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The coal ministry has notified strict guidelines for carrying out underground coal gasification in India.

Underground coal gasification (UCG) enables the coal to be converted into gas (producer or syngas). UCG is an in-situ gasification process carried out in non-mined coal seams using injection of oxidants, and bringing the gas to surface through production wells drilled from the surface. The gas could to be used as a chemical feedstock or as fuel for power generation. In addition to offering a method of using coal which sometimes could not be otherwise mined, the UCG has less environmental and social impact.

For coal gasification in India, time ceilings have been announced to ensure that syngas production from these captive blocks commence within 36-42 months from the date of issue of letter of allocation. Any slippage in these deadlines could lead to serious penalties including forfeiting of bank guarantees.