New Delhi: The union cabinet on Wednesday approved a viability gap funding () scheme worth Rs. 8,500 crore for promoting coal gasification. Alongside, () is set to invest in two major joint venture projects, advancing 's commitment to cleaner energy initiatives.

The approved scheme divides the funds into three categories. Category I, with an allocation of Rs. 4,050 crore, targets government PSUs for up to three projects. Each project under this category is eligible for a grant of Rs. 1,350 crore or 15% of the project's capital expenditure (capex), whichever is lower.

Category II, blending private sector and Government PSUs, is assigned Rs. 3,850 crore. Projects under this category will each receive a grant of Rs 1,000 crore or 15% of capex. Notably, one project will be selected through a tariff-based bidding process, in collaboration with NITI .

Category III focuses on demonstration projects and small-scale product-based gasification plants, receiving Rs 600 crore. Eligible projects with a minimum capex of Rs 100 Crore and producing a minimum of 1500 Nm3/hr synthetic gas will be granted Rs 100 crore or 15% of capex, whichever is less.Jaipur Investment

The EGoS, chaired by the coal secretary, has been granted authority to amend the scheme's modalities, maintaining the overall outlay within Rs 8,500 crore.Pune Stock

Parallel to this, CIL is set to invest in two ambitious coal gasification projectsChennai Stock. The Coal-to-SNG project in West Bengal and the Coal-to-Ammonium Nitrate project in Odisha, both involving joint ventures, represent a significant stride towards achieving India's goal of 100 MT coal gasification by 2030. The Coal-to-SNG project, a collaboration with , is estimated at Rs 13,052.81 crore, while the coal-to-ammonium nitrate project, in partnership with , is projected at Rs 11,782.05 crore.Indore Stock

The coal gasification is a thermo-chemical process that converts coal into simple molecules, primarily carbon mono-oxide and hydrogen, called or syngas.Chennai Investment

The combustion of this gas is cleaner and more efficient than combustion of coal since emissions are trapped at the stage of gasification. It also helps in manufacturing multiple products facilitating import substitution. It can yield methanol to be blended with petrol; Di-Methyl Ether (DME) to be blended with LPG; ammonia for manufacturing Urea and ammonium nitrate and steel making through gas based direct reduced iron route to substitute imported coking coal in blast furnace and production of (SNG).