Government Considers Rs 6,000 Crore Scheme to Promote Coal Gasification: Coal Ministry
The Ministry of Coal announced on Friday that the government is contemplating a comprehensive Rs 6,000 crore initiative to boost coal gasification in India.
According to the ministry, the implementation of gasification technology in the country will bring about a transformative change in the coal sector, minimizing dependence on imported natural gas, methanol, ammonia, and other crucial products.
In its statement, the ministry stated, “We are considering a comprehensive scheme to promote coal/lignite gasification projects for both the public and private sectors, with a budget allocation of Rs 6,000 crore.”
The selection of entities for the coal/lignite gasification scheme will be conducted through a transparent and competitive bidding process, as outlined in the statement.
The plan consists of two main segments. In the first segment, support will be extended to Public Sector Undertakings (PSUs), while the second segment encompasses both the private sector and PSUs, with a dedicated budget allocation for each project.
For the second segment, at least one project will be selected through a tariff-based bidding process, with specific criteria formulated in consultation with Niti Aayog.
The third segment involves the provision of budgetary support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants, according to the statement.
Additionally, the ministry stated that it is contemplating an incentive to reimburse the Goods and Services Tax (GST) compensation cess on coal utilized in gasification projects for a period of ten years after the commercial operational date (COD), provided that the GST compensation cess is extended beyond FY27.
The purpose of this incentive is to offset the entities’ inability to claim the input tax credit for the same. The ministry has set a target to achieve coal gasification of 100 million tonnes (MT) of coal by FY 2030.
“The initiative holds immense potential to mitigate environmental burdens by reducing carbon emissions and promoting sustainable practices, aligning with the country’s global commitments towards a greener future,” highlighted the ministry.
About Coal Ministry:
The Ministry of Coal is tasked with the overarching responsibility of formulating policies and strategies regarding the exploration and development of coal and lignite reserves. It also has the authority to approve significant projects of considerable value and make decisions on all associated matters.
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