The world's newest carbon citadel rises up between the blasted deserts of Inner Mongolia and the coal-black lands of Shaanxi province.

Ordos is a city that few outside China know. But the future of global warming looks increasingly more likely to be set in industrial powerhouses like this than in the negotiating halls of Copenhagen.

While the world's countries struggle to reach a treaty to defeat climate change, Chinese miners and scientists here are ramping up production and finding new ways to burn and bury carbon that will shape the policies of the world's biggest polluting nation.

Ordos is the new face of coal in China. It is home to the world's biggest coal company and an industrial-scale experiment to turn coal into diesel that could create a major new source of greenhouse gases. At the same time, it hosts the planet's most efficient mine and one of China's biggest carbon capture and storage projects, which buries the gases blamed for global warming.

China's emissions will be high on the agenda when China's president, Hu Jintao, meets Barack Obama on Tuesday. The summit brings together the two countries that together account for 40% of the world's greenhouse gases.

China is trying to use science to clean up and expand coal production, which is good news for the local environment but potentially disastrous for the planet's climate. Both trends are apparent at Ordos. The discovery of extensive coal and gas deposits has turned this outpost into a boom town.

The past and future of coal are apparent at the district's southern border.

On one side of the Huojitu river is the traditional mining region of Shaanxi province. Dirty, inefficient and dangerous, this is the face of Chinese coal that the outside world has grown used to.

At the small Bandingliang colliery, the pit has been dug so far into the hillside that truck drivers take 30 minutes to reach the coalface, fill up and return with their load.

"We drill holes," said Zhao Zhaoguo, a migrant from Henan province on his way down the shaft. "We stuff explosive inside, then a detonator. We set it off, and then, 'voom' - there's a big bang."

Such techniques have made China's mines the deadliest and most inefficient in the world, But they are changing.

Prompted by President Hu Jintao's drive for "scientific development", the government is on a drive to reduce waste, improve safety and boost productivity. Many small private collieries in the area have been shut down. Managers at Bandingliang say they have been given a choice of modernisation or closure. Next door, work is under way on a new mine that will have new equipment and more than twice the production capacity.

"In the future all we will have to do is press a button, and the coal will just come up by itself," said Mr. Zhao.

That vision is closest to coming true just a few kilometres away in Inner Mongolia, now the number one region for coal production in China.

Heavy industry has followed the fuel. That trend and the low population density have given Inner Mongolia the highest per capita carbon dioxide emissions in China.

But much of the industry here is more modern, efficient and "clean" than that of China's old rustbelt cities. Shenhua, the world's biggest coal company, runs several mega-mines in the region, the most advanced of which is the fully automated Shangwan pit, which produces more than 1mn tonnes of coal a month with just 300 workers. On the outside at least, the state-owned company's pit resembles a garden.

The Communist party mine secretary, Wang Tianliang, is proud. "In this mechanised working face, this single shaft and single face ranks No 1 in China ... in the world we are No 1," he says. "In more than 3,000 days of operation, we have not had a deadly accident."

We drive 10 kilometres to the pit face, 355 metres below the surface. The tunnel is wider and cleaner than the London Underground. There are just a handful of miners at our destination. They work with remote control devices that change the direction, position and speed of a German-made cutting machine that slices back and forth along a 300-metre-wide coal face.

Hydraulic supports keep the tunnel stable until the cutters have moved on.

The Shangwan mine plans to almost double its output by 2015. Carriages from Shangwan - each containing 60 to 80 tonnes of coal - are hauled off by powerful engines towards other mines, where more cargo is added. At peak times, snakes of 200-carriage trains pass every 10 minutes on single rails through northern China, en route to ports and major power plants on the wealthy eastern seaboard.

At the end of the line, the way coal is burned is changing too. Dirty old steel factories are being upgraded or relocated. To reduce smog, the low chimneys of small thermal power generators are being replaced by the towering smokestacks of more efficient "supercritical" plants. Although China is notoriously building a new coal-fired plant each week, most of them are more efficient than facilities in the UK. They are also better

equipped to remove sulphur dioxide and other noxious gases.

But almost none of them remove carbon dioxide. The result is that local air pollution is finally easing in many places but emissions of greenhouse gases into the planet's atmosphere are increasing.

The pattern could change again, but not necessarily for the better.

Beijing's leaders acknowledge the need to tackle climate change, but their priority is energy security. With oil prices high, China's policymakers are hedging their bets by investing in one of the world's most controversial

fuels: coal diesel.

Shenhua is once again at the forefront of development. Last year, the company launched a pilot that uses an advanced technique on a scale never seen before in the world. In its first 12 months, the experimental

liquefaction facility in Ordos expects to produce more than a million tonnes of vehicle fuel.

China has launched two major coal-to-liquid projects. One, in Ningxia, is a tie-up with SASOL that uses the South African firm's gasification methods. The Guardian is the first western media organisation to visit the other facility, in Ordos, which pioneers a direct liquefaction technique that "cracks" carbon with hydrogen extracted from water to produce clear diesel.

Shenhua hopes to expand production fivefold, largely using coal from the nearby Shangwan mine. The main driver is cost. Shu Geping, the chief engineer at the plant, says the price of liquid coal is competitive when the cost of oil is over $40 a barrel. In the future, as production increases and the technology is improved, it will become even cheaper.

Environmental concerns will weigh against these economic benefits. On the surface, the plant is impressively clean. There is no smell and in the glow of an Inner Mongolian sunset, white and pink smoke billows from its pipes.

But for each tonne of the liquid, six and a half tonnes of water must be piped from an aquifer more than 70 kilometres away and more than three tonnes of carbon dioxide are released into the air. These are concerns for a country that is already desperately short of water and increasingly criticised as the world's biggest emitter of greenhouse gases.

Government researchers have been cautious about adopting this technology nationwide because liquid coal results in 50% to 100% more emissions than a comparable amount of oil.

The prospect of millions of petrol tanks being filled with such a fuel has alarmed environmentalist groups. "Developing this technology on a big scale will lock China up even further in its unsustainable reliance on

coal, which is the biggest cause of climate change," said Yang Ailun, of Greenpeace.

Last year, the government blocked several new proposals for coal liquefaction facilities. But this may be to ensure the monopoly of the state firm. In the long term strategic concerns may ensure a future for liquefaction.

Shu insists his new facility can be good for the environment because it is equipped to capture and condense carbon dioxide for possible storage.

Next year, the facility will begin one of China's most ambitious carbon capture and sequestration research programmes. In a US-backed project, it will store 100,000 tonnes of carbon dioxide annually in a nearby saline aquifer.

A successful pilot could pave the way for a wider scale adoption of the technology that many believe is of global importance. Beijing's policymakers believe dumping carbon underground is expensive and risky for local environments. But under foreign pressure, they have identified more than 100 sites for potential storage.

Ordos will lead the way, but it remains to be seen whether its scientists will be as successful with carbon storage as they have been with coal liquefaction.

Copyright: Guardian News & Media 2009