China powers up using Nazi-era coal-to-fuel tech

In a recent report, Bloomberg highlights that exactly 100 years ago, German chemists Franz Fischer and Hans Tropsch patented a process to convert coal into liquid fuels, which later fueled Nazi Germany’s war efforts and apartheid South Africa’s oil embargo workaround. 

Today, China is the largest—and most significant—user of this century-old Fischer-Tropsch synthesis.

According to the International Energy Agency (IEA), China’s coal-to-chemicals sector consumes about 380 million metric tons of coal annually, making it effectively the world’s third-largest coal consumer if treated as a separate entity—surpassing countries like the US, Japan, and Indonesia.

“The longer China remains addicted to coal, the more difficult it will be to decrease carbon dioxide emissions,” said Carlos Fernandez Alvarez, head of coal at the IEA. Despite major advances in renewables, China uses more coal than the rest of the world combined.

China’s coal-conversion industry is expected to grow by 5 per cent to 10 per cent in coming years, compensating for declining coal use in cement and steel production. While the “traditional” coal chemical industry uses metallurgical coal to produce fertilizers and chemicals, China’s “modern” coal chemical industry employs advanced Fischer-Tropsch and methanol synthesis techniques to create petrochemicals vital for plastics.

Most operations are located far inland near coal reserves, where coal is mined underground and transported directly into gasification plants. These facilities produce everything from synthetic fabrics to plastic bottles.

For Beijing, this industry enhances energy security by reducing reliance on imported oil and provides a lifeline for coal mining jobs amid declining power sector demand. Investments in regions like Xinjiang demonstrate China’s commitment to sustaining and expanding coal conversion.

Despite coal’s critical global role, it remains overlooked in climate discussions. Global coal demand hit record highs last year and shows little sign of dropping. A century after Fischer and Tropsch’s breakthrough, coal continues to find new—and growing—uses worldwide.

By Naila Huseynova