MIT study concludes that absent climate policy, coal-to-liquids could account for around a third of global liquid fuels by 2050
|The top graph depicts CTL in a no policy scenario; the bottom graph, for CTL in a world climate policy scenario. Credit: Chen et al., 2011 Click to enlarge.|
A new assessment of the viability of coal-to-liquids (CTL) technology by researchers from the MIT Joint Program on the Science and Policy of Global Change (JPSPGC) found that without climate policy, CTL has the potential to account for around a third of global liquid fuels by 2050.
However, the viability of CTL becomes quite limited in regions with climate policy due to the high conversion cost and huge carbon footprint. Although adding carbon capture and storage (CCS) could reduce CO2 emissions, the additional cost from implementing CCS makes CTL less attractive, the report finds.
Converting coal into liquid fuels is known to be more costly than current energy technologies, both in terms of production costs and the amount of greenhouse gases the process emits. Production of CTL has a large carbon footprint, releasing more than twice the lifecycle greenhouse gases of conventional petroleum fuels. However, with the rise in energy prices that began in 2008 and concerns over energy security, there is renewed interest in the conversion technology, the report notes.
To assess the prospects for CTL—specifically, polygeneration technology that produces liquid fuels, chemicals, and electricity by coal gasification and the Fischer-Tropsch process—the MIT team incorporated the engineering data for CTL from the US Department of Energy (DOE) into the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium (CGE) model of the global economy.
They modeled different scenarios, varying the stringency of future carbon policies, the availability of biofuels and the ability to trade carbon allowances on an international market. Researchers also examined whether CTL-conversion plants would use carbon capture and storage technology, which would lower greenhouse gas emissions but create an added cost.
Based on DOE’s plant design that focuses mainly on liquid fuels production, the study found that, without climate policy, CTL might become economical as early as 2015 in coal-abundant countries like the United States and China. In other regions, CTL could become economical by 2020 or 2025. Carbon capture and storage technologies would not be used, as they would raise costs. In this scenario, CTL has the potential to account for about a third of the global liquid-fuel supply by 2050; at that level it would supply about 4.6% of global electricity demand.
However, the viability of CTL would be highly limited in regions that adopt climate policies, especially if low-carbon biofuels are available. Under scenarios that include stringent future climate policies, the high costs associated with a large carbon footprint would diminish CTL prospects, even with carbon capture and storage technologies. CTL conversion may only be viable in countries with less stringent climate policies or where low-carbon fuel alternatives are not available.
The main contribution of our research is to provide a comprehensive and consistent approach to investigate the future of CTL conversion, a strategy which has been discussed intensively especially in coal-abundant countries. In addition, the multi-input and multi-output structure we develop to represent CTL conversion could also be applied to other polygeneration approaches that produce different fixed or variable output shares or that relied on other feedstocks. Thus, future research may explore coal-biomass-to-liquid (CBTL) or biomass-to-liquid (BTL) processes which, while probably having higher conversion costs, could have significant benefit in terms of reduced CO2 emissions.—Chen et al.
Chen, Y.-H. Henry, J.M. Reilly and S. Paltsev (2011) The Prospects for Coal-To-Liquid Conversion: A General Equilibrium Analysis. (Report 197, Joint Program Report Series)