Global coal to liquid market has witnessed a steady growth over the recent years and is expected to witness rapid expansion in next seven years. Growing liquid fuel demand coupled with unstable oil and gas supply scenario is expected to drive CTL technology commercialization over the forecast period.
Recent developments in coal liquefaction using environment-friendly techniques are estimated to stimulate industry growth. Syngas generated through Fischer Tropsch (F-T) approach find application in chemicals, wax, power generation and biofuels. Methanol to gasification (MTG) technique is usually used for manufacturing LPG from coal in industrial scale that can be utilized in modified transportation vehicles and heating and cooking processes.
Byproducts obtained from the liquefaction process include synthetic wax, chemical feedstock, lubricants, alternative liquid fuels and ultra clean diesel. CTL primarily benefits major oil importers including India, Vietnam, Thailand, Italy, South Africa and China, having abundant coal reserves. This is further expected to reduce reliance on petroleum imports and help these economies to efficiently utilize their domestic resources.
Increasing concerns towards health and optimum air quality, clean cooking fuel demand is expected to witness significant growth over the forecast period. Dimethyl ether (DME) derived from coal has gained attention on account of its non-toxic and non-carcinogenic properties. DME has potential of replacing diesel and serve as an alternative fuel for transportation and off-grid power sectors.
Surging energy demand coupled with increased vehicular emission norms is anticipated to drive CTL industry as a major alternative to conventional sources. This has urged the companies to diversify their liquid fuel supply business and invest towards developing alternative liquefaction processes such as biomass-to-liquids (BTL) and gas-to-liquids (GTL).
Majority of energy intensive industrial process involve significant GHG emissions. Major CTL companies are integrating CO2 capture and storage (CCS) technology to mitigate emissions in the liquefaction facilities. This is expected to provide industry participants lucrative opportunities to develop sustainable ways of capturing and sequestering CO2 generated in-situ.
Risks associated with soil and water contamination in the process also impede the large scale growth of CTL plants. These risks need further study in depth so as to recognize uncertainties and facilitate commercialization. Reconfiguring conventional plants to produce less CO2 are expected to reduce cost for additional installations and enhance overall profitability.
High capital costs incurred in plant setup and technology implementation raises concern over CTL process. Stringent regulatory policies, surging demand and volatile crude oil and derivative prices are expected to negatively impact the oil & gas industry. CTL has significant potential in becoming a better alternative energy resource to meet increasing global energy demand.
Commercial coal-to-liquid production has witnessed a surging growth in South Africa. More than 80% of the coal consumed in the nation is utilized for electricity generation or used as synfuel feedstock.
Capacity underutilization of various refineries coupled with government legislations regarding conventional fuels has prompted the U.S. to exploit its recoverable domestic coal reserves. Owing to advantageous geological characteristics coupled with technological advancements in the region, large scale surface mining has witnessed a steady growth in the past and is expected to drive market penetration over the forecast period.
Exploration of technically recoverable coal reserves in China, India, Indonesia, Russia and Australia are expected to supplement raw material supply. Capacity expansions of existing CTL facilities along with new installations in aforementioned regions are anticipated to steer liquid fuel supply over the forecast period. Combination of biomass with coal provides opportunity for setting up CTL plants in locations with high yields of biomass supply.
Shell, Chevron and Sasol are the industry leaders and held the maximum market share in 2014. Aforementioned companies have implemented FT process to liquefy waste anthracite thus utilizing all grades of coal extracted from the mines. Other companies operating in global coal to liquid market include Pall Corporation, Shenhua Group, Yankuang Group Company, DKRW Energy, Bumi plc, Monash Energy and Linc Energy.
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