Page 67 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

June 2026 chemical outputs, and reduce dependence on imports of natural gas, methanol, ammonia, and other
critical feedstocks.

India currently imports end-use and intermediate chemical products worth approximately Rs 2.7 lakh
crore annually. Coal gasification offers a significant opportunity to reduce these imports, generate
substantial foreign exchange savings, strengthen domestic manufacturing capabilities while supporting
industrial growth and economic self-reliance.

The coal gasification promotion initiative is expected to catalyse investments of Rs 2.5 to 3 lakh crore and
create around 50,000 direct and indirect employment opportunities across 25 projects in coal-bearing
regions. The Lakhanpur project marks a historic milestone as India's first commercial-scale coal-to-
ammonium nitrate facility. The project is being developed by Bharat Coal Gasification and Chemicals
Limited (BCGCL), a joint venture of Bharat Heavy Electricals Limited (BHEL) and Coal India Limited (CIL). It
will produce 2,000 tonnes per day of ammonium nitrate using indigenously developed coal gasification
technology by BHEL.

A land-leasing agreement was signed in April between BCGCL and CIL’s subsidiary Mahanadi Coalfields
Limited (MCL). The project will come up on about 350 acres under MCL possession, has received required
clearances and work is expected to start after the foundation ceremony. The Union Ministry of Coal has
enabled the use of coal bearing area land for such projects and is providing Rs 1,350 crore support under
its incentive scheme.

The project will serve as a model for future coal gasification ventures and contribute significantly to India's
vision of becoming a self-reliant manufacturing and industrial powerhouse. The foundation stone laying
of the Lakhanpur project underscores the Government's commitment to promoting clean coal
technologies, maximizing value from domestic resources, and building a resilient industrial ecosystem
aligned with the vision of Aatmanirbhar Bharat.

20. Ministry of Coal Organises BRICS Side Event on Clean Coal Technologies with Focus on Coal
Gasification

The Ministry of Coal organised a BRICS Side Event on Clean Coal Technologies, with a focus on Coal
Gasification, bringing together senior government officials, representatives from public sector
enterprises, industry, technology providers, and a BRICS delegation from Russia, Ethiopia and the United
Arab Emirates (UAE).

Delivering the keynote address, Shri Sanoj Kumar Jha, Additional Secretary, Ministry of Coal, highlighted
the role of coal gasification in strengthening India's energy security and supporting industrial
development. He stated that coal gasification enables the conversion of coal into syngas, which can be
used for the production of ammonia, methanol, hydrogen, synthetic fuels, DRI and other value-added
products. He noted that the technology has the potential to reduce import dependence while promoting
the efficient utilisation of domestic coal resources.

Shri Jha reiterated the Government of India's commitment to achieving the target of gasifying 100 million
tonnes of coal by 2030 through policy support, financial incentives, assured coal linkages and coordinated
efforts across ministries. He also highlighted the progress being made through various coal gasification
projects and stressed the importance of collaboration among BRICS countries in advancing clean coal
technologies.

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