NTPC Bids on Center's Rs 37,500 Coal Gasification Scheme

Coal gasification is gaining attention as NTPC Limited’s latest move brings fertilizer and chemical manufacturing into the Centre’s Rs 37,500 crore support program.

The Ministry of Coal has received two applications from the state-owned power company in the scheme’s second round: one envisages urea production, while the other covers methanol and dimethyl ether (DME).

The development places domestic coal-based feedstock at the center of efforts to expand production of industrial inputs.

It also comes as the government seeks wider participation in gasification projects, with a third application round now open to eligible companies until January 11, 2027, for fresh applications.

What will NTPC’s Coal Gasification Initiatives Produce?

The two applications cover three products with applications across major industrial sectors:

• Urea: A key fertilizer used in agriculture. Domestic coal-based production could diversify the feedstock base for fertilizer manufacturing.
• Methanol: An industrial chemical used in manufacturing processes and as a feedstock for other chemicals.
• Dimethyl ether (DME): A fuel and chemical feedstock with potential applications in energy and industrial markets.

Coal gasification converts coal or lignite into synthesis gas, commonly called syngas; this can be processed into chemicals, fertilizers and fuels, which will be used as inputs by downstream industries.

Also Read: How India's Government Policies Support Chemical Manufacturing (2026 Strategy Guide)

How does the Rs 37,500 Crore Scheme Support Manufacturing?

The Union Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026. Its key provisions include:

• A total financial outlay of Rs 37,500 crore.
• Incentives of up to 20 percent of eligible plant and machinery costs.
• A target of approximately 75 million tons of coal and lignite gasification under the scheme.
• A national ambition to reach 100 million tons of coal gasification by 2030.

The Ministry of Coal said the NTPC applications demonstrate how coal gasification can support domestic production of critical industrial products and diversify the use of indigenous resources.

It has opened the scheme’s third round, with applications due by January 11, 2027, to attract more eligible companies and investment.

The government’s May scheme announcement cited imports of around 20 percent of urea requirements, nearly all ammonia requirements and 80-90 percent of methanol requirements.

Expanding coal gasification could offer another domestic production route, although NTPC has not disclosed project locations, capacities, investment values, or commissioning schedules for its applications.