Now Reading: Industry seeks assured offtake for coal gasification projects
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Industry seeks assured offtake for coal gasification projects
The energy industry is seeking assured offtake commitments from the government for coal gasification projects, arguing that viability gap funding alone may not be enough to unlock investments. Executives said putting in…
The energy industry is seeking assured offtake commitments from the government for coal gasification projects, arguing that viability gap funding alone may not be enough to unlock investments. Executives said putting in Rs 10,000 crore without a guaranteed market makes the arithmetic unworkable.
The government has rolled out a Rs 37,500 crore incentive scheme to scale up coal gasification and build a coal-to-chemicals ecosystem. The scheme offers up to 20% of plant and machinery cost, but industry says capital subsidy does not address demand and market risks.
Industry is also seeking freight support or land allocation near mine heads and ports to lower logistics costs. The Talcher fertiliser project in Odisha has highlighted execution challenges for such projects.
Indian Opinion Analysis
Coal gasification has been a policy priority for years, but India has little commercial-scale capacity. The Talcher fertiliser project, a joint venture between public-sector firms, was meant to be a flagship but has faced repeated delays and cost overruns. The new Rs 37,500 crore scheme is the government's largest single push, but past experience shows that capital incentives alone do not guarantee a viable project if downstream demand is uncertain. Developers are asking for the same kind of offtake guarantees that thermal power plants once received under power purchase agreements. The Ministry of Coal is expected to finalise scheme guidelines in the coming months, and the key signal will be whether it includes any mandatory offtake or pricing support.
Source: energy.economictimes.indiatimes.com
This brief was synthesised by AI from the source linked above.
