The Massachusetts Institute of Technology (MIT) reports that a new assessment of the viability of coal-to-liquids (CTL) technology done by researchers from the MIT Joint Program on the Science and Policy of Global Change found that if climate change policy was not a factor, CTL has the potential to account for around a third of global liquid fuels by 2050.

However, MIT reports that the viability of CTL becomes limited in regions with climate change policies, owing to the high conversion cost and the large carbon footprint of the process. Although adding carbon capture and storage (CCS) could reduce carbon dioxide emissions, the additional cost of implementing CCS makes CTL less attractive, the report finds.

Converting coal into liquid fuels is known to be more costly than current energy technologies, both in terms of production costs and the amount of greenhouse gases the process emits. The production of CTL has a large carbon footprint, releasing more than twice the lifecycle greenhouse gases of conventional petroleum fuels. However, with the rise in energy prices since 2008 and concerns about energy security, there is renewed interest in the conversion technology, the report notes.

The MIT team incorporated the engineering data for CTL from the US Department of Energy (DOE) into the MIT Emissions Prediction and Policy Analysis (EPPA) model to assess the prospects for CTL, particularly with regard to polygeneration technology, which produces liquid fuels, chemicals, and electricity by coal gasification, and the Fischer-Tropsch process. The EPPA model is a computable general equilibrium model of the global economy.

The MIT researchers modelled different scenarios, varying the stringency of future carbon poli- cies, the availability of biofuels and the ability to trade carbon allowances on an international market. Researchers also examined whether CTL conversion plants would use CCS technology, which would lower greenhouse-gas emissions, but found it was unlikely as it created added costs.

Based on the DOE’s plant design, which focuses mainly on liquid fuels production, the study found that without climate policy, CTL might become economical as early as 2015 in coal-abundant countries like the US and China. In other regions, CTL could become economical by 2020 or 2025.

In this scenario, CTL has the potential to account for about one-third of the global liquid-fuel supply by 2050, and at that level it would supply about 4.6% of global electricity demand.

MIT further reports that the viability of CTL would be highly limited in regions that adopt climate change policies, especially if low-carbon biofuels are avail- able. Under scenarios that include stringent future climate change policies, the high costs associated with a large carbon footprint would diminish CTL prospects, even with CCS technologies. Therefore, CTL conversion may only be viable in countries with less stringent climate policies or where low-carbon fuel alternatives are not available.