01/19/2014 12:13 pm ET Updated Dec 06, 2017

China's Coal to Gas Plans: Old Wine in New Bottles

Co-authored by Li Shuo, Greenpeace East Asia


The Chinese coal industry has a plan to solve the nations air pollution crisis -- consume more coal. Last week the Chinese chief energy planning agency, the National Energy Administration (NEA) concluded its annual work session with a plan for for a whopping 50 billion m³ coal-to-gas (CTG) output target for 2020. According to the NEA, if the target is carried out, CTG could supply one-eighth of China's gas consumption by the end of this decade. The problem is, in reality this just means more coal consumption -- which means more catastrophic air pollution.

Throughout 2013, the Chinese government gave an unprecedented set of green lights to 15 CTG applications. To put that in context, a grand total of 4 approvals existed before last year. All these projects are expected to convert coal into synthetic natural gas (SNG) through various gasification processes. The reason? Coal industry advocates, want to solve the severe air pollution through the substitution of coal to gas. The problem of course is that this is the same old wine just in a new bottle.

Under the guise of "addressing air pollution" these plans will do nothing more than increase the problem -- the consumption of coal. Ironically, it is exactly the same coal companies that contribute most to air pollution that are now selling the "silver bullet" of CTG as a solution to the problem they themselves create. As a matter of fact, CTG will neither stem China's growing air pollution crisis, nor upgrade its energy infrastructure. Instead it will further lock China to its coal addiction - with a whole set of new environmental risks.

CTG entails significant carbon emissions, water consumption, as well as air and water pollution. If the 2020 CTG target is met, 12 billion tons of CO2 will be emitted over the 40 year timespan of these projects -- close to two years of China's total CO2 emissions.

The water impacts are potentially more concerning. China is already facing a coal and water crisis given the enormous water withdrawals the coal industry requires. According to one study, one cubic meter of SNG requires 6 to 10 liters of water to produce. The target will therefore exacerbate China's water conflict by adding 300-500 million tons of water consumption yearly. Considering 77 percent of the approved capacity will operate in water stressed regions, this huge pipeline of CTG projects are simply unaffordable to China's dry west.

In the long run the NEA's plan could fundamentally re-shape the geographic layout of coal production and the growth trajectory of the whole sector. The target would imply coal consumption of about 160-180 million tonnes per year. This might not sound like a huge addition given China's enormous appetite for coal, but consider that half of the CTG projects approved are located in Xinjiang, China's far western autonomous region with abundant yet largely untouched coal reserves. The CTG target will certainly unleash a local coal development rush in an ecologically fragile place, where the current water consumption rate has already gone beyond the provincial water allocation cap. If left unchecked, the gradually declining consumption of coal in China's eastern economic powerhouse will rapidly turn west. China will miss its opportunity to truly optimize its energy and economic structure and diversify away from coal.

The catastrophic air pollution China experienced in 2013 has proven China's decades-old coal obsession is simply unsustainable. The result was a set of ambitious air pollution control plans to slash coal consumption. The coal industry seems set on rebranding its toxic product in "new bottles." Failing to recognize it as such will only undermine China's important steps to reign in this crisis.