China has ordered the suspension of all but two coal-to-liquid (CTL) projects as it strives to curb excess investment in the sector and ease tight coal supplies, the planning commission of a coal-rich northwestern region said yesterday.
The exceptions to the suspension were a project due to be launched in Inner Mongolia this year by Shenhua, China's biggest coal producer, and Sasol's project with Shenhua's Ningxia Coal Industry, said the Ningxia Development and Reform Commission.
Shenhua's project would be the first in the world to put direct liquefaction technology into commercial production. The second project will use indirect liquefaction technology, which Sasol, the world's biggest maker of petrol from coal, has developed and used for decades.
China, the world's biggest coal producer and consumer, started encouraging CTL projects a few years go to help ease its reliance on imported crude oil. But tight coal supplies and surging prices have triggered the worst power shortages since 2004, and made industrial projects that divert coal less attractive.
The National Development and Reform Commission, China's top economic planning agency, recently asked local governments to tighten administration of CTL projects, the Ningxia bureau said.
Several CTL projects have already been approved and some are under construction. Yitai Coal, the second-biggest coal producer in Inner Mongolia, said in April it would start operating at a plant this autumn that would turn coal to 160 000 tons of products a year.
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