Budget 2022: Government plans four coal gasification, chemical conversion plants

In its endeavour to reduce emissions and control dependence on crude oil, the Centre today said four coal gasification and coal-to chemicals plants will be set up on a pilot basis to understand the technical and financial viability of such projects. "Four pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set up to evolve technical and financial viability," said Finance Minister Nirmala Sitharaman while presenting the Union Budget 2022-23 (Apr-Mar).

India is committed to cut consumption of coal, a primary pollutant, in power plants to half by 2030 and reduce its overall carbon footprint. Coal gasification is considered a greener alternative to burning the fossil fuel in furnaces and also helps produce other products such as urea. Meanwhile, coal liquefaction, commonly referred to as coal to liquid or coal to chemicals, is a technology used to produce alternative chemicals, including fuels such as diesel and petrol, from coal.

It, thus, reduces dependence on crude oil and vagaries of global price changes. In India, it is projected to help reduce the import bill spent on purchasing crude oil. As part of its plan to prepare the company for the future, state-owned Coal India Ltd is already setting up a coal gasification and a coal to chemicals unit each. Together with other public sector enterprises, Coal India is spending more than 132 bln rupees to set up a 1.27 mln tn surface coal gasification-based integrated fertilizer complex at Talcher using coal from nearby mines. Here, coal is being blended with petcoke and then gasified to produce syngas that shall be converted into neem-coated urea. Coal India is also setting up a 60-bln-rupee coal-to methanol plant