New Era Cleantech Solutions Pvt Ltd, which recently broke ground for a coal gasification plant in Chandrapur, has now announced plans to produce coal gas-based urea at the same site on a priority basis. The company, initially focused on ammonia production from coal, now intends to build the urea plant in the first phase itself.
Shift in Strategy Due to Urea Supply Constraints
Managing Director Balasaheb Darade told TOI that the decision was driven by urea supply constraints arising from the US-Iran war. The project entails an investment of Rs20,000 crore in two phases. The plant is expected to produce approximately 3,850 tonnes per day of urea, equivalent to 1.27 million metric tons per annum (MMTPA), based on the gasification of 1.3 MMTPA of coal. If successful, it would be the first-ever private sector coal-to-urea plant in India.
Need for Government Subsidies
Darade emphasized that the industry requires subsidies in the initial phase to meet the high capital cost of plant and machinery. He urged the government to include coal gas-based urea in its subsidy plans. The company has written to the Ministry of Coal requesting a clear policy framework, financial incentives, and viability gap funding for coal-to-urea projects.
Urea is currently available to farmers at subsidized rates, which absorb price volatility, especially during crises like the Middle East conflict. The war has caused urea prices to double. India relies on imports for urea, which is typically made from natural gas—a largely imported feedstock. In contrast, coal is abundant and price-stable, making it a viable alternative for urea production. According to Darade, coal-based urea could eventually become a cheaper source in the long term and even open up export opportunities.
