Abstract: Underground coal gasification (UCG) is the inevitable choice for China’s energy development and driven by the strategy of the development of efficient coal energy structure. The industrialization process needs to be promoted by all parties in coordination, and the making of industrial policy is the first to bear the brunt. Based on the background and extensive investigation on relevant situations at home and abroad, the difficulties faced by the making of industrial policies for UCG are analyzed and demonstrated, and the countermeasures and suggestions to solve the difficulties are put forward from four aspects, including the strategic value of UCG industrialization, market access and legal status of UCG projects in relevant countries, method of filing and approval of UCG projects in China, and the thinking on the making of UCG industrial policies. It is shown that the UCG project involves coal, oil and natural gas in the management of mineral resources. From the perspective of environmental protection management, it involves groundwater, soil and surface ecology, atmosphere and many other aspects. The management responsibility belongs to multiple government departments, and the application and approval process is very complex. Although relevant countries have made many attempts in the making of UCG industrial policies, there is no current and sustainable policy for improving UCG industry, which has become a “short board” for the promotion of UCG industrialization. Foreign experts have suggested to their own governments to launch the UCG technology as soon as possible through the policy and regulatory framework, and to eliminate social concerns about the environmental safety of UCG. For a long time, China has adopted the “one case, one discussion” method for the filing and approval of UCG projects. It is difficult for some UCG projects to be approved, which has greatly restricted the industrialization process of UCG. Based on the above difficulties, it is suggested that the government should formulate and issue an operable UCG industrial policy system, focusing on five directions: establishing a UCG project market access and approval system, clarifying the use of mineral resources and fiscal and tax preferential policies for UCG projects, bringing UCG scientific and technological innovation into the national major science and technology plan, building a UCG scientific and technological innovation platform system, and creating a high-quality professional talent training base of UCG. The purpose is to provide legal guarantee for promoting the industrialization of UCG in China.