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The Ministry of Coal’s ₹37,500 crore Scheme for Promotion of Surface Coal

ICICIdirect Research 09 Sep 2026 DISCLAIMER

News: The Ministry of Coal’s ₹37,500 crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects has received a good response in Round 1, with seven applications from major public and private players, including NTPC (SNG), Adani Enterprises (three urea projects), Gallantt Ispat (DRI & syngas), Shyam Sel & Power (syngas) and Talcher Fertilisers (urea). The scheme aims to convert domestic coal/lignite into higher-value products such as syngas, methanol, ammonia, urea and hydrogen, reduce dependence on imports of LNG, urea, ammonia and methanol worth around ₹2.77 lakh crore in FY25, and support the government’s target of 100 MT coal-gasification capacity by 2030, including 75 MT under the scheme.The programme is expected to catalyse ₹2.5–3 lakh crore of investment.The initiative builds on the earlier ₹8,500 crore scheme, under which eight projects are already under implementation. Round 1 applications will now undergo detailed evaluation, while Round 2 opened on 8 September 2026, with further rounds every two months.

View: The scheme could create a multi-layered opportunity across the coal-gasification value chain as projects progress towards execution. Thermax and BHEL could benefit from gasification technology, boilers, process equipment and balance-of-plant requirements. Engineers India could benefit through feasibility studies, engineering and project-management consultancy. Larsen & Toubro, Tata Projects and could potentially participate in EPC, process equipment and balance-of-plant packages. Overall, the ₹2.5–3 lakh crore estimated investment potential under the scheme provides a sizeable multi-year opportunity, although actual benefits will depend on project awards, technology selection and conversion of applications into executable projects. 

Impact: Positive

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