Forecasting the development of China's coal-to-liquid industry under security, economic and environmental constraints

Zhaoyang Kong, Xiucheng Dong and Qingzhe Jiang

Energy Economics, 2019, vol. 80, issue C, 253-266

Abstract: Coal-to-liquid (CTL) technology has attracted attention in China as an alternative way to alleviate oil shortages. However, due to low profits and environmental problems, Chinese CTL policy is cautious and unstable, rendering the future development of CTL technology uncertain. Considering security, economic and environmental constraints, this study uses system dynamics models to predict the long-term development of the CTL industry in China. The results show that CTL production will steadily increase over the next few years, and a greater increase will occur after 2021. If the government will not provide support policies for CTL industry, we forecast CTL production will be 29.3 million tons by 2030. Once government actively supports CTL, its production is projected to reach 51.8 million tons, which is 45 times greater than that in 2015. When environmental issues are also considered, the production is expected to 47.3 million tons. The sensitivity analysis shows that under different refined oil prices, CTL production ranges from 29.3 to 56.3 million tons. At present, China's CTL only accounts for 0.2% of its oil consumption, and the EROI value of CTL is approximately 0.9:1. The low EROI implies little importance for CTL from a net energy perspective. Based on these research findings, this research offers some relevant policy suggestions.

Keywords: Coal-to-liquid; EROI; MROI; System dynamics (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:80:y:2019:i:c:p:253-266

DOI: 10.1016/j.eneco.2019.01.009

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