The Union Cabinet approved a ₹8,500 crore viability gap funding (VGF) scheme to support coal gasification projects, promoting cleaner energy alternatives and enhancing energy security.

Basics of Coal Gasification

• Coal gasification is a thermo-chemical process that transforms coal into simpler molecules, primarily carbon monoxide (CO) and hydrogen (H2), which together form synthesis gas or syngas.

Mechanism

• In the gasification process, coal is subjected to partial oxidation by reacting with air, oxygen, steam, or carbon dioxide at high temperatures. 
• This process takes place in a gasifier, a specialized vessel designed to control the amount of oxygen and heat, causing the breakdown of coal into syngas. 
  • The impurities are then removed, resulting in cleaner syngas. 
• This method is known as the ex-situ method.

Note: The composition of syngas depends on the quality of coal used in the process, as different types of coal yield varying proportions of CO, H2, CO2, methane (CH4), and other gases.

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Significance

• The combustion of syngas is much cleaner and more efficient than direct coal combustion because harmful emissions, such as sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter, are trapped during the gasification process.
• This significantly reduces the environmental impact compared to traditional coal-burning methods.

Need for Coal Gasification in India

• India holds significant coal reserves, with an estimated total of 361,411.46 million tonnes of thermal coal, as reported by the Geological Survey of India (GSI) on April 1, 2022.          
  • It is also the second-largest coal reserve holder globally, after China.
• India’s coal production witnessed a 14.8% increase, reaching 893 million tonnes (MT) in the 2022-2023 financial year, contributing over 10% of global coal production. 
  • This makes India a key player in the global energy landscape.
• Despite the global push to reduce coal dependency due to environmental concerns, coal remains a vital energy source for India’s development. 
  • As a developing nation, India continues to rely heavily on coal to meet its growing energy needs, making coal gasification an important alternative technology to ensure cleaner and more efficient use of this abundant resource.

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Benefits of Coal Gasification as a Cleaner Solution

• Reducing Import Dependency: India has a significant dependency on the import of products like crude oil, natural gas, methanol, ammonia, ammonium nitrate, and olefins. 
  • Many of these can be replaced with by-products derived from syngas, reducing the nation’s import reliance and promoting self-sufficiency.
• Transition to Sustainable Energy:Although the world, including India, is transitioning to cleaner energy sources, India’s abundant coal reserves can still serve a crucial role.
  • India’s coal consumption is projected to rise from 1 billion tonnes to 1.5 billion tonnes by 2029-30. 
  • Coal gasification offers a sustainable solution to meet this demand while addressing environmental challenges of traditional coal use.
• Impact on the Pharmaceutical Industry: India plans to increase the domestic production of active pharmaceutical ingredients (APIs), reducing reliance on imports from China. 
  • Syngas holds significant potential in the production of APIs and methanol, which can be used as solvents in the pharmaceutical industry.      
• Cleaner and Environmentally Friendly: Coal gasification plants offer substantial environmental benefits. Unlike traditional coal combustion, they produce no scrubber sludge and most of the wash water is reprocessed. 
  • Residual wastewater from gasification plants can be treated effectively, making coal gasification a cleaner and more environmentally friendly technology compared to conventional coal use.

Challenges with Coal Gasification in India

• Inferior Quality of Coal: Indian coal has a high ash content (30-35%), even after washing, which presents a technical barrier to large-scale coal gasification. 
  • The high ash content affects the efficiency and cost-effectiveness of the process.
• Induced Subsidence of Surrounding Rocks: Deep mining for coal gasification can lead to subsidence (sinking) of surrounding rocks, causing significant deformation in the remaining coal and rock formations, which may disrupt the process and safety.  
• Occupational Hazard: Unlike surface gasifiers, the coal gasification process in deep mines can lead to high temperatures and pressure, making it harder to control, which increases the risk to workers operating in such conditions.          
• Environmental Impact: Some studies suggest that coal gasification may generate more CO2 emissions compared to conventional coal power plants, raising concerns about its environmental sustainability.
• Groundwater Contamination: Coal gasification is more water-intensive than conventional energy methods, and with India’s existing water scarcity, this could exacerbate the challenges related to water usage and contamination.     

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Way Forward for Coal Gasification in India

• Regulation on Ash Content: Strict enforcement of regulations limiting coal ash content (currently at 34%) is necessary. 
  • The coal washeries, while crucial, face challenges in investment, water usage, and disposal. 
• Coal blending should be encouraged, as waste products from the gasification process (e.g., sulfur, slag) can be valuable by-products that are easier to manage.
• Level Playing Field: Coal gasification projects, especially those using clean technology, should be exempted from cess and duties on coal feedstock. 
  • This will create a level playing field and encourage the adoption of environment-friendly alternatives.
• National Policy on Coal Gasification & Liquefaction: A National Policy should be urgently formulated to guide the coal gasification and liquefaction processes. 
  • This policy will ensure faster and smoother implementation of coal gasification projects across the country.
• Dedicated Closed Coal Mines for Coal Gasification: Coal mines should be specifically earmarked for gasification projects, awarded through auction linkage, to ensure consistent coal quality, sustained supply, and better control over mining and transportation costs.
• Viability Gap Funding (VGF): The government should provide financial incentives to make the high capital expenditure (CAPEX) of gasification projects more viable. 
  • These incentives are crucial for improving the economic feasibility of coal gasification as part of India’s energy security and transition to clean energy.
• Global Best Practices: India should adopt best practices from other countries that have successfully implemented coal gasification projects. 

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