Energy minister Paul Wheelhouse is due to make an announcement on underground coal gasification (UCG), which involves burning coal in subterranean seams to produce gas, following consideration of an independent review.
Environmentalists are hopeful that a permanent ban on the practice will be put in place.
A moratorium, separate from the ongoing one on shale gas fracking and coalbed methane extraction, has been in place in Scotland since last October.
Six licences to carry out experimental operations in Scotland, in the Firth of Forth and Solway Firth, have been issued by the UK government’s Coal Authority.
The proposals sparked outrage from environmental campaigners and local communities, who claim the largely untested technique poses a major threat to health and the planet.
Professor Campbell Gemmell, former chief executive of environmental agency Sepa, was tasked with carrying out an independent examination of the gas extraction technique.
Mary Church, head of campaigns for Friends of the Earth Scotland, said: “Setting coal seams under two of our major Firths alight is a reckless idea and we urge the government to listen to communities, act decisively and make sure underground coal gasification never takes place in Scotland.
“The history of UCG is littered with contamination incidents, ground subsidence and industrial accidents around the world.
“The climate change consequences of permitting UCG are enormous, and allowing the industry to take root would be completely out of step with Scotland’s world-leading ambition to tackle global warming.”
WWF Scotland director Lang Banks added: “The science is clear – to protect our climate the vast majority of fossil fuel reserves must remain unburned.
“We would fully expect any independent review to conclude precisely the same and for ministers to move to ban underground coal gasification.
“Burning coal underground should have no place in Scotland’s energy future, which is why the Scottish Government was right to extend its moratorium on unconventional gas extraction to include underground coal gasification.
“We hope the minister’s announcement will turn the current moratorium into an outright ban.”
A Scottish Government spokesman said: “Following the submission of Professor Campbell Gemmell’s independent review of underground coal gasification, minister for business, innovation and energy Paul Wheelhouse will make a statement to update parliament on Thursday October 6.”
Cluff Natural Resources and Five Quarter each hold three licences.
Five Quarter recently went into receivership and Cluff has announced it would cease funding potential development of the sites.