Published On : 18 Sep 2018
Coal and Petroleum are the core of conventional non-renewable energy. It would not be wrong to say if these two eradicate overnight, the world would come to a standstill. Petroleum which is majorly used for fueling the automobile industry is witnessing a major demand due to change in lifestyle and rise in disposable income across the world. Coal is majorly used for generating electricity. Though renewable energy such as solar and wind energy are emerging, but will take time to have any negative impact on the global coal market. Owing to the extensive use of petroleum, the whole world is witnessing a severe drop in the petroleum reservoirs. This has helped the global coal liquid fuel (CLT) market to rise high. As petroleum is more valued, researchers have found that due to same internal structure, coal can be converted into petroleum.
Cleaner Synthetic Oil Obtained Favors the Market to Grow
The major driver that is driving the global coal to liquid fuel market is the abundant availability of coal in comparison to petroleum. The drop in crude oil reservoirs is making headlines whereas coal still remain to be productive enough. This has led made the coal to be most extensively used type of energy source. Rising concerns regarding clean cooking fuel, health, and optimum air quality is favoring the market to grow exponentially. Dimethyl ether, which is obtained from coal, has gained a tremendous popularity as, it is known to be non-carcinogenic and non- toxic, thus having a potential to replace diesel for off-grid power and transportation sectors.
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Apart from these, the products obtained from the liquefaction process consists of chemical feedstock, synthetic wax, ultra clean diesel, lubricant, and alternative liquid fuels are cleaner in comparison to fuels extracted from reservoirs. This factor has made all the government of various countries to promote CLT market, as the rising concern regarding environment still persists. Technological advancement of the oil and gas industry has helped the manufacturer to make the conversion procedure in a more simplified, and efficient way without consuming time. This has made a positive impact on the market growth.
Record Low Price of Crude Poses Major Threat to the Market
Water and soil contamination during the CLT process is ringing alarm among the environmental friendly population, thus building a major road block for the market to grow. High capital costs required for setting up a plant accompanied with the expensive technology setup is going to be a major concern for the market. Apart from these one of the important restraint that the vendors in CLT market is facing is the record low prices of crude oil, this have made the major companies to lower the production of liquid fuels from coal.
Rise in Transportation Sector Aids China to Dominate the Region
On the basis of region, the global coal liquid fuel market is smeared across Europe, North America, Asia Pacific, and Rest of the World. Countries such as Australia, Russia, South Africa, India, the U.S and China are considered to be major market. However, China and India are likely to dominate the region due to surge in production of CLT owing to the rise in transportation sector. Some of the major players in the market are Linc Energy, Sasol, Bumi plc, and Shenua.
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