NTPC Proposes Coal-to-Urea and Methanol Projects Under ₹37,500-Crore Gasification Scheme
Coal India Limited and its subsidiaries like BCCL, CCL and other coal-producing companies could potentially explore opportunities in the emerging coal gasification value chain
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India’s ambitious coal gasification programme has received a significant push with NTPC Limited submitting two proposals to establish coal-based manufacturing projects for producing urea, methanol and dimethyl ether (DME).
The proposals have been submitted under the Centre’s ₹37,500-crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects. The Ministry of Coal confirmed that both applications received during the second round of the scheme were submitted by NTPC.
While one proposal envisages the production of urea, the other focuses on methanol and dimethyl ether (DME), products that have important applications in the fertiliser, chemical and energy sectors.
Third Round Opens, January 11 Deadline
The Ministry of Coal has opened the third round of applications under the scheme with effect from November 10, 2026. Eligible companies and entities can submit their proposals until January 11, 2027.
The latest round is expected to provide another opportunity for public and private sector companies to participate in coal and lignite gasification projects, attract investments and expand the country’s domestic manufacturing capabilities.
The Union Cabinet approved the ₹37,500-crore scheme on May 13, 2026, to accelerate the development of surface coal and lignite gasification projects across the country.
Why Coal Gasification Matters
Coal gasification involves converting coal into synthesis gas, commonly known as syngas, which can subsequently be used to manufacture a range of industrial products, including fertilisers, chemicals, fuels and other value-added commodities.
For India, the technology offers an opportunity to move beyond the conventional use of coal for power generation and utilise domestic coal reserves to manufacture products that currently involve substantial import dependence.
Urea is a critical agricultural input, while methanol and DME have applications across the chemical, industrial and energy sectors.
Successful implementation of such projects could strengthen domestic supply chains, diversify coal utilisation and create new industrial investment opportunities.
Opportunity for Coal India and Its Subsidiaries
The coal gasification programme also opens up significant possibilities for Coal India Limited (CIL) and its subsidiaries.
Companies such as Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL) and other coal-producing subsidiaries could potentially explore opportunities in the emerging coal gasification value chain.
The technology could create additional avenues for utilising domestic coal resources and producing higher-value industrial commodities. However, no official announcement has been made regarding a fresh application from Coal India or its subsidiaries in the second round.
100 Million Tonnes Gasification Target by 2030
The government’s broader ambition is to achieve 100 million tonnes of coal gasification capacity by 2030. Through the ₹37,500-crore incentive scheme, the Ministry of Coal intends to encourage investments, promote technological adoption and accelerate the development of commercially viable projects.
NTPC’s two proposals represent an important step towards translating this ambition into actual industrial projects.
The next challenge will be to move from project proposals to investment commitments, technology selection, execution and commercial production. The opening of the third round will be crucial in determining whether the programme can attract wider participation and build momentum towards India’s 2030 coal gasification target.
