China pauses on turning coal into liquid fuel

The Chinese government has issued a temporary moratorium on new facilities for converting coal into liquid transportation fuels, although at least two of the biggest projects will still move forward.

The moratorium would allow the state-owned Shenhua Group to build a plant in Inner Mongolia and continue a project with the South African energy giant Sasol. But the broader effects of the policy are unclear for an estimated six other plants reportedly under construction.

Chinese companies have been pursuing coal-converting technologies for a range of products, from chemicals to liquid fuels, to reduce China's reliance on imported crude oil. Industry officials say coal-based chemical production will continue and suggest that the current policy does not necessarily represent a definitive shift away from coal-to-liquid technologies.