In February 2006, the Chinese government said that it planned to make a major investment of about US$15 billion in coal-to-liquids (CTL) plants (both direct and indirect) over the next 5 to 10 years as part of an effort to reduce dependency on oil imports. The National Development and Reform Commission (NDRC) said that the combined output of the CTL plants could reach 16 million tons annually—about 320,000 barrels per day. (Earlier post.)

State-owned Shenhua Group, China’s largest coal company, alone has upped its plans for CTL production to 30 million tons by 2020.

The  CTL process produces various products, with 77.2% of output being diesel fuel; 19.6% naphtha; 2.3 liquefied petroleum gas; and 0.9% special wax. The  cost of production is currently RMB 1,986 (US$257) per ton (about $35 per barrel), according to Shenhua’s calculations.

At those yields, 50 million tons of CTL output per year would produce about 11.8 billion gallons of diesel, or 32.4 million gallons US (771,000 barrels) per day of CTL diesel.