Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)http://www.shanghaidaily.com/art/2006/12/14/299867/Coal-to-liquid
Coal-to-liquid fuel gets a lift in China
Created: 2006-12-14 CST, Updated: 2006-12-14 CST
CHINA plans to spend one trillion yuan (US$128 billion) through 2020 to develop its coal-to-liquid-fuel and chemical industry as it works to reduce reliance on oil imports and cut pollution. The National Development and Reform Commission, China's top industrial policy planner, said on Wednesday that it has mostly completed an opinion-gathering process for a long-term industry blueprint that will be sent soon to authorities for approval. The Shanghai Securities News said yesterday the total proposed budget for the 2006-2020 period is more than one trillion yuan, half of which will be used for equipment supply and 10 percent for technological knowhow. The country plans to increase annual capacity for turning coal into liquid fuel from a very small amount now to 1.5 million metric tons by 2010, 10 million tons by 2015 and 30 million tons by 2020. As a result, the fuel could make up four percent of the country's total refined oil products by 2015 and 10 percent by 2020. China also wants to build the capacity for making dimethyl ether to five million tons, 12 million tons and 20 million tons by 2010, 2015 and 2020. DME, produced from methanol made by gasifying coal, is a clean-burning fuel alternative that can be blended with other fuels. On the other hand, the government plans to add only limited production capacity for traditional coal-to-chemical products such as coke and fertilizer. "China is rich in coal, but the coal conversion industry could be hurt by risks such as falling crude prices, rising coal costs and environmental protection issues," said China Jianyin Investment Securities analyst Ye Zhijun. Building a DME plant, for example, will cost much more than a crude oil refinery with comparable capacity, and the DME production process also consumes more water, industry analysts pointed out. To avoid investment in uneconomic projects, the government has said it will approve only new coal-to-chemicals plants that meet specified production capacities.
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SHENHUA Group Corp, China's biggest coal company, and partner Shanghai Huayi Group have won state approval to build a 12 billion yuan (US$1.5 billion) plant that will convert coal into chemicals to tap rising demand. The plant in Baotou, Inner Mongolia Autonomous Region, is designed to produce 1.8 million metric tons a year of methanol and convert 600,000 tons a year into aromatics, the National Development and Reform Commission said yesterday.
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