State-owned Coal India Ltd and ArcelorMittal Nippon Steel India have partnered to explore a significant coal gasification project in Odisha, aiming to boost cleaner energy production and reduce India's dependence on costly imports.
State-owned Coal India Ltd on Wednesday said it has entered into a pact with ArcelorMittal Nippon Steel India Pvt Ltd (AMNS) to explore the utilisation of synthesis gas produced from a proposed coal gasification plant near the steelmaker's Paradip pellet plant in Odisha.
The memorandum of understanding (MoU), executed on Wednesday, envisages a coal gasification facility to be established by CIL adjacent to or at the AMNS Paradip Pellet Plant, coupled with carbon capture, utilisation and storage (CCUS) technology, according to a regulatory filing by Coal India Ltd (CIL).
Under the initial framework, both the companies will assess the technical and commercial feasibility of the proposed project, examine implementation modalities and facilitate the preparation of a Preliminary Feasibility Report (PFR) to evaluate its viability.
Coal gasification converts coal into synthesis gas (syn-gas), and steelmakers use this as a cleaner fuel and chemical reducing agent. It replaces imported natural gas and is injected into blast furnaces to reduce reliance on expensive, imported coking coal. Coal India accounts for over 80 per cent of domestic coal output.
The Union Cabinet had earlier approved a Rs 37,500-crore incentive scheme to promote coal gasification projects, aimed at boosting clean energy production and reducing dependence on forex-guzzling imports of LNG, urea and methanol, while insulating the country from global price volatility and supply chain disruptions.
The Union Cabinet under the chairmanship of Prime Minister Narendra Modi approved the scheme for promotion of surface coal/lignite gasification projects with a financial outlay of Rs 37,500 crore. The scheme marks a major step towards accelerating the country's coal gasification programme, advancing the national target of gasifying 100 million tonnes (MT) of coal by 2030, strengthening energy security, and reducing dependence on imports of key products such as LNG, urea, ammonia and methanol.
India holds one of the world's largest coal reserves of 401 billion tonnes and lignite reserves of 47 billion tonnes. Coal accounts for over 55 per cent of the country's energy mix.