Over $4 billion coal gasification project planned in Andhra Pradesh

According to a Business Standard report, Reliance Industries has planned a coal gasification project in Andhra Pradesh at a cost of $4.6 billion. This proposed project will use underground gasification technology to convert deep coal deposits into useful gas without traditional mining. This project could prove to be a major step in the coal gasification sector in the country.

According to an official report from PIB Delhi, the second round of the ₹37,500 crore scheme to promote surface coal and lignite gasification projects has been completed. This scheme was approved by the Union Cabinet on 13 May 2026 with a total financial outlay of ₹37,500 crore to accelerate the development of surface coal and lignite gasification projects in the country.

According to official information provided by the Ministry of Coal, this is a significant step in advancing the objectives of the scheme. The conclusion of the second round has been announced, in which two applications have been received from NTPC Limited. These applications include plans to produce urea, methanol, and dimethyl ether, which highlights the potential of coal gasification in supporting domestic production of critical industrial products and diversifying the use of India's indigenous resources.

Looking at the details of the applications received under the second round, the first applicant is NTPC Limited, whose end product is urea. The second application has also been made by NTPC Limited, whose end products are methanol and dimethyl ether. Both these applications will play an important role in the direction of surface coal gasification in the country.

Based on the progress achieved during the first two rounds, the third round of this scheme has been launched by the Ministry of Coal from 10 November 2026. Through this third round, another opportunity is being provided to eligible entities to submit proposals for setting up coal and lignite gasification projects in the country. The last date for submitting applications under the third round has been set for 11 January 2027.

The Ministry of Coal aims to encourage wider participation of industries, attract investments, and accelerate the adoption of coal gasification technology through successive rounds. All these efforts contribute to the national target of achieving 100 million tonnes of coal gasification capacity by the year 2030.

Such projects are proving to be important in various states regarding clean energy and alternative uses of coal in the country. The project proposed by Reliance in Andhra Pradesh will bring new investment to the energy sector in the state and a new approach to technology will be seen at the local level. Special financial provisions and rules have also been framed by the government for coal gasification schemes so that industries can come forward.

These schemes will not only help in meeting energy requirements but also in providing raw materials required for the chemical and fertilizer industries. The active participation shown by large public sector companies like NTPC is proof that the future of coal gasification in the country is bright. The ministry may organize more such rounds in the coming time so that more and more companies can join this sector.