China is accelerating a major energy shift, and it’s not what many expected. Instead of doubling down exclusively on renewables, the country is ramping up coal-to-gas and coal-to-chemicals projects, positioning itself as a global outlier in the energy transition conversation.
Why the Sudden Push?
Energy security is the driver. China imports nearly half of its natural gas as LNG, leaving it exposed to global price volatility. Converting cheap, abundant domestic coal into gas is seen as a safeguard against rising import dependency.
At facilities like the $6.7 billion Ningxia Baofeng plant, production is set to double within five years. Coal-derived gas now costs roughly one-third less than imported LNG, making it financially attractive to both industry and policymakers.
The Environmental Dilemma
The problem? Emissions. Coal-to-gas production is carbon-intensive and clashes with China’s stated 2060 net-zero ambitions. While the technology strengthens energy security, it risks locking in high-emission infrastructure for decades.
Global Implications
China’s coal-to-gas boom could disrupt global LNG markets, pressuring exporters while also raising concerns about the pace of the global transition. For oil and gas companies, this signals the need to balance affordability, security, and sustainability in a world where all three are increasingly interdependent.
Conclusion
The coal-to-gas pathway illustrates the tough reality of the energy transition: what works for energy security often conflicts with climate goals. The question is whether technology, such as carbon capture and storage (CCS), can bridge this gap—or whether the world is heading for deeper contradictions in energy policy.