Coal Gasification Offers Pathway to Strengthen India’s Fertilizer Security and Industrial Feedstock

India’s fertilizer security relies heavily on manufacturing capacity alongside the availability and cost of the feedstocks required to produce essential agricultural nutrients. Agriculture requires reliable supplies of urea and other fertilizers, making coal gasification an alternative method to convert domestic coal into chemical inputs, diversify production routes, and reduce exposure to international supply chain disruptions.

During the previous financial year, India imported urea and ammonia valued at approximately US$8 billion. This reliance underscores the ongoing need to strengthen domestic feedstock production and lower import dependence across the broader fertilizer value chain.

Through coal gasification, raw coal transforms into synthesis gas, or syngas, which primarily consists of hydrogen and carbon monoxide. Following purification, the resulting hydrogen combines with nitrogen extracted from the air to manufacture ammonia, a critical intermediate for nitrogen fertilizer production. Subsequent reactions with carbon dioxide yield urea, alongside other downstream fertilizer products.

This process allows India to establish a parallel domestic feedstock route running alongside existing natural-gas-based production methods. Integrated coal-to-chemicals facilities can connect domestic coal resources with syngas, ammonia, and fertilizer manufacturing, retaining greater economic value within the domestic industrial ecosystem.

Gasification also serves functions beyond chemical production. Chemical gasification generates syngas for downstream products like methanol and industrial chemicals, whereas thermal gasification converts coal into producer gas. This gas can supply heat to industrial furnaces, kilns, and boilers, replacing conventional fuels where applicable.

Recognizing the difference between these applications matters for national policy. Chemical gasification builds domestic feedstocks over the long term, while thermal gasification provides industries with an alternative method to utilize locally available coal in heat-intensive operations. Both approaches require technologies tailored to intended uses and the characteristics of Indian coal, which frequently exhibits high ash content.

In May 2026, the Indian government approved a ₹37,500-crore policy designed to encourage the gasification of surface coal and lignite. This initiative aligns with the government's target to gasify 100 million tonnes of coal by 2030.

Financial arguments for coal gasification continue to gain traction. In select industrial applications, thermal gasification has reduced heating costs by nearly half, while recording thermal efficiencies near 90 percent. For sectors such as steel, cement, and metals—where fuel expenses represent a major share of operating costs—these savings directly impact production economics.

Environmental technologies have advanced correspondingly. Carbon capture systems integrated into gasification setups report efficiencies between 80 and 90 percent. Additionally, Zero Liquid Discharge systems enable process water to be treated and reused within the gasification cycle, cutting freshwater requirements and liquid waste.

Ultimately, the viability of coal gasification rests on diversifying domestic production, building industrial capabilities, and mitigating vulnerability to external supply shocks. Long-term success will be measured by reliable fertilizer production, displaced import volumes, production costs, and overall environmental performance.

"The push toward coal gasification presents a strategic opportunity for Indian industry to reduce its reliance on costly fertilizer imports. With the government's recent policy backing, businesses operating in sectors like steel, cement, and chemicals must evaluate how integrating domestic feedstock routes can lower operational expenses. Success will depend heavily on deploying commercially viable technologies that balance cost efficiency with strict environmental and emissions controls." — Dr. Shishir Gupta, Founder & CEO, StartupLanes