experience of coal gasification in India is
limited. As such the success of initial coal gasification projects is very important for
the national mission.
In order to implement various coal gasification projects, it has been planned to set up
various gasification projects in phases. In phase I, the project based on low ash coal
available in CIL will be taken up. CIL will take care of mining of coal and marketing of
the product and the gasification and product conversion plant will be set up on
BOO/BOM/LSTK contract basis. Considering the low availability of low ash coal,
gasification plants will be set up based on high ash coal and with concessions given
for commercial mining of coal it is expected to reach the goal of 100 MT gasification
by 2030.
India has a huge reserve of coal of about 344 BT of non-coking coal out of which
about 163 BT is proved reserves and with the current rate of consumption; it is
expected to last for more than 5 decades. About 80% coal is used in thermal power
plants. With environment concerns and development of renewable energy,
diversification of coal for its sustainable use is inevitable. Coal gasification is
considered as cleaner option as compared to burning of coal and has diversified use
of coal in other form of energy.
Syngas can be used to produce Gaseous Fuels such as Hydrogen, Substitute

Natural Gas (SNG or Methane), Di-Methyl Ether (DME), Liquid Fuels such as
Methanol, Ethanol, Synthetic diesel and Chemical and Petrochemicals like
Methanol derivatives, Olefins, Propylene, Mono-Ethylene Glycol (MEG), nitrogenous
fertilizers including Ammonia, DRI, Industrial Chemicals along with Power
Generation. Entire value chain of the process is as follows
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2. Coal Resources in India
With 344 BT of coal resources including 163 BT of proved reserves, India has the 4 th
largest reserves of coal in the World. The total World proved reserves of coal are
1074 BT and India accounts for around 10% of the global reserves. US has the
largest coal reserves followed by Australia and China.
2.1. Category Wise Breakup of Coal Resources
A detailed analysis of the Indian coal reserves by category and depth is given in the
tables below:
Break-up of Coal Resources (MT) in India – Category wise as of 1.04.2020
Coal Type Proved Indicated Inferred Total % Share
Prime Coking 4,668 645 0.00 5,313 1.5
Medium Coking 14876 11245 1863 27984 8.1
Semi Coking 529 992 186 1707 0.5
Sub-Total of
Coking 20,073 12,882 2,049 35,004 10.1
Non-Coking 1,42,804 1,37,386 27,203 3,07,393 89.4
Tertiary Coal 594 121.17 909 1624 0.5
Grand Total 163,471 1,50,389 30,161 344021 100.00
% Share 47.5 43.7 8.8 100
Table 2.1 - Source: GSI Coal Inventory’2020
It is evident from Table 2.1 that 90% of the coal reserves in India constitute non-
coking coal or thermal coal which is primarily used for power generation and in
industries such as cement and brick-kilns. Whereas approximately 10% of the
reserves are coking coal reserves which are majorly used in steel production
process. India imports a quarter of its coal requirements.
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2.2. Depth wise Breakup of Coal Resources
Break-up of Coal Resources (MT) in India – Depth wise as of 1.04.2020
%
Depth Range (m) Proved Indicated Inferred Total Share
0-300 118082 65704 9122 1,92,907 56.1
300-600 26882 66600 15009 1,08,492 31.5
0-600 (for Jharia only) 8399 6 0 8,405 2.4
0-600(Non-Coking) 5657 445 0 6,102 1.8
600-1200 4451 17634 6030. 28,115 8.2
Total 1,63,471 1,50,389 30,161 3,44,021 100.00
Table 2.2 – Source: GSI Coal Inventory’2020
It is evident from Table 2.2 that around 56% of the total coal resources or 72% of the
total proved reserves lie up to the depth of 300 metres. The shallower the depth,
easier the mining. More than 90% of the coal production in India is done through
open-cast mining, which is usually up to a depth of 300 metres, whereas the rest is
done through underground mining.
The above tables make it clear that India has huge reserves of coal. Therefore, it
would be beneficial for India if it finds a sustainable way of using these reserves as
the world including India is gradually transitioning away from coal toward cleaner
fuels in the wake of climate change. The use of domestic coal reserves becomes
even more important, especially when India does not have other sources of fuel –
crude oil and natural gas, 82% and 45% of the requirement of those fuels is met
through imports. This exposes India to the vagaries of price volatility and supply
insecurity.
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2.3. Grade wise Breakup of Non-Coking Coal
Break-up of Non-coking Coal Resources (MT) in India – Grade wise as of

1.04.2020
G1-G3 G4-G5 G6 G7-G8 G9-G14 G15-G17
Grand Total
1413 5384 12170 20655 100596 2586 142804
Measured
1336 5031 12783 23775 92851 1610
Indicated 137385
Inferred 27203 27203
307393
Table 2.3 – Source: GSI Coal Inventory’2020
2.4. R/P Ratio of Different Countries as of 2020
Figure 2.1 – Source: BP Statistics 2021
Figure 2.1 shows that the proved reserves of coal for India will last 147 years if India
produces its coal at the current level as of 2020. This implies that India must figure
out a sustainable way to use its coal reserves, otherwise this resource would remain
buried under the ground as the transition towards cleaner fuels accelerates.
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3. Gasification Potential Study of Indian Coal
In view of the potentiality of converting indigenous coal resources to different energy

forms and chemicals, NITI Aayog is presently exploring roadmap and suitable
technology options for surface coal gasification in the Indian context. In this
perspective, a Technical Committee on Surface Coal Gasification has been
constituted by (S&T), NITI AAYOG.
In the minutes of the fifth meeting of Technical Committee on Surface Coal
Gasification (SCG) held on 17.05.2018 under the Chairmanship of Sri V.K.
Saraswat, Member (S&T),NITI AAYOG, it was decided that the detailed analysis of
the coal from potential operational mines/blocks with respect to Surface Coal
Gasification (SCG) should be carried out jointly by CMPDIL, Ranchi and CSIR-
CIMFR, Dhanbad. The findings and recommendations of the report published under
the title “Gasification Potential Mapping of Indian Coals and utilization strategy” are
listed below:
3.1. Important Coal Properties in View of Gasification
Gasification Potential Mapping of high ash Indian coals have been carried out as per
the following coal characterization matrix:
Figure 3.1: Coal Characterization Matrix
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Coal choice is the least flexible factor considering economic, geographical and
political reasons. Therefore, it is necessary to adopt a coal gasifier, which best suits
to the properties of the coal to be processed. The important coal properties which
affect the gasifier performance are to be determined from proximate and ultimate
analysis, cold and hot crushing strength, gasification reactivity & surface area, ash
fusion temperature (AFT), slag behaviour, ash composition, caking index, rank and,
petrographic characteristics, etc.
3.2. Experimental Methodology
The experimental methodology to carry out this exercise is constituted by the

following steps, these are respectively: collection of coal samples from different
mines, sample preparation, proximate and ultimate analyses, specific surface area,
true density and reactivity, mechanical strength of coal, char and aggregates, ash
fusion temperature, ash chemical composition, base-acid ratio and ash slag
temperature, caking index and swelling number, petrographic analysis. Based on
these scientific experiments recommendations were given for different potential
seams of different mines.
3.3. Recommendations
Recommendations for different potential seams of different mines are as shown
below:
1. MCL, Talcher, Bhubaneswari OCP, Seam 2
Recommendations: High-temperature EFG seems the most suitable gasifier
option for this coal and can also be handled in a low-temperature refractory
lined EFG. This coal can also be handled in MBG and FBG, however, care
should be taken in view of agglomeration due to iron & calcium content.
2. MCL, Talcher, Bhubaneswari OCP, Seam 3
Recommendations: Membrane lined high-temperature EFG seems the
suitable gasifier option for this coal. This coal can also be handled in MBG
and FBG.
3. MCL, Talcher, Jagnnath, Seam 2
suitable gasifier option for this coal. However, washing/blending with low ash
feed recommended. This coal can also be handled in MBG and FBG.
4. MCL, Talcher, Kaniha area, Seam 2
suitable gasifier option after washing/blending with low ash coal. However,
high ash content will attract high CAPEX& OPEX otherwise impose a high
thermal penalty. This coal can also be handled in MBG and FBG.
5. MCL, Talcher, Balram, Seam 2
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high ash content will attract high CAPEX &OPEX otherwise impose a high
6. MCL, Talcher, Bharatpur, Seam 2
suitable gasifier option for this coal. However, washing/blending with low ash
feed recommended. This coal can also be handled in MBG and FBG.
However, care should be taken to avoid agglomeration in FBG.
7. MCL, Talcher, Ananta OCP, Seam 2
8. MCL, Talcher, Lingraj OCP, Seam 2
9. MCL, Talcher, Lingraj OCP, Seam 3
high ash content will attract high CAPEX & OPEX otherwise impose a high
10. MCL, Talcher, Hingola, Seam 8
11. MCL, IB Valley, Lakhanpur OCP, Lajkura Seam
12. MCL, IB Valley, Kulda OCP, Lajkura Seam 2(Orient)
high ash content will attract high CAPEX & OPEX otherwise impose a high
13. MCL, IB Valley, Kulda OCP, Lajkura Seam 2
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14. MCL, IB Valley, Belpahar, IB Seam

thermal penalty. This coal can also be handled in MBG and FBG. However,
care should be taken to avoid agglomeration in FBG.
15. MCL, IB Valley, Rampur, Top-Bottom Composite Seam
suitable gasifier option for this coal. This coal can also be handled in MBG
and FBG. However, care should be taken to avoid agglomeration in MBG &
FBG.
16. MCL, IB Valley, Samaleswari OCP
suitable gasifier option. However, washing/blending with low ash feed is
recommended. This coal can also be handled in MBG and FBG. However,
care should be taken to avoid agglomeration in MBG & FBG.
17. MCL, IB Valley, Lajkura, Level 1 Top Seam
18. MCL, IB Valley, Lajkura, Level 2 Bottom Seam
Recommendations: Membrane, as well as refractory lined EFG, may be a
thermal penalty. This coal can also be handled in MBG and FBG but a high
probability of agglomeration due to the high iron content and low AFT.
19. CCL, Ashoka Mines, Lower Dakra Seam
Recommendations: Membrane lined High-temperature EFG seems the
high ash content will attract high CAPEX &OPEX otherwise impose the high
thermal penalty. This coal can be also handled in MBG after washing/blending
with low ash feed and in FBG without washing or blending with low ash feed.
However, care should be taken to avoid agglomeration in MBG and FBG.
20. CCL, Urimari Mines, Upper Balkudra Seam
21. CCL, Urimari Mines, Lower Balkudra Mines
Recommendations: Membrane lined High-temperature EFG may be the
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22. CCL, North Urimari Mines, Argada A+B Seam

high ash content will attract high CAPEX &OPEX otherwise it will impose
higher thermal penalty. This coal can also be handled in MBG and FBG with
care to avoid agglomeration due to its weakly caking nature.
23. CCL, Magadh Mines, One Bottom Seam
Recommendations: Membrane lined High-temperature EFG may be the
high ash content will attract high CAPEX & OPEX otherwise impose the high
thermal penalty. This coal can also be handled in MBG after washing or
blending with low ash feed. FBG may be other option.
24. CCL, Amrapali Mines, One Combined Seam
25. CCL, Purnadih Mines, Lower Middle Dakra Combined Seam
26. ECL, Mohanpur mines, Seam A
blending with low ash feed. FBG may be other option. However, care should
be taken to avoid agglomeration in FBG and MBG due to its weakly caking
nature.
27. ECL, Chitra Mines, Chitra Seam
suitable gasifier option. This coal can also be handled in MBG and FBG.
28. ECL, Jhanjhra Mines, R-V Seam
suitable gasifier option and can also be handled in a low-temperature
refractory lined EFG. This coal can also be handled in MBG and FBG.
However, care should be taken to avoid agglomeration in FBG and MBG.
29. ECL, Kotthadih Mines, R-VI Seam
However, care should be taken to avoid agglomeration in FBG and MBG.
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30. ECL, Sonepur Bazari, R-VI Seam

However, care should be taken to avoid agglomeration in FBG and MBG due
to its weak caking nature.
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4. Gasification Technology
The gasification technology is now marching towards maturity with the history that
dates back to 1800s. The first patent was granted to LURGI GmbH in Germany in
the year 1887. In 1940, commercial coal gasification was used to provide “town gas”
for streetlights in both Europe and United States. Since then, many coal gasification
plants have come up in the world for the downstream production of chemicals like
methanol, ammonia etc. and combined cycle power generation. Appropriate
technology selection depends upon the characteristics of coal feed and the end
product required from the coal gasification island. A large number of products can be
produced based on coal gasification.
4.1. Coal Gasification Process
Coal gasification offers a practical means of utilizing coal for meeting stringent
environmental control requirements. In the gasification process, sulphur present in
the coal is converted to hydrogen sulphide (H 2S) and minor amounts of carbonyl
sulphide (COS). These sulphur compounds can be easily and economically removed
from gas streams by a wide variety of commercially available processes (i.e., acid
gas removal systems). The separated acid gas is further processed to recover
elemental sulphur. After the acid gas removal treatment, only few ppm of sulphur
remains in the coal gas. Nitrogen oxides (NO x) are not formed to any appreciable
extent in the reducing atmosphere of coal gasification. The particulate content in the
fuel gas after gasification is negligible since the gas cleaning steps (hot cyclones,
water scrubbing or hot gas cleaning) capture almost all the particulate.
Except for hot gas clean up, other two systems are commercially established and
practiced. Most part of the wash water is recycled and the residual waste waters
from gasification plants can be effectively treated. The coal gasification plants do not
produce any scrubber sludge which need careful and costly disposal.
Though ash handling is an issue while using high ash Indian coals, the coal ash from
gasifier is not hazardous and its leaching effect is very low. The fine ash generated
in the processes using pulverized coal feed may be used for value added products
like manufacturing of fly ash bricks. In slagging type of Gasifier wherein slag is
produced as a bottom product instead of ash, this slag can be gainfully employed in
cement industries and simultaneously eliminating the problem associated with
handling of ash.
Coal gasification process has several other advantages besides minimum

environmental impacts which are briefly discussed below. A broad range of coals
with varying ash content, coal fines, middling and washery rejects can be
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successfully gasified. Coal can be fed to the gasifier in the form of crushed coal of 5
to 50 mm size, coal fines, pulverized coal or coal water slurry depending upon the
generic type of gasification process (i.e., moving bed, fluidized bed and entrained
bed). Oxygen enriched Air or oxygen can be used as gasification medium. If oxygen
is used in a coal gasifier instead of air, carbon dioxide is emitted as a concentrated
gas stream. In this form, it can be captured more easily and at lower costs for
ultimate disposition in various sequestration approaches. By contrast, when coal
burns or is reacted in air, 80 percent of which is nitrogen, the resulting carbon
dioxide is much more diluted and is costlier to separate from the much larger mass
of gases flowing from the combustor or gasifier. Carbon conversion efficiency of as
high as 99% can be attained in the gasification process. The major advantage of
gasification is that coal is converted into a gaseous fuel which is easy to handle and
is a clean form of energy. In the gaseous form, it enables to substitute petroleum
products and natural gas. The synthesis gas has wide range of applications. It can
be used in Integrated Gasification Combined Cycle (IGCC) system for efficient and
clean generation of electric power. It is suitable for the manufacturing of hydrogen
and basic chemicals such as ammonia, methanol, substitute natural gas, CTL (coal
to liquid), as reduction gas in steel industry etc. It can be used in complex of plants
for the simultaneous production of electric power, chemicals/ fertilizers, reduction
gas and fuels which also improve the economics of coal gasification.
4.2. Categories of Coal gasification Technologies
Different Surface Coal Gasification process technologies broadly categorized on the

basis of type of gasifiers in use are as follows:
(i) Moving Bed or Fixed bed Dry bottom (FBDB)
(ii) Fluidized Bed (back mix reactors)
(iii) Entrained Bed (plug flow reactors)
The process technologies may further be classified according to feed use and heat
recovery e.g., use of pulverized coal as dry or in slurry form and heat recovery in
form of steam generation or direct quenching there by generating process vapour
along with the gasifier effluent gas. All these have to be analysed carefully while
selecting a technology. The aforesaid categories of Coal Gasification Technologies
have been described below:
(i) Moving Bed / Fixed Bed Type Gasifier
Moving bed type gasifier is among the various types of Gasifiers commercially
operated. It operates with a counter current flow of oxidant through a series of
reaction zones – gradually changing from coal-coke-tar-ash. The moving bed reactor
requires sized coal, generally in the range of 5-50 mm with a limitation on the fines
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content (-6 mm) in the feed. Air blown gasifiers do not exceed ash melting point
whereas oxygen blown moving bed gasifiers can be either dry ash or slagging.
Dry ash gasifier uses considerable excess process-steam, required to control the
bed temperatures below the ash fusion point to avoid formation of clinkers. Highest
bed temperature is generally maintained below the ash fusion point. Dry- ash
Removal System is highly suitable for High-ash Indian Coals having High Ash Fusion
Temperatures.
Slagging gasifier: Highest bed temperature is allowed to exceed ash fusion point
producing slag. It operates at pressure around 30 kg/cm 2 and around1100OC. This
process is highly suitable for non-caking and weakly caking high ash coal with a high
fusion point of ash more than 1400 O C. Slagging type with a bath of molten slag at
the bottom has different reaction zones viz., drying, devolatilization, gasification and
combustion. The char from devolatilization is partly gasified by steam and CO2 while
the residual char is burnt with the oxygen input.
(ii) Fluidized Bed Type Gasifier
Fluidized bed gasifier is fed with 5 to 50 mm size coal as well as pulverized coal
which is fluidized and gasified by the oxidant gas either oxygen or air. The reactor
operates around 30 kg/cm2 pressure and at a temperature well below the ash fusion
temperature of coal, typically ranging from 800 to 1050 OC depending on the
feedstock characteristic. As a result of maintaining constant low temperature, clinker
formation and possible defluidisation of the bed is prevented.
Low temperature operation makes fluidized bed gasifiers ideal for reactive coals.
Due to the restricted flow of oxidant most of coal particles do not burn completely but
form char particles which are entrained the raw gas exit gasifier. This necessitates
separation and recycle of substantial quantity of char particles.
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(iii) Entrained Flow Type
In this fine coal feed and oxidant are fed co-currently. As a result, oxidant and steam
is entraining the coal particles. This results in high throughput and high carbon
conversion efficiencies. Entrained flow type gasification is the cleanest and efficient
type of coal gasification. The entrained flow gasifiers are widely used abroad. It is
ideal for coal with low ash content. If ash content of coal fed in entrained flow gasifier
is high, considerable part of energy will be consumed in melting & slagging the ash
content of high ash coal resulting in lower gasification energy.
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5. Coal Gasification Products: Sectoral Potential
5.1. Chemicals and Petro-chemicals
Coal to Liquids is an upcoming industry which can play a vital role in India’s chemical
and petrochemical industry as majority of chemicals and petrochemicals are derived
from products which are derived from crude oil and natural gas. Coal can be used to
make the following products:
a) Methanol
b) Ethanol
c) Olefins – (Primarily - Ethylene and Propylene)
d) DME, Acetic Acid and Formaldehyde
5.1.1. Methanol
Natural gas to methanol is an established process, however, coal is also being used
to produce methanol in some parts of the World, mainly China. India having
abundant reserves of coal can produce methanol from coal.
Figure 5.1 – Source: Chemical and Petrochemical Statistics 2019
Conversion Efficiency of Coal to Methanol:
It is estimated that 2.7-3 tons of coal would be required to produce 1 ton of Methanol.
Therefore, 5-6 MT of coal would be required to produce around 2 MT of Methanol.
Also, methanol can be used as a feedstock to produce Olefins, DME and Acetic
Acid, however, Olefins are currently produced from natural gas and naphtha.
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Potential of Methanol consumption:

M15 Fuel: BIS has notified M15 fuel for automobile sector wherein 15% methanol
can be blended with Gasoline. In addition to the present domestic methanol
consumption, about 5-7 Million tonnes more can be utilised in M15 fuel with 30
million Tonnes of consumption of gasoline.
Pharma Sector: Methanol acts as solvent for many of the bulk drugs and there is a
need to identify the potential requirement of methanol by 2030.
5.1.2. Ethanol
Under the national policy on bio fuels 2018, Government of India with effect from
01.01.2003 resolved to supply 5% ethanol blended petrol under its First-Generation
Ethanol blended petrol(EBP). Government of India has also advanced the target for
20% ethanol blending in petrol (also called E20) to 2025 from 2030. Ministry of
Petroleum and Natural Gas is in the process of modifying National Policy on Bio
fuels 2018, to include production of ethanol also from coal gasification route. Primary
discussions with licensors such as Synata Bio (USA) revealed that ethanol can be
produced in a cost-effective manner from Syn Gas. Oil companies have also shown
interest to buy cost effective ethanol and this will help in reducing imports.
Ethanol is envisaged for being a downstream product from syngas obtained by coal
gasification. Opinions were voiced regarding fermentation of syngas to meet the
demand of ethanol blending projected by 2025-26. India’s net import of petroleum
stood at 185 million T putting the cost at 55 billion USD, which is used primarily for
products in the transportation sector. NITI Aayog has laid out a roadmap for ethanol
blending preponing the target from the earlier 2030 to 2025. Additionally, ethanol has
medical applications as an antiseptic and disinfectant. It is also used as a chemical
solvent and in the synthesis of organic compounds.
Ethanol Demand Projection in India
Supply Year Projected Petrol Requirement of ethanol for
Sales (MMT) blending in Petrol (Cr. Litres)
2021-22 31 437
2022-23 32 542
2023-24 33 698
2024-25 34 988
2025-26 35 1016
Table: 5.1
Source: Roadmap for Ethanol Blending in India 2020-2025, Report of Expert Committee, NITI Aayog
Currently, ethanol is obtained from biochemical processes using sugar, starch and
oilseed-based feedstocks. However, these first-generation bio-based ethanol
feedstocks have some concerns regarding food supply & security, limited impact on
emission reduction and impact of land & water usages. Second generation ethanol
feedstock have also emerged using feed such as energy crops, municipal wastes,
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forest & agricultural residues. However, the major challenge related to production of
ethanol through the biochemical route is the lower conversion achievement.
Synata Bio has designed an advanced syngas to ethanol technology to ferment
syngas. The plant design includes utilization of unique and proprietary anaerobic
microorganisms which provides higher hydrogen uptake and increases overall yield
to ethanol. Syngas introduced at the bottom of the bioreactor and injection
technology maximizes syngas dissolution and mass transfer. A sterile seed train of
reactors is employed to grow the necessary population of Synata Bio’s proprietary
microbes to populate the production reactors. The production reactors produce a
liquid product stream, “broth”, containing the dilute ethanol product (about 2.5%-3%
w/v) in water that is distilled and dehydrated to produce the desired high purity
ethanol, prior to being sent to the finished product tanks.
5.1.3 Olefins (Primarily- Ethylene and Propylene)
Olefins are currently produced from natural gas and naphtha. Natural gas is a scarce
natural resource in India as it imports almost 45% of its requirement. Moreover,
Naphtha is derived from crude oil which is again an imported commodity as India
imports around 82% of its crude requirement. Therefore, coal to methanol and then
further production of olefins would help India to substitute the use of imported
products to produce olefins. The production of olefins is about 9 MT in India from
crude oil however economics of product is to be examined for setting up plant since
about 3 tons of Methanol are required to produced 1 ton of olefins.
5.1.4 DME, Acetic Acid and Formaldehyde
Production of DME in India is insignificant, whereas approximately 0.16 MT of Acetic

Acid is produced. DME can be blended with LPG and India currently imports 50% of
its LPG requirement of around 21 MT per year. A 20% DME blend with LPG is
feasible and can open an opportunity to substitute LPG imports by DME which is
produced from domestic coal. Therefore, 2 MT of DME would be required assuming
a 20% blend for around 10 MT of LPG imported. 1.4 units of methanol are required
to produce 1 unit of DME.
Acetic Acid (CH₃COOH), popularly known as Vinegar, is a clear liquid with a pungent
odour, sharp taste and is widely used as a food preservative. The most common
route for its production is the carbonylation of methanol. GNFC is the only producer
in India using methanol to acetic acid route – therefore, low cost of methanol is
imperative to make acetic acid competitive.
Formaldehyde is the simplest form of aldehyde (HCHO) which is a colourless gas
with a pungent odour. Formaldehyde is used in the production of household
products, building materials, glues and adhesives, resins etc. It is commonly
produced through the dehydrogenation of Methanol, so Methanol to Formaldehyde is
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a common route. Like Acetic Acid, availability of low-cost Methanol becomes

important to competitively produce Formaldehyde.
5.2 Fertilisers and NH3 based products

Hydrogen available in Syn Gas can be utilised for manufacturing ammonia (NH3)
which is a feed stock to Urea, Ammonium nitrate and there are many other
applications of ammonia.
5.2.1 Urea
Department of Fertilisers have made a plan to ensure meeting demand of urea
through domestic production and accordingly revival of old plants and new fertiliser
plants have been planned.
Urea demand-supply projections in India for FY25

(fig. in MT)
Urea Supply
Urea Demand
Year Existing New/Revived
Demand Total Supply Gap
Units Units
FY19 31.773 26.27 0 26.27 -5.503
FY20 32.482 26.27 1.33 27.6 -4.882
FY21 33.179 26.27 3.87 30.14 -3.039
FY22 33.863 26.27 5.14 31.41 -2.453
FY23 34.425 26.27 7.68 33.95 -0.475
FY24 35.085 26.27 7.68 33.95 -1.135
FY25 35.724 26.27 7.68 33.95 -1.774
Table: 5.2
Urea (Figures in MT)

Production Import Consumption
2014-15 22.6 8.8 31.4
2015-16 24.5 8.5 33
2016-17 24.2 5.5 29.7
2017-18 24.0 5.9 29.9
Table 5.3 – Source: Fertilizer Scenario 2018
To have a medium- term scenario for potential investment, it is recommended that
the demand projections till 2030 may be taken up for planning of future fertiliser
plants based on coal gasification as have been tried in case of Talcher Fertiliser
Plant.
5.2.2 Di-Ammonium Phosphate (DAP)

DAP is the 2nd most sought after fertilizer in India. Ammonia can be produced
through SCG plants, but the other raw material Phosphoric Acid is import dependent
due to low availability of phosphate minerals in India. This comes under non
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regulated sector and Department of Fertiliser may look into production of DAP under
Atmanirbhar Bharat Scheme.
Di-Ammonium Phosphate (DAP) (Figures in MT)
Production Import Consumption
2014-15 3.4 3.8 7.2
2015-16 3.8 6 9.8
2016-17 4.4 4.4 8.8
2017-18 4.7 4.2 8.9
Table 5.4 – Source: Fertilizer Scenario 2018
5.2.3 Ammonium Nitrate (AN)

Ammonium Nitrate is an important constituent for manufacturing of explosives in
open cast mines and at present there is an import of about 2.5 million tonnes of AN.
Most of the domestic manufacturers are importing ammonia and producing ammonia
through imported Natural Gas and these plants are situated on the western part of
the country. The consumption centers are in the eastern part and are more inclined
to imported AN received from Vizag port. Department of Chemicals may formulate a
strategy for production of AN from domestic sources.
5.3 Hydrogen
Currently hydrogen is playing as an important part of the world energy scenario as
‘Net Zero’ Targets has been announced by many nations and companies and the
voice for decarbonizing the Energy Sector, not only the Electric Sector is being
strong. The green hydrogen will also enhance renewables deployment.
Coal can be a competitive source to produce hydrogen in India, however, the
emissions from coal-based hydrogen are double that of gas based. Hydrogen
production is sensitive to electricity and gas prices, whereas in the case of coal, the
price also depends on capex and opex. India unlikely to be competitive for hydrogen
produced from gas, low cost of renewable electricity presents an opportunity, though
the cost of electrolysers is high. Dovetailing Coal to Hydrogen with the existing
Gasification Projects is a low hanging fruit. Methanol being a promising hydrogen
carrier and methanol prices being discovered around INR 22/Kg, a separate detailed
analysis on hydrogen production from coal should be done. CIL can produce low-
cost electricity for electrolysis through pit head plants, though the hydrogen produced
will not be green, which is the Global emphasis.
5.4 Steel Making

As per National Steel Policy, India is expected to build a capacity of 300 million
tonnes of steel per annum to cater to demand of around 255 mtpa by 2031. To
support this demand and the necessary production process, the requirement of coal
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would be to the tune of 300 mtpa of which around 165 mt would be coking coal, 35
mtpa coal for PCI (pulverized coal injection) and around 100 mt would be non-coking
coal for DRI (direct reduced iron or sponge iron prod).
Coke is an essential input for production of steel and currently about 0.9 Tonne of
coke is required to produce 1.0 Hot Metal (HM) through blast furnace route. Indian
coking coals are inferior to imported coking coals in terms of ash and other
properties. At present, SAIL & TATA use about 90% of imported coking coal in the
blend and rest 10% through indigenous sources.
CO and H2 of Syn gas are important reducing agent for steel making and are
environment friendly method of steel making through DRI route. JSPL has already
set up a plant for steel making through Gas based DRI. Promotion of setting up of
such plant for steel making thus reducing the dependence of coking coal which is
mainly imported is recommended as Atmanirbhar Bharat Abhiyaan
5.5 Pharmaceutical Sector

India has an ambitious plan of producing APIs indigenously rather importing from
China. The potential of Syn Gas requirement is being examined by Department of
Fertilizers for making APIs and also methanol as solvent.
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6 Global Experience in Coal Gasification
Global coal gasification market is expected to reach around 3,89,825 MW by 2026,

growing at a CAGR of approximately 10.8%.5 Fertilizer segment is anticipated to
hold the major market share. Ammonia production by coal gasification has increased
the demand for fertilizers. Another segment with a good growth rate, above 10.5%, is
power generation. Growing trend of Integrated Coal Gasification Combined Cycle
(IGCC) power plants worldwide has increased the opportunities. Demand for coal
gasification technology has increased in fuel gas production, owing to the increased
use of synthetic natural gas. By region, the global coal gasification market is
segmented into North America, Asia Pacific, Europe, Latin America, and the Middle
East and Africa.
a) Region dominating the coal gasification market is Asia Pacific. China

contributed the highest market share in 2017. Other countries, such as India
and Japan, are also promising markets for coal gasification.
b) North America is likely to show a good rate of growth. The U.S. contributed the
majority market share in the year 2017.
c) Moderate market growth is likely to be registered in the European region.

Germany contributed the majority share in 2017.
d) The Middle East and Africa and Latin America are likely to witness good market
growth.
6.1 China6
a) The Chinese government’s initiatives in its 11th and 12th five-year plans have
boosted the gasification industry in the country.
b) China produces more than 90% of its ammonia through coal gasification.
c) China is expected to increase the uptake of large-scale coal-to-SNG projects

and possibly scale up various coal-to-oil technologies projects, which in turn,
would supplement the gasification market.
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China case study7
a. The coal chemical industry, which includes gasification technology, accounts

for about 5% of China’s total coal consumption.
b. Higher self-reliance in energy supply and lower risk of oil and gas supply from
abroad are the major drivers of coal gasification related industries.
c. China has been pushing for coal gasification in a major way by adopting
proven western-developed gasifiers to gain operational experience.
d. It is the only country in the world, where large-scale coal gasification related
industries play a significant role in economic development.
e. China started importing the western Coal gasification technology in 1950.

Coal gasification technology was of major importance to China as it moved to
prioritize, develop and use its energy resources.
f. Western gasifiers have a strong presence in China. Air Products, Siemens,

KBR, GTI, Air Liquide are prominent western gasifiers in China.
g. Role of Coal Gasification in Ammonia/Urea: NH3 capacity is approx. 70 MTPA

(~30% of the world) and urea capacity is approx. 80 MTPA (~40% of the
world).
h. Role of Coal Gasification in Methanol: China has become by far the largest
producing country in the world, representing 54% of world methanol capacity
(~80 MTPA) and 48% of world methanol production in 2018.
i. China is the incremental methanol supplier to the world. Around 70% of China
methanol is produced from coal.
j. Role of Coal Gasification in Ethylene Glycol (EG): Capacity of coal-based EG

is approx. 2.5 MTPA (~30% of China total).
k. Role of Coal Gasification in Methanol to Olefin (MTO): Capacity of coal-based

Olefin is approx. 13mt/a (~25% of China’s total).
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6.2 United States
Coal gasification projects started in the 1990’s in the US, however, it did not have a
very successful experience. Efforts to gasify coal for power generation have failed,
technologically and financially. Only two of the 25 coal-gasification electricity
generating plants proposed in the U.S. since 2000 have ever come online: Southern
Company’s Kemper plant in Mississippi and Duke Energy’s Edwardsport plant in
Indiana.
Under pressure from the Mississippi Public Service Commission for having logged
billions of dollars in cost overruns at Kemper and one of the reasons being the
technological problems with the gasifier, the Southern company affiliate, Mississippi
Power which started operations in 2014 had announced in 2017 that it will halt
burning the coal at its facility, leaving Edwardsport as the only plant gasifying coal.
Edwardsport, which started operations in 2013, has been plagued by technological
problems and is still not running properly. Because of its operational problems and
huge construction cost overruns, Edwardsport’s electricity is wildly expensive.
Most importantly, the natural gas prices in the US crashed post the shale oil and gas
revolution which meant that the cost of producing electricity using natural gas was
lower than that for coal. With abundant oil and gas reserves, sufficient production of
oil and gas and declining cost of renewables – solar and wind, US is unlikely to
gasify coal for power generation or for producing chemicals in the future since
natural gas provides a much cheaper and technologically established option for the
same.
6.3 Japan
Japan has done quite a lot of research on coal gasification, especially IGCC
technology and is continuing its R&D efforts in the clean coal technology space. The
reliance on coal plants increased more after the Fukushima disaster in 2011. Many
Japanese corporations such as Mitsubishi, Nakoso and others have developed
IGCC technologies because of which Japan supports clean coal technology.
According to the Ministry of Economy, Industry and Trade (MEITY), Japan will retire
the inefficient older coal plants by 2030 but will continue to use Ultra-supercritical
and IGCC plants. There have been two IGCC plants in operation with a total capacity
of 800 MW. And another plant is likely to be added with a capacity of 543 MW this
year. Therefore, Japanese have not shunned the coal gasification projects like the
US, they are gradually moving ahead with this technology.
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7 Indian Efforts in Coal Gasification
In the past, number of efforts has been made to gasify coal in India. These efforts
started in year 1960s and are continuing even now with varying capacities/scales.
Most of them are aiming for self-reliance for India by using high ash domestic coal
with end products like fertilizer (urea), power generation and methanol. Some Indian
companies have gained experience while successfully commissioning gasification
project abroad.
7.1 Coal Gasification: Past Indian scenario
In the past, several efforts have been made to gasify coal in India. Fertiliser plant at
Sindri used to gasify coal for production of fertiliser in 1960s (now closed). JSPL in
its Angul plant had tried mixing of imported coal with domestic coal for gasification
process (currently in-operational or running sub optimally). Talcher Fertilizer Limited
(TFL) is also going ahead with mixing of pet coke in high ash domestic non-coking
coal for Syn Gas production. BHEL has set up a pilot plant in Trichi and has
produced 6.2 MW power but the plant has faced many issues in handling high ash
coal. M/s Thermax has also set up a pilot plant for coal to methanol production with
DST funding under the aegis of NITI Aayog in Pune. L&T has commissioned many
gasifiers in China and are in the business of erection and commissioning of gasifiers.
7.2 Existing Coal Gasification Plants in India
(i) CO and H2 of Syn gas are important reducing agent for steel making and are
environment friendly method of steel making through DRI route. Jindal Steel &
Power Limited has installed world’s first DRI plant based on Coal gasification
technology by using domestic coal which is already operating in Angul District of
Orissa for steel making. The Syn Gas project started in 2007 and commissioned in
2014. It is a technology demonstrator and can be very important for expanding the
way for Sustainable and Green Development of India. With NSP of 300 Mt crude
steel by 2030, the adoption of Coal Gasification technology will create a new
segment of capacity addition in India, therefore minimising the need of imported
coking coal.
(ii) BHEL has set up a pilot plant in Trichi and has produced 6.2 MW power but the
plant has faced many issues in handling high ash coal.
(iii) M/s Thermax has also set up a pilot plant in 2014 for coal to methanol production
with DST funding under the aegis of NITI Aayog in Pune.
(iv) L&T has commissioned many gasifiers in China and are in the business of
erection and commissioning of gasifiers.
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7.3 Ongoing Surface Coal Gasification Projects
Setting up of coal gasification plant is a capital-intensive work. Further, the

experience of coal gasification in India is limited. As such the success of initial coal
gasification projects is very important for the national mission. It has been planned to
set up two gasification projects on pilot basis one on high ash coal blended with pet
coke and the other from low ash coal for the purpose of establishing technology.
Details of these two projects are as mentioned below:
7.3.1 Talcher Fertiliser Plant
A joint Venture Company named Talcher Fertilizers Limited (TFL) comprising of

RCF, CIL, GAIL and FCIL has been constituted (2016) to set up a Surface Coal
Gasification based integrated fertilizer complex using high ash coal from nearby
Talcher Coalfields mixed with pet coke from Talcher refinery with an Investment of
Rs 13277 cr. Coal blended with pet-coke up to 25% shall be gassified to produce
syngas, which shall be converted into Ammonia and subsequently to 1.27 Mt tonnes
of neem coated Urea annually. TFL Board approved coal gasification technology of
M/s Air Products (earlier M/s Shell) for the proposed plant. Exclusive subsidy policy
for urea produced through coal gasification route by TFL has been approved by the
cabinet in 2021. This will ensure concession rate/subsidy for the urea produced
through coal gasification route by TFL for a period of 8 years from the date of start of
production and will be determined by providing 12% post tax IRR on equity.
Hon’ble Prime Minister of India had laid the Foundation Stone of the plant at Talcher
on 22.09.2018. M/s Projects & Development India Limited (PDIL) is the Project
Management Consultant (PMC) for this project. The project is being implemented on
partial Lump Sum Turn Key (LSTK) basis. LSTK tenders for major plants (Coal
Gasification & Ammonia-Urea) are under evaluation. NIT for Captive Power Plant
and other Off-sites & Utilities are under preparation by the consultant. Currently, all
pre-project works such as Commissioning of Water System, Supply-cum-Erection for
Power Works, Land Development etc. are progressing in full swing.
7.3.2 Dankuni Coal to Methanol Plant
In pursuance to initiatives towards development of Clean Coal Technology and

alternate use of coal, CIL has floated a tender for engagement of an agency on BOO
basis for setting -up a coal-based Methanol plant of a 2050 MTDA (0.676) capacity in
the premises of Dankuni Coal Complex (DCC) near Kolkata. Coal sourced from
Raniganj coalfields shall be gassified to produce syngas which shall be subsequently
converted into methanol. The project will come up with an investment of about Rs
5800 Crs and 1.5 MT Coal will be supplied from Sonepur Bazari Mines of ECL.
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7.3.3 Other proposed projects
CIL has further identified four different coal gasification projects in ECL, SECL, WCL
and CCL wherein methanol, ammonia, ammonium nitrate and urea are expected to
be produced. The pre-feasibility report has been prepared by PDIL and CMPDI has
been engaged as a principle implementing agency for the project getting completed.
NLCIL has also taken up one lignite to methanol project at Neyveli.
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8 Indian Strategy for the Future of Coal Gasification
Honourable Prime Minister had announced a vision of 100 MT Coal Gasification by

2030. At present most of the coal produced in India is utilised in thermal power
plants for power generation. Due to environmental concerns, in all likelihood, the
requirement of coal for thermal power generation will reduce in long run. Accordingly,
there is a need to find an alternative use of coal to prolong the life of coal and utilise
the natural resources available in the country.
8.1 Challenges
Coal Gasification utilises chemical property of coal and as such availability of

consistent quality of coal for the entire project life is an important factor. There are
many other challenges for the successful running of surface coal gasification projects
which can be summarised as:
(i) Availability of coal having gasification potential and of consistent quality as

a feed stock is utmost important. There should be an appropriate linkage
policy for this purpose.
(ii) The quality of coal available in India is mostly of low rank high ash coal.
Technology for conversion of high ash coal to syn gas is one of the major
challenges. There is a need to develop indigenous technology suited to
Indian coal.
(iii) Capital requirement for setting up of these plants is high and huge capital
will be required to achieve the mission. Further, due to uncertainty and
dependence on foreign licensors for Syn Gas conversion, the cost of
various products produced domestically may not be at par with the
imported products. Specially methanol produced from Coal may not be
competitive with methanol produced from Natural Gas.
(iv) The lack of experience in the domestic sector for SCG is also a
challenging factor. This is mostly because there is little expertise in
domestic sector for coal gasification.
(v) Infrastructure requirement such as land, water, electricity will play an
important role in establishing SCG projects. Further, development of
market for various products and transportation cost from point of
production to consumption centre will also be important.
(vi) Use of M15 fuel as transport fuel, blending of DME with LPG and
establishing Syn Gas to ethanol conversion technology will be key in
achieving the Mission.
(vii) The coordination between various stakeholder Ministries such as P&NG,
Chemical and Fertilisers, Steel, Coal, Power etc. is also important for the
success of various SCG projects.
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8.2 Setting up of National Coal Gasification Mission

In order to create awareness among all stake holders and to prepare an
implementable road map with specific responsibilities, Ministry of Coal has decided
to set up National Coal Gasification Mission. The Mission is created with an aim to
take up following objectives which is required for the vision of achieving 100 MT coal
gasification by 2030.
a) Mapping of gasification potential of coalfields specially in North east

b) Development of indigenous technology suitable for various feed stock (low
ash coal, coal mixed with pet coke and high ash coal)
c) Development of suitable business model for setting up of various projects
d) Marketing strategy for end products
e) Policy support with a view to encourage Atmanirbhar Bharat Scheme
f) Coordination with various stake holding Ministries
g) Providing quantifiable targets to various companies and monitoring the
implementation of activities.
8.3 Organisational Structure
In order to take up this mission, number of committees has been formed and nodal
officers in various organisations have been created. Efforts taken so far as
mentioned below:
8.3.1 Steering Committee

To provide policy direction for Coal to Chemical economy; to advise and
recommend institutional mechanism and assign role to various stakeholders; assign
role to various stake holder including Ministries and to facilitate and recommend
policy decisions for making coal to chemical economy viable and implementable, a
committee under chairmanship of Hon Member, NITI Aayog has been constituted.
The committee is having the following members:
1) Dr V.K.Saraswat, Member, NITI Aayog,Chairman

2) Secretary, Ministry of Coal
3) Secretary, Ministry of Chemicals and Fertilisers
4) Additional Secretary, NITI Aayog
5) Additional Secretary, Ministry of Coal
6) Shri Neeraj Sinha, Adviser (Energy), NITI Aayog
7) Shri Rajnath Ram, Adviser Energy, NITI Aayog: Member Secretary
8) Ms Vartika Shukla, Director EIL
9) Shri R P Sonde, VP Thermax
NITI Aayog has also constituted a Technical Standing Group for supporting the
Steering committee for technological advances & feasible options for the coal
Gasification.
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8.3.2 Implementation Committee
Ministry of Coal has also constituted an implementation committee under the

Chairmanship of Additional Secretary (Coal). This group consists of the following
members on development of Surface Coal Gasification by ensuring implementation
of policies on Coal Gasification and taking up various projects on commercial scale
basis:
1. Shri Vinod Kumar Tiwari, Additional Secretary, Ministry of Coal, Chairman
2. Adviser, Energy, NITI Aayog
3. Joint Secretary MoP&NG
4. Joint Secretary Ministry of Chemical and Fertiliser
5. Project Adviser, Ministry of Coal
6. CMD NLCIL
7. Director, Technical CIL
8. Director, IOCL
9. Director, GAIL
10. Director T/ CM Peeyush Kumar, Ministry of Coal, Member Secretary
The terms of references of the committee are as under:
a. Study the efforts made so far in taking up gasification projects by various

companies.
b. Study worldwide practice of gasification.
c. Fix up actionable points for each stake holders and monitor for its
implementation
d. Formulate implementation action plan
e. Suggest changes in present policies
f. Identify projects for implementation including coalfields, site for project and
marketing strategies
g. Monitoring of commissioning of projects
8.3.3 Resource Group
Ministry of Coal has also created a Resource Group of academic and research
institutions for research activities related to Coal Gasification. The members of this
group are listed below:
1) Central Institute of Mining and Fuel Research (CIMFR), Dhanbad

2) Department of Mining Engineering, IIT ISM Dhanbad
3) Department of Mining Engineering, IIT Kharagpur
4) Department of Chemical Engineering, IIT Madras, Chennai
5) Department of Chemical Engineering, IIT Bombay, Mumbai
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The group has been assigned the task to prepare a technology road map for Coal
Gasification and conversion of Syn gas to various end products. The work will
include establishing:
i. State of the art analytical hub for characterization, understanding coal towards
gasification vis-à-vis selection of matching gasifier as well as utilization pattern
and strategies.
ii. Laboratory scale to pilot scale fluidization, gasification facilities along with
expertise for design of pilot scale, demo-scale gasifiers, performance
evaluation, techno-economic feasibility towards methanol, chemical feedstock,
SNG, DRI, Fertilizer etc.
(Letters of constitution of all 3 committees are enclosed at annexure I, II and III)
8.4 Research and Development
Various research and development programs are currently going on for the overall
growth of coal gasification sector in India. Some pilot projects are on their way to
make the establishment and smooth running of large-scale commercial projects in
the future. Some of these projects are shown below:
8.4.1 Indigenous Gasifier Development Programs
Sl. Organizati Facility Specification Operational Present Remarks

No on s study status
.
1. CSIR- 1.5 TPD ID: 200 mm Established In operation 250 kg/day
CIMFR, Oxygen MOC: gasification for more Methanol
Dhanbad Enriched Refractory for high ash oxygen generation
Pressurize lined coal from loading and pilot plant
d Fluidized Temp: 1050 Talcher, MCL subsequent development
o
Bed C (Ash 36 & syngas & integration
Gasificatio Pressure: 10 42%) with improvement. with 1.5 TPD
n (PFBG) kg/cm2 50% Oxygen Gasification of PFBG plant is
Pilot Plant Capacity: 1.5 enrichment & coal from in progress.
Installed in TPD steam another
Dec, 2020 Gasifying sources &
agent: Oxygen Biomass.
+ Air + Steam
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2. CSIR- 0.5 TPD ID: 100 mm Established In operation Established

CIMFR, Air-Blown MOC: High air blown smooth
Dhanbad Pressurize temperature gasification feeding, ash
d Fluidized alloy for high ash withdrawal
bed Electrically (27-49%) and
gasification heated coal, coal- fluidization
(PFBG) Capacity: 0.5 biomass (4 without
Pilot Plant TPD Nos) blends operational
Installed in Gasifying successfully. problems like
Mar, 2009 agent: Air + Design data agglomeratio
Steam used for n clinker
Temperature: upscaling. formation.
1000 oC
Pressure: 3
kg/cm2
3 EIL (R&D) Fluidized 200 mm ID Under In operation to Targeted for

Gurgaon Bed (refractory operation for overcome CTL
Gasifier lined with 2 coal (ash ~ issues related
stage cyclone) 42%) with to the coal
and gas Oxygen & fines
cleaning Steam carryover and
system and syngas quality
ground flare improvement.
system
Coal feed rate
capacity: 3.6
TPD
O2 & Steam
blown
Designed for
30 bar
operated up to
6 kg/cm2
4 BHEL, R&D Fluidized refractory lined Operated for In operation to Establishing

Hyderabad Bed Coal federates coal with ash establish oxy- Syngas to
Gasifier 1.2 TPD content 28% - blown mode Methanol
45% with air &
Oxygen/Air Pilot Plant at
steam,
blown with upgradation the
steam for operation downstream
Temperature: with oxygen & of the gasifier
1050 oC steam in is in progress.
Pressure: 1.2 progress
ata
5 BHEL, Fluidized refractory lined Operated in Needs major --

Trichy Bed Coal federates air-blown revamping
Gasifier 168 TPD mode for
Air blown with IGCC
steam
Temperature:
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1050 oC
Pressure: 10
bar
6 Thermax, 1 TPD Type: Tested Coals: Active --

Pune fluidized Bubbling South African,
bed coal fluidized bed Indonesian
gasification Coal feed rate and Indian
pilot plant Capacity: 1 coal
Established TPD
in 2014 Pressure: up
to 0.3 bar
7 Thermax, 6 TPD Type: Tested Coals: under pre- demonstratio

Pune fluidized Bubbling Variety of commissionin n of coal to
bed coal Coal feed rate Indian coal. g stage (Aug methanol
gasification Capacity: 6 (Can also 2021) under
pilot plant TPD handle other progress
Pressure: SA/Indonesia
upto 6 bar n coal)
8.4.2 Other efforts for Pilot and demonstration project
a. M/s Synata bio in collaboration with M/s Thermax is planning to set up a Coal
to Ethanol demonstration plant of 20K capacity to establish the technology of bio
conversion of Syn Gas to Ethanol.
b. CMPDI in collaboration with GTI, USA is planning to set up a pilot project for
production of Hydrogen with CCUS technology.
8.5 Implementation Strategy
In order to take ahead the Vision of 100 MT coal Gasification by 2030, Ministry f coal
has chalked out implementation strategy which include:
1. Gasification potential mapping of entire coalfields

2. Setting up of commercial scale plants for various feed stocks based on
available gasification technologies
3. R&D efforts and completing pilot scale and demonstration scale studies in
developing technologies suited for Indian coal.
4. Developing policy framework for making available coal to proposed projects
to be set up both in public and private sector
5. Providing policy support for ensuring financial viability of projects
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6. Coordinated approach with all stakeholders including Ministries for

establishing the entire value chain.
The Ministry of Coal has planned to execute the vision of establishing the
commercial scale projects in a three-fold implementation strategy:
Phase I: Setting up project on Pilot basis
The Ministry of Coal has aimed for gasification of 4 MT of coal through 2 projects –
The Talcher Fertilizer Plant & the Dankuni Methanol Plant. The Talcher Fertilizer
Plant will be based on gasification of high ash coal with blending of petcoke and will
be accomplished through a joint venture of Coal India Limited (CIL), Rashtriya
Chemicals & Fertilizers (RCF) and GAIL India Limited. The methanol plant at
Dankuni will utilize low ash coal sourced from the eastern part of the country and will
be implemented through Build-Own-Operate (BOO) mode.
Phase II: Upscaling efforts towards coal gasification
Coal India Limited, which is the major coal producer of the country has identified 4
key gasification projects across its subsidiaries, Eastern Coalfields Limited (ECL),
South Eastern Coalfields Limited (SECL), Central Coalfields Limited (CCL) &
Western Coalfields Limited (WCL) to gasify 6 MT of coal and produce various
downstream products such as methanol, ammonia & synthetic natural gas (SNG).
Phase III: Gasification of 90 MT coal
After successfully setting up technology in the Phase II, more projects shall be
identified. Stakeholders are expected to be active participants in the gasification
roadmap for India for which Ministry of Coal shall extend support for sourcing of coal.
8.6 Infrastructure Requirement
Coal gasification projects will need a dedicated infrastructure to be able to get them
on ground. Availability of basic facilities such as land, water and feedstock, which is
coal, is extremely important for these projects to get kick-started. Investors could
either join hands with any of the PSU’s, most likely CIL, or independently go for the
projects. Initially, the former approach is likely to yield better results as CIL can
readily provide basic amenities such as land, coal and water that will fast-track the
implementation because land acquisition can be an arduous process in India. Here,
there is a distinction between upstream and downstream infrastructure. Upstream
infrastructure largely comprises coal gasification technologies that will gasify coal to
produce syngas and consequently other downstream products. Whereas the
downstream infrastructure will focus on the product specific pipelines and the
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infrastructure required for different products. For example, methanol is a corrosive

product, so, it will require a corrosion resistant pipeline and automobiles are also
likely to be calibrated to use methanol-gasoline blends or diesel-DME blends.
Moreover, India will require testing facilities and centres for conducting experiments.
Therefore, the Government must simultaneously think about creating the requisite
infrastructure as it plans to implement the 100 MT target of gasifying coal.
8.7 Generating Local Interest
The implementation of the projects will require coordination of various central, state,
and local Government offices. And it becomes extremely important to get the active
support of the local population to successfully implement the projects. Benefits to the
locals in the form of jobs and social infrastructure such as hospitals, schools,
providing clean drinking water etc., through CSR activities will fetch their support.
The projects must be designed in a way to have minimal impact on local air quality,
water, and soil.
8.8 Funding Requirement and Business Models
Infrastructure development will call for a massive infusion of capital in the system.
The Government has to take calls based on specific projects whether to jointly
develop the infrastructure projects with private partners or fund them by itself. The
Government will attract various private investors through financial tools such as
Viability Gap Funding, long term off-take contracts, creation of special economic
zones and low cost of capital. Several business models such as Build Own Operate,
Build Own Operate Transfer, and Build Own Transfer can be used depending upon
the specific project and investor.
8.9 Inter-Ministerial Collaboration
The National Coal Gasification Mission’s objective to gasify 100 MT of coal will
definitely require collaboration amongst the Government at various levels – Central,
State and Local. As seen from table 9.1, the different products that could be
produced through coal gasification will require coordination of the respective
Ministries as well. For example, if methanol is blended with gasoline and the
transportation of methanol is done through inter-state pipelines – this will require
close coordination of Ministry of Coal, Ministry of Petroleum & Natural Gas, and the
State Governments. Moreover, the support from the local Governments will play a
key role in implementing the projects. A three-tier Institutional Frameworkhas been
created to steer the National Coal Gasification Mission and it would be one of the
most important tasks of the teams to ensure coordination and collaboration between
various departments. Since coal gasification involves different Ministries, it would be
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efficient for the Government to have a single team of members to interact with
investors interested in coal gasification projects.
8.10 Policy Decisions and Statutory Approvals
The Government would need to take some major and path breaking policy decisions
to create a technologically and economically feasible environment to push coal
gasification in India. For example, blending of methanol with gasoline may require
the Government to forego some of its tax revenue on gasoline to make Methanol
economically viable and similar might be the case with DME blending with LPG or
diesel. The policy decisions and statutory approvals will have to provide a level-
playing field for the private and public sector companies to attract serious
investment. The policy makers would strive to eliminate any distortions in the market
for the different products produced through coal gasification route.
8.11 Institutional Integration
There have been numerous research efforts going on in different universities,

laboratories, and PSU’s sporadically on the coal gasification process. There is an
urgent need to consolidate all of them and bring them under one umbrella to avoid
reinventing the wheel and have better collaboration. The Resource Group should
bring different institutions working on coal gasification together. A lack of industry-
academia collaboration results in developing technologies or solutions that are
seldom scalable. Therefore, a better coordination would help researchers to focus on
the relevant issues and problems faced by the industry and this would make the
research of academicians more applicable and relevant.
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9 Policy Supports in Coal Gasification Sector and Way Forward
A number of efforts have been taken to provide support to private sector and public
sector for setting up of Coal Gasification plants. This includes concessions in
revenue share for commercial auction of coal blocks. If the successful bidder
consumes the coal produced either in its own plant(s) or plant of its holding,
subsidiary, affiliate, associate for coal gasification or liquefaction or sells the coal for
coal gasification or liquefaction process, a rebate of 20% on the revenue share
quoted by the successful bidder will be allowed on the total quantity of coal
consumed or sold or both for gasification or liquefaction on an yearly basis, subject
to the following conditions:
i. At least 10% of scheduled coal production as per approved mining planfor that
year shall be consumed or sold for gasification or liquefaction;
ii. Coal Controller's certification would be required for the quantity of coal consumed
or sold or both for gasification or liquefaction.
MoC has also proposed to give freedom to Coal India Limited for utilising coal for its
own gasification projects at a rate to be decided by CIL. Further, all coal companies
have appointed nodal officers for taking up coal gasification projects in their
company. However, due to dependence on foreign licensors for technology and
competition from other feed stock such as natural gas, there is a need to provide
incentives and policy support to companies for taking up coal gasification projects..
NITI Aayog's 'Methanol Economy' programme is aimed at reducing India's oil import
bill, greenhouse gas (GHG) emissions, and converting coal reserves and municipal
solid waste into methanol. Although slightly lower in energy content than petrol and
diesel, methanol can replace both these fuels in the transport sector (road, rail and
marine), energy sector (comprising DG sets, boilers, process heating modules,
tractors and commercial vehicles) and retail cooking (replacing LPG [partially],
kerosene and wood charcoal). Blending of 15% methanol in gasoline can result in at
least 15% reduction in the import of gasoline/crude oil. In addition, this would bring
down GHG emissions by 20% in terms of particulate matter, NOx, and SOx, thereby
improving the urban air quality
9.1 Way ahead for taking up Mission
Ministry of Coal had organized an international webinar under the Chairmanship of

Honorable Minister of Coal on 31.8.2020 wherein NITI Aayog, representatives of
various Ministries, research organizations, private and public sector coal companies
and technology providers.
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Further, Coal India Limited, on behalf of the Ministry of Coal, conducted the
stakeholder consultation involving industry and coal consumers for coal gasification
on 8th June 2021 over video conferencing.
Based on various consultations made, the following actionable points have emerged
for the mission:
9.1.1 Allocation & Linkages
a. The best suited condition for the lower maintenance and operational cost for
the optimum performance of the gasifiers is when the feedstock is not diversified.
Grant of long-term Fuel Supply Agreements will ensure the supply of coal from a
single source helping to curb the sensitivity of the gasifiers due to the difference of
physical and chemical properties of coal from different sources.
b. The identification of mines with better Grade of Coal suitable for Surface
Gasification will help the stakeholders to identify assets for future auctions. Keeping
in the mind about the mega gasification projects, allocation of coal blocks will be
better option than long term coal linkages as far as the pricing of coal is concerned.
9.1.2 Gasification Technology Adoption
There is a need to develop research and development facilities on similar lines of

China to promote gasification technology in India. Optimum process configuration
has to be selected with CAPEX and OPEX in view while addressing impurities in
syngas and metallurgical challenges.
Adoption of Carbon Capture, Utilization & Storage (CCUS) technology for control of
carbon emissions needs to be examined. It can be based on model adopted by USA
for enhanced oil and hydrocarbon recovery leading to an additional recovery of 10%
oil in some cases.
9.1.3 Downstream Products
a. For the marketability and the upcoming demand of various products like
ammonia, urea, methanol, ethanol and other chemicals the need for a balanced
poly-product portfolio design would be critical to ensure market resilience and to
promote economically sustainable coal gasification in line with the risk hedging
strategy used by established players like SASOL. Policy introduction for the
substitution of naphtha as feedstock for chemical products needs to be framed.
Further, MoP&NG is to modify National Policy on bio fuels to include ethanol
produced through coal gasification route.
b. The syngas obtained from the coal gasification can be used to obtain multiple
products like methanol, DME, olefins etc. of which India is a net importer presently.
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One of the major challenges is the end-product prices are market driven and it is
essential for coal-based gasification products to be price-competitive with imported
products. The separation of Sulphur from crude oil to produce a cleaner oil also
requires huge quantities of hydrogen obtained from the gasification process.
c. The coking coal imported for steel making causes a huge outflow of Forex
from the country. Syngas can be made available for steel making through the Direct
Reduced Iron (DRI) route and increase in usage of Electric Arc Furnace (EAF) and
Direct Reduced Iron (DRI) will and also help towards reduction of import bill for
furnace oil.
d. Coal to syngas route can be adopted for ammonia production with the
liberated carbon dioxide being used to produce urea in a single complex, thus
contributing to lower carbon emissions and lowering the import of ammonia and urea
(around 2.5 million MT of ammonia & 7-8 million MT urea are being imported into the
country presently). But the differential higher CAPEX of 30-40% for a coal
gasification-based ammonia plant makes it less attractive for fertilizer sector than a
natural gas-based plant. However, India being an importer of natural gas, can
leverage the vast reserves of coal to substitute natural gas as the primary feedstock
for ammonia production.
9.1.4 Business Model for Surface Coal Gasification Projects
Various business models were deliberated during discussions wherein coal may be
offered at a discount for SCG projects and Coal India may be offered equity in the
venture.It will ensure long term tie up with the key raw material supplier and secure
supply of key feedstock coal at a discounted price.
EPC model of project implementation can also be taken up by companies where a
reputed EPC contractor develops the project from commencement to final
completion. The owner or principal of the EPC project provides the EPC contractor
with a detailed design including technical and functional specifications, in order for
the EPC contractor to build and deliver the project to the "turn of the key", within a
specified time period. An EPC contract is often a fixed price contract or an all-
encompassing lump sum contract and any shortfall of costs is a risk that rests with
the EPC contractor, making cost control their number one priority.
Build-Own-Operate (BOO) will be a suitable model as it will bring substantial benefits
to the owner. Build, Own, Operate (BOO) is also a widely recognized mode of
implementation of a project where the project owner grants the right to finance,
design, build, operate and maintain a project to an independent entity, which retains
ownership of the project. The primary advantages of BOO model are de-risking the
project owner from various risk associated with technology, process integration,
construction, operations & maintenance and it offers long term reliability and
efficiency if a renowned BOO operator backed by strong execution background and
financial capability is selected for the project.
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9.2 Incentives, Policy Enablers
9.2.1 Waiver of GST Compensation Cess of Rs. 400/ tonne of coal:
It is imperative to note that coal gasification provides a cleaner and alternative

approach for utilization of coal. In view of the above, the GST compensation cess of
Rs. 400 per tonne on the quantity of coal consumed and/ or sold for coal gasification
is proposed to be waived. If GST compensation cess is removed on coal, then the
tentative reduction in the cost of production of Methanol is expected to be around Rs.
800-900 per MT. This will not entail any revenue loss as the waiver is proposed only
on incremental coal use for gasification purpose.
9.2.2 Reduction in additional Cess and Duties:
The landed cost of coal is almost double than the notified price of coal on account of
high rail freight, levy of royalty (14% of the cost of coal), additional duty & cess (GST
@ 5% of cost of coal, DMF @30% and NMET 2% of Royalty and GST compensation
Cess @Rs 400 per tones) etc. It is thus proposed to reduce the royalty and freight
charges and provide waiver on application of GST on coal, to make coal gasification
competitive. With waiver of GST on coal (5%) and 15% reduction in freight charges
for coal and final product, the cost of final product (Methanol) may further be reduced
by ~Rs. 650-750 per MT. Due to curtailment of GST compensation cess and
additional duty on coal, the tentative reduction on aggregate price of final product
(Methanol) may be in the range of Rs. 1,450-1,650 per MT.
9.2.3 Tax holiday for 15 years for coal gasification projects:
Tax holiday for 15 years may reduce the average cost of production of methanol by
Rs. 700-1000 per MT and the same may further increase depending upon the scale
of operation and profitability of the company.
9.2.4 Subsidy for purchase of capital equipment
Subsidy for purchase of capital equipment may be provided and depending on the
quantum of capital subsidy (say 15-25% of capital cost) the venture may reduce cost
of production of methanol in the range of Rs.600-Rs.1100 per MT.
9.2.5 Interest Rate Subvention
Interest Rate Subvention @ 20-30% may be provided thereby reducing the interest
burden on coal gasification projects and improve the bankability of these projects.
Interest rate subvention of 20-30% may reduce average cost of production of
methanol by Rs. 400 - 600 per MT.
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9.2.6 Hike in custom duty on import of Methanol:
Almost 90 % of domestic methanol requirement is met through imports. To promote

domestic production and discourage diversion of idle or additional capacities in
foreign market, additional custom duty may be imposed on import of Methanol
(presently at 10%). A tentative impact of Rs. 2,000 to Rs. 2,500 per MT through hike
in custom duty or introduction of additional levy on imported methanol may prove to
be beneficial for domestic players.
9.2.7 Import duty exemption:
Import duty exemption for capital goods for setting up coal gasification projects may
be considered. The incentives should be on the same lines as given to the petroleum
sector for upstream projects as these projects are also going to make available oil
and gas substitutes.
9.3 Other Incentives / Policy Measures for Coal Gasification
In addition to the fiscal incentives, following incentives/ policy measures are

proposed to promote gasification of coal in India:
9.3.1 Roadmap for Methanol Blending in India:

In line with the roadmap for Ethanol Blending in India by 2025, a policy regarding
M15 blend i.e. 15% blending of methanol with petrol is proposed to be introduced by
Niti Aayog suggesting specific responsibilities of Union Ministries, State
Governments, refineries and vehicle manufacturers for the production, supply and
gradual rollout of methanol blending in petrol and provision of subsidies to incentivize
methanol blending.
9.3.2 Funding of research and development in the field of coal gasification:
There is a need to earmark adequate annual budget for funding research and
development in the field of coal gasification.
9.3.3 Lease of land under Coal Bearing Areas (Acquisition and Development)
Act, 1957:
MoC propose to lease land under CBA Act, 1957 for development of pit-head
surface coal gasification projects. This shall help in reducing the logistics cost and
improving the overall profitability and viability of the project.
9.3.4 Allocation of long-term coal linkages through auction:
For coal gasification projects, homogenous quality of coal is essential to reduce the
operational expenditure. Therefore, policy support needed so that coal gasification
can be considered for a direct linkage without the auction route on notified price for
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Power sector. The initial floor price shall be the relevant CIL/ SCCL ROM price for
regulated sector and the tenure of the linkages shall be for up to the life of the End
Use Plant (in line with the policy and methodology adopted for auction of coal
linkages for medium term and long term under paragraph B(iii) of SHAKTI Policy).
9.4 Way Forward
The below course of action may further assist to achieve the goal of using 100 MT of
coal for coal gasification by 2030.
a) Focused group discussions may be held with the potential companies (who
may want to be BOO operator) to sense their interest and to understand their critical
expectations.
b) Allocation of ear-marked land for development of pit-head surface coal
gasification projects. This shall significantly reduce logistics cost and improve the
overall profitability and viability of the project.
c) Introduction of policy regarding M15 blend & provision of subsidy to refineries
to incentivize blending and provision of subsidy of methanol shall be in line with
ethanol. It has been envisaged that the target of substituting 10% crude oil imports
by 2030 can be met under the M15 programme and M15 has the potential to achieve
up to 20% crude oil import substitution by 2030.
d) Introducing economical financing options for SCG projects. Lower rate of
interest coupled with flexible repayment option shall reduce the burden of debt trap
for SCG projects. The stakeholders are of the common opinion that CAPEX
financing is a major impediment to implement SCG projects.
e) Exemption of GST Compensation Cess, reduction of duty on raw coal to
make domestic product competitive, such policy-driven measures are a major need
for domestic players, which will make price of final products highly competitive and at
par with global standards.
f) Rationalizing domestic coal prices on an integrated basis to ensure viability of
coal gasification.
g) Development of Single window clearance system for requisite approvals for
surface coal gasification projects & creation of guideline templates for smooth
acquisition of regulatory & statutory approvals.
h) Incentives may be given to steel producers for usage of coal gasification. It
shall also minimise GHG emission and reduce foreign exchange outflow through
reduction in import of coking coal.
i) Investment and fund allocation for capacity building for capital equipment
manufacturing in the country. In line with “Atmanirbhar Bharat Abhiyan” capacity
building for capital equipment manufacturing industries shall act as catalyst in
reducing import of heavy machineries and spares. The reduction dependence on
imports for critical machineries and spares shall provide reliability of supply to the
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domestic producers and eradicate the uncertainty like exchange rate fluctuation,
customs policy, etc. related to cross border transactions.
j) A common platform may be designed to provide all the relevant information
about SCG projects like details of most widely accepted technologies, case studies
from around the world, research papers, key success stories, policy driven incentives
and road map for undertaking mega projects. It may act a ready reckoner for MSME
as well as large scale industrialist and may also be utilised as an interactive platform
to voice opinion of all stakeholders.
k) A reward and recognition policy may be introduced to honour
companies/ventures achieving given targets in the coal gasification projects. The
facilitation and recognition of successful and profitable ventures shall inspire others
to undertake investment in SCG projects.
l) Facilities may be established and funded to undertake research and
development in the field of coal gasification projects. It shall assist in the
development of SCG projects in the country and cater to the requirements of the
industry.
m) A robust and time bound fiscal incentive policy may be introduced like tax
holiday, exemption of duties or capital subsidies. The policy may be restricted to
companies which commence production in next 3-4 years. It shall provide ready
incentive to interested parties and fast-track the construction activities and project
implementation which is critical to the common objective of our nation of utilising 100
MT of coal per annum for gasification.
50
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299946/2021/CCT
ANNEXURES
51
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299946/2021/CCT
Annexure I
52
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299946/2021/CCT
53
444
299946/2021/CCT
54
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299946/2021/CCT
Annexure II
55
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299946/2021/CCT
56
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299946/2021/CCT
Annexure III
57
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299946/2021/CCT
Annexure IV
58

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National Coal Gasification Mission

(Vinod Kumar Tiwari)

Mission Document of National Coal Gasification Mission

6.1 China .................................................................................................................................. 29

1. Figure 2.1: R/P Ratio of Different Countries as of 2020

1. Table 2.1: Break-up of Coal Resources (MT) in India – Category wise as of

1. AFT – Ash Fusion Temperature

45. MTO – Methanol-to-Olefins

1.1. Need for Coal Gasification

a) Reduction in emissions intensity of Gross Domestic Product (GDP) by 33 to 35

b) Achieving about 40 percent cumulative electric power installed capacity from

c) Creating an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide

1.2. Atmanirbhar Bharat Abhiyaan:

Honourable Prime Minister of India in his 75 th Independence Day speech has

In order to achieve 100 MT coal gasification projects in India by 2030, Ministry of

Setting up of coal gasification plant is a capital-intensive work and will require at

Syngas can be used to produce Gaseous Fuels such as Hydrogen, Substitute

2. Coal Resources in India

2.1. Category Wise Breakup of Coal Resources

Break-up of Coal Resources (MT) in India – Category wise as of 1.04.2020

Coal Type Proved Indicated Inferred Total % Share

Prime Coking 4,668 645 0.00 5,313 1.5

Medium Coking 14876 11245 1863 27984 8.1

Semi Coking 529 992 186 1707 0.5

Non-Coking 1,42,804 1,37,386 27,203 3,07,393 89.4

Tertiary Coal 594 121.17 909 1624 0.5

Grand Total 163,471 1,50,389 30,161 344021 100.00

% Share 47.5 43.7 8.8 100

Table 2.1 - Source: GSI Coal Inventory’2020

2.2. Depth wise Breakup of Coal Resources

Break-up of Coal Resources (MT) in India – Depth wise as of 1.04.2020

0-300 118082 65704 9122 1,92,907 56.1

300-600 26882 66600 15009 1,08,492 31.5

0-600 (for Jharia only) 8399 6 0 8,405 2.4

0-600(Non-Coking) 5657 445 0 6,102 1.8

600-1200 4451 17634 6030. 28,115 8.2

Total 1,63,471 1,50,389 30,161 3,44,021 100.00

Table 2.2 – Source: GSI Coal Inventory’2020

2.3. Grade wise Breakup of Non-Coking Coal

Break-up of Non-coking Coal Resources (MT) in India – Grade wise as of

2.4. R/P Ratio of Different Countries as of 2020

Figure 2.1 – Source: BP Statistics 2021

3. Gasification Potential Study of Indian Coal

In view of the potentiality of converting indigenous coal resources to different energy

3.1. Important Coal Properties in View of Gasification

Figure 3.1: Coal Characterization Matrix

3.2. Experimental Methodology

The experimental methodology to carry out this exercise is constituted by the

14. MCL, IB Valley, Belpahar, IB Seam

22. CCL, North Urimari Mines, Argada A+B Seam

30. ECL, Sonepur Bazari, R-VI Seam

4.1. Coal Gasification Process

Coal gasification process has several other advantages besides minimum

4.2. Categories of Coal gasification Technologies

Different Surface Coal Gasification process technologies broadly categorized on the

(i) Moving Bed / Fixed Bed Type Gasifier

(ii) Fluidized Bed Type Gasifier