China's Synthetic Gas Push: A Security Measure with Environmental Costs

China's push for synthetic gas production is driven by its need for energy security, particularly in times of geopolitical risk. The country relies heavily on imported natural gas and liquefied natural gas (LNG) shipments, which can be exposed to price swings, maritime chokepoints, sanctions, and political pressure.

Beijing views coal-to-gas projects as a strategic hedge, not just another way to produce fuel. These plants convert domestic coal into synthetic natural gas (SNG), which is then injected into parts of the existing gas network. This gives Chinese planners an additional gas source when imported LNG becomes expensive or vulnerable to disruption.

The strategy has its drawbacks, however. Coal-to-gas production consumes large amounts of coal and water, increasing carbon emissions and shifting pollution towards water-stressed regions in northern and western China.