India’s search for new energy streams to ensure energy security has gathered momentum with the launch of
a ₹37,500-crore scheme aimed at accelerating the country’s coal and lignite gasification programme,
primarily as an import-substitution initiative for key products such as LNG, urea, ammonia, methanol and
related chemicals.
Coal gasification converts solid coal into synthetic gas or syngas — a mixture of carbon monoxide, hydrogen,
carbon dioxide and methane — by reacting coal at high temperatures with a controlled amount of oxygen
and steam rather than through complete combustion. The syngas can then be used to produce electricity,
liquid fuels such as gasoline and diesel, and chemicals including fertilisers, methane and ammonia. The push
assumes significance as India remains heavily dependent on imports of critical energy products, importing
more than 50% of its LNG requirement, 20% of urea, 100% of ammonia and 80-90% of methanol demand.
India’s import bill for key substitutable products — LNG, urea, ammonium nitrate, ammonia, coking coal,
methanol, DME and others — stood at around ₹2.77 lakh crore in FY25, a vulnerability further exposed by the
continuing geopolitical tensions in West Asia. At the same time, India possesses one of the world’s largest coal
reserves of 401 billion tonnes and lignite reserves of 47 billion tonnes, with coal still accounting for more than
55% of the country’s energy mix.