China tests world's largest, 600,000-ton, coal-to-ethanol production plant

[eppur_se_muova]

2. It looks like it is, a little. They don't burn the coal completely, they partially burn it to make coke for steelmaking.

It's the coke flue gas that is actually converted to ethanol. Since the coke (purer form of carbon than raw coal) is going to be produced anyway, and flue gas carries most of the sulfur and nitrogen impurities that lead to pollution (aside from the GHG effect of CO2), this is basically making a useful chemical feedstock from what had been exhaust (though I think that is normally burned in furnaces, so it doesn't totally go to waste -- just makes lots of CO2 and sulfur/nitrogen emissions).

Granted "better than coking coal" is a low bar, it's still a little step up ...