China's coal-to-liquid (CTL) sectors must quickly adjust to a low-carbon economy to meet the energy demand while mitigating environmental and energy security challenges. Similarly, China's climate goals for 2050 are gravely jeopardized if the industry's enormous ecological impact is not addressed. This research develops a conceptual framework for environment-security-economic evaluation of the high-carbon energy sector. Moreover, it constructs a system dynamics material model to predict the upgrade plan's industrial capacity and carbon emission scale. Finally, it calculates the dynamic optimal deployment scale at various epochs based on the sequential decomposition goal of "carbon peak" and "carbon neutrality." These measures are needed to anticipate the development of China's CTL industry. The road map predicts that by 2025, China's CTL industry will be able to meet at least 5% of the country's total oil demand. The adoption of scale A process will improve the economic and environmental performance of the CTL industry due to the cost savings and efficiency gains at a larger scale. In addition, the industry's overall energy efficiency will rise in 2023 and exceed 50% after 2035. Findings indicate that the CTL sector will approach a carbon peak in 2029 and neutrality and transition to hydrogen generation by 2050.
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