Two applications, both from state-owned power producer NTPC Ltd, have been received in the second rolling round of applications for incentives to set up coal gasification projects, the Coal Ministry said on Tuesday. The ministry also announced the launch of the third round under the government’s ₹37,500-crore incentive scheme.

NTPC has sought incentives for projects to produce urea, methanol and dimethyl ether (DME). In the first round, it had applied for incentives to set up a synthetic natural gas production project.

A total of seven applications were received in the first round, including three from Adani Enterprises for urea production projects. The remaining applications covered projects involving synthetic natural gas and direct reduced iron, among other products.

Commenting on the response, Atanu Mukherjee, Chief Executive Officer of energy engineering and advisory firm Dastur Energy, said, “NTPC’s continued participation is encouraging. However, the limited response in the second round highlights the need to complement financial incentives with schemes that help create commercially viable and bankable coal gasification projects that attract wider private-sector investment.”

He said the government’s ₹37,500-crore scheme provides a strong foundation, but viability-gap funding alone may not be sufficient.

“Even commercially sound projects can struggle to secure financing because lenders remain cautious about technology, construction and operating risks, particularly where domestic commercial precedents are limited,” he said.

The Coal Ministry said successive rolling rounds were aimed at widening industry participation, attracting investments and accelerating the adoption of coal gasification technologies.

India has set a target of gasifying 100 million tonnes of coal by 2030.