New Delhi: Hydrogen, synthetic natural gas (SNG), methanol and ammonia should be the first products India makes from coal under its Rs 37,500-crore gasification scheme, according to a new study that ranked 23 coal-derived products for their power to cut imports of fuels, fertilisers and industrial chemicals.
The study, by the Centre for Domestic Economy Policy Research (C-DEP) and the Centre for WTO Studies (CWS), is titled "Coal-to-Chemicals Policy in India: A Strategic Framework for Product Prioritisation under the National Coal Gasification Mission". It scored the 23 products across eight economic, industrial and strategic parameters to guide where the scheme's money should go first.
Source: The S Bharat — Hydrogen, SNG should lead Rs 37,500 crore coal gasification push: Study
Hydrogen emerged as the highest-priority product, followed by SNG, methanol, ammonia, dimethyl ether (DME), LNG, LPG, urea and diammonium phosphate (DAP), the study said.
The case rests on India's import bill. The country imported nearly $37 billion worth of LPG, LNG, urea and DAP in 2024 — more than $27 billion of it LPG and LNG alone, and another $9.6 billion urea and DAP, the report said. The government scheme aims to facilitate gasification of an additional 75 million tonnes of coal and lignite a year, against a national target of 100 million tonnes of coal gasification capacity by 2030.
Regulator's caution: prove the technology first
Speaking at the report's release, Petroleum and Natural Gas Regulatory Board (PNGRB) Chairperson Anil Kumar Jain said coal gasification in India was still at an early stage and the commercial viability of technologies suited to Indian coal had yet to be established. "While import dependence, supply security and strategic importance should guide product prioritisation, we must first allow industry to test these technologies and establish their feasibility," he said, according to a statement issued by the organisers.
C-DEP President Jaijit Bhattacharya said the government's Rs 37,500-crore commitment made it important to identify the products that could deliver the greatest economic benefits. "Our analysis provides a framework for directing investment towards products that can reduce imports, strengthen domestic supply chains and support India's industrial self-reliance," he said.
Source: The S Bharat — Hydrogen, SNG should lead Rs 37,500 crore coal gasification push: Study
Lessons from China: build clusters, but in phases
The report draws on China's coal-to-chemicals industry, which expanded domestic production of fertilisers, methanol and downstream chemicals through integrated industrial clusters — but also ran into underutilised plants, high capital costs and water constraints when capacity grew too fast. It recommends that India adopt a phased investment approach and develop integrated manufacturing clusters where common gasification facilities supply multiple downstream chemical industries, and it cautions that commercial viability and technological feasibility will decide whether the programme succeeds.
Source: The S Bharat — Hydrogen, SNG should lead Rs 37,500 crore coal gasification push: Study