Coal gasification — talked about for decades, often through the prism of the beleaguered Talcher project — has suddenly begun to bustle with activity.

On May 13, the government approved a ₹37,500 crore scheme to promote surface coal gasification. Earlier, on May 5, L&T announced it had won a major equipment supply order from Bharat Coal Gasification and Chemicals Ltd, a joint venture of Coal India and Bharat Heavy Electricals.

On April 29, the Ministry of Coal approved a 75,900 tonnes per annum (tpa) coal-to-acetic acid project by Kartikay Vayunandana Pvt Ltd, a day after it signed agreements authorising two companies — Reliance Industries and Axis Energy — to undertake underground coal gasification projects in Odisha and Andhra Pradesh.

Reinforced atmanirbharta in response to the West Asia crisis? Perhaps so. But the key point is about getting the technology right. The ₹13,000 crore Talcher project didn’t — so it is in a limbo even after two decades. The Ministry says it is “71.24 per cent complete”, but there are serious doubts about the other 28.76 per cent, given the financial and operational disputes with the main contractor, Wuhan Engineering of China.

That the Talcher project has given coal gasification a negative hue is unfortunate because India has 400 billion tonnes of coal that it cannot (should not) burn.

Talcher failed because the wrong gasifier was matched to the wrong coal. The Talcher project’s technology — entrained gas flow — was not appropriate, and the project’s proponents — public sector companies — persisted with it despite being warned.

Atanu Mukherjee, CEO of Dastur Energy, a Houston-based energy transition and gasification advisory firm, who had once advised on the Talcher project, explains that in an entrained gas flow system, ash is extracted from the gasifier in liquid form. Talcher coal has high aluminium and silicon content.

The liquid ash rises to a temperature of 1,550 degrees C. This affects the gasifier operations, calling for more oxygen and impacting refractory life. To lower the flow (viscosity) they would have to add calcium or magnesium, which jacks up the cost. The practical way to gasify such coal is to add petcoke. This would lower ash content, Mukherjee says.

It is learnt that Talcher Fertilizer is now contemplating such a change in technology.

Experts suggest that “non-slagging” gasifiers, such as fixed or fluidised bed gasifiers, are more suited for high-ash coals.

Mukherjee says lignite, which India is abundantly blessed with, is more suited for gasification than coal, as its chief problem is moisture and not ash. Incidentally, NLC India Ltd, the public sector mining-cum-power production company, has said it gave up its coal-to-methanol project as it was not financially feasible. It had earlier planned a ₹4,400 crore project to convert 2.5 million tpa lignite into 4,00,000 tpa methanol.

Mukherjee believes that, with the right technology, coal gasification can lead to the production of green hydrogen at $1.25 a kg, assuming domestic coal price of $40 a tonne. This is an important and often overlooked pathway for green hydrogen.

Deep coal seams that are hard to reach for coal production are candidates for underground coal gasification (UCG). Reliance Industries and Axis Energy have just bagged two underground mines each. Axis Energy had earlier told businessline that the company is on the verge of finalising an “access to technology”.

Uncertain underground

UCG is a tough game. It has had limited success globally; the only commercial UCG plant is in Angren, Uzbekistan.

Coal is burnt underground (in-situ combustion) with limited oxygen and steam to get syngas, which is a mixture of carbon monoxide and hydrogen — an intermediate material for many products such as hydrogen, ammonia and methanol.

Mukherjee points out that once a coal seam is lit, you have little control over what happens underground, as parameters such as temperature and pressure keep changing which, in turn, mauls the geometry of the coal seam.

He points out that due to various technical reasons, both physics and chemistry, UCG is vastly different from in-situ combustion of oil — a method of enhanced oil recovery by reducing the oil’s viscosity to make it flow upwards.

On the flip side, if India masters UCG, it could become a pioneer. “Coal gasification can become an important pillar of this resilience architecture because it allows India to convert its domestic coal and lignite resources into syngas and downstream products such as methanol, ammonia, DME (dimethyl ether), SNG (synthetic natural gas), hydrogen and fertilizer intermediates,” says Mukherjee.

“However, the success of this programme will depend on execution discipline,” he adds, stressing on the right matching of gasification technology to the feedstock coal.

Published on May 18, 2026