World Energy Outlook 2007

dependence. CTL production reaches 1 mb/d in 2030. This is still below the
target of 1 mb/d by 2020 set by Chinese companies, but is 250 kb/d above the
Reference Scenario level. The production of biofuels increases to 19 Mtoe by
2030, twice as high as in the Reference Scenario.
SPOTLIGHT
How Much Would More Coal-to-Liquids Increase China’s
CO 2
Emissions?
In the Alternative Policy Scenario, CTL production reaches 1 mb/d in
2030, emitting between 140 and 250 Mt of CO 2
, depending on the
production process used. This level of emissions is one-third higher (40 to
60 Mt of CO 2
) than in the Reference Scenario, because of the higher level
of CTL production. The 140 Mt estimate corresponds to direct coal
liquefaction, a process with 60% energy-conversion efficiency, while the
250 Mt figure corresponds to indirect liquefaction, which reaches only
around 40% efficiency.
CTL emissions of CO 2
per unit of fuel produced are five to seven times
higher than in a conventional refinery. Even so, in 2030 their share in total
Chinese emissions in the Alternative Policy Scenario is only 2%, compared
with less than 1% in the Reference Scenario.
More worrying are the implications for water. Water needs will be between
350 and 550 million cubic metres per year. Most of the currently planned
CTL projects are located near to coal resources, notably in Inner Mongolia
and Shanxi, provinces which already face serious water shortages. Priority
is at present given to supplying households, irrigation for agriculture and
existing power facilities. It may prove to be very difficult for new CTL
projects to obtain sufficient water supplies.
11
China’s oil imports continue to increase over the period, albeit at a slower rate.
They will still rise significantly – by 6.6 mb/d from 2005 to 2030, reaching
9.7 mb/d in 2030, but are well below the level of 13.1 mb/d in the Reference
Scenario. The difference is equivalent to the current combined production of
Indonesia and the United Arab Emirates. China’s degree of dependence on oil
imports differs markedly between the two scenarios. In the Alternative Policy
Scenario, the share of imports in total demand rises from 46% in 2005 to 72%
in 2030 – seven percentage points lower than in the Reference Scenario.
Imports from the Middle East would probably fall the most. The slower
growth in oil imports would significantly reduce the level of emergency oil
stocks China would need to hold.
Chapter 11 - Alternative Policy Scenario Projections 367