Talcher Fertilizers, NTPC apply for coal gasification scheme

In September 2026, the coal ministry recently confirmed that Talcher Fertilizers Limited (TFL) and NTPC have submitted applications through the online portal for the government’s Scheme for Promotion of Surface Coal/Lignite Gasification Projects. The clarification comes amid reports suggesting that the ₹37,500-crore scheme had received limited interest. The coal ministry also said that the scheme remains at an early stage of implementation and that the first application window will remain open until September 7, 2026. The final number of applications will be determined after the prescribed application process and subsequent rounds are completed.

It aims to promote the conversion of domestic coal and lignite into higher-value products, including syngas, methanol, ammonia and urea. The request for proposals under the scheme was issued on July 7. The government expects more applications as the deadline approaches. Applications will be invited through rolling rounds. Once one application window closes, the next round will open from the following day and remain open for two months, thus allowing companies additional time to prepare projects.

The Union Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026, with a total financial outlay of ₹37,500 crore. Through the initiative, the government aims to catalyze investments of approximately ₹2.5 lakh crore to ₹3 lakh crore across nearly 25 projects. In addition to that, the scheme is expected to generate around 50,000 direct and indirect jobs and support the development of 100 million tons of coal gasification capacity by 2030. The government also plans to complete the targeted 25 plants within five years. Meanwhile, four projects that are already under construction are expected to be completed within the span of a year.

Impact on the Chemical Market

Coal gasification helps to convert coal into synthesis gas, or syngas, which can then serve as a feedstock for producing several value-added products. These products include methanol, urea, ammonium nitrate, ammonia, and synthetic natural gas. Coal gasification can help to enable greater utilization of India’s domestic coal and lignite resources while supporting the production of strategically important chemicals and fuels. The government has further designed the scheme to help accelerate the development of coal and lignite gasification capacity in India.

By converting domestic resources into higher-value products such as syngas, methanol, ammonia and urea, the initiative aims to strengthen domestic manufacturing capabilities. Furthermore, greater use of domestic coal and lignite could help reduce the country’s dependence on imported feedstocks.

Impact on the Coal Gasification Market

The global coal gasification market size was estimated at USD 258.59 billion in 2025 and is predicted to increase from USD 288.10 billion in 2026 to approximately USD 733.77 billion by 2035, expanding at a CAGR of 10.99% from 2026 to 2035.

According to Precedence Research, the demand for hydrogen gas is expected to propel the growth of the coal gasification market during the forecast period. Hydrogen is increasingly becoming popular as a clean energy carrier with various applications. The market has witnessed the increasing utilization of coal gasification for the production of hydrogen gas. The coal gasification process has significant potential to produce hydrogen with reduced emissions and contribute to a more sustainable energy system. Hydrogen is also being widely used to generate electricity, power vehicles, and power industry and heat, as well as reduce dependency on fossil fuels.

Governments all around the world seem to be directing investments in clean energy production, which is likely to boost the adoption of coal gasification technologies for power generation and the industrial sector. Supportive government investment, policies, subsidies, and incentives are positively influencing the growth of clean energy technologies and resulting in the rise in coal gasification plants. Moreover, the environmental benefits of UCG technology can assist in mitigating the impact of coal utilization on the climate. Underground coal gasification (UCG) has the potential to lower greenhouse gas emissions compared to conventional coal combustion methods. Thereby driving the market's growth in the coming years.

Impact on the Coal Power Generation Market

The global coal power generation demand is worth around USD 17.86 gigawatts in 2025 and is anticipated to reach around USD 70.64 gigawatts by 2035, growing at a CAGR of 3.14% over the forecast period 2026 to 2035.

According to Precedence Research, increasing government focus on supporting coal power generation, along with effective policies and regulations, is considered to drive the growth of the global coal generation market. Governments around the world are offering subsidies to coal power generation companies; with this, tax incentives by governments help to reduce the cost of producing electricity from coal. Governments are investing in research and development of new technologies that can improve the efficiency and environmental performance of coal power plants, such as carbon capture and storage technologies.

With increasing global pressure to reduce greenhouse gas emissions, regulations are increasingly being implemented to limit CO2 emissions from power plants. CCS technology can help power plants comply with these regulations, allowing them to continue operating and avoiding potential penalties or shutdowns. With CCS technology, coal-fired power plants can be more competitive with other forms of energy generation that emit fewer greenhouse gases. CCS technology helps to capture carbon dioxide (CO2) emissions from coal-fired power plants and stores them underground, preventing them from entering the atmosphere and contributing to climate change.

Expert Opinion

Coal Minister G. Kishan Reddy said on August 13 that eight companies, including Coal India, are exploring opportunities to produce synthesis gas (syngas). According to the minister, activity in this area is expected to accelerate over the coming months. The government currently provides incentives for surface coal gasification, while similar incentives are not yet available for underground coal gasification.