Celanese China advocates use of coal-based fuel ethanol

The chemical firm Celanese China advances the proposition that using coal-based ethanol as an alternative to gasoline and diesel fuel is pivotal to reducing dependency on imported oil and addressing energy security, as China continues to demand more fuel products; China currently imports 52% of its energy needs. Celanese China maintains that using clean coal technology can significantly help in meeting the country’s energy demands for the next two or three decades. A joint venture agreement was recently inked between Celanese, a Fortune 500 company, and Indonesia’s state-owned energy company Pertamina to develop fuel ethanol projects. The deal is intended to address the ever-increasing demands of Southeast Asia’s largest energy consumer. This was a major step forward for the company since it had problems in the United States, where legislation predating Celanese’s coal-to-ethanol technology requires that most ethanol made in the country be derived from corn. In China, Celanese has only been given approval to build a facility in Nanjing, capital of the eastern province of Jiangsu, for industrial ethanol, which is used mainly in paints, inks and pharmaceuticals. It has no presence in the potentially massive fuel ethanol market, citing the country’s regulatory environment, which limits fuel ethanol distribution to designated players only. Previously, ethanol was largely derived from agricultural products such as corn and sugarcane; this has been criticized for its impact on food prices and use of arable land. Celanese’s process uses hydrocarbon products to make ethanol. China could use coal to efficiently and cost-effectively produce ethanol. This technology has the potential to be a “game-changer” that could transform the ethanol industry. Last year, Celanese said that Chinese consumption of industrial ethanol reached 3 million tons a year in 2010, with growth expected to grow by 8% to 10% yearly. However, demand for fuel ethanol, at 1.5 million tons in 2010, was projected to jump to 15 million tons by 2020. Wang Tao, a resident scholar of the Energy and Climate Program at the Carnegie-Tsinghua Center for Global Policy, said increased production of coal-based ethanol, like corn-based ethanol, may not be carbon efficient. “Using this technology to generate fuel has huge implications on China’s emission targets and on climate change globally, and this concerned the Chinese government,” Wang said. The latest five-year plan stated that the country aims to reduce carbon dioxide emissions per unit of GDP by up to 17%. Furthermore, coal, which is widely considered a dirty source of power, is also expected to shrink in demand due to other directives in the plan. (August 14, 2012)