Can 'Black Gold' Power India's Future? 'Dirty Coal' Finds New Uses

Can India's dirty coal be made clean? Indian scientists have made a breakthrough to use coal on the road to energy independence. India is confronting a hard reality. It is a fast-growing economy with rising energy demand, but it is deeply dependent on imports for oil, gas and several key industrial fuels. At the same time, it sits atop one of the world's largest coal reserves. Now, as global tensions disrupt supply chains and expose vulnerabilities, India is hoping to turn back to coal with a new question: can this so-called dirty fuel be made cleaner and more strategic?

For long, India's coal has been made into a villain, but on this World Environment Day (June 5), Indian scientists reveal how "dirty old coal" can really become the new age "black gold" in India's journey for a clean and green "Viksit Bharat" (developed India) with energy independence.

India holds nearly 400 billion tonnes of coal, among the largest reserves in the world. Coal already accounts for about 55 per cent of the country's energy mix and nearly 74 per cent of electricity generation. At the same time, the country imports around 83 per cent of its crude oil and about 50 per cent of its natural gas. Dependence is even higher in chemicals and industrial feedstocks, where more than 80 to 90 per cent of products like methanol are imported. This imbalance has always been a concern. But today, it has become a strategic vulnerability.

The ongoing crisis in the Middle East involving tensions between the US, Israel and Iran has once again highlighted the fragility of global energy supply lines through the Strait of Hormuz. Shipping disruptions, volatility in prices and uncertainty around supply have put pressure on countries like India that depend heavily on imports.

Energy security alone is not enough, so what India increasingly seeks is energy independence, and that is where coal is being rediscovered.

This is not a return to the past, but an attempt to reinvent coal for the future. At the centre of this transformation is coal gasification, a process that converts coal into a cleaner intermediate fuel known as synthesis gas or syngas. This gas is primarily a mix of carbon monoxide and hydrogen, and it can be used to produce a wide range of products. These include fertilizers, chemicals, synthetic fuels and even hydrogen.

Instead of simply burning coal, gasification allows it to be processed in a controlled way, improving efficiency and reducing emissions. It also unlocks an entire downstream industrial ecosystem that can replace imports and build domestic capacity.

Recognising this potential, India has launched an ambitious push with the Union cabinet approving a massive Rs 37,500 crore scheme to promote coal and lignite gasification projects across the country. The programme aims to make the technology more attractive for industry, support large-scale projects and accelerate adoption. It targets the gasification of about 75 million tonnes of coal and is expected to unlock investments worth several lakh crore rupees.

This push builds on earlier efforts, including a Rs 8,500 crore incentive scheme to support pilot projects and technology development. Together, they are designed to create a full-fledged coal gasification ecosystem in India. Companies like Thermax India, Coal India and Bharat Heavy Electricals Ltd (BHEL) are leading the charge.

BHEL has pioneered a homegrown Pressurised Fluidised Bed Gasification (PFBG) technology specifically designed to process high-ash Indian coal (35 per cent to 45 per cent ash content). This breakthrough technology called oxy-blown tech converts abundant domestic coal into valuable syngas, which can be utilised for power generation or the production of chemicals like methanol and ammonium. For policymakers and experts, the shift is driven by a simple logic. Use what India has in abundance, instead of depending on what it lacks.

VK Saraswat, former Member of NITI Aayog, has been one of the strongest voices advocating this approach. He points out that India's energy demand has already risen sharply and will continue to grow in the decades ahead. "The country's energy demand has tripled over the last three decades," he says. "In a projection of this kind, coal will continue to play a dominant role." But he is equally clear that the way coal is used must change. "If we continue to use coal in the same way as we are using so far, it has been identified as a dirty fuel. The requirement today is that we should learn how to use coal in a cleaner manner."

That is precisely what gasification offers. "Coal gasification gives you minimum emissions compared to burning of the coal. And if it is integrated with carbon capture, the net carbon output becomes close to zero," Saraswat says. For him, the argument goes beyond efficiency. "The alternative is that we should work on abundance. At 400 billion tonnes, it can meet India's energy needs for 180 to 200 years."

India currently spends vast amounts of foreign exchange on importing oil, gas, fertilizers and chemicals. Coal gasification can substitute a significant portion of these imports by producing the same products domestically. "It is a good solution for most of everything that India is suffering today," Saraswat says, referring to energy imports, fertilizer shortages and industrial raw material needs. But for years, there was a major technical roadblock. Indian coal is not like coal found elsewhere as it has a much higher ash content, often exceeding 45 per cent. This made it difficult to use in conventional gasification technologies, most of which were developed for low-ash coal abroad.

"There was a myth that Indian coal cannot be gasified." That myth has now been broken. "Indian scientists have developed coal gasification technology using Indian coal with high ash content," he says. Pilot plants are already operational, producing syngas and even converting it into methanol in a critical breakthrough. Once the technology works with Indian coal, it can be scaled up for a variety of applications and uses.

Syngas can be converted into methanol, ammonia, and fertilizers, reducing dependence on imported natural gas. It can be used to produce synthetic natural gas and even hydrogen, opening pathways to future energy systems. It can support industries ranging from chemicals and plastics to aviation fuel and advanced materials. Saraswat sees it as a complete industrial transformation. "Coal gasification is the way we will switch from a crude oil based economy to a clean coal based economy," he says.

He also highlights the importance of integrating carbon capture and utilisation. By capturing carbon dioxide emissions and using them to produce additional chemicals or fuels, efficiency can be increased while emissions are reduced. Globally, countries like China have already adopted coal gasification at scale. India is now trying to catch up, with a focus on indigenous technology and domestic resources.

India's annual coal demand is already around 1 billion tonnes and is expected to rise further by 2047. At the same time, the country has committed to achieving net zero emissions by 2070. Balancing growth, sustainability and security will require new approaches and coal gasification is being positioned as one such bridge. It allows India to continue using coal, but in a more efficient and cleaner way. It strengthens domestic supply chains, reduces exposure to global shocks and builds industrial capability. Above all, it gives India control.

The future lies in sovereignty, from fertilizer production to hydrogen, chemicals to aviation fuel, coal gasification offers a pathway to reduce import dependence across sectors. The lesson from global crises including disruptions in vital shipping routes like the Strait of Hormuz is unmistakable because dependence comes with risk and domestic resources offer resilience.

Coal, once seen purely as a problem, is now being reimagined as part of the solution. Coal is black. Black is beautiful. And for India, coal, the "black gold", is ours. The challenge is to make it clean and efficient for the nation's journey towards true energy independence.