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Budget: Coal gasification of 100 MT to give fillip to end-use sectors like steel, say experts



Increasing coal gasification and liquefaction capacity will reduce India’s reliance on imports of natural gas and other critical items, curb emissions and give a fillip to end-user sectors like steel, experts said. Finance Minister Nirmala Sitharaman while presenting the interim budget in parliament on Thursday said: “Coal gasification and liquefaction capacity of 100 MT will be set up by 2030.”
Under gasification process, coal is converted into liquid fuel called syngas used as fuel for steel production.

The move is in line with the objective of Aatmanirbhar Bharat, said Somesh Kumar, Partner & Leader- Power & Utilities, EY.

“…it will not only enable investment and employment generation but will also reduce reliance on imports of critical items like natural gas, methanol, ammonia and other essential products,” Kumar said.

He stressed that coal gasification is one of the most viable and effective clean coal technologies for production of synthetic fuels, chemicals, various thermal applications and power generation.

It also helps in utilising coal for meeting stringent environment requirements. According to Ritabrata Ghosh, Vice President, Sector Head, Corporate Sector Ratings, ICRA, 100 million tonne per annum coal gasification target by 2030 can provide a fillip to end-use sectors like steel, chemicals, petrochemicals, and fertilizers. “Increased availability of syngas from coal can help reduce import dependence of natural gas,” Ghosh explained.

Former chairman of Coal India Partha S Bhattacharyya said coal gasification enables power generation with much less CO2 emission.

In January, the government approved an outlay of Rs 8,500 crore as financial assistance for promoting coal, lignite gasification projects.

The government has also approved setting up of a coal-to-SNG (Synthetic Natural Gas) project through a joint venture between Coal India and GAIL at an investment of Rs 13,052.81 crore and coal-to-ammonium nitrate project through a joint venture between CIL and BHEL for Rs 11,782.05 crore.

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