Coal gasification key to build long-term resilience against global energy shocks: Experts

Experts and industry analysts have highlighted coal gasification as India's most viable near-term hedge against global energy supply shocks, particularly in ...

What Happened

Experts and industry analysts have highlighted coal gasification as India's most viable near-term hedge against global energy supply shocks, particularly in the context of the West Asia crisis that temporarily threatened closure of the Strait of Hormuz.
The closure of the Hormuz corridor — through which nearly half of India's crude oil imports pass — demonstrated that India's energy import dependency is a structural vulnerability that cannot be addressed by renewable energy alone in the short term.
China's coal gasification capacity of approximately 350 million tonnes per annum (MTPA) was cited as the benchmark: China's coal-to-chemicals programme covers over 90% of its ammonia production and 40% of global urea output, insulating it from energy import disruptions.
India has a stated target of gasifying 100 million tonnes (MT) of coal by 2030 under the National Coal Gasification Mission (NCGM); the NCGM budget for FY2026–27 has been sharply increased to ₹3,525 crore, up from ₹300 crore in FY2025–26.
A Cabinet proposal for a ₹37,000 crore incentive scheme specifically for coal gasification was under active consideration as of late April 2026, on top of the existing ₹8,500 crore Viability Gap Funding (VGF) framework.

Static Topic Bridges

Coal Gasification — Process and Technology

Coal gasification is a thermo-chemical process that partially oxidises coal with a controlled supply of oxygen and steam at high temperatures (700–1,500°C), converting solid coal into synthesis gas (syngas) — a combustible mixture of hydrogen (H₂), carbon monoxide (CO), methane (CH₄), and carbon dioxide (CO₂).

Syngas is a versatile intermediate: it can be converted to urea and ammonia (fertiliser), methanol, liquid fuels (Fischer-Tropsch synthesis), hydrogen, or used directly for power generation via IGCC (Integrated Gasification Combined Cycle).
Surface Gasification: Above-ground, in industrial reactors (moving bed, fluidised bed, or entrained flow types).
Underground Coal Gasification (UCG): Gasifies coal in-situ within the seam — suitable for deep or un-minable coal deposits. GAIL initiated India's first UCG pilot in Rajasthan (lignite seams, 230–900 m depth) in 1999.
India's coal challenge: Indian coal has high ash content (20–45%), which reduces gasification efficiency and requires specialised reactor designs — currently a key technological gap.
IGCC (Integrated Gasification Combined Cycle): Combines gasification with a combined-cycle power plant; more efficient and less polluting than direct coal combustion, but capital-intensive.

Connection to this news: India's high-ash coal composition has historically slowed commercial adoption of gasification. The current push — catalysed by the West Asia energy shock — aims to overcome this through dedicated R&D investment and VGF support for high-ash coal gasification plants.

National Coal Gasification Mission (NCGM)

The Ministry of Coal launched the National Coal Gasification Mission to promote commercial-scale coal and lignite gasification, with a target of gasifying 100 million tonnes of coal annually by 2030.

NCGM launched in 2021; governed by the Ministry of Coal.
Target: 100 MTPA coal gasification capacity by 2030 (current capacity is near-zero at commercial scale).
Policy incentives: 50% rebate on revenue share for coal blocks where at least 10% of production is used for gasification; separate NRS (Non-Regulated Sector) auction window for coal gasification plants.
Viability Gap Funding (VGF): ₹8,500 crore framework for supporting public and private sector gasification projects.
NCGM budget trajectory: ₹300 crore (FY2025–26) → ₹3,525 crore (FY2026–27) — a 10x increase signalling policy urgency.
Total investment pipeline in coal gasification projects: estimated ₹64,000 crore.
Cabinet-level proposal under review: ₹37,000 crore additional incentive scheme (as of April 2026).

Connection to this news: The West Asia crisis provided the strategic urgency to accelerate NCGM implementation. Experts argue India must replicate China's coal-to-chemicals roadmap to reduce import exposure for fertilisers, petrochemicals, and fuels.

Strait of Hormuz and India's Energy Import Vulnerability

The Strait of Hormuz, between Iran and Oman, is the world's most critical oil chokepoint. Approximately 20% of global petroleum trade and nearly 50% of India's crude oil imports pass through this strait.

India imports approximately 85–88% of its crude oil requirements; total crude imports exceed 230 million tonnes annually.
Major crude suppliers through Hormuz: Saudi Arabia (~17% of India's imports), Iraq (~25%), UAE (~6%), Kuwait (~5%).
Any closure or disruption of Hormuz would trigger immediate crude price spikes and supply shortfalls for India.
India's Strategic Petroleum Reserve (SPR): 5.33 million tonnes of crude across three underground caverns — Mangaluru (1.5 MT × 2) and Padur (2.5 MT). Provides approximately 9–13 days of import cover, well below the IEA's recommended 90 days.
India is not an IEA member; it holds observer status and participates in emergency stock-sharing exercises.

Connection to this news: The Hormuz episode made clear that India's 9–13 days of SPR cover is wholly inadequate. Coal gasification — producing ammonia, urea, and liquid fuels from domestic coal — is the structural solution that reduces the category of imports exposed to Hormuz disruption, particularly fertiliser inputs (LNG for urea production).

India's Coal Reserves and Energy Security Strategy

India holds the world's 5th largest coal reserves — approximately 361 billion tonnes (proven + indicated) as of 2023 — yet imports coal because domestic production is inadequate for current demand and because coking coal (used in steel-making) is scarce domestically.

Coal India Limited (CIL): World's largest coal producer; produces approximately 770–800 MT annually (2025–26).
India imports approximately 250 MT of coal annually — thermal (non-coking) and coking coal.
Domestic coal is predominantly high-ash (20–45% ash) and low-sulphur bituminous or sub-bituminous.
National Energy Policy (NITI Aayog) targets reducing energy import dependency from ~53% of primary energy to below 40% by 2030.
Atmanirbhar Bharat Abhiyan and Make in India both cite domestic coal valorisation (gasification) as a strategic pillar for chemical and fertiliser self-sufficiency.
India's urea import exposure: India imports approximately 7–8 MT of urea annually; domestically produced urea relies on imported LNG as feedstock — replacing LNG with domestic coal-derived syngas is the core strategic goal.

Connection to this news: India's large domestic coal base is the primary strategic asset that coal gasification unlocks. Converting even a fraction of proven reserves to syngas would eliminate the fertiliser-import vulnerability highlighted by the West Asia crisis.

Key Facts & Data

China's coal gasification capacity: ~350 MTPA (benchmark cited by experts for India to aspire toward).
India's NCGM target: 100 MTPA by 2030.
India's current commercial gasification capacity: Near-zero.
NCGM VGF framework: ₹8,500 crore.
NCGM budget increase: ₹300 crore (FY2025–26) → ₹3,525 crore (FY2026–27).
Proposed additional incentive scheme: ₹37,000 crore (under Cabinet review, April 2026).
India's crude oil import dependence: ~85–88% of total consumption; ~50% passing through the Strait of Hormuz.
India's Strategic Petroleum Reserve: 5.33 MT — approximately 9–13 days of import cover.
India's coal reserves: ~361 billion tonnes (5th largest globally); high-ash (20–45%) composition.
India's annual urea import: ~7–8 MT — a direct target for import substitution via coal gasification.
Syngas products: Ammonia, urea, methanol, hydrogen, liquid fuels, power (via IGCC).
India's crude oil imports (annual): Exceeds 230 million tonnes; major suppliers — Iraq, Saudi Arabia, UAE through Hormuz corridor.