China looks to ban coal-to-gas projects

Chinese authorities are considering banning any new coal-to-gas projects in a move that could save emissions equivalent to Australia’s annual output.

Reports in the Chinese press suggest Beijing is considering halting approvals for new coal to gas and coal to oil projects as part of its next five year plan for the industry, mostly as a result of oversupply of gas.

Deutsche Bank analysts also reported on the proposal, citing “people familiar with the 13th FYP for coal”. It noted that the four coal-to-gas projects currently under construction are expected to complete construction during the 13th FYP and contribute 15bcm gas p.a. by 202.

But Chief of Energy Research Institute of NDRC Zhang Yousheng said China may not approve new coal-to-gas projects mainly because there will be sufficient gas supply and even oversupply in the country.

Such a move would have a huge impact on China’s carbon dioxide emissions because the process of converting coal to gas or oil is extremely emissions intensive.

Greenpeace says that an analysis done with Energydesk found that China’s coal to gas projects could release more than 1 billion tonnes of carbon dioxide each year.

That is around three times the planned emissions reductions in the US between now and 2020 or equivalent to the annual total of Australia and New Zealand combined.

The reports suggest China will complete existing projects – designed partly to supply gas to Beijing – but will significantly reduce its targets thereafter, potentially ending the need for any of the planned projects to be built.

It will also be a blow to Australian technology developers, who have been touting coal-to-gas technology as some sort of emissions abatement scheme, when in fact the opposite appears to be true.

The reduction on coal consumption by the measures would be approximately 300 million tonnes, or half of the growth from 2014 to 2020 allowed in the recently released State Council energy plan.