A project to convert coal into oil in the north-western Chinese region of Ningxia, the biggest plant of its kind in the world, delivered its first shipment of products on Wednesday, the official China Daily reported.
The coal-to-liquid (CTL) project, which has an annual production capacity of 4 million tonnes of oil, was built by the Shenhua Ningxia Coal Industry Group, a subsidiary of China's biggest coal producer, the Shenhua Group.
It took 39 months to build and cost 44 billion yuan ($6.33 billion), China Daily said on Thursday.
The controversial plant was first mooted in 2006 and involved the South African energy conglomerate Sasol. However, the firm pulled out in 2012 after the plant had still not been approved by regulators.
Coal-to-oil technology rose to prominence in China due to soaring global oil prices, but regulators suspended all new projects in 2008 after oil prices retreated and concerns were raised about its feasibility.
Government experts also expressed concern about the deployment of a highly water-intensive technology in some of China's most arid regions, including Ningxia.
According to new guidelines issued last year, CTL plants in China are permitted to use a maximum of 3.7 tonnes of coal for each tonne of oil produced, and they should prioritise the use of low-quality coals in order to reduce their use elsewhere.
The Shenhua Group launched its first CTL project in Inner Mongolia in 2010. The firm aims to boost total capacity at the Ningxia plant to 11 million tonnes a year by 2020.