The Future of Victorian Lignite

Coal is abundant, affordable, available and reliable, and is vital to the world’s sustainable energy needs.

World energy demand, consumption and prices are dramatically increasing, as is the price of metallurgical and thermal coal.

With lignite being integral to Victoria’s economy, the use of drying, gasification and liquefaction technologies will enable the State’s lignite to be used to produce key commodities such as diesel, urea, petrochemicals and hydrogen, as well as exportable coal, and in so doing, substitute for the conventional feedstocks such as oil, gas and black coal.

Technology to convert coal to liquid or gaseous fuels has been available in various forms since the 1920s, but cost has rendered it uncompetitive. The new market dynamics for commodities such as diesel, urea, methanol and its derivatives, and the adoption of new low emission coal technologies, are now providing opportunities for lignite as a low cost feedstock to compete with the traditional feedstocks commonly used to produce these commodities.

In addition to opportunities to convert lignite to value added tradable commodities, the adoption of suitable drying technologies is expected to enable lignite to be exported and compete directly in black coal markets as an energy and feedstock resource.

The following products present exciting challenges and opportunities for Victorian coal.

Solid fuels and products

Lignite in raw form can be used for boiler fuel in power generation. Value can be added with drying technologies to transform the product into high energy content briquettes and pellets that could compete with black coal as an exportable fuel.

Chars and cokes may potentially be derived from lignite for pyrometallurgical applications to produce reductants and carburising chemicals, and as a general carbon source for other applications. Calcium loaded char has applications in water and waste treatment and as an ion-exchange medium.

In the future, lignite may even be refined into a purer form of carbon for use in production of a myriad of carbon products including carbon fibres, carbon anodes, activated carbons, filter aids, pigments, graphite lubricants and conductors, and formed carbon materials.

Gaseous products and hydrogen

Gasification of coal to produce synthetic gas can convert solid coal into a gaseous feedstock that is a precursor to a range of other products. The process can also facilitate the separation and sequestration of carbon dioxide.

Hydrogen, one product that can be derived from syngas, has the potential to be used directly as a fuel gas, in fuel cell technologies, stationary power production and in vehicles.

Liquid products

Liquid products from coal can be produced either from syngas via gasification or by the direct liquefaction of lignite. Through the syngas pathway, liquid fuel products include diesel, methanol, fuel gasoline blends, and high octane gasoline extenders.

The direct liquefaction pathway generally produces lower quality products such as synthetic crude oil which, with further processing, may be used to produce fuel oil, diesel, motor fuel blends, kerosene, heating oil etc. Non-fuel products may also be produced, including solvents, polymers, surfactants, lubricants and a suite of other carbon-based chemicals.

Waxes, resins and polymers

A range of waxes can be produced using products derived from lignite, as well as phenolic resins and plastics, composites, and low strength structural and building materials.

Agricultural products

Syngas manufactured from coal can be used to produce ammonia, the key precurser to nitrogenous fertilisers.