Chinese coal-to-liquid project operated by the country’s biggest coal miner has resulted in severe environmental degradation, Greenpeace claims.
The site near the city of Ordos, owned by Shenhua, has reportedly drained 50 million tonnes of groundwater from the Haolebaoji region since its commencement in 2006.
Greenpeace, which has issued a report today, is the first international organisation to point openly to the problem of environmental degradation caused by China’s state-owned companies.
According to the report, between March and July this year, Greenpeace conducted 11 field trips to the affected region. During the trips, they sampled water and soil and found high levels of toxic chemicals in the discharged wastewater, as well as many carcinogenic compounds in sediment samples.
"Shenhua claims its coal-to-liquid project has 'low water consumption' and 'zero discharge'. Our investigation proves these claims are false," Greenpeace East Asia campaigner Deng Ping said.
"Shenhua's practices are violating Chinese water resource principles and laws controlling industrial waste water discharge."
Shenhua, whose coal-to-liquid project has a production capacity of 1.08 million tonnes a year, with plans to expand to 5 million tonnes, responded to the allegations with a promise to carry out its own investigation.
"We are taking these allegations very seriously and we will start our own investigations into the project to ensure that it meets all environment-related regulations," a spokeswoman from Shenhua Group said. "We will release our own environmental report on the project after the investigation."
Greenpeace has warned that any future expansion of the site would triple the current water demand, leading to damaging consequences.
Coal-to-liquid technology turns the traditional fuel into petrochemicals. The process has long been controversial due to its high water and energy needs but with slowing growth of coal power generation, China's coal companies are seeking new markets. More than 100 coal chemical projects are currently waiting for approval, said Li Yan, Greenpeace climate and energy manager.
"This is why we chose to stand out against a big iconic project like Shenhua coal-to-liquid at this time as it's still possible that some major decisions can be shifted because of environmental concerns."
Previously, Ordos government pointed to the Shenhua-caused damage in two notices published on its website. The decreased ground-water level was of the government’s biggest concern as it resulted in a lack of safe drinking water for residents and irrigation problems. It has also been reported that local residents initiated a petition regarding the problem.
Recently, China, having been slated for its poor environmental consciousness for many years, has finally focused on battling pollution and environmental degradation. Following widespread public protests, the country has announced cancelling its plans to build a $6bn (£3.9bn) uranium processing plant as well as several other petrochemical projects.