The minister also said that the government has taken a number of steps to reduce India’s import dependency and build supply chain resilience in critical minerals. The central government has been empowered to exclusively auction mining lease and composite license for 24 critical minerals.
The Government has approved an outlay of ₹ 8,500 crore as financial incentive, for promotion of coal/lignite gasification projects for both government PSUs as well as private sector, the union minister of coal and mines, G Kishan Reddy said in a written reply in Lok Sabha on Wednesday.
Coal gasification is a process that transforms coal into a mixture of gases, primarily carbon monoxide and hydrogen (syngas), by reacting it with oxygen, steam, or air under controlled conditions at high temperatures. It is a thermochemical process where coal is converted into a gaseous fuel, known as syngas, which can be used for various applications, especially producing clean electricity.
Coal gasification is a significant source of hydrogen, which can be used in various applications, including transportation, industrial processes, and heating.
The minister said that the government has also approved investment by Coal India Limited (CIL) in joint ventures of CIL-BHEL and CIL-GAIL for undertaking coal gasification projects.
He said that a new sub-sector, “Production of Syngas leading to coal gasification,” was created under the Non-Power Sector (NRS) linkage auctions policy to support this initiative in 2022. For this sector, Reddy said, the government has allowed auction with a floor price at the notified price of the regulated sector, for the projects commissioning within the next seven years.
The minister informed that a 50 per cent rebate in the revenue share for coal used in gasification has been introduced in commercial coal block auctions, provided that at least 10 per cent of the total coal production is used for gasification purposes.
Coal gasification
Coal is one of the most abundant natural resources in India. Coal gasification technology enables conversion of coal into syngas (synthetic gas), which can be used to produce downstream products like methanol, ammonium nitrate, synthetic natural gas (SNG) and fertilisers, among other things. Coal gasification technology provides alternative use of coal promoting environmental sustainability to align with vision of developed India 2047 the minister said.
He added that the Government has not conducted any specific impact assessment of the financial incentive scheme for coal gasification projects.
Coal India Limited (CIL), a CPSE under Ministry of Coal, has secured Khattali Chhoti Graphite Block in Madhya Pradesh, through e- auction of critical mineral blocks conducted by ministry of mines. Besides, CIL has also signed a non-disclosure agreement with an Argentinian company and an Australian company for acquisition of lithium assets in Argentina.
The minister said that the government has taken a number of steps to reduce India’s import dependency and build supply chain resilience in critical minerals. Firstly, the central government has been empowered to exclusively auction mining lease and composite license for 24 critical minerals, with an aim to increase exploration and mining of critical minerals and ensure self-sufficiency in their supply.
Besides, the government has also announced the setting up of a critical minerals mission for a harmonised approach in areas including domestic production, recycling, overseas acquisition of critical mineral assets and research & development in the union budget of 2024-25.
