HOHHOT - Work began on indirect coal-to-liquid (CTL) project with an annual output of 2 million tons in North China's Inner Mongolia autonomous region.

The indirect coal liquefaction line is located in Zhungeer county in Ordos City. It is operated by Inner Mongolia Yitai Group Co Ltd, a private firm.

At a cost of 29 billion yuan ($4.2 billion), it is expected to produce 2.15 million tons of oil products each year, including diesel, naphtha, liquefied petroleum gas and liquefied natural gas.

As part of its clean energy strategy, China has launched a number of direct or indirect coal liquefaction and coal gasification projects in Inner Mongolia, Shaanxi, Ningxia, Xinjiang and Liaoning in recent years.

At the end of last year, the world's biggest single CTL project, undertaken by a subsidiary of the state-owned Shenhua Group, went into production in northwest China's Ningxia Hui Autonomous Region. It is able to turn more than 20 million tons of coal to 4 million tons of oil products annually.

According to a report by China Petroleum and Chemical Industry Federation, China's coal-to-liquid efficiency increased by 20.4 percentage points last year. In 2017, the total production capacity will grow by 3 million tons.