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China Will Not Stop Approved Coal Chemical Projects

An official from the Energy Bureau of the National Development and Reform Commission said in an interview yesterday that it is not accurate enough to say that China will stop the coal chemical projects under construction. At present China will not call a halt to the projects already approved.

Some media reports said the State Council held a meeting on renewable energy on June 7. China will stop coal chemical projects and grain ethanol fuel projects that are under construction. The report quoted a government official as saying. Take Shenhua's coal-to-oil project as an example. It cost more than $10 billion, but its lifecycle is far away.

For the Shenhua Group's coal direct liquefaction project (i.e. coal to oil) mentioned in the above report, which cost 10 billion yuan. And the coal-to-oil project under construction without state approval in violation of the law, the state will immediately call a halt.

It is revealed that the State Council held a meeting on the 7th on the development of renewable energy is the message: China has coal-to-oil technology, but "coal-to-oil" is not suitable for large-scale development.

"On the development of 'coal to oil', the state's attitude has been basically to develop and master the technology, rather than vigorously develop, at least for the time being will not vigorously develop." The official said.

In January 2007 announced the "Coal Industry Eleventh Five-Year Plan", the state proposed "orderly advance the construction of coal conversion demonstration projects, to promote the construction of coal liquefaction demonstration projects. The government requires that the industrial demonstration of coal liquefaction and coal-to-olefin be completed during the 11th Five-Year Plan. To lay the foundation for industrialization in the next ten years.

In April 2007, China's 11th Five-Year Plan for Energy Development was released. "The focus of the 11th Five-Year Plan includes "oil substitution projects", which will accelerate the development of coal-based, biomass-based liquid fuels and coal chemical technology, coordinate planning, and build key demonstration projects in an orderly manner. For the "12th Five-Year Plan" and a longer period of oil substitution industry development to lay the foundation.

According to the introduction, in these demonstration projects, Shenhua Group in Ordos production of coal direct liquefaction project will be put into operation within this year. The first phase can produce 1.08 million tons of oil equivalent.

In addition, there are two projects of Yanmar Group and Lu'an Group. As well as the introduction of the proven technology of South Africa's Sasol Synthetic Fuels International Ltd. to build a 3 million tons/year indirect liquefaction plant. and the completion of a commercial operation demonstration project, etc.

Just a few days ago just issued the "State Council on the issuance of a comprehensive work program of energy saving and emission reduction notice", the state again said that it will steadily develop alternative energy, develop medium and long-term planning for the development of alternative energy, and promote direct and indirect liquefaction of coal, coal-based alcohol ether and olefin instead of oil large sets of demonstration projects and technology reserves.

"From these planning documents can be seen, the Chinese government's attitude towards 'coal-to-oil', or the development and mastery of technology, did not propose to vigorously develop." Yesterday, a coal-to-oil business analyst told this reporter that China's attitude toward coal-to-oil is to "promote technology reserves," the attitude toward renewable energy is to "vigorously develop" the contrast is very sharp.

As an analyst of a large coal-to-oil enterprise, the person admits that coal-to-oil projects do have a large capital consumption, energy consumption, environmental protection costs and other disadvantages.

The analyst believes that whether China's coal-to-oil can be developed on a large scale, but also depends on the process of China's renewable energy development, as well as the high and low oil prices.

China Coal Research Institute of an expert yesterday said that the country was the first coal-to-oil project is still relatively enthusiastic, but then saw a flurry of the project, especially some projects are simply "playing coal-to-oil in the guise of the circle of coal", coupled with the development of coal-to-oil is still in the funding, technology shortages and high energy consumption and other issues, the country's attitude has gradually become cautious. The country's attitude has gradually become cautious.

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