Considering natural gas (NG) to be the most promising low‐carbon option for the energy industry, large state owned companies in China have established numerous coal‐based synthetic natural gas (SNG) projects. The objective of this paper is to use a system approach to evaluate coal‐derived SNG in terms of life‐cycle energy efficiency and CO2 emissions. This project examined main applications of the SNG and developed a model that can be used for evaluating energy efficiency and CO2 emissions of various fuel pathway systems. The model development started with the GREET model, and added the SNG module and an end‐use equipment module. The database was constructed with Chinese data. The analyses show when the SNG are used for cooking, power generation, steam production for heating and industry, life‐cycle energies are 20–108% higher than all competitive pathways, with a similar rate of increase in life‐cycle CO2 emissions. When a compressed natural gas (CNG) car uses the SNG, life‐cycle CO2 emission will increase by 150–190% compared to the baseline gasoline car and by 140–210% compared to an electric car powered by electricity from coal‐fired power plants. The life‐cycle CO2 emission of SNG‐powered city bus will be 220–270% higher than that of traditional diesel city bus. The gap between SNG‐powered buses and new hybrid diesel buses will be even larger–life‐cycle CO2 emission of the former being around 4 times of that of the latter. It is concluded that the SNG will not accomplish the tasks of both energy conservation and CO2 reduction.
