Government to roll out coal gasification-based urea policy within a month

The government is finalising a new policy to promote urea production through coal gasification and expects to unveil it within a month, an official said. The move is aimed at strengthening self-reliance and conserving foreign exchange, as India remains heavily dependent on imported natural gas.

Addressing a roadshow to promote the government’s coal gasification scheme, the official said, "We are in the process of framing a new policy for coal gasification-based urea manufacturing and expect it to be ready within a month." He added, "Since this involves assured government business and we rely significantly on natural gas — about 25 per cent of which is imported — the initiative will benefit us in terms of self-sufficiency and reducing pressure on the foreign exchequer."

Coal Secretary Vikram Dev Dutt noted that the Ministry of Chemicals and Fertilisers has been working on the proposed urea policy for some time, but the current circumstances have accelerated the process. "Inputs were provided by the Ministry of Coal to ensure that coal gasification for urea production is incorporated into the new policy, which is now at an advanced stage and is expected to be finalised within a month," he said. Coal gasification-based urea production involves converting coal and pet coke into synthesis gas (hydrogen and carbon monoxide) through high-temperature oxidation. The hydrogen is then combined with nitrogen from the air to produce ammonia, which reacts with carbon dioxide to form urea. This method substitutes natural gas as a feedstock, thereby lowering import dependence.

Earlier, a domestic coal gasification company had urged the government to place coal-based urea projects on par with gas-based plants, including providing suitable offtake assurance mechanisms and reserving production capacities for the coal gasification route.

The appeal comes amid a broader government strategy to diversify raw material sources for urea manufacturing, cut reliance on imported natural gas, and tap into India’s abundant coal reserves using cleaner gasification technologies.

In its letter to the government, Maharashtra-based New Era Cleantech Solution, which is developing a 5 MMTPA coal gasification project in Chandrapur, said coal-based urea plants should receive equal treatment with gas-based facilities, including appropriate offtake guarantees and designated capacities for the coal gasification pathway.

New Era Cleantech Solution Pvt Ltd is also planning to establish a 1.27 MMTPA coal gasification-based urea plant in Bhadravati, located in Maharashtra’s Chandrapur district.