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How coal gasification can help India reduce its oil & gas import
India has been blessed with large coal deposits, especially in the eastern part of the country. Recent reforms in the coal sector, like commercial coal block auctions, engagement of MDO by Coal India Limited (CIL) for faster development of Greenfield projects, single-window system developed by the Ministry of Coal for the faster clearances, auction of abandoned/discontinued mines by CIL on the revenue-sharing basis and better coordination between Central and State Governments, have paved the path for increased self-dependency in the coal sector. The domestic supply of coal is expected to be more than the requirement for power generation in the next 2-3 years which will ensure that coal is available to other sectors.
Due to poor deposits of oil and gas in India, coal can be a way for India to reduce import dependency. And one of the best ways to ensure the clean utilisation of coal is through coal gasification. Coal gasification is a process that is more environment-friendly as compared to the combustion of coal and can be a better option for the future use of coal. Through products derived from Syn gas (produced via gasification of coal), such as Methanol, Ethanol, Ammonia, Ammonium Nitrate, and Dimethyl Ether (DME), imports can be substituted. And syn-gas can also be used for producing Grey/Blue Hydrogen for steel-making and for usage in refineries.
With India targeting net zero emissions by 2070, the future of coal depends on coal gasification as the process generates less CO2 and it is also easy to capture CO2produced during the gasification process. Coal gasification strategies consist of four major components, such as — making coal available for coal gasification projects, identifying suitable coal gasification technologies, including Carbon Capture, Utilisation and Storage (CCUS) and setting up coal gasification projects and market dynamics for the end-products which are expected to face a challenge from imported products based on natural gas.
Coal availability
The coal sector in India has witnessed steady growth over the last eight years. All India coal production in FY22 was 777 MT, with a growth of 8.5 percent over FY21, and registering a substantial increase from 566 MT in FY14. Coal production from captive mines has also registered a 30 percent growth in FY’22 with a production of 86 MT. Similarly, domestic coal offtake witnessed 18.4 percent growth in FY’22, amounting to 818 MT, which is substantially higher than the offtake level of 572 MT in FY14. In FY23, till December, there has been a growth of 16.1 percent in coal production over the last year as the figure settled at 607.3 MT and an increase of 6.9 percent in offtake with 637.2 MT. Five tranches of commercial coal auctions have been successful, consisting of 64 coal blocks with a total peak-rated capacity of 152.4 MT. In FY24, coal production from captive/commercial blocks will also supplement Coal India’s production target of 780 MT and SCCL’s 75 MT and will ensure domestic coal production of 1 BT.
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