Underground Coal Gasification

The Ministry of Coal has released the Draft Guidelines for Mining and Mine Closure Plan for Underground Coal and Lignite Gasification (UCG) Blocks, 2025.

What is Underground Coal Gasification (UCG)?

Underground Coal Gasification (also known as in-situ gasification) is an advanced technique in which the gasification process occurs deep underground, directly within the coal seam.
Instead of mining the coal and bringing it to the surface, wells are drilled down to the seam. A controlled amount of oxygen and steam is injected to ignite and gasify the coal in place. The resulting syngas is then extracted through another well.

Coal gasification is a process that converts coal into syngas (synthetic gas), which is primarily composed of carbon monoxide (CO), hydrogen (H₂), carbon dioxide (CO₂), methane (CH₄), and water vapor (H₂O).
This is achieved by reacting coal at high temperatures (typically above 700°C) with a controlled amount of oxygen and/or steam.
The resulting syngas can be used for various applications, including power generation, the production of chemical feedstocks, and as a fuel for synthetic natural gas (SNG) production.

Utilisation of Unminable Coal: Accesses deep or thin coal seams that are not feasible to mine using conventional methods.
Reduced Surface disturbance: Lesser environmental & social impacts compared to traditional method.
Efficiency: Potentially higher efficiency and lower costs due to the elimination of coal mining, transportation, and surface gasification processes.
Lower Emissions: The controlled environment allows for better management of emissions & pollutants.

Technical Complexity: Requires advanced technology for drilling, ignition, and maintaining controlled gasification conditions.
Environmental risks: Potential risks include groundwater contamination, subsidence, and uncontrolled gas migration.
Regulatory and Public acceptance: Addressing regulatory concerns and gaining public acceptance is crucial, especially regarding environmental and safety issues.
Monitoring and Control: Requires continuous monitoring and control to ensure efficient operation and to mitigate potential environmental impacts.

Power Generation: Such as in gas turbines or combined cycle plants for electricity generation.
Chemical Feedstocks: Production of chemicals such as methanol, ammonia, and synthetic natural gas.
Hydrogen Production: UCG can be an alternative source of hydrogen for industrial uses and fuel cells.

A pilot feasibility study by an accredited institution is mandatory before project approval, assessing technical, environmental, and risk parameters.
Environmental Safeguards: Target seams should lie below 300 metres in low-permeability strata, ensuring a safe distance from aquifers and excluding seismic or eco-sensitive zones.
- Gasification must focus on optimal syngas output, minimal waste, and sustainable resource use.
Financial Accountability: A mine closure fund must be deposited in an escrow account before operations begin.
- Base contribution: ₹50,000 per hectare, indexed to the Wholesale Price Index (WPI).
- Up to 75% of funds may be released after verified progressive closure; non-compliance could result in licence forfeiture or revocation.
Institutional Oversight: The Coal Controller Organisation will evaluate and approve projects, supported by a Technical Committee comprising experts from the Ministry of Coal, the DGMS, and the Ministry of Petroleum and Natural Gas.
- The Secretary (Coal) will act as the appellate authority for grievances.