New Delhi, Oct. 18 -- India's push to convert domestic coal into gas is drawing interest from steelmakers seeking to reduce dependence on imported fuels, manage price volatility and improve supply security. But the high cost of setting up gasification plants is making companies cautious about investing directly in the technology.

In May, the cabinet approved a Rs.37,500 crore scheme to promote coal and lignite gasification, with a target of 100 million tonnes of gasification capacity by 2030. Mint examines why some steelmakers are exploring the technology, while others prefer to buy the gas rather than invest in production.

Coal gasification converts coal into synthesis gas, or syngas, which can be used as a fuel or to produce products ...