The net energy impact of substituting imported oil with coal-to-liquid in China

To alleviate the high risks to oil supply caused by high dependency on oil imports, China is actively seeking alternative energy sources to reduce its imported oil (IO). Coal-to-liquid (CTL) is regarded as an option in China. However, few analyses have examined the net energy impact of substituting IO with CTL and determined how effective the substitution would be. Energy return on investment (EROI) analysis, an important index to characterise the viability of a natural resource from an energy standpoint, can provide insights into these issues. This paper first introduces new methods to calculate the EROIs between CTL and IO from a life-cycle perspective. Then, based on the EROI values, a new, simple method is provided to calculate the net energy change resulting from the substitution of IO with CTL. The results show that without considering the environmental inputs, the mean EROI of CTL with/without internal energy inputs is 0.29/1.44, and that of IO is approximately 5.60. When environmental inputs are considered, these values decrease to 0.27/1.09 and 5.07, respectively. In general, IO has a better net energy return than CTL. Moreover, substituting 1 MJ IO with CTL would lead to a net energy loss of 0.3-4.6 MJ. The above results suggest that China should be more cautious in developing the coal liquefaction industry from a net energy perspective.