China's Coal-to-Gas Capacity to Triple by 2030 Amid Geopolitical Tensions

China is rapidly expanding its coal-to-gas (CTG) industry as part of its strategy to ensure energy security. According to Rystad Energy, China's CTG capacity will triple by 2030, reaching 28 billion cubic meters per year.

This growth is driven by the country's efforts to reduce reliance on imported liquefied natural gas (LNG) due to geopolitical tensions and supply chain disruptions. The government has set a goal of developing synthetic gas from coal at scale as part of its 15th Five-Year Plan, covering 2026-2030.

The Xinjiang province is emerging as the hub for CTG expansion, with mine-mouth coal prices averaging just $30 per tonne between April 2025 and May 2026, less than 40% of the equivalent price in Inner Mongolia. This cost advantage translates to delivered gas prices in East China, which are generally below China's average LNG import price.

New projects are incorporating carbon capture technologies, such as electrolytic hydrogen integration and wastewater recycling, with some plants designed to capture up to 550,000 tonnes of CO2 per year. However, challenges persist, including water availability, environmental compliance, and carbon emissions.