India’s coal gasification drive adds fresh momentum to the coal trade and bulk shipping

Coal gasification has recently received renewed policy support in India as part of the country’s broader energy-security and industrial strategy. The government recently approved around $3.9 billion incentive package for coal gasification projects, alongside its target of achieving 100 million tonnes of coal gasification annually by 2030 under the National Coal Gasification Mission. Several projects involving Coal India, BHEL, GAIL and BPCL are already under development. The broader objective is to reduce dependence on imported gas and chemical feedstocks by converting domestic coal into higher-value industrial products.   For coal markets, this is significant because gasification creates an additional source of industrial coal demand beyond conventional power generation. For shipping markets, the implications extend beyond outright coal volumes and increasingly towards changing trade flows, cargo mix and tonne-mile demand.   Meanwhile, China remains the largest and most developed example globally. Its coal-to-chemicals and coal-to-liquids industries are estimated to consume around 250–300 million tonnes of coal annually, equivalent to 5–7% of the country’s total coal consumption. Around 70% of China’s methanol production and nearly 80–90% of ammonia production is coal-based. This has supported both domestic coal movements and imports of higher-quality coal required for blending and industrial applications.   South Africa is another important example. Sasol’s coal gasification and coal-to-liquids operations have, for decades, been a key part of the country’s fuel and chemicals sector. South Africa is estimated to gasify more than 40 million tonnes of coal annually, primarily for the production of synthetic fuels, chemicals and industrial feedstocks. While the model was initially developed to reduce dependence on imported oil, it also demonstrated how coal gasification can create long-term industrial demand for coal beyond electricity generation.