Auckland-based clean tech darling LanzaTech is continuing to advance its operations in China.

The company has signed a memorandum of understanding with Henan Coal and Chemical Industrial Corporation, one of China’s largest coal producers.

The deal, believed to be the first coal to biological fuel project in the world, will use coal gasification technology and LanzaTech’s biological fermentation process to produce ethanol fuels and chemical products.

Lanzatech has also signed a letter of intent supported by the Chinese Academy of Science (CAS) to establish a bio energy research centre.

The centre will further the development, pilot production and commercialisation of products from coal derived synthesis gas.

In July, Lanzatech signed a letter of intent with CAS and Baosteel, China’s largest steel and iron factory, to help develop a similar demonstration plant using steel mill gases.

The two facilities, which are separate, are both due to be completed in the second half of 2011.

Both applications will help industry cut back on emissions intensity.

The Baosteel application uses gases produced as a by-product from steel mills, which means more value produced from the same feedstock.

The Henan application will allow the company to ferment its synthetic gas into ethanol as an alternative to burning it to produce electricity and methanol - and emissions.

Henan Coal and Chemical Industrial Corporation ranked as the second largest coal company in China last year and is the biggest company converting coal to syngas in Asia.