China approves second major coal-to-oil plant

China has approved a second major coal-to-oil plant, this time for a one metric ton per year (mtpy) facility to be built by Shandong-based Yankuang Group. The country tightened up on plans for coal-to-oil plants in July 2006, amid concerns that the plants consume too much water and cause considerable environmental damage. Instead, it said that major plants must be approved on a case-by-case basis, although small demonstration plants (0.16 mtpy or smaller) still do not need government permission. The National Development and Reform Commission approved the plant on April 28. Yankuang will build the new plant in Yulin, Shaanxi province, and wants to bring it onstream by the end of 2009. The company also hopes to expand production to 5 mtpy by 2013, but government approval will only be given once the first 1-mtpy plant proves successful. Shenhua was the first company to be awarded a license for a 1-mtpy plant in Erdos, Inner Mongolia, which is set to start up in September. In addition, Shanxi’s Lu’an Group and Inner Mongolia’s Yitai Group are both building 0.16 mtpy plants, which will come on stream this year. (June 25, 2008)