China Energy Group begins full operations at coal-to-liquids plant
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China Energy Group Ningxia Coal Industry Co Ltd commenced full operations at the world’s largest coal-to-liquids plant in China’s Ningxia Hui autonomous region. The facility processed 24 million tonnes of coal in 2025, utilizing indirect coal liquefaction to produce rocket fuel and machine lubricants. The operational shift was driven by rising international oil prices exceeding US$100 per barrel following the blockage of the Strait of Hormuz during the US-Israel war on Iran.
Consequences
The plant’s operations allow China to leverage its abundant coal reserves to reduce dependence on imported crude oil. By increasing the value of coal sevenfold, the project provides substantial economic returns and serves as a strategic hedge against external oil supply disruptions.
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