The Government has approved captive mining for production of gas through coal gasification and liquefaction. The under ground coal gasification aims at extracting energy from coal seams which cannot be otherwise mined through conventional methods. The recent rise in international oil prices has led many countries to seek gainful use of such coal reserves for energy extraction. Underground coal gasification is a recognized clean coal technology while surface gasification of coal is a proven technology and both can be taken up as per requirements of the industry.

Coal liquefaction aims at converting coal to liquid fuels, for which commercially proven technology is available. South Africa has been successfully producing gasoline and fuel oil from coal for quite some time. Coal reserves in India are amenable to coal gasification and liquefaction.

The recognition of coal gasification and liquefaction as end uses would give a fillip to development of technologies by the public sector as well as the private sector. The notification would facilitate allocation of coal blocks for this purpose to interested parties.