The Ministry of Coal has opened the third round of applications under the Centre's ₹37,500 crore Scheme for Promotion of Surface Coal and Lignite Gasification Projects, inviting eligible companies to submit proposals for setting up gasification facilities across India.
The announcement was made on November 10, 2026. The deadline for submitting applications under Round 3 is January 11, 2027, according to the Ministry of Coal.
Editorial Insight
Key Highlights
Important points readers should notice.
Issue/Event: Third application round opens under the ₹37,500 crore coal and lignite gasification scheme.
Location: India.
Authority/Organisation: Ministry of Coal, Government of India.
Action Taken: Round 3 launched on November 10, with January 11, 2027, set as the application deadline.
- Impact: The programme seeks to attract industrial investment, expand domestic production of higher-value products and advance India's coal gasification capacity target.
The development comes after the conclusion of Round 2, which received two applications from NTPC Limited. The proposals envisage producing urea through one project and methanol and dimethyl ether (DME) through the other.
The government is seeking wider participation from eligible industrial entities to accelerate the use of domestic coal and lignite for manufacturing higher-value industrial products.
Round 2 concludes with two NTPC applications
Editorial Analysis
Why This Matters
The development matters because coal gasification is being positioned as a way to connect India's domestic mineral resources with industrial manufacturing. - Fertiliser production: Gasification-based processes can support the production of ammonia and urea, important inputs for agriculture. - Industrial chemicals: Methanol and DME have applications in manufacturing and other industrial value chains. - Import dependence: Greater domestic production could help reduce reliance on imported feedstocks, depending on project costs and commercial viability. - Investment opportunities: The scheme aims to attract companies willing to develop gasification facilities. - Energy and resource strategy: The programme seeks to expand the use of India's domestic coal and lignite resources. The results will depend on whether submitted proposals translate into viable projects, financing, construction and commercial operations.
The Ministry of Coal confirmed that both applications received during Round 2 were submitted by NTPC Limited.
The proposed end products are:
- Urea: An important fertiliser used in India's agricultural sector.
- Methanol and Dimethyl Ether (DME): Industrial chemicals with applications across manufacturing and other sectors.
These applications indicate the potential of coal gasification to support domestic production of industrial inputs. However, the submission of proposals does not mean that the projects have received final approval or entered commercial production.
What is the government trying to achieve?
Coal gasification converts coal or lignite into synthesis gas, commonly known as syngas. This gas primarily contains hydrogen and carbon monoxide and can be processed further to manufacture products such as methanol, ammonia and urea.
The government intends to encourage industries to use India's domestic coal and lignite resources for higher-value products rather than relying entirely on conventional imported feedstocks.
The ₹37,500 crore scheme was approved by the Union Cabinet on May 13, 2026. Its financial outlay is intended to support the development of surface coal and lignite gasification projects.
The Ministry has said that successive application rounds are intended to encourage wider industry participation, attract investment and accelerate the adoption of gasification technologies.
January 11 deadline for Round 3
With Round 3 beginning on November 10, eligible companies have until January 11, 2027, to submit their applications.
The latest round provides another opportunity for companies interested in developing coal and lignite gasification facilities to participate in the government-backed programme.
The outcome will be important in assessing how much interest the scheme attracts beyond the applications received in the earlier rounds.
India's coal gasification target
The Ministry of Coal has linked the programme to India's broader national target of achieving 100 million tonnes of coal gasification capacity by 2030.
The proposed expansion is intended to strengthen domestic manufacturing of industrial products and diversify the use of India's coal and lignite resources.
However, coal gasification also raises environmental considerations. The process produces carbon-containing gases, and its overall climate impact depends on plant efficiency, pollution controls and whether carbon capture and storage are deployed.
The opening of Round 3 is therefore an important industrial policy development, but the actual contribution to energy security, manufacturing and emissions reduction will depend on project implementation and environmental safeguards.
