Tuesday, March 17, 2026

South China Morning Post - China energy security EconomyChina Economy Unlimited petrol? Chinese firm claims it can produce fuel from air and water - Published: 6:00pm, 17 Mar 2026Updated: 6:09pm, 17 Mar 2026

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Unlimited petrol? Chinese firm claims it can produce fuel from air and water

The start-up plans to build ‘large-scale’ facilities to convert carbon dioxide into synthetic fuel, though some question its commercial feasibility

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Employees inspect equipment at a petrochemical refinery in northeast China’s Heilongjiang province. China is exploring alternatives to fossil fuels as part of an effort to reduce its reliance on imported crude oil. Photo: VCG
Mandy Zuoin ShanghaiandMia Nurmamatin Hong Kong

A Shanghai-based start-up claims to have mastered a technique for producing synthetic petroleum at low cost from air and water, as China intensifies efforts to develop alternatives to traditional fossil fuels amid the US-Israel war against Iran.

Carbonology announced it had created a process for converting carbon dioxide extracted from air and water into artificial fuel using solar and wind energy, Chinese media outlet Cailianshe reported on Tuesday.

The company – co-founded by a former vice-president at Tesla in 2024 – said it had achieved sufficient cost reductions to sell synthetic petrol, diesel, jet fuel and naphtha at market-competitive prices, according to the report.

Now, the firm is “preparing” to roll out “large-scale production capacity in China”, the report added.

During a phone interview, a member of staff at Carbonology confirmed the report was accurate but declined to provide further details.

Carbonology is among a wave of Chinese firms exploring the potential for technologies that capture carbon dioxide from the air – an industry that is maturing but still faces scepticism from some experts.

Direct air capture (DAC) techniques have moved from laboratory curiosity to reality over the past decade, but most of the captured greenhouse gases have so far ended up being stored underground rather than converted to fuel.

Mandy Zuo
Mandy joined the SCMP in 2010 and has been 
reporting on China news ever since. She has covered a range of areas including China policies, economy and society news.
Mia Nurmamat
Mia Nurmamat (previously bylined as Mia 
Nulimaimaiti) joined the Post in August 2022. She 
holds a master’s degree from the University of Hong Kong and a bachelor’s from Fudan University. She interned at NBC's Asia desk before joining the Post. Her areas of focus are trade and macroeconomics.

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