SYNTHETIC NATURAL GAS

China’s abundant coal resources can be used to produce synthetic natural gas (sometimes
called “SNG”). The SNG can be piped into cities, where it produces less local air pollution
when burned than coal. However, there are several problems with such a strategy for cutting
local air pollution. First, SNG is expensive. Second, SNG requires enormous amounts of water.
Third, SNG produces significant amounts of heat-trapping gases—much more per unit of heat
or electricity than burning coal directly.1

As one Chinese expert said, synthetic natural gas plants “do not reduce emissions. They only
shift emissions elsewhere. Actually, they increase emissions.” 2

As of June 2018, five pilot synthetic natural gas projects are operating in China, with a total
capacity of just under 6 billion cubic meters per year (bcm/year). Roughly 80 SNG projects
with a cumulative capacity of more than 300 bcm are in different stages of the development
pipeline. (This is 10 more than were in the pipeline in June 2017.)3

Whether these plants will be built is unclear. One source notes that, after 10 years of effort,
China’s synthetic natural gas industry is still in the “pilot demonstration stage.” New projects
struggle to receive environmental approvals, with only four granted in 2016. Water source
approvals are also a challenge, with only three granted in 2016.4

Several five-year plan targets for SNG capacity have been missed:

● The 12th Five-Year Plan set a goal of 15–18 bcm/year of SNG capacity by 2015,
however by 2015 only 3.1 bcm/year of SNG capacity had been built.5

● The 12th Five-Year Plan also set a goal of 60 bcm/year of SNG capacity by 2020. The
13th Five-Year Plan cut that 2020 target to 17 bcm/year (roughly 4 bcm/year in each
of four locations: Xinjiang Huaidong, western Inner Mongolia, eastern Inner Mongolia
and north Shaanxi).6

In general, governments in coal provinces support synthetic natural gas projects. In May 2017,
a 1,279 km synthetic natural gas pipeline project was approved by four provincial governments
(Inner Mongolia, Shanxi, Hebei and Tianjin).7

In 2017, China’s National Standardization Committee began implementing its first synthetic
natural gas standard.8

The global warming implications of Chinese synthetic natural gas production could be
significant. One recent study found that using synthetic natural gas for electricity generation
and industrial heat generation produces 40%–70% more CO2 emissions than directly burning
coal. Production of 17 bcm/year of SNG (the 2020 goal in China’s 13th Five-Year Plan) would
result in roughly 85 million tons of carbon dioxide—almost 1% of China’s current emissions and
0.3% of global emissions.9

Note on Terminology

References

1. See Henry Gass, “China Push into Synthetic Natural Gas has Pollution Consequences,” Scientific American
(October 2, 2013), https://www.scientificamerican.com/article/china-push-into-synthetic-natural-gas-haspollution-consequences/;
Chris Emery, “Synthetic gas would cut air pollution but worsen climate damage in China,” Princeton University (April 28, 2017), https://www.princeton.edu/news/2017/04/28/synthetic-gas-wouldcut-air-pollution-worsen-climate-damage-china.

2. Lin Boqiang, Director, China Center for Energy Economics Research, Xiamen University, quoted in “‘Irrational’
Coal Plants May Hamper China’s Climate Change Efforts,” New York Times (February 7, 2017), https://www.
nytimes.com/2017/02/07/world/asia/china-coal-gas-plants-climate-change.html?_r=0
.

3. ARA International Limited, “China Natural Gas Map” (April 2018), http://www.chinagasmap.com/theprojects/
coal-to-gas.htm
; Hu Yuejun, “煤制天然气深度调查 70个项目大干快上 示范项目盈利难” [Synthetic Natural Gas In-depth
Investigation: 70 Projects Launched, but Difficult to Make Profits], China Energy Net (June 16, 2017) at Appendix,
https://www.china5e.com/news/news-991685-1.html.

4. 北极星电力网新闻中心 [Bjx News Center], “聚焦| 2016年煤制气项目发展状况分析” [Focus: 2016 Synthetic Natural Gas
Projects Development Status Analysis] (March 28, 2017), http://news.bjx.com.cn/html/20170328/817104.shtml;
Kathy Chen and David Stanway, “China resumes environmental approval of coal-to-gas projects,” Reuters (May
20, 2016), https://www.reuters.com/article/us-china-coal-gas/china-resumes-environmental-approval-of-coal-togas-projects-idUSKCN0YB0UD.

5. NDRC, “12th Five-Year Plan of National Natural Gas Development” (December 2012), http://zfxxgk.nea.gov.cn/
auto86/201212/W020121203312244945303.pdf
; SINOPEC, “预计2020年煤质天然气产量达600亿立方米” [Estimated
Synthetic Natural Gas Annual Output Reaches 60 Billion Cubic Meters by 2020] (December 2017), http://www.
sinopecgroup.com/group/xwzx/hgzc/20141217/news_20141217_536430164969.shtml
.

6. National Energy Administration (NEA), “煤炭深加工产业示范‘十三五’规划” [13th Five-Year Plan of National
Coal Deep Processing Industry Demonstration] (February 2017), http://zfxxgk.nea.gov.cn/auto83/201703/
W020170303357509200744.pdf
.

7. 北极星电力网新闻中心 [Bjx News Center], “聚焦| 2016年煤制气项目发展状况分析” [Focus: 2016 Synthetic Natural Gas
Projects Development Status Analysis] (March 28, 2017); Jiansong Sun, “中海油气电集团蒙西煤制天然气外输管道项目
获核准” [The Mengxi Synthetic Natural Gas External Transportation Pipeline Projects at China National Offshore
Oil Corporation Gas & Power Group were Approved], Sina Finance (January 18, 2018), http://finance.sina.com.cn/chanjing/gsnews/2018-01-18/doc-ifyquixe3749359.shtml.

8. Coal China, “煤制合成天然气国家标准获批发布” [National Synthetic Natural Gas Standards were Approved and
Released] (January 18, 2017), http://www.coalchina.org.cn/detail/17/01/18/00000039/content.html.

9. Chris Emery, “Synthetic gas would cut air pollution” (April 28, 2017); SINOPEC, “预计2020年煤质天然气产量达600
亿立方米” [Estimated Synthetic Natural Gas Annual Output Reaches 60 Billion Cubic Meters by 2020] (December
2017) (“Preparation of coal gas per thousand cubic meters emits about 4.5 tons of carbon dioxide to 5 tons.
If the future annual production of coal gas reached 100 billion cubic meters, an annual increase of nearly 500
million tons of carbon dioxide.”).

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