STRATEGIC PARTNER GENERAL PARTNERS MAJOR PARTNERS COAL CONVERSION OPPORTUNITIES IN CHINA

STRATEGIC PARTNER

GENERAL PARTNERS

MAJOR PARTNERS

Pantone: 286UR:45 G:88 B:167C:90 M:73 Y:1 K:0

Accelerati ng China’s coal conversion market

COAL CONVERSION OPPORTUNITIES IN CHINA

Autumn 2011

ADVISORS

www.china-greentech.com | CGTI WHITE PAPER 2011 3

About the China Greentech Initiative

Founded in 2008, the China Greentech Initiative (CGTI) Partner Program has rapidly grown to become

the only China-international collaboration platform of 100+ organizations, focused on identifying,

developing and promoting green technology solutions in China. Partnering organizations are technology

buyers and sellers, service providers, investors, policy makers and influencers. Sector tracks addressed

during the 2011 CGTI Partner Program include Cleaner Conventional Energy, Renewable Energy, Electric

Power Infrastructure, Green Building, Cleaner Transportation and Clean Water.

Built on two cornerstones, strategic market research and a community of 300+ industry experts, CGTI

provides participating organizations with three core areas of benefit: world class market insights that

enable better decisions, meaningful relationships that lead to business opportunities, and thought

leadership and education that position participants as leaders in China’s greentech markets.

In addition to the Partner Program, CGTI offers Advisory Services, conducts briefings and publishes

public content, including White Papers and the annual China Greentech Report. The flagship China

Greentech Report 2009, released at the World Economic Forum, together with the China Greentech

Report 2011, have helped establish CGTI as the authority on China’s ever evolving greentech markets.

Cleaner Conventional Energy Sector Definition

CGTI defines Cleaner Conventional Energy as energy derived from non-renewable fossil fuels (such as coal, oil and natural gas) and nuclear power in ways that minimize their negative impact on the natural environment. Cleaner Coal is a term that defines the cleaner use of coal by emphasizing methods that reduce its negative impact on the environment. Cleaner coal technologies typically address atmospheric pollution from burning coal, and include such solutions as coal screening and scrubbing, gasification, flue gas desulfurization, carbon capture and sequestration (CCS, also referred to as carbon capture and storage) and coal blending. Cleaner Oil refers to technologies that help reduce wastewater, gas and residue emissions, as well as increase energy utilization. Cleaner oil technologies can be applied to oil exploration and extraction (such as reinjection of water, steam or gas for improving oil production and reducing pollutant emissions), oil transportation and refining. Cleaner Gas refers to technologies to extract and use natural gas, a cleaner burning fuel compared to coal and oil. Cleaner gas technologies facilitate the improved usage of coal-bed and coal-mine methane (CBM/CMM), reduction of greenhouse gases through the use of low concentration methane, and the support of natural gas combined-cycle (NGCC) processes. Nuclear Power uses nuclear fission reactions to produce steam, which then generates electricity. It is an alternative energy source that reduces carbon emissions and decreases dependence on fossil fuels.


Executive Summary

The government’s promotion of coal conversion means opportunity for coal producers and equipment

suppliers, especially for coal-to-chemicals and water treatment technologies.

For years, China’s central government has promoted coal conversion technologies for energy

security given the country’s abundance of coal resources. Yet given concerns about water use, carbon

emissions, and the economic attractiveness of certain coal conversion technologies, a disconnect has

emerged between central government caution on coal conversion versus local government efforts to

promote the technology for local jobs and tax revenue. Because water represents the major market and

policy impediment to coal conversion, CGTI’s research suggests that water efficiency, wastewater

treatment and water recycling technologies would represent a major market if government

enforcement improves and issues related to intellectual property (IP) are resolved. Based on current

conversion technologies and market prices for various fuels and chemicals, a CGTI sensitivity analysis

suggests coal-to-chemicals offers the most attractive economics among coal conversion techniques.

Definition and Scope

Coal conversion technologies include coal-to-liquids, coal-to-chemicals (such as coal-to-methanol and coal-to-olefins), coal-to-gas, and coal poly-generation (the conversion of coal into multiple products, such as electricity and methanol). This White Paper evaluates market and regulatory developments in the coal conversion sector and analyzes the current economics of various coal conversion technologies. Specifically, the White Paper examines:

Regulatory: The White Paper explains the evolution of policies to encourage coal conversion, as well as other policies that may impact coal conversion. The White Paper examines the central and local government policies and the motivations behind these policies. Market: In addition to profiling four recent important coal conversion projects, the White Paper summarizes central and local government projections for coal conversion and lists existing and planned projects in each region of China. The White paper examines the size of the market opportunity and the business motivations of major project developers. Economic analysis: The White Paper includes a sensitivity analysis of the economic trade-offs of coal conversion methods, and evaluates the most important cost variables and risks based on present costs and technologies. Finally, CGTI and its Partners identify ways in which various industry stakeholders (including government, public and private players) could play in accelerating the coal conversion market to address conflicting policy goals surrounding coal use, local development, emissions and water use.


Coal Conversion Regulatory Context

The central government has promoted coal conversion research and development (R&D) and

demonstrations since 2000, and local governments are now aggressively launching commercial

projects, but this local push will increasingly conflict with central government policies on emissions

and water, leading to potential project cancellations.

Overview of energy composition and coal use in China

In 2010, China consumed 3.2 billion tons of coal, of which only 150 million tons, or 5%, went to

produce chemicals.1 Coal accounted for 70% of China’s energy use in 2010, and while this is projected to

decline to 57% by 2020, absolute coal production will continue to grow rapidly.2 Coal is primarily used in

the electric power sector, accounting for 48% of coal use today, and in metallurgy, accounting for 26%,

where coal is used for coking and fuel.3 Because of China’s abundant coal supplies, and future needs for

imported oil and industrial chemicals, such as glycol and ethylene, coal conversion could play an

important role in addressing these shortages.

Central government policies on coal conversion are becoming increasingly cautionary

China’s abundant coal resources and rising imports of oil and chemical products have led the

central and local governments to cautiously promote coal conversion to enhance energy security,

promote domestic innovation and local employment, and improve resource use.

Beginning in 2000, the central government stepped up its efforts to acquire and develop coal

conversion technology. In July 2000, the National Key Industry, Products and Technology Catalog

exempted coal-to-gas (CTG) and coal-to-liquid (CTL) technologies from tariffs and import value-added

taxes, and in 2001, the National 863 Plan initiated several CTL technology research projects.4 In 2004,

the Key Advanced Technology Industry Development Priority Guide emphasized equipment related to

CTG, coal-to-chemicals and poly-generation.5

In 2006, the central government stepped up its efforts to promote coal conversion with its Mid- to

Long-Term Development Plan on Coal Conversion Industry. The plan, which was never officially released,

would have set annual coal conversion capacity targets in 2020 for up to 30 million tons of CTL, 66

1 National Bureau of Statistics, “中华人民共和国 2010 年国民经济和社会发展统计公报,” *PRC 2010 National

Economic and Social Development Statistics Report], Feb., 2011; National Bureau of Statistics, “中华人民共和国

2009 年国民经济和社会发展统计公报,” *PRC 2009 National Economic and Social Development Statistics Report+, Feb., 2010 2 Ibid. 3 National Bureau of Statistics, “China Energy Statistical Yearbook 2010,” Jan., 2011 4 National Development and Reform Commission (NDRC), “当前国家重点鼓励发展的产业，产品和技术目录

(2000 年修订),” *National Key Industry, Products and Technology Catalog, 2000+, Jul., 2000 5 NDRC, Ministry of Science and Technology (MOST), and Ministry of Commerce (MOFCOM), “当前优先发展的高

技术产业化重点领域指南(2004 年度),” *Key Advanced Technology Industry Development Priority Guide, 2004], Apr., 2004


million tons of coal-to-methanol (CTM), and 20 million tons of coal-to-dimethyl ether (DME).6 In 2007,

the 11th Five-Year Plan (2006-2010) promoted domestic technology for a million ton direct-CTL

demonstration plant and two indirect-CTL plants, and introduced foreign technology for a 3 million ton

indirect-CTL commercial demonstration project.7 The 12th Five-Year Plan (2011-2015) followed up on

these developments by promoting R&D and application of coal conversion, including coal-based poly-

generation.8

For several reasons, the central government has pursued a more cautious approach to coal

conversion over recent years. Coal conversion requires high capital investment, and China is still gaining

experience and developing domestic technology. Overcapacity is another important reason for slowing

development: in the case of CTM, 50% of capacity is currently idle.9 Finally, as will be discussed further

below, coal conversion can entail high water consumption and wastewater production.

Since 2006, the government has adopted a number of restrictive policies on coal conversion. That

year, the Notice on Strengthening the Management of Coal Conversion Industry and Facilitating its

Healthy Development, which prohibited approval of projects with annual production of less than 3

million tons for CTL, 1 million tons for CTM and coal-to-DME, and less than 0.6 million tons for coal-to-

olefins (CTO).10 In August 2008, the Notice on Strengthening the Management of CTL Projects stopped

all CTL projects other than the Shenhua Direct Liquefaction.11 In 2011, the Notice on Regulating Coal

Conversion Industry for Orderly Development prohibits approval of coal-to-glycol projects under 0.2

million tons of annual capacity and CTG projects under 2 billion cubic meters annual production.12 In

addition, the government never released its 2006 targets for coal conversion; instead, given other policy

priorities, these will likely be revised to lower targets.

Provinces with abundant coal reserves have set high coal conversion targets

Notwithstanding the cautious attitude in Beijing, provincial governments have published plans for

large-scale coal conversion projects and high provincial coal conversion targets. Regions with abundant

coal have led the way:

6 NDRC, “煤化工产业中长期发展规划(初稿),” *Mid to Long-Term Development Plan on Coal Conversion Industry

(Draft)], Oct., 2006 7 NDRC, “煤炭工业发展’十一五’规划,” *The 11th Five-Year Plan for Coal Industry], Jan., 2007 8 National People’s Congress, “中华人民共和国国民经济和社会发展第十二个五年规划纲要,” *PRC 12th Five-Year Plan for National Economic and Social Development], Mar., 2011 9 CHEM99, “煤制甲醇上下游产能皆过剩,” *Overcapacity Exists Upstream and Downstream of CTM Industry+, May

3, 2011, http://coalchem.chem99.com 10 NDRC, “关于加强煤化工项目建设管理促进产业健康发展的通知,” *Notice on Strengthening the Management of Coal Conversion Industry and Facilitating its Healthy Development], Jul., 2006 11 NDRC, “关于加强煤制油项目管理有关问题的通知,” [Notice on Strengthening the Management of CTL Projects], Aug., 2008 12

NDRC, “关于规范煤化工产业有序发展的通知,” [Notice on Regulating Coal Conversion Industry for Orderly Development], Mar., 2011


Xinjiang plans to develop modern coal conversion bases at Yili and Zhuageer. Projects planned

for completion by 2015 imply capacity of 3.6 million tons of CTL, 60 billion cubic meters of CTG,

1 million tons of CTO, 800,000 tons of coal-to-DME, and 1 million tons of coal-to-glycol.13

Ningxia has 87 coal conversion projects including Shenhua Group’s 2 million ton CTO project and

Sinochem’s 2 million ton ammonia and 3.2 million ton acetic acid projects. By 2020, Ningxia

plans production capacity of 20 million tons with the goal of becoming a national Coal

Conversion Industry (CCI) base.14

Shaanxi plans to invest RMB 555.7 billion to develop 27 modern large coal conversion projects.15

Shanxi similarly plans for coal conversion to become a strategic industry to help restructure

Shanxi’s economy, with the goal of developing large companies as industry leaders. Uric acid

and acetylene are key products.16

Inner Mongolia plans to hasten development of a new CCI base by promoting national

demonstration projects on CTL, CTM, CTO, coal-to-DME and coal-to-glycol.17

Guizhou is developing 14 coal conversion projects to build up three large coal conversion

industry bases by 2020—planned investments total RMB 123 billion.18

Yunnan plans to produce millions of tons of CTL and CTO by developing two large coal

conversion industry bases in Qujing and Zhaotong while advancing the Honghe and Xundian coal

conversion bases.

Some provinces have made coal conversion a condition for obtaining mining rights. The purpose of

such policies at the provincial level is to diversify local economies by converting coal locally instead of

exporting it for power production. High capital costs means higher investment, more jobs and more

local technology development.

A glance at provincial targets suggests they are significantly more aggressive than national policy

goals and targets. In the case of CTL, where the central government has limited investments due to high

cost, high water use and high emissions, the 2015 national target calls for 10 million tons of annual

capacity, compared to combined provincial targets of 37.2 million tons. For CTG, the national 2015

annual capacity target is 300 billion cubic meters, compared to combined provincial targets of 1,476

billion cubic meters. Because of the importance of water in the context of obtaining national project

approval, the national targets may be more realistic.

13 People’s Government of Xinjiang Uygur Autonomous Region, “新疆维吾尔自治区国民经济和社会发展十二五

规划纲要,” [The 12th Five-Year Plan on National Economic and Society Development in Xinjiang Uygur Autonomous Region], Jan. 18, 2011 14 Tao Yang, “化工投资迅速重启，煤化工蓄势待发,” *Investment on Chemical Industry Booming, Coal Conversion Industry Ready to Go], (Shanghai: CITIC, 2011) 15

Ibid. 16

Ibid. 17

Ibid. 18 Ibid.


Water scarcity in coal-heavy regions and other policy needs will limit coal conversion

Both the central and regional governments continue to promote coal conversion for domestic

resource use, energy security, economic development and diversification. Yet other national policy

themes are also vitally important to China’s future, and at times it can be difficult to see how such

themes can be compatible with aggressively promoting coal conversion.

In the area of water consumption, national policies prohibit using residential and agricultural water

for coal conversion, restrict CTG and CTL projects in regions with water scarcity, and prohibit coal

conversion in regions where water consumption has reached quota. On environmental protection,

policies prohibit coal conversion in regions where industrial impact exceeds environmental tolerance,

and require the rejection of projects that fail to meet environmental standards on emissions and

wastewater treatment. Finally, on location selection, policies limit coal conversion in regions that import

coal while promoting coal conversion in regions with sufficient water and coal resources.

As these policies suggest, water is clearly the most important impediment to developing coal

conversion in China. Coal conversion projects require a large amount of water for daily production. For

example, typical processes for CTM require 15 tons of water for each ton of methanol, coal-to-DME

requires 20 tons of water for each ton of DME, and CTL requires 10 tons of water per ton of CTL.19

A look at one of China’s premier policies, the Energy Golden Triangle, illustrates the dilemma of

coal conversion development and water scarcity. China’s top four coal-rich provinces are Shanxi, Shaanxi,

Inner Mongolia and Xinjiang.20 The National Energy Agency (NEA) has drafted plans for an Energy Golden

Triangle to extend from Ningdong, Gansu, to Yulin, Shaanxi, and to Erdos, Inner Mongolia.21 The region

now accounts for 24% of national coal production, and under the plan would account for 30% by 2020,

including major coal conversion elements: 15 million tons of CTL capacity, 40 billion cubic meters of CTG

capacity, and 2.5 million tons of CTO capacity.22 Yet two of the total three provinces touched by the

Energy Golden Triangle suffer from water scarcity or stress.

19 Tao Yang, “化工投资迅速重启，煤化工蓄势待发,” *Investment on Chemical Industry Booming, Coal

Conversion Industry Ready to Go], (Shanghai: CITIC, 2011) 20

StateCoal, “中国各省市煤炭储量情况,” *Statistics of Coal Reserves in China+, Jun. 5, 2008, http://statecoal.cn 21 21CBH, “西部能源金三角开发规划上报国务院,” *Development Plan of Energy Golden Triangle Area Submitted to State Council], Oct. 11, 2011, www.21cbh.com 22

China Oil News, “能源“金三角”崛起西部未来成龙头,” *Emergence of Energy Golden Triangle, Lead in Future Western China], Oct. 13, 2011, www.oilnews.com.cn


Carbon emissions are another problem for potential future coal conversion projects. Industry

participants at a CGTI Working Session noted that while present projects are not planned with carbon

prices in mind, any future carbon policy could have a deep and permanent effect on coal conversion

economics, given that the carbon emissions embodied by coal-derived chemicals, methane or diesel fuel

might be substantially higher than their non-coal-based market equivalents. This could be particularly

challenging for CTG, in light of the current large-scale plans in Xinjiang and the need for CTG to compete

in the long run with the price of domestic shale gas.

The next five years will help clarify how China’s central and regional governments intend to resolve

the critical dilemma regarding carbon emissions and water conservation needs in north China on one

hand, versus efforts to develop coal conversion technologies for high-value domestic coal production on

the other. Water treatment technologies and low-water use coal conversion technologies could help,

but in many cases these advanced technologies are only available from foreign solutions providers

which might require additional intellectual property protections and higher capital costs.23

23 CGTI interview


Coal Conversion Market

Coal conversion appears to be at a turning point in China when it moves from pilot projects and early

commercial demonstrations to wide-scale commercial deployment.

Domestic supply gaps will drive coal conversion

Domestic supply gaps in oil, natural gas, ethylene and glycol will worsen, driving further

development of coal conversion. Yet it appears some technologies have a clear advantage over others.

Over a dozen large CTG projects are underway in west China to feed the West-to-East natural gas

pipeline, whereas CTL has slowed due to concerns on costs and emissions. Coal-to-chemicals is making

progress, with one CTO plant completed, but methanol-to-olefin (MTO) conversion requires further

R&D.

Given rapidly rising demand for many fuels and chemicals, China unsurprisingly faces future gaps

between domestic supply and demand. In the case of oil, China already imports over half its total

consumption, and this gap will worsen by 2015, when the country will import 63% of its demand from

abroad, according to PetroChina forecasts.24 In the case of natural gas, the picture will shift from 2010

when China needed to import just 13% of supply, to a severe shortage in 2015 when the country will

import over half its total demand, despite rising domestic supply in the intervening years, according to

BP forecasts.25 Ethylene and glycol, two critical industrial chemicals, will also see domestic supply gaps in

2015: in the case of ethylene, China will need to import about one fifth of its demand, while for glycol

the country will need to import roughly three-quarters of its consumption needs.26 In all three cases,

increased domestic supply from coal could reduce the overall effect of worldwide oil price volatility on

China’s economy.

China’s current plans for coal conversion focus on CTG, CTM and coal poly-generation

Among coal conversion technologies, poly-generation has taken the lead in terms of the number of

proposed and planned projects. Two projects have been completed in Shandong and Shanghai and a

further eight are under construction in Xinjiang, Gansu, Qinghai, Ningxia, Guizhou, Shanxi, Anhui, and

Inner Mongolia. An additional nine projects have been proposed. Given poly-generation’s capability to

produce a variety of derivative products, some believe it offers the best path for future coal conversion

development.27

24 Bakhsh, Nidaa, “China’s Crude Oil Demand to Rise 14% by 2015, PetroChina Says,” Bloomberg, Apr. 1, 2011 www.bloomberg.com 25

China Daily, “Natural Gas Reserves Plan Recommended,” Apr. 13, 2011, www.chinadaily.com.cn 26

CGTI interviews 27

Cai Ningsheng, “Development of Coal Gasification & Poly-Generation in China,” IEA-MOST Workshop on Fossil Fuel Technologies, Jun. 11, 2010


By number of projects, CTG is second in position after poly-generation with 12 projects under

construction in Xinjiang (7 projects), Inner Mongolia (4 projects) and Liaoning (1 project). A further nine

projects have been proposed, four of which are in Xinjiang. Xingjiang thus accounts for over half of all

CTG projects—the region is poised to become a major base for CTG conversion.28 The economics of CTG

in Xinjiang are driven by the construction of the new West-to-East natural gas pipeline and the cost of

exporting coal from the region via train.

28 People’s Government of Xinjiang Uygur Autonomous Region, “新疆维吾尔自治区国民经济和社会发展十二五

规划纲要,” [The 12th Five-Year Plan on National Economic and Society Development in Xinjiang Uygur Autonomous Region], Jan. 18, 2011


CTO projects, which are based on first transforming coal into methanol, and then methanol into

olefin, are few in number so far, with only one plant in operation, two under construction, and two

further plants proposed. Shenhua Group is the only Chinese company with domestic MTO technology,

and operates the only plant located in Inner Mongolia producing 600,000 tons of olefin annually,

converted in turn into poly-propylene and poly-ethylene. The plant cost RMB 17 billion and began

commercial operations in January 2011 after several years of trial operations.29 CGTI Partners expressed

the view at a Working Session that improved domestic MTO technology is the key to accelerating this

market.

Currently China has four CTL plants in operation: two in Inner Mongolia and two in Shanxi. A

further eight plants are proposed or under construction, but China’s central government has taken a

slow approach on CTL development in light of a number of problems in the industry. According to

reports from CGTI Partners, several CTL plants have operated at a loss despite elevated world oil prices

because of low conversion efficiency and inability to obtain sufficient coal of the quality needed to

operate economically.30 Given that coal quality issues have challenged conventional power producers in

recent years, this assertion appears reasonable. In addition, the water and carbon issues surrounding

coal-derived liquid fuels for transportation will pose a dilemma for policy makers who might otherwise

see CTL as a solution to oil imports.

29 Shenhua (Baotou) Charcoal Chemical Industry Co., Ltd., “神华包头煤制烯烃示范项目运行情况及主要工艺,” [Operation Status and Major Technologies Applied in Shenhua Baotou CTO Project], www.shenhuagroup.com.cn, accessed on Oct. 18, 2011 30 CGTI interview


Economic Analysis of Coal Conversion

CGTI’s study of coal conversion analyzed the economics of various technologies given current fuel and

chemical prices, in addition to capital costs and conversion factors from publicly available project

data. The analysis found that CTM would offer the most attractive economics, and CTL would be

economical at today’s oil prices. These results may differ from actual experience in China given the

favorable coal conversion ratio and need for access to high quality coal. Notably, the analysis did not

include the impact of water or carbon.

CGTI analyzed a 2,500 ton/day CTM plant combined with a 250 MW Integrated Gasification

Combined-Cycle (IGCC) plant. Our economic assumptions included:

Coal price: RMB 500/ton

Methanol price: RMB 3,080/ton

1 ton of coal yields 0.68 tons of methanol

Electricity price: RMB 0.385/kWh

IGCC heat rate: 11,800 btu/kWh

7% cost-of-capital, 20 year life

CGTI’s analysis compares the effects of capital cost of methanol conversion to IGCC conversion. At

2011 methanol prices, even the cheapest IGCC plant capital cost does not justify poly-generation versus

pure methanol. The result is sensitive to the methanol price and the methanol conversion rate.


Similarly, CGTI analyzed a 6,000 ton/day CTL plant producing diesel, naphtha and 125 MW of

electricity. Recent China experience (Yankuang, Shenhua) suggests capital costs from RMB 5 million to

RMB 7 million per ton of daily plant capacity. Additional assumptions included the following:

Prices: coal RMB 500/ton, diesel RMB 8,050/ton, naphtha 8,000/ton

Electricity price: RMB 0.385/kWh

No carbon price

Conversion ratios from 2007 U.S. Department of Energy study31

7% cost-of-capital, 20 year life

Under CGTI assumptions, the study showed that CTL would currently be economical given 2011 oil

prices. Note that in this sensitivity analysis, the conversion ratio is taken from a U.S. CTL study, but CGTI

Partners suggested that the conversion ratio in some Chinese projects is much lower, although no

specific data are available, which causes the discrepancy between the conclusions from this analysis and

experiences in China. Indeed, even at the high end of capital cost and at a low diesel price of RMB

6,000/ton, CTL would still be economical. Diesel price is the main sensitivity factor, followed by capital

costs.

31 Van Bibber, Lawrence, et al., “Baseline Technical and Economic Assessment of a Commercial Scale Fischer-

Tropsch Liquids Facility,” (U.S.: National Energy Technology Laboratory, DOE, 2007)


The Path Ahead

The coal conversion industry is at a turning point in its history in China. For the first time, a major

coal-producing country is set to make coal conversion a major, large-scale commercial element in its

energy development plans. Yet as this study has made clear, the most aggressive provincial plans for

coal conversion carry severe environmental risks that appear to conflict with national plans for the

industry, as well as important national objectives for water use and environmental protection. For this

reason, there are many areas where stakeholders can work together to ensure that coal conversion can

go forward in a way that reduces such policy conflict, ideally through better enforcement of existing

policies and regulations combined with reasonable, cost-effective deployment of water-saving and

wastewater treatment technology. Stakeholders can take the following actions to further this goal:

Central government policy makers and regulators can establish paths to protect intellectual

property for water-treatment technologies, publish clearer roadmaps for technology and

industry development, provide additional funding for R&D in water-saving technologies, and

promote enforcement of water use and wastewater regulations to ensure local officials do not

violate quotas for industrial water use or divert water from more water-efficient industries

toward coal conversion.

Local policy makers and regulators can increase local enforcement of wastewater treatment,

water use and environmental regulations, and consider policies to ensure coal conversion

projects meet overall energy efficiency and water use goals.

Technology providers and other private stakeholders can market wastewater treatment and

water recycling technologies for coal conversion. They can also work with other players, such as


research institutes, to coordinate policies to promote the introduction of advanced water-saving

and water-treatment technologies.

Project developers can seek international partners with mature technologies that can be

employed in China, particularly to reduce carbon emissions and improve wastewater treatment

and water recycling.

Abbreviations

BTU: British Thermal Unit CBM: Coal-Bed Methane CCI: Coal Conversion Industry CCS: Carbon Capture and Storage CMM: Coal-Mine Methane CTG: Coal-to-Gas CTL: Coal-to-Liquid CTO: Coal-to-Olefin DME: Dimethyl Ether IGCC: Integrated Gasification Combined-Cycle IP: Intellectual Property kWh: Kilowatt Hour MTO: Methanol-to-Olefin NEA: National Energy Agency NGCC: Natural Gas Combined-Cycle R&D: Research and Development


This license allows for the copying, distributing, transmitting and adapting of the work for non-commercial purposes, provided

that new content is distributed using a comparable license, and this work is attributed as: China Greentech Initiative (Greentech

Networks Limited), “Coal Conversion Opportunities in China,” Autumn 2011. Permissions beyond the scope of this license may be

available at www.china-greentech.com.

The China Greentech Initiative™ and The China Greentech Report™ are trademarks of Greentech Networks Limited, a Hong Kong

limited liability company. While significant input was received in the creation of this White Paper, with the large number of

participating organizations, by necessity this is not a consensus deliverable. All opinions expressed herein are based on the

judgment of CGTI at the time of distribution, and are subject to change without notice due to economic, political, industry and

firm-specific factors.

Greentech Networks Limited and its partners and advisors make no representation or warranty, express or implied, concerning

the fairness, accuracy or completeness of the information and opinions contained herein. While every effort has been made to

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This White Paper may include case studies of partners, advisors and other organizations which the research team believes added

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Acknowledgements

Hundreds of individuals provide input into the work of CGTI and the content of this White Paper,

including leaders of major Chinese enterprises, foreign companies, entrepreneurs, investors,

government, NGOs and policy advisors. CGTI Partners and Advisors that support the Cleaner

Conventional Energy Sector are presented on the front and inside cover of this White Paper.

CGTI wishes to acknowledge several organizations for their support of this White Paper, including Bayer,

LP Amina, Peking University, Shell, Tsinghua-BP Clean Energy Center and UNIDO. CGTI Director of

Analytics Anders Hove wrote this White Paper based on research performed by Analysts Jing Wang and

Lini Fu for an October 2011 Opportunity Assessment. Cina Loarie provided copy-editing support and

managed publication of the White Paper. CGTI Partner Relations team members Caitlin Rhodes, Cindy

Jiang and Grace Rumford supported the Opportunity Assessment, under the direction of Managing

Director Ellen Carberry.

http://www.china-greentech.com/

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STRATEGIC PARTNER GENERAL PARTNERS MAJOR PARTNERS COAL CONVERSION OPPORTUNITIES IN CHINA

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