India’s Coal Chemical Potential and Energy Security
Riyasat IAS Mentorship Team
Updated 19 Jul 2026
2 min read
India’s Coal Chemical Potential and Energy Security
GS PAPER III — Economy, Energy, Infrastructure
Why in News? With the 2026 Strait of Hormuz crisis roiling global crude markets, the Union Cabinet has cleared a ₹37,500 crore Surface Coal and Lignite Gasification Scheme aimed at strategic energy sovereignty. The scheme targets 100 million tonnes of coal gasification capacity by 2030, positioning domestic coal chemistry as a hedge against imported fuel shocks.
Key Facts for Prelims Surface Coal and Lignite Gasification Scheme approved: ₹37,500 crore outlay.Target: 100 million tonnes (MT) of coal gasification capacity by 2030.Financial incentive: up to 20% of plant and machinery cost.Coal-linkage tenure extended to 30 years for gasification projects.BIS has approved blending Dimethyl Ether (DME) up to 20% in LPG.A 20% DME blend could cut LPG imports by 63 lakh tonnes/year, saving ~₹34,000 crore in forex annually.Indian coal has higher ash content than Chinese coal used in coal-to-chemicals plants — a key efficiency challenge.CSIR-National Chemical Laboratory developed the underlying methanol-to-DME technology.
Quick-Reference Data Table
Metric
Estimated Impact
LPG import reduction from 20% DME blending
63 lakh tonnes per year
Annual forex savings
~₹34,000 crore
Gasification capacity target by 2030
100 million tonnes
Subsidy on plant & machinery cost
Up to 20%
Extended coal-linkage tenure
30 years
UPSC Note — Prelims Angle Expect statement-based MCQs from India’s Coal Chemical Potential and Energy Security testing numbers, scheme names, ratios and committee recommendations. Revise the data table above rather than the narrative — Prelims rewards precision on figures.
Prelims MCQ Practice With reference to India’s coal gasification push, consider the following statements: 1. The Surface Coal and Lignite Gasification Scheme targets 100 million tonnes of gasification capacity by 2030. 2. The Bureau of Indian Standards has approved blending Dimethyl Ether up to 20 percent in LPG. 3. Indian coal generally has lower ash content than the coal used in China’s coal-to-chemicals industry. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 Answer: (a) Statements 1 and 2 accurately describe the scheme’s target and the DME blending approval. Statement 3 is incorrect — Indian coal has higher, not lower, ash content compared with Chinese coal used in coal-to-chemicals processes.
