A moratorium was placed on UCG in October last year so that evidence on the technique could be gathered and considered.
The process involves converting coal into product gas while still in the coal seam. Gas is produced and extracted through wells drilled into the unmined coal seam.
However, following a report by Professor Campbell Gemmell of University of Glasgow, the Scottish Government has decided to "block" the practice for a variety of reasons, including:
• The UCG industry having a history of incidents of pollution and losses of containment
• UCG presenting a serious issue to face in reducing Scotland's carbon/greenhouse gas emissions without an operational storage method, such as carbon capture.
Energy Minister Paul Wheelhouse said it is the government's view that UCG "poses numerous and serious environmental risks".
"Accordingly, UCG will have no place in Scotland's energy mix at this time," he said. "In Professor Gemmell's report he recommends it would be wise to consider an approach to UCG based upon a precautionary presumption against the technology, and that it would appear logical to progress toward a ban.
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"I cannot predict what kind of clean energy technologies may be available in the decades to come, but what is certain is that this resource will still be there. As a result of today's announcement, our Energy Strategy for Scotland will set out an energy mix for the future that does not include UCG.
"The position I have announced on UCG is a clear validation of the evidence-based approach this government is taking and I thank Professor Gemmell for his work in preparing the report."
Professor Campbell Gemmell added: "It is extremely difficult to conceive of UCG progressing into use at this time. Despite there being few longer-term operations at scale to consider, and no directly comparable operations in siting, regulatory and policy terms, there is both a history of incidents of pollution and losses of containment.
"In my view, the Scottish Government has responded appropriately to the available evidence on this technology."
However, Scottish Conservative energy spokesman Alexander Burnett said he was "disappointed" with the decision.
"It's deeply disappointing that the Scottish Government is taking this stance – it's yet another missed opportunity," he said. "The SNP has closed the door on shale, and now it's doing the same for underground coal gasification.
"These technologies could create thousands of jobs, boost the economy and lower future energy bills. If we don't start embracing these technologies, we risk getting left behind altogether."
Mr Wheelhouse has now written to the UK Government, requesting that it issues no further UCG licences in Scotland and that existing licences are revoked.
(LM/JP)
