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China to Invest $128 Billion to Develop Coal-Based Synthetic Fuels

Xinhua. China will invest more than one trillion yuan (US$128 billion) to develop alternative coal-based synthetic fuels to ease the country’s dependence on oil imports, according to the National Development and Reform Commission (NDRC).

The project aims to produce 30 million tons of liquefied coal and 20 million tons of dimethyl ether (DME) by 2020. Coal-to-olefin (CTO) output is expected to hit 8 million tons and coal methanol to reach 66 million tons.

The money will also be spent on building seven industrial bases nationwide to produce coal-based energy source on a massive scale, including the biggest alternative fuel production base in the lower reaches of the Yellow River.

Xinjiang is projected to produce 10 million tons of liquefied coal, and the eastern region of Inner Mongolia will become the major methanol supplier, with an annual capacity of 10 million tons.

A pipeline, at a cost of five billion yuan, will be built to transport 10 million tons of methanol a year from Inner Mongolia to the northeastern Liaoning province.

In July 2006, the Chinese government determined that it would not approve coal liquefaction (Coal-to-Liquids) projects with an annual production capacity of less than three million tons; coal to methanol or dimethyl ether (DME) projects of less than one million tons; and coal-to-alkene projects of less than 600,000 tons, according to a circular released by the National Development and Reform Commission (NDRC). (Earlier post.)



What are the odds they'll sequester the extra CO2? (I'm pretty sure I know the answer to that one already.)


Perhaps, at least they will be competing less on the world market for peak oil in the future.


China will let nothing stop their determination to build an auto based society so that they can fully experience the joy that America has had all these years living the high life in the fast life. They are determined to have the "good" life regardless of the consequences. When it comes down to choosing between the car and the planet, the Americans and the Chinese will choose the car every time, hands down.

Future generations can go eat algae.

China had the opportunity to build a sustainable society and increase the well being of their citizens at the same time. Instead, they have decided that the fun factor of the automobile overrides any considerations of livable cities, smog, global warming, water shortages, and all the other nasty things that we can just let the future citizens of the planet worry about.

Hmmm. $128 billion. Well, I guess you have to get them credit for realizing how unsustainable their given course is given the existence of peak oil and all the resource wars that problem implies.


Talk about sending the wrong signal. I suspect low cost Chinese manufacturing was a reason consumers enjoyed low prices for the last decade. Now it has unleashed an environmental monster and a backlash is looming. Then again the West has no moral authority to complain as the Chinese are only just catching up.

Even if the process CO2 was sequestered (which it won't be) there is still the tailpipe CO2.


Well perhaps the rest of the world will have to end up slapping carbon taxes on their chinese imports. That is, after the rest of the world adopts a carbon price!


China has also been highly criticized for keeping their currency highly undervalued, which has the effect of increasing their industrial sector more than would occur otherwise.

The Chinese won't do anything that threatens their economic growth. That's not really a shock.


posting errors


What is up with this spam block? I can't post my comments.


The CO2 might be piped for enhanced petroleum recovery.


The silver lining might be that there will be a massive installed capacity for conversin of carbon/hydrogen rich material into fuels/chemicals.
_The caveat is that it may be decades before this transition takes hold. Furthermore, the PRC may not have enough land to do this, even with algae and all human, animal, agri/forestry and other biomass wastes combined.



The latest issue of Nature is devoted to biofuels and other alternatives like CTL. They mention that a combined CTL/BTL facility would still reduce net CO2 and act as a bridge to full BTL.


This might not boost CO2 emissions very much.

China has huge pollution problems (according to both statistics and my son who has been there several times) but they are talking of changing course. Of course it is just talk for now.

The Chinese want growth but they also like 'showcase' projects. Their cleanup efforts are likely to focus on keeping the 'latest and greatest' activites very clean while allowing older industries to continue polluting heavily.


To their credit, China is putting in light rail for Beijing and Shanghai. These will probably be the largest subways in the world, and one of the goals is to make driving around the city slower and less appealing than taking the train.

However, cars will probably increase anyway. If they get anywhere near the US car density of ~0.77 cars/person, that's over a billion cars and we're in deep trouble, especially if they're big cars.

Finally, CTL and CTO take a lot of hydrogen, C to DME and C to MeOH take even more. Where is the hydrogen going to come from?

Paul Dietz

Finally, CTL and CTO take a lot of hydrogen, C to DME and C to MeOH take even more. Where is the hydrogen going to come from?

From the water that is reacted with the coal, and from the coal itself (which has approximately one hydrogen per carbon, ignoring the water content.)

The CO/H ratio of the syngas can be adjusted by the water-gas shift reaction:

CO + H2O <--> CO2 + H2

Roger Pham

"Where is the hydrogen going to come from?"

Very relevant question. The H2 comes from gasification of coal or biomass, resulting in H2 and CO. If the hydrogen economy is in place, one can stop right there and use the H2 for all kinds of energy needs. Very efficient and very low pollution. The heat resulted in the gasfication process can be recycled to produce electricity via steam turbine thus preventing energy wasting.

However, for now, additional steps will be necessary for Fischer-Tropsch synthesis to produce liquid fuels for current vehicles. This will entail considerable more complexity, cost, lower energy efficiency, and considerable more environmental pollution. The increase in pollution is per a recent GCC article comparing the pollution problem of current petroleum usage vs. replacing that with CTL products.

This is another argument for the eventual hydrogen economy, supplemented by crops of PHEV and BEV as well. Only electric vehicles and H2 vehicles will deliver pollution-free transportation that can make transition to the eventual all-renewable energy economy seamless. For now, generate H2 and electricity from coal or NG. For future, generate H2 and electricity from biomass, solar, or wind energy. Once the investment toward Hydrogen and electric vehicle infrastructure is made, hopefully sooner rather than later, our transportation energy security will be in much better shape!

CTL machinery now will allow China to easily switch to H2 production when the hydrogen economy is all in place. Tremendous progress is being made in H2 storage, generation and utilization that no doubt, one day we all will get to enjoy pollution-free transportation, as well as home heating and all industrial energy consumption!

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