Energy officials in North China's Shanxi province are considering creating a coal chemical base to turn the fossil fuel into clean energy after heavy smog blanketing the country looks set to affect the use of the raw material, officials said.

"As air quality keeps deteriorating in most regions of China, Shanxi must advance the establishment of the coal chemical modernization base in the province's northern area. The move will increase the province's supply of coal-transformed gas and oil to the rest of the country rather than just coal or coal-generated power.

"Meanwhile, the base will make full use of lean coal, which used to be waste. All in all, the move will play a very significant part in easing air pollution through providing clean energy to North China," Zhu Xiaoming, director of the province's State-owned Assets Supervision and Administration Commission, said during a panel discussion at the 12th National People's Congress.

The coal-rich province has long been a major energy supplier to neighboring regions including Beijing, Tianjin and Hebei province in North China. Coal output and reserves accounted for about a quarter of the country's total. The fossil fuel topped China's energy profile as the country rose to become the world's second-largest economy.

"We may not change China's coal-dominated energy structure in the short term but we can make the energy cleaner and more efficient," said Li Jinping, chairman of the board of Lu'an Group in Shanxi province.

Zhu added the coal resource was not made full use of in the province and non-coal industries in the province were not sufficiently promoted.

"The changes in China's coal market and the consumption structure both signal an urgent transformation in the province's coal industry," Zhu said.

He added the base for coal chemical modernization in the province's north will expand output from coal to gas, oil, hydrocarbons and other processed products. Conditions are said to be perfect for setting up the base. The province's north has a coal reserve of 95 billion tons, making it a leading coal base in China. The reserve centers on lean coal, an ideal material for coal gasification. The output of lean coal can exceed 200 million tons per year by the end of 2015, officials say. Large areas of unoccupied land and massive water supplies, crucial to coal processing, are also available.

Once established, each year the base will produce 30 billion cubic meters of coal gas, 6 million tons of coal-liquefied oil, 1.2 million tons of coal-converted olefin (a synthetic fiber made from a polyolefin, such as polypropylene or polyethylene used in wallpaper, ropes and vehicle interiors) and 1 million tons of coal-converted ethylene glycol, according to the province's deputies to the congress, who asked for the central government's approval for the base.

Premier Li Keqiang said in a Friday discussion with the province's deputies that the energy hub should develop new advantages based on the traditional industry and promote clean energy, which will help improve the quality and efficiency of the province's economy.

The premier said in a government work report delivered on March 5 that China will take strong measures to strengthen pollution prevention and control, including raising energy efficiency. The government will also improve energy production and use, including stepping up energy conservation and the reduction of emissions as well as imposing a ceiling on total energy consumption.