Miners are currently prohibited from extracting the gas that is released during mining operations.
A change in the policy will allow for the tapping of the natural resource for energy generation, while enhancing revenues for the state-owned company.
According to an official from the petroleum ministry, an in-principle approval has been given to such a porposal.
"We will soon move a Cabinet note to allow CBM extraction by CIL," the official said.
CIL chairman and managing director S Narsing Rao told The Financial Express, "It is difficult to calculate gains at this juncture as everything will depend on the cost of extraction and availability of gas."
The company is one of the largest owners of proven coal resources worldwide estimated at 52.5 billion tons.
A coal methane policy will enable CIL to extract the gas from both existing as well as new mines.
India currently produces nearly 0.32 million standard cubic meters a day of methane, which can generate about 80MW of electricity and this figure is projected to increase to 7.4 mmscmd by 2014, reported the news agency.
