Beyond its domestic market, China has begun to seek export opportunities for its own gasification technologies and coal conversion systems, as well as looking to establish a major engineering, procurement and construction role. Indeed, the role of China is likely to be critical in establishing coal conversion projects in, say, certain developing countries as it can not only provide the technical expertise but also financially underpin such activities, including the associated infrastructure needs, which makes it a very competitive option (Minchener, 2013).
The potential to export technology and expertise is reasonable. For example, in Mongolia, which has adequate low-grade coal and water supplies, negotiations are underway for a major CTSNG project, with the end-product being transported to China. A feasibility study and general environmental assessment for the project has been completed by the Wuhan Engineering Company on behalf of the Ministry of Mining and Heavy Industry of Mongolia. This forms part of the overall economic assessment prior to project investment. The planned industrial plant and gas transmission pipelines will have an annual production capacity of 725 million m3 of SNG and 300,000 ton of high quality gasoline/petrol. The complex will be built next to the Baganuur coal mine, close to the capital city of Ulaanbaatar (Montsame, 2017). The driver for the project is to limit air pollution caused by the direct combustion of the low-grade coal through its replacement with SNG. The assessment project is being funded by the World Bank as one of the subcomponents of the Mining Infrastructure Investment Support Project, financed by a World Bank soft loan.
The way forward
The strategic drivers for China’s coal to future fuels development and deployment programme continue to be to support national energy security while promoting regional economic opportunities through enhanced employment. To this is linked the need to establish intellectual property by developing Chinese technology, which can result in increased competitiveness through cost reduction from localised equipment manufacture.
Within these broad objectives, there continues to be a strong push to establish future fuels from coal, primarily coal to liquids and coal to synthetic natural gas, together with the production of hydrogen, dimethyl ether and methanol. While the latter three fuel options are mature technologies, China does not yet have a commercial scale sector established for the two prospects with the greatest market potential. It is close with coal to liquid processes but has some way to go for coal to synthetic natural gas. However, it does have much of the necessary framework in place at large scale for providing the coal and more especially for transporting the end products. At the same time, the overall development plan continues to evolve with focused R&D in place to both improve existing options and to develop new prospects.
That said, China is struggling to reconcile national strategic requirements with international market forces, as reflected in the volatility of oil prices, which determines whether the coal-based future fuel options can remain financially competitive.
In response to these challenges, China has established long term plans, since the energy optimisation challenges can be solved, while the government can to some extent address the economic uncertainties, thereby underpinning the sector as necessary.
The biggest issue may yet be environmental sustainability, namely ensuring the availability of water and addressing the high carbon intensities for the various processes. There are some very innovative developments that seek to address the former, through minimisation of direct water use and the effective cleaning plus recycling of waste water to limit overall demand. As for the carbon issue, it is technically feasible to capture the CO2 emitted from the processes, at low marginal cost, thereby enabling it to be used for enhanced oil recovery, which improves its economic attractiveness. Although this remains to be demonstrated at large scale, it is a positive sign that China has agreed that it will take such requirements forward in cooperation with the Asian Development Bank.
Other carbon removal options are being considered, based on the use of renewable energy as a means to break down the CO2 and form alternative products including future fuels. However, such end products will release CO2 when used and it remains questionable whether such an approach will ultimately result in a significant net reduction in greenhouse gas emissions.
The 10 largest coal producers and exporters in the Indonesia:
Source: IEA Clean Coal Centre
- 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
