India Approves $3.92 Billion Coal-to-Synthetic Gas Plan

New Delhi. Prime Minister Narendra Modi's cabinet has approved a $3.92 billion plan to convert coal and 'lignite' into synthetic gas.

The coal and biogas production expansion plan converts low-grade coal like 'lignite' into gas used for electricity production, which is considered cleaner than burning traditional coal. It can also produce fertilizer.

The objective of this program is to promote energy security and reduce dependence on imported fuels such as liquefied natural gas (LNG). India meets about half of its LNG demand from gas imported from abroad.

"This plan is a big step towards accelerating India's coal/lignite gas production program," the government statement said, "It supports the goal of using 100 million tons of coal for gas production by 2030."

India, the world's most populous country, is the fourth-largest buyer of LNG and the second-largest importer of liquefied petroleum gas.

The objective of the coal-to-gas production plan is also to diversify the use of coal and reduce the import of fertilizers such as urea, ammonia, and ammonium nitrate.

The government imported such products worth approximately $32.6 billion last year. India has an estimated 401 billion tons of coal reserves, which is among the largest globally.

The Iran war has burdened the Indian economy, which is heavily dependent on Middle East energy and fertilizer, making Delhi's economic growth outlook uncertain.