**Executive Summary**
This document provides the Minister of Coal's response to Lok Sabha Unstarred Question No. 834, concerning the Government's initiatives for coal to synthetic natural gas (SNG) production. It outlines key initiatives, partnerships, and potential regions for SNG and Coal Bed Methane (CBM) production, emphasizing the role of SNG in strengthening national energy security and meeting environmental targets. The response was prepared on February 4, 2026.
**Key Points / Main Content**
* **Government Initiatives for SNG Production:**
* Coal gasification, including coal-to-SNG, is identified as a key pathway for cleaner utilization of domestic coal.
* A 50% rebate in revenue share is provided in commercial coal block auctions for coal used for gasification (minimum 10% of total production).
* A Financial Incentive Scheme of ₹8,500 crore is approved to promote coal/lignite gasification projects, including SNG.
* **SNG Production Projects:**
* Two coal-to-SNG projects are being undertaken by PSUs:
* Coal Gas India Limited (CGIL - CIL & GAIL joint venture) is setting up a plant in Bardhaman, West Bengal (633.6 Million Nm3/1.83 MMSCMD capacity).
* CIL (MoU with BPCL) is setting up a plant in Chandrapur, Maharashtra (633.6 Million Nm3/1.83 MMSCMD capacity).
* **Benefits of SNG:**
* SNG can serve as an effective substitute for imported natural gas.
* SNG is useful in chemical and power sectors, strengthening national energy security.
* Combustion of SNG results in lower emissions (particulate matter, SOx, NOx), improving air quality and public health.
* **Regions for SNG Production:**
* Areas with high potential for SNG production through coal gasification include:
* CGIL project at Sonepur Bazari area in ECL, West Bengal (estimated 633.6 Million Nm3/1.83 MMSCMD of SNG per annum).
* CIL project in WCL, Maharashtra (estimated 633.6 Million Nm3/1.83 MMSCMD of SNG per annum).
* **PSU Collaboration:**
* CIL has formed a joint venture with GAIL and also signed an MoU with BPCL for coal-based SNG project.
* **Coal Bed Methane (CBM) Production:**
* 15 CBM blocks are active for exploration, development or production phases across India.
* 6 blocks are in production stage, 7 in exploration and 2 in development.
* Cumulative CBM production is 7.1 Billion Cubic Meter (BCM) up to March 2025, with current production at about 2.27 MMSCMD.
* 9 operators (PSUs and Private Sector) are engaged in CBM exploration and development.
* **Regions for CBM Production:**
* High potential regions include coalfields located in Jharkhand, West Bengal, Madhya Pradesh, Rajasthan, Gujarat, Odisha, Chhattisgarh, Tamil Nadu, Telangana, Andhra Pradesh, Maharashtra, and North-East.
**Impact Analysis**
**Government of India**
* **Impact:** The Government can achieve cleaner utilization of domestic coal, reduced import dependency for natural gas, and strengthened national energy security. Meeting environmental targets is also supported through decreased emissions.
* **Action Required:** Continue supporting coal/lignite gasification projects, monitor the progress of the projects undertaken by CGIL and CIL and enforce regulations related to CBM production.
**Public Sector Undertakings (PSUs) - CIL, GAIL, BPCL**
* **Impact:** The PSUs are central to the execution of SNG and CBM production projects, requiring investments and operational activities.
* **Action Required:** Execute SNG projects according to the MoU’s and established timelines and engage in CBM exploration and development.
**Chemical and Power Sectors**
* **Impact:** These sectors will have access to an alternative fuel source in SNG, potentially reducing costs and reliance on imported natural gas.
* **Action Required:** Adapt their infrastructure to utilize SNG and integrate it into their energy mix.
**Private Sector Companies**
* **Impact:** Private companies engaged in CBM exploration and development can benefit from government initiatives.
* **Action Required:** Continue CBM exploration and development activities in allocated blocks.
**Environment and Public Health**
* **Impact:** Reduced emissions from SNG usage compared to direct coal or oil usage lead to improved air quality and public health.
* **Action Required:** No direct action is required; however, support for policies promoting cleaner energy sources is encouraged.
Key Entities Referenced
Synthetic Natural Gas (SNG): A key focus of the policy, examining its production, benefits, targets, and potential use as a substitute for imported natural gas.
Ministry of Coal: The central ministry responsible for initiatives related to coal and synthetic natural gas production in India.
Coal India Limited (CIL): A major Public Sector Undertaking involved in coal production and synthetic natural gas projects.
Coal Gas India Limited (CGIL): A joint venture between Coal India Limited (CIL) and Gas Authority of India Limited (GAIL) focused on setting up a coal-to-SNG plant.
Financial Incentive Scheme of ₹8,500 crore: A financial scheme to promote coal/lignite gasification projects, including SNG.
GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
UNSTARRED QUESTION NO. 834
TO BE ANSWERED ON 04/02/2026
COAL TO SYNTHETIC NATURAL GAS PRODUCTION
834. SHRI TATKARE SUNIL DATTATREY:
Will the Minister of COAL be pleased to state:
(a) the various initiatives taken by the Government to launch coal to synthetic natural gas
production in the country;
(b) the manner in which Synthetic Natural Gas (SNG) can be beneficial for meeting energy
demand and environmental targets of the country;
(c) the target set for synthetic natural gas production in the country along with the industries in
which synthetic natural gas likely to be used;
(d) the regions which have been identified for high potential for production of synthetic natural
gas;
(e) the details of collaboration with other Public Sector Undertakings (PSUs) for production of
synthetic natural gas along with the role of private sector in production of synthetic natural gas;
(f) the status of production of coal bed methane in the country along with the role of PSUs and
private sector in Coal Bed Methane production; and
(g) the regions which have been identified for high potential for production of coal bed
methane?
ANSWER
MINISTER OF COAL AND MINES
(SHRI G. KISHAN REDDY)
(a): Government of India has identified coal gasification, including coal-to-Synthetic Natural
Gas (SNG), as a key pathway for cleaner utilisation of domestic coal. In commercial coal block
auctions, 50% rebate in revenue share is being provided for the coal used for gasification
purposes provided the coal quantity used for coal gasification is at least 10 % of the total
production. A Financial Incentive Scheme of ₹8,500 crore has been approved to promote
coal/lignite gasification projects, including SNG. Two coal-to-SNG projects are being
undertaken by PSUs as under:–
I. Coal Gas India Limited (CGIL) - a joint venture of Coal India Limited (CIL) and Gas
Authority of India Limited (GAIL)) is setting up a coal-to-SNG Plant of 633.6 Million
Nm3 (1.83 MMSCMD) capacity at Bardhaman, West Bengal.
II. CIL (MoU with BPCL) is setting up a coal-to-SNG Plant of 633.6 Million Nm3 (1.83
MMSCMD) capacity at Chandrapur, Maharashtra.
(b): Synthetic Natural Gas, produced from syngas through gasification of coal, can serve as
an effective substitute for imported natural gas to meet requirements of chemical and power
sectors, thereby strengthening national energy security.Further, compared to direct coal or oil usage, the combustion of SNG results in
significantly lower emissions of particulate matter, sulfur oxides (SOₓ), and nitrogen oxides
(NOₓ), leading to improved air quality and public health. Accordingly, SNG has the potential
to support India's environmental and sustainability objectives.
(c) and (d): As per Preliminary Feasibility Report (PFR), the CGIL project at Sonepur Bazari
area in ECL, West Bengal and the CIL Project in WCL, Maharastra are each estimated to
produce 633.6 Million Nm³ (1.83 MMSCMD) of SNG per annum. These are likely areas for
SNG production through coal gasification. SNG, being a substitute for natural gas, finds it use
in chemical and power sectors thereby ensuring energy security.
(e): CIL has formed a Joint Venture with GAIL and also signed an MoU with BPCL for
production of coal-based SNG project through surface coal gasification.
(f): At present, fifteen (15) Coal Bed Methane (CBM) blocks are active for exploration,
development or production phases across India. Of these 15 CBM blocks, 6 blocks are in
production stage, 7 blocks are in exploration stage and the remaining 2 are in the development
stage. The cumulative CBM production has reached 7.1 Billion Cubic Meter (BCM) up to
March, 2025, with the current production rate of about 2.27 MMSCMD. At present, 9 operators
(both PSUs and Private Sector) are engaged in CBM exploration and development.
(g): The potential for production of Coal Bed Methane (CBM) in the country has been
identified mainly in the coal-bearing sedimentary basins. High potential regions include
coalfields located in the States of Jharkhand, West Bengal, Madhya Pradesh, Rajasthan,
Gujarat, Odisha, Chhattisgarh, Tamil Nadu, Telangana, Andhra Pradesh, Maharashtra and
North-East.
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