Coal to Liquid Fuel Market Expected to Reach $7.7 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Coal to Liquid Fuel Market," The coal to liquid fuel market size was valued at $3.4 billion in 2021, and coal to liquid fuel industry is estimated to reach $7.7 billion by 2031, growing at a CAGR of 8.7% from 2022 to 2031.

Coal is an essential fuel utilized across the globe to generate electricity, while petroleum fuels are commonly utilized in vehicles. Moreover, coal and petroleum fuels majorly possess carbon, which makes the conversion of coal to liquid fuels more feasible. The production of liquid fuel from coal is also known as coal-to-liquid technology or coal liquefaction through direct or indirect liquefaction. In this procedure, the coal is dissolved in solvent at high temperature and pressure, followed by hydrogenation to produce a high grade, clean fuel suitable for use in transportation. Moreover, the obtained liquid fuel tends to be ultra-clean, sulfur-free, low in particulates, causes low CO2 emissions.

Increase in dependency on natural gas and crude oil to produce transportation fuels along with stagnant or slowly declining reserves as per the current industry scenario is the key factor responsible for the CTL technology implementation. The rise in the costs of crude oil or natural gas processing is further projected to drive demand for the CTL process. Technological advancements coupled with sustained growth of the liquid fuels demand for transportation are the key factors driving the global CTL market. In the current industry scenario, there are twenty active CTL facilities across the globe. With a rise in gas prices, the substitution of natural gas from dry coal, to be used in natural gas-fired power generation facilities, seems to be significantly economical.

The coal liquefaction market also has certain restraints. These include environmental pollution if coal is burned in the atmosphere. Coal liquefaction may cause health problems and optimum air quality issues if handled inappropriately. Risk associated with soil and water contamination in the process of coal liquefaction is high. High capital investment in setting up liquefaction plants and technology implementation are also hampering the coal to liquid fuel market growth.

The global coal to liquid fuel market forecast is segmented based on by technology, application, and region. On the basis of technology, the market is segmented into direct liquefaction and indirect liquefaction. In addition, on the basis of application, the market is segmented into transportation fuel, cooking fuel, and others. Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA. Presently, Asia-Pacific accounts for the largest coal to liquid fuel market share, followed by North America, Europe, and LAMEA.

China is the leading country in the global CTL industry with the maximum number of actively operating projects, i.e., eight as of the total plants in the world. Companies involved in the development or operation maintenance of these projects include Shenhua Group (Erdos, Inner Mongolia); Yitai Coal Oil Manufacturing Co., Ltd. (Ordos, Zhungeer); Jincheng Anthracite Mining Co., Ltd. (Jincheng); Shanxi Lu'an Co. Ltd. (Lu'an); Yitai Yili Energy Co. (Yili); Yitai (the Ordos, Zhungeer-Dalu and Guanquanbao, Urumqi); and Shenhua Group Corp. Ltd. (Yinchuan, Ningxia). The National Petroleum Council had presented several situations with the production forecast, which clarifies that the peak oil situation can only be partially solved by the currently operating CTL projects. The industry must be commercially developed over the coming years, in terms of coal supply and set up of new plants along with instant commissioning of the planned but delayed or the cancelled projects.

Competitive Landscape

The major companies profiled in this report includes Sasol Energy, Cleanse Corporation, Shenhua Group, Yitai Coal OIl Manufacturing Co. Ltd., Jincheng Anthracite Mining Co., Ltd., Shanxi Lu'an Co. Ltd., Bumi Plc, Envidity Energy Inc., Altona Energy, DKRW Energy, and Monash Energy. Due to increase in the demand for eco-friendly and presence of abundant coal, deteriorating levels of petroleum reservoirs, increased awareness about the technical expertise related to the conversion process among the industrialists, and growth of transportation sector in developing countries, such as India and China, drive the coal to liquid fuel market. The above-mentioned factors will have positive impact on the demand for coal to liquid fuel market. Additional growth strategies such as expansion of storage capacities, acquisition, partnership and research & innovation in the optimization and improvement in efficiency of the conversion of coal to liquid fuel have led to attain key developments in the global coal to liquid fuel market trends.

Key findings of the study

• As per coal to liquid fuel market analysis, by region, Asia-Pacific is projected to exhibit CAGR of 9.0% from 2022 to 2031.
• By technology, the indirect liquefaction segment for the largest market share in 2021.
• By application, the transportation fuel segment was the leading segment in 2021.

Impact of Covid-19 on Global Coal to Liquid Fuel Market

The global COVID-19 pandemic has negative impact on the coal to liquid fuel market. The pandemic outbreak has not only caused infections and deaths but also created havoc in the global economy. Mining companies have been severely affected by the pandemic outbreak. Global restrictions to encourage social distancing have negative impact on mining and construction projects, which have either slowed or put on hold for further notice. The above-mentioned factor seriously affected the growth of the coal to liquid fuel market. However, after the vaccination initiatives among the developed and developing countries has led to gradual decline over the restriction over social distancing.

Furthermore, the government has invested huge revenue in order to kick start the stagnant global economy through construction and mining industries. In addition, developing countries such as India and China have invested in the development of the alternative fuel production plants while gradually reducing the fossil fuel imports in order to improve the national energy security. The presence of above-mentioned initiatives and policies will provide lucrative coal to liquid fuel market opportunities for the development of the market.