Coal-Based Urea Parity Sought with Gas Plants

New Delhi, Apr 15 (PTI) A domestic coal-gasification firm has written to the government, seeking that coal-based urea projects be placed on equal footing with gas-based plants, including the introduction of appropriate offtake assurance mechanisms and earmarking of capacities for the coal-gasification route.

The representation comes amid a broader government push to diversify feedstock sources for urea production, reduce reliance on imported natural gas, and leverage India's vast domestic coal reserves through cleaner gasification technologies.

In a letter to the government, New Era Cleantech Solution, a Maharashtra-based company developing a 5 MMTPA coal gasification project in Chandrapur, said that coal-based urea projects should be given parity with gas-based plants, including suitable offtake assurance mechanisms and the earmarking of capacities for the coal-gasification route.

The company said that, given the capital cost of coal-based plants is significantly higher than that of gas-based units, with a substantial portion of this expenditure attributable to GST and customs duties on equipment, it has requested the government to consider appropriate fiscal incentives and support measures to ensure project viability and encourage greater private-sector participation.

New Era Cleantech Solution Pvt Ltd plans to set up a 1.27 MMTPA coal gasification-based urea project at Bhadravati in Chandrapur district of Maharashtra.


Imported LNG is used as feedstock for domestic urea production. India's fertiliser sector consumes nearly 50 per cent of total imported natural gas and about 28 per cent of the country's total gas usage, according to the letter.

India is one of the largest consumers of urea in the world. As per available sectoral data, annual urea demand is currently around 40 MMTPA, whereas domestic production is only about 29 MMTPA, resulting in imports of nearly 11 MMTPA last year.

The company stated that the continuing mismatch between domestic requirements and indigenous availability underlines the urgent need for fresh urea capacities within the country.

The demand-supply gap is fundamentally a feedstock security issue. India's reliance on imported natural gas for urea production exposes it to global disruptions, price volatility, and geopolitical risks. Transitioning to domestic coal-based feedstock ensures a reliable supply, reduces import dependence, stabilises costs, and strengthens both fertiliser security and agricultural resilience, the letter stated.

New Era Cleantech Solutions had last month commenced the development of India's first greenfield Integrated Coal Gasification and Carbon Capture Complex at Bhadrawati in Chandrapur, Maharashtra, with an investment of Rs 20,000 crore.