China's renewable boom masks a quiet Coal-to-Liquids expansion

Based on dealflow and ongoing projects, most countries are basically assuming 2.1*C by 2050 is the reality and as such, they have an incentive to maximize capacity into the late 2030s and early 2040s.

Think of it like the NPT - those who rushed nuclear weapons capacity by 2000 succeeded with little-to-no ramifications.

You have to remember that we're halfway through 2026, so 2040 is only a little over 13 years away now, and any global consensus will only begin to seriously be negotiated around then add-subtract 5 years.

> When I run the numbers I don't see that. Ammonia is about 18% Hydrogen. Using green hydrogen would cost $500 per ton of ammonia. Putting it in perspective world production of ammonia is about 25kg per capita.

Green Ammonia is still 2x the cost of Grey (coal) Ammonia [0]. This difference is starting to fall (eg. in India the price difference is now 10% [1]), but it will stil take a decade for Green Ammonia to definitively become cheaper than Grey Ammonia, and most National Green Hydrogen strategies don't expect mass domestic capacity to finish being built out until the early-to-mid 2030s.

And this ignores the fact that non-alloy steel (which is the primary steel used for most domestic infra projects across the world from ASEAN to India to Iran to the GCC to Turkiye to Russia to China) cannot be forged without carbon, and the cheapest input for that is metallurgical grade coal.

Everyone is trying to rush as much production capacity as they can before everyone is forced to reach an agreement like the Montreal Protocol even though CFCs impact were know well before it.

[0] - https://www.sciencedirect.com/science/article/pii/S2666352X2...

[1] - https://jmkresearch.com/green-ammonia-is-only-10-costlier-th...

China began their buildout in 2008-09 following the oil shock due to the Iraq Civil War. India, Indonesia, Vietnam, and others are now starting the same kind of buildout at a similar scale over the next decade.

> Ammonia based fertilizers don't have carbon dependency, they have hydrogen dependency. Steel can be manufactured from iron oxide by reducing with carbon or hydrogen

Grey Ammonia remains 2x as expensive as Green Ammonia. This is changing (eg. as I mentioned elsewhere, India the price difference is only 10% now), but at global scale green hydrogen buildouts that will make it significantly cost competitive won't be finished until 2035 to 2040 depending on the country.

The IP for Green Steel (ie. Low carbon steel) as scale is tightly held by 3-4 Western European steelmakers, and India and the ASEAN countries I listed are all dramatically expand their steel production capacity.

And those European steelmakers and their customers like Volkswagen, Saab, and Volvo are uninterested in transferring their IP as it would destroy their CBAM advantage within the European market and Asia is not interested in using European steel as it would make infrastructure buildouts unneccesarily expensive.

This is why China [0][1], India [1], Saudi Arabia [1], and ASEAN states like Vietnam [2] are all treating CBAM as a discriminatory tariff and pushing back.

> Regarding "fatalistic or doomerism", in Europe we hear from many politicians, that we need to invest more in renewables and phase out coal, oil and gas. When asked for reason why we need to do this investment, the usual answer is "to save the climate". So on hand we have Europe decreasing it's CO2 emissions and mostly Asia increasing it's CO2 emissions, so that Europe's decreases are canceled out.

Yep. And frankly, the EU-27 is not in a position to pressure Asia. Much of the steel, grey ammonia, and other industrial products being manufactured with heavy carbon intensity is not intended for export to the EU-27 or the products manufactured using them are easily financed by the EU's carbon credit scheme or domestic export tax credits made to alleviate the CBAM tariff.

We modeled this standoff back in the late 2000s and early 2010s and it's happening exactly to the dot.

[0] - https://www.bloomberg.com/news/articles/2026-01-01/china-cal...

[1] - https://www.ft.com/content/5675563c-b1d5-47b5-858b-69653248e...

[2] - https://eastasiaforum.org/2026/03/06/vietnams-carbon-market-...