Govt to Introduce Underground Coal Gasification-Specific Provisions Within Auction Framework

The Government of India is set to introduce specific provisions for Underground Coal Gasification (UCG) within the country’s coal auction framework, a move aimed at promoting cleaner and more efficient use of India’s vast coal reserves.

According to senior officials at the Ministry of Coal, the new provisions will allow companies to bid for coal blocks specifically designated for UCG projects, marking a major policy shift towards integrating advanced technologies in the coal sector.

Underground Coal Gasification is a process that converts coal into synthetic gas (syngas) — a mixture of hydrogen, carbon monoxide, and methane — while the coal remains underground. This syngas can be used to generate power, produce fertilizers, and serve as feedstock for the chemical industry, offering a low-emission alternative to conventional coal mining and combustion.

The ministry is currently working on drafting a dedicated regulatory framework, including guidelines for bidding parameters, environmental safeguards, and resource utilization. Officials said the move will help attract private and foreign investments into this niche sector and could play a vital role in India’s energy transition strategy.

“The inclusion of UCG within the auction regime reflects our commitment to leveraging innovation for sustainable coal utilization,” a senior ministry official said.

Industry experts have welcomed the initiative, noting that India’s deep and unmineable coal seams make it a strong candidate for UCG adoption. However, they also cautioned that robust environmental norms and technology transfer partnerships will be essential to ensure feasibility and safety.

This development aligns with the government’s broader goal of promoting clean coal technologies, enhancing energy security, and reducing import dependence on natural gas and crude oil.