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The central government is working on a long-term plan to increase the use of alternative fuels to reduce the country's dependence on oil.

Coal gas and renewable energy sources such as biomass and solar power are expected to become "major alternatives," according to the National Development and Reform Commission (NDRC).

Wu Yin, a senior energy official with NDRC, said at a weekend meeting that the recommendations of a national leading group from several cabinet departments are part of an "oil alternative strategy".

He said "the essence of the report" will be incorporated in China's 11th Five-Year Guideline (2006-10), which will be discussed at the annual session of the National People's Congress next month.

China aims to raise the ratio of renewable energy to total consumption to 13 percent by 2020, up from the current 7 percent.

Zhang Guobao, vice-minister of the NDRC, said the key to achieving the goal is to increase the use of nuclear, wind and solar energy so that dependence on coal and oil can be cut.

The use of renewable energy has been growing at more than 25 per cent in China, the highest in the world, and Zhang said solar power consumption in the country accounted for 40 percent of the global total at the end of 2004.

The government has decided to significantly increase the use of ethanol as vehicle fuel in more than the current five provinces. Corn, wheat, potatoes and sugarcane are the main raw materials for this alternative fuel.

Given the abundance of reserves in the country, coal liquefaction, a clean and relatively efficient way of producing synthetic products, is also high on the agenda.

China Oil News reported last week that the government plans to spend US$15 billion to build plants that can manufacture 16 million tons of oil products from coal annually in the next five to 10 years.

The plants will be located in coal-rich Shanxi, Shaanxi and Yunnan provinces, as well as the Inner Mongolia Autonomous Region.

According to earlier reports, Shenhua Group, the nation's largest coal producer, is building a 24.5 billion yuan (US$2.96 billion) coal liquefaction plant in Inner Mongolia, the first of its kind in the country.

(China Daily February 13, 2006)