A chemical company in Shanghai has started producing an alternative fuel that could save hundreds of millions of dollars a year if used to power the cityÂ’s entire fleet of diesel buses. Bus engines must be refit before they can use the fuel, however. Shanghai Coking & Chemical Corp, a unit of domestic chemical leader Shanghai Huayi Group, put its 5,000-tonne-per-year dimethyl ether plant into operation earlier this week.Dimethyl ether, or DME, is a clean-burning alternative to liquefied petroleum gas, liquefied natural gas, diesel and gasoline. It can be made from natural gas, coal or biological organisms. Market experts say that the new fuel can be profitably produced provided crude oil prices remain above US$40 per barrel. Currently global oil prices are around US$72 a barrel, almost triple 2002 prices. DME costs about $123 less per tonne than diesel fuel. The new fuel could help ShanghaiÂ’s diesel bus operators save more than 300 million yuan per annum. Around 15,000 of ShanghaiÂ’s 19,000 buses are diesel-powered.
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