BEIJING, July 22 China has warned operators
against "blindly" developing projects to turn coal into
synthetic fuel, underlining the requirements needed for
regulatory approval as companies rush into investments that are
costly and might harm the environment.
The warning, published by the National Energy Administration
(NEA) on its website (www.nea.gov.cn) on Tuesday, came days
after plans to produce billions of cubic metres of gas from coal
were described by a top government researcher as "irrational".
The government bans coal-to-gas plants that would produce
less than 2 billion cubic metres a year and coal-to-oil projects
smaller than one million tonnes a year, according to the NEA
Even projects meeting those guidelines must get approval
from the State Council, China's cabinet, before construction can
begin, it added.
"Some regions are highly enthusiastic about new projects.
There are signs of blind development regardless of the
environment, water resources, technology and financial
capabilities," the statement said.
"It's strictly prohibited to build coal-to-oil and
coal-to-gas plants in provinces that need to buy coal from other
Natural gas is set to play a crucial role in China's war on
pollution to reduce heavy reliance on coal, with the government
aiming to boost total gas supplies to 420 billion cubic metres
by 2020, which is 2.5 times the consumption last year.
But production from conventional gasfields has struggled to
keep up with demand and China increasingly relies on supplies
piped in from Central Asia plus long-term supply deals for
liquefied natural gas. It hopes non-conventional sources like
synthetic natural gas will help plug the gap.
Beijing has been cautious in approving coal-to-gas (CTG)
investment, having given final approval to just four plants by
the end of 2012, due to concern about coal supply, strain on
already scarce water resources and large emissions of carbon
But companies backed by regional authorities are proposing a
total of 50 coal-to-gas plants, according to estimates by
Greenpeace, which would exacerbate the water crisis in regions
like Inner Mongolia in the north, and Xinjiang and Gansu in the
"Coal-to-gas production may bring relief to smog conditions
in selected regions but will likely increase in coal consumption
and carbon emission across the country," Greenpeace said in a
statement last week.
(Reporting by Chen Aizhu; Editing by Alan Raybould)