China Energy to invest $24 billion in coal-to-liquid project
10 October 2024
China Energy Investment Corporation, the country’s biggest coal miner, announced a $24 billion (170 billion CNY) investment to build an integrated plant that will convert coal into oil products, Bloomberg reported. The coal-to-liquid (CTL) plant will be located in Hami city in Xinjiang. The first phase of the project is slated to come online in 2027.
The Xinjiang region is rich in coal, but it is located in the remote, northwest part of China, far away from the largest industrial consumers of coal and coal generated electricity. The facility in Hami city is just the latest in a series of CTL developments green-lit in recent years in the mining hubs of Xinjiang, Shaanxi, Ningxia, and Inner Mongolia. Hami alone has indicated it will approve 300 billion yuan’s worth of such projects in its five-year plan through 2025, which could consume 152 million tonnes of coal by the end of the decade.
Touted for its rapid deployment of clean energy, China remains by far the world’s largest coal consumer and continues to push output to record levels, which hit 4.7 billion tonnes (~93 EJ) last year. In the growing Chinese economy, the growing renewable (solar and wind) energy output compounds fossil fuel energy, which is also on the rise.
Renewables and hydro are ‘input-equivalent’ energy values, i.e., the amount of fossil fuel energy that would be required by thermal power stations to generate the actual renewable electricity output.
(Data: Energy Institute [6296])
The Hami facility will have a production capacity of 4 million tonnes per year of synthetic fuels such as diesel and gasoline. China’s CTL capacity rose 24% to 11 million tonnes in 2023 compared to 2019. That means the new plant will account for a significant fraction of Chinese CTL output.
Source: BNN Bloomberg