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Japan’s METI to Provide China with Coal Liquefaction Technologies

NEDO approach to liquefaction. Click to enlarge.

The Nihon Keizai Shimbun reports that Japan’s The Ministry of Economy, Trade and Industry (METI) will provide coal liquefaction technologies to China as part of a broader Japanese effort to promote coal use in Asia outside Japan to alleviate the tightness in global oil supplies.

Earlier this year, the Chinese government announced plans to invest about US$15 billion in coal-to-liquids (CTL) plants (both direct and indirect) over the next 5 to 10 years as part of an effort to reduce dependency on oil imports.

China’s National Development and Reform Commission (NDRC) said that the combined output of the CTL plants could reach 16 million tons annually—about 320,000 barrels per day. That represents about 5% of China’s total current oil consumption, and 10% of its imports. (Earlier post.)

METI intends to tap proprietary technologies of the New Energy and Industrial Technology Development Organization (NEDO), an independent administrative agency under its control.

As a first step, NEDO will join with Chinese energy companies Datang International Power Generation Co. and Xinwen Mining Group to conduct feasibility tests on the efficiency of their liquefaction processes. NEDO has already been involved in two liquefaction trials in China, one of them with Shenhua, China’s largest coal company.

The two Chinese firms plan to start operating a liquefaction plant by around 2010, with construction costs estimated at ¥100 billion (US$877 million). NEDO will received license fees for its technology.

Indirect coal liquefaction first gasifies coal and then converts the coal-derived syngas into fuels and petrochemicals using Fischer-Tropsch technology. There are several technology and process alternatives for this type of approach to CTL.

Direct liquefaction, by contrast, breaks down the complex coal structure into smaller component molecules which then can be further refined into liquid fuel products by reducing the contents of sulfur and nitrogen.

In the aftermath of the first global oil crisis in 1974, Japan initiated what it called the Sunshine Project to devise liquefaction technology unique to Japan as part of an oil-alternative energy development program. Work within the Sunshine Project focused on three direct liquefaction processes: Solvolysis, Solvent Extraction, and Direct Hydrogenation to liquefy coal.

The NEDOL (NEDO Liquefaction) Process integrates the three liquefaction processes to attain high liquid yield under mild liquefaction reaction; produce coal-liquefied oil rich in light distillate; be highly stable; and apply to a wide range of coal grades.

Direct liquefaction conversion may have a slight edge in terms of process energy efficiency, according to some studies, but overall system efficiencies are basically comparable, and both approaches are far less efficient than crude oil refining.

Furthermore, of the various process and feedstocks possible for the generation of synthetic liquid fuels, coal-to-liquids processes are by far the most greenhouse gas intensive—more than twice so compared to conventional diesel on a well-to-wheels basis, according to a recent lifecycle analysis. (Earlier post.)



allen zheng

Great more GHG's, and unless it is used for other purposes/sequestered, it will start to push the climate even warmer.

allen zheng

Another factor is the incredible death rate, thousands a year, in China's coal (death) mines. Improper management also cause coal mine fires that release roughly the same amount of C02, and more Sulfur oxides/NOX/particulates, into the atmosphere than coal burned for usefull purposes (heating, steel, etc). They also bake the earth above the fires, and poison/deplete the groundwater; China is facing a major water crisis/shortage in the next 5-10 years in many areas that also mine coal.
____They may also run out of coal quickly. With industrialization and cars competing for coal, there would be a great sucking sound of China demanding ever more fossil energy. Additionally, considering India's, and the rest of the developing world's growing energy needs, the demand (and price) for coal and nuclear may skyrocket whether we like it or not.

Rafael Seidl

China has huge coal reserves, as does the US. Both countries are keen to use these to alleviate their dependence on oil from the Gulf and other places that represent a potential supply risk. CO2 sequestration is an issue that both have paid lip service to but are unwilling to invest in. They will certainly not put their coal-related plans on hold until a viable solution is found.

Note that the NEDOL process is based on iron catalysts. These can be used in both low and high temperature FT synthsis, yielding mostly diesel and mostly gasoline, respectively. Cobalt-based catalysts are 1000x more expensive and can only be used at low temperatures, but they are also more effective and last longer.

The inherent inefficiency of the FT process can be compensated to some extent by using the waste heat for power generation, third-party industrial processes or district heating (incl. absorption chillers in summer).



This makes the aims of Kyoto look all the more hopeless. We will get cheap goods made in China while global climate miseries continue. I think a hefty import tariff of say 20% should be slapped on goods made in countries that don't try to reduce emissions.



I agree. The main drivers of China's emissions are all those imports from other countries. The world and the U.S. is paying for more than the lastestd DVD and TV sets. We are paying in increased coal emissions that waft there way all the way to the U.S. West Cost and higher GHG. So, the U.S., for example, is responsible not only for its own excessive emissions, but China's growing emissions, especially sulfur dioxide -- a killer.

When a U.S. firm outsources to China, it avoids responsibility for the emissions resulting from production. The WTO rules need to be modified to account for those emissions and make us pay for externalities wherever produced.


I wonder if you can funnel the CO2 produced in this process into algae bioreactors for BTL or biodiesel.

allen zheng

Yes, if enough money, sun/light, willpower, know how, foresight and land/space is available. But then again, the efficiency of photosynthesis is ~11%. It is also focused on specific spectrums in the visable wavelength band. An efficient wideband photovotaic collector (>50%) combined with high efficiency frequency specific lights (>50%) may double available land.

The increase in wages, and the cost of doing business in China is going up. Companies are planning/considering moving to/sourcing from locations in Southeast Asia (Vietnam, Cambodia, Indonesia, Philippines), South Asia (Bangladesh, India, Pakistan), Latin America (north of the equator first, the maybe south), and possibly West Africa (Mauritania to Togo). For Latin America and coastal West Africa, low cost of business may lure manufacturing of the lowest rung of the industrial/ manufacturing scale, textiles and simple stamped metal parts. Additionally, proximity to Europe and US will perhaps lure just in time operations. Shorter distances reduce transit time and costs (fuel prices). Asian countries offer large population pools, that may also be better educated, more suited for higher rungs on the industrial scale, as well as low level service operations (back office ops).
____Furthermore, the Commies in charge of the PRC realize the cost that environmental degredation has caused, and will cause (in $, social unrest, and lives). They have haltingly moved towards cleaning up their act (for political, social, financial, and other reason), and this may cause the cost of doing business in China to move upwards.

The appointment of the new US Treasury Sec. may signal the controlled fall of the dollar in the future. The pegging by the renminbi to the dollar will either cause the PRC's currency to freefall along with it, or force them to unpeg. If they come along for the ride, the PRC may have to dump goods in order to pay for imports of raw material, and finished goods. On one side is the specter of devaluation induced inflation running as high as 13%, and the other is mass deflation (caused by massive dumping). A series of high profile WTO cort cases will follow in suit. Tarrifs passed by US may trigger a economic, financial, and diplomatic crisis. If not managed properly, military reprocussions may follow.


China unpegged it's currency from the US dollar a little while ago, so they know what's coming for the USD.

andreas buechel

co2 / so2 mitigation with algae:



Independent testing firm CK Environmental, Inc. conducted a week-long evaluation of the GreenFuel beta system emission reduction performance. CK Environmental’s test report certifies that over the seven-day test period, the GreenFuel beta system simultaneously removed 85.9 percent NOx (±2.1 percent, regardless of weather or light conditions), and 82.3 percent CO2 (±12.5 percent) on sunny days, or 50.1 percent CO2 (±6.5 percent) on cloudy or rainy days. The testing methods conformed to EPA standards for measuring NOx and CO2 emissions. CK Environmental vice president Mike Cahill oversaw the project.

“This is one of the most promising and unique technologies to reach this stage of field demonstration in a very long time,” he said. “I have never seen anything like it in my career so far.”


Roger Pham

Great article, and all the comments that follow. Given the inefficiency of CTL and pollution potential, there should be greater emphasis on promoting renewable methane, either bio or solar, and solar hydrogen as our future energy currency.

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