China is doubling down on coal, launching a wave of investments in coal-to-chemicals projects worth an estimated $150 billion. The country plans to convert coal into synthetic gas and petrochemicals, aiming to reduce its reliance on imported oil and gas.
According to data from Global Energy Monitor, the combined capacity of planned and under-construction coal-to-gas and coal-to-chemicals facilities is set to triple current operational capacity. The 34 projects under development could increase China’s annual coal demand by approximately 300 million tons, a volume equal to the entire coal production of South Africa.
The drive gained momentum after Russia’s invasion of Ukraine in 2022 and recent tensions in the Middle East, both of which pushed up oil and gas prices. Beijing sees domestic coal as a strategic substitute for imported hydrocarbons.
Geopolitical motives behind the coal push
China imports large quantities of oil and gas, making it vulnerable to supply disruptions. The country’s leaders view coal-to-chemicals as a way to strengthen energy security.
– China imports oil and gas, so it wants to become somewhat independent from external supplies of key energy resources. That is why it is developing coal processing – said Jakub Szkopek, an analyst at Erste Securities, in an interview with wnp.pl.
Most of the new projects are located in regions with rich coal deposits. The coal-to-chemicals process uses gasification to turn coal into syngas, which is then used to produce fuels, plastics, fertilizers, and other chemicals traditionally derived from crude oil or natural gas.
Economic growth vs. climate goals
Environmental groups warn that converting coal into fuels and petrochemicals emits far more carbon dioxide than production based on oil and gas. However, China’s climate ambitions clash with priorities of economic competitiveness and rising living standards.
– China, India, and the United States still have virgin coal seams. They can often mine coal from shallow depths, often using open-pit methods. There is no question of the same depths of coal seams as in the European Union or Ukraine – noted Jacek Korski, former head of Kompania Weglowa and a mining expert, in an interview with wnp.pl.
– Furthermore, these great powers do not care about the greenhouse effect. They value economic development and raising the standard of living for their citizens more than fighting climate change – Korski added.
The expansion of the coal chemicals industry creates new, long-term sources of demand. Growing volumes of coal are being processed into a wide range of chemicals, including ammonia-based fertilizers and olefins, the building blocks for many plastics and adhesives.
Źródło: wnp.pl, Fot. UnsVision / Shutterstock
