India approves coal gasification plan to weather Mideast war crunch

NEW DELHI: India approved a nearly $4 billion plan on Wednesday to expand coal gasification – a cleaner process to burn coal – aiming to ease energy supply pressures caused by the Middle East war.

Prime Minister Narendra Modi’s cabinet cleared the $3.92 -billion plan to accelerate the conversion of coal and lignite into synthetic gas, the government said in a statement.

Coal gasification converts low-grade coal such as lignite into gas used for power generation in a process considered cleaner than conventional coal burning. It can also produce fertilisers.

The programme is intended to boost energy security and cut dependence on imported fuels such as liquefied natural gas (LNG), around half of which India sources from overseas.

“The Scheme marks a major step towards accelerating India’s coal/lignite gasification programme,” the government’s statement said, adding it supports a goal of gasifying 100 million tonnes of coal by 2030.

India, the world’s most populous country, is the fourth-largest buyer of LNG and the second-largest importer of liquefied petroleum gas (LPG), much of it from the Middle East.

The gasification scheme is also aimed at diversifying coal use and reducing imports of fertilisers including urea, ammonia and ammonium nitrate.

India’s import bill for such products stood at about 2.77 trillion rupees ($32.6 billion) last year, the government said.

India holds an estimated 401 billion tonnes of coal reserves, among the largest globally.

The Iran war has burdened the Indian economy, which is heavily dependent on energy and fertilisers from the Middle East, clouding Delhi’s economic growth outlook.