China to make 4 mln ton DME annually for auto use

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Shanghai, October 8, 2008 (Gasgoo.com) China's projects of producing dimethyl ether (DME) as an alternative energy for automobiles will have a combined annual capacity of four million tonnes by 2010, said Jiefang Daily today, citing sources from a DME forum in Shanghai. DME makers are waiting for the government to issue regulations and permissions for making the new energy.

XinAo Gas Holdings Limited, currently a leading Chinese company in producing DME, has established its industry chain of converting coal to methanol fuel to dimethyl ether. This coal-based process is much cheaper and easier than producing DME out of natural gas and can make good use of China's rich coal resources. Therefore, the price of DME as a new clean energy for vehicles in China will be little affected by the erratic global oil price.

DME is an ideal clean-burning alternative to liquefied petroleum gas (LPG), liquid natural gas, diesel and gasoline, and it can also be mixed with LPG for auto use. The trial run of DME-powered vehicles in many Chinese cities has proved a great success. In Shanghai, DME buses have been in service in the line of Bus 147 and two DME filling stations have been built. More and more vehicles, especially urban buses, are expected to use DME as their new energy.

Many DME projects have emerged in China and more are on the way. They will be able to produce four million tonnes of DME fuel altogether each year by 2010, an industry expert said. However, the DME is now used on a trial basis as an alternative energy for vehicles. For this new clean fuel to be mass produced, the Chinese government has to come up with relevant regulations and give green light to the domestic DME companies.

China is to start construction of its largest DME project with an annual output of three million tons to reduce rising oil consumption. Located in Ordos city of north China's energy-rich Inner Mongolia Autonomous Region, the project will cost 21 billion yuan ($3.07 billion), the Shanghai Securities News reported in August.

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