China Halts Approval on New CTL Projects in Near Future     

China will not accept applications for new coal-to-liquid projects in near future, according to a senior official with the Ministry of Industry and Information Technology.
   Hou Shiguo, deputy director of the ministry's industrial department, presented at China International Coal Conference on April 20th that the Chinese government will cap the total capacity of coal-to-chemicals projects and phase out outdated technologies and equipment.
   China, which counts on chemical and other heavy industries for its economic growth, is highly reliant on coal and petroleum. To develop coal-based chemical industry would help find more sources of alternatives to replace oil and natural gas, Hou said.
   But the domestic coal-based chemical industry is highly fragmented with a large number of small and polluting facilities spreading across the nation. The economic viability for such projects is also uncertain as related commercial technology is yet proven while the prices for coal and oil have been fluctuating widely in international markets recently.
   China should make better use of existing coal-to-liquids and coal-to-gas projects, but stop approving new plants in large scale without considering resource, environment and the economic viability and technological know-how, Hou said.
   The government should develop coal-based chemical projects in regions with rich water resources and appropriate ecological environment, and develop large-scale coal-to-gas projects and ban small-sized coal-to-fertilizers plants. It also should encourage large coal companies to cooperate with downstream metallurgical companies in developing integrated coal-based chemical projects.
   Although Shenhua Group has completed its coal-to-liquids project in Erdos, Inner Mongolia, the technology is not mature for large-scale commercialization, Hou said. Therefore China's government will not approve new similar projects in near term.
   The National Development and Reform Commission said in September 2008 it would not approve new coal-to-liquids projects except for the Shenhua plant in Erdos and an additional 50: 50 joint project between Shenhua Ningxia Coal Group and South Africa's Sasol in eastern Ningxia region. (CCR2008 No. 28)