While it is recognised that gasification-based coal conversion produces an end product that has a higher asset value than coal, is more flexible in its mode of utilisation and is generally seen as a cleaner product, there is a need to consider the emissions arising from the production process.
Conventional emissions
The nature of the gasification system and its various clean-up units provides inherent advantages in removing syngas contaminants prior to utilisation of the syngas (NETL, 2016), due in part to the high-pressure gasifier operation, which significantly reduces the gas volume requiring treatment.
Carbon emissions
Besides the issue of high coal and water usage to produce synthetic fuels (Table 4), the other issue is the release of CO2 into the atmosphere, which represents both a challenge and an opportunity. While the synthetic fuel end products have high amenity values, their production results in higher levels of CO2 release than would be the case if that coal had been directly combusted. Should the sector continue to grow, this level of greenhouse gas release might impact adversely on China’s declared intention to peak its national CO2 emissions by 2030, if not earlier. However, the coal conversion processes lead to the CO2 being concentrated prior to being emitted from the plant. This offers a potentially low marginal cost route for Carbon Capture, Utilization, and Storage (CCUS) where the CO2 is captured, transported and then used for EOR, providing a suitable oil well is located reasonably close to the plant. This can provide a revenue stream to the CO2 provider from the oil producer as a result of the incremental oil that is produced. At the same time, a significant portion of that CO2 then remains stored within the oil deposit.
China has a large number of coal–chemical plants in which CO2 capture offers a low-cost (less than 20 US$/t) possibility, while many of these coal-chemical plants are also in the vicinity of oil fields amenable to CO2-EOR/Enhanced Oil Recovery (Minchener, 2011b). China has the unique opportunity to demonstrate CCUS at low cost. Since China has established significant capacity across the CCUS chain through research, development, the construction of nine pilot projects, and extensive international cooperation (ADB, 2015), it has reached an adequate level of readiness to construct large-scale CCUS demonstration projects.
The NDRC of China and the Asian Development Bank (ADB) have worked closely together on a number of CCS/CCUS institutional capacity projects, which led to the development of a coal-based CCUS development and deployment roadmap for China. This included the identification of a number of early opportunity demonstration projects based around large coal-to-chemicals plants that would allow Chinese industry to gain familiarity in establishing major, multi-stakeholder projects. These opportunities for such demonstrations can aid China in building up expertise on all aspects of the CCS/CCUS chain. At COP21 in 2015, the Ministry of Finance of China publicly stated that the Chinese government will work with the ADB to establish several CCUS demonstration projects using this approach. This should also kick-start China’s intended overall CCUS demonstration and deployment programme, which should position the nation as a global leader for ensuring that high efficiency low emissions clean coal technology will form a key part of a global low carbon future.
In terms of a timescale for such for CO2-EOR demonstration projects, the current low oil price may have temporarily reduced the financial incentives to proceed, since they may have a direct impact on the CO2 off-take price that any oil producer is willing to pay. Typically, oil producers pay about a quarter of the price of the crude oil recovered for the injected CO2. However, the fundamental drivers remain strong.
As noted previously, China imports more than half of its crude oil. At the same time, some 70% of its domestic oil production comes from nine large oil fields, which are all mature and are either facing or will soon face a decline in production. In some of these oil fields, water flooding is no longer effective in maintaining oil production levels. Introducing CO2-EOR is thus inevitable to maintain the economic viability of such oil fields. Thus, it is essential to undertake early stage pilot testing and demonstration to show that this technique will also successfully lead to effective CO2 storage. In order to overcome the lack of interest at current oil prices, the Chinese government will need to provide alternative incentives to industries both to capture and transport CO2 and to conduct CO2-EOR.
To put this in context, the NDRC-ADB CCUS roadmap suggests that a phased approach to CCUS demonstration and deployment is needed. It recommends first targeting low-cost CCUS applications in coal–chemical plants with CO2-EOR, to prove the feasibility of the CO2 off-take arrangement and provide much-needed confidence in large-scale CCUS application. In parallel, intensive R&D activities, including limited activities in coal-based power plants, could bring down the capture costs while providing new insights and experiences. This dual-track approach of accelerated demonstration and more intensified R&D until the year 2025 can pave the way for wider deployment of cost-competitive CCUS from 2030 onward (ADB, 2015).
The coal chemical industry (including future fuels) expects to have to play a major role in reducing the nation’s unit GDP carbon emission and unit GDP energy consumption by 18% and 15% respectively during the 13th Five-Year Plan period (2016-2020). While CCS is seen as a potential mainstream route to permanently removing CO2 from the atmosphere, there is no direct financial benefit to industry in doing so, unless it is linked to a CO2-EOR process (that is CCUS). In recognition of this problem, there continue to be numerous R&D programmes to turn the CO2 into a stable and saleable product. However, the prospects remain limited, either due to market opportunities or because the energy needed to break down the CO2 and turn it into other chemical compounds is high. If that second energy source is carbon based, it results in additional CO2 being released, thereby partly or wholly negating any benefit arising.
However, there are some possibilities to use renewable energy sources, which will change the carbon balance significantly although if the end product is a fuel then the CO2 will not be removed from the atmosphere for long. The polygeneration option outlined in Figure 16 is one such option and there are several others. Thus R&D studies and industrial trials on the conversion of CO2 to methanol have been carried out by numerous research agencies, both in China and abroad.
In Iceland, the aptly named Carbon Recycling International built a pilot plant that uses renewable-derived electricity to make hydrogen for conversion into methanol in a catalytic reaction with CO2, which had been captured from flue gas released by a geothermal power plant located nearby. The annual recycling capacity is 5.5 thousand tonnes of CO2 a year into methanol. The energy for the process comes from the Icelandic Grid (Carbon Recycling International, 2016).
The development focus is on the synthesis catalyst necessary to achieve high conversion and high selectivity, as well as affordable hydrogen generation based on renewable energy sources (Asiachem, 2016c). The Chinese R&D is at an early stage, including work by the CAS Shanxi Institute of Coal Chemistry, the CAS Shanghai Advanced Research Institute and the Shanghai Huayi Group.
Figure 16 Possible route for conversion of CO2 to methanol (Asiachem, 2016c)
- Bumi Resouces
- Adaro Energy
- Indo Tambangraya Megah
- Berau Coal
- Bukit Asam
- Baramulti Sukses Sarana
- Harum Energy
- Mitrabara Adiperdana
- Samindo Resources
- United Tractors
Source: IEA Clean Coal Centre
