China will invest more than 1 trillion yuan (US$128 billion) in the development of the nation's coal chemical industry by 2020, according to the National Development and Reform Commission (NDRC).

A coal yard worker shovels of coal onto the back of a truck in Ningan, Heilongjiang Province. [Bloomberg News]

The nation will focus on the production of liquefied coal, dimethyl ether (DME), coal-to-olefin (CTO) and coal methanol, according to a draft of the medium- and long-term plan for the development of China's coal chemical industry.

China plans to build seven coal chemical bases by 2020, according to the draft.

The seven bases are the middle and lower reaches of the Yellow River, the eastern Inner Mongolia Autonomous Region, eastern Heilongjiang Province, Jiangsu, Shandong, Henan and Anhui provinces, central China, Yunnan, Guizhou and the Xinjiang Uygur Autonomous Region.

According to the draft China plans to produce 30 million tons of liquefied coal and 20 million tons of DME by 2020.

The nation also aims to produce 8 million tons of CTO and 66 million tons of coal methanol by that year.

In addition, production of traditional coal chemical industries such as calcium carbide and coke that have witnessed overcapacity will be kept under control.

"The big investment in the coal chemical industry will help to satisfy the country's ever-increasing energy demand," said Han Wenke, director of Energy Research Institute of the NDRC.

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