HOHHOT, June 14 (Xinhua) -- China is developing new energy sources by converting coal into diesel.

The world's first coal to diesel conversion production line, in China's Inner Mongolia Autonomous Region, produced 860,000 tonnes of diesel last year.

Coals entering the production line can be converted into diesel in just 24 hours. The core technology was developed by Shenhua Group, China's largest coal enterprise. The production line has achieved a steady output since its establishment in 2008.

"The diesel we produce has much lower quantities of sulphur content, and will not freeze even at minus 60 degrees Celsius. It has better qualities than ordinary diesel," said Hu Qingbin, deputy general engineer of the Inner Mongolia-based coal-to-oil subsidiary of Shenhua.

According to Hu, 3.5 tonnes of coal can generate one tonne of diesel, and when the price of diesel is at about 50 U.S. dollars per barrel the company could achieve a profit and loss balance.

China is rich in coal deposits while short in petroleum and gas. In 2017, China imported more than 400 million tonnes of petroleum and 94.6 billion cubic meters of gas, and the volume is expected to rise in the future.

However, the heavy use of coal will cause environmental problems.

"China's energy resource structure has determined the importance of the clean use of coal," said Wang Limin, deputy director of the economic and information commission of Ordos City.

The Inner Mongolia Yitai Group Co., Ltd. was one of the earliest coal enterprises in China to experiment with coal-to-oil conversion. The company has developed an indirect coal liquefaction technology and built a pilot project with an annual output of 160,000 tonnes during the past 10 years.

Shenhua enhanced the technology based on Yitai's success and has built several indirect coal-to-oil production projects with capacity of millions of tonnes.

Yet as technology improves, China remains cautious about the development of coal liquefaction.

"Now we are still at the trial period, which means that each project will go through a very strict approval process," said Zhang Donghai, chairman of the board of Yitai Group.

Every coal-to-oil project has a supporting sewage treatment plant built to minimize the industry's damage to the environment.

"Meanwhile, water consumption during coal-to-oil conversion has more than halved to 6 tonnes per tonne of oil," said an engineer with Yitai Group.

"Innovation has accelerated the development of China's clean use of coal," said Hu Qingbin of Shenhua. "And this will hopefully promote the clean use of coal in the world and benefit mankind in the long run."