North China's Shanxi province has announced details of the source, use and management of a 10 billion yuan ($1.52billion) investment fund it will establish for the clean utilization of coal.

The fund will be mainly used in the transformation of the coal industry in Shanxi, in areas such as coal-electricity integration, the coal chemical industry, coalbed methane drainage and utilization, carbon trading and emission reductions, and carbon capture and sequestration.

Chen Yongwei, a fund manager of Shenzhen Capital Group Co's Shanxi branch, said the clean and efficient use of coal is fundamental for the transformation and upgrading of the coal industry, and this move is an important measure to realize that goal.

As a major part of Shanxi's coal supply-side structural reform, the technological research and development will focus on highly efficient use of clean coal. Innovations are needed in the coal-based low-carbon projects and in the coal deep processing industry.

Money is the key enabling coal enterprises to do research and development, and to innovate. The establishment of the fund can consequently help their industrial development. To better use the fund, Chen said it should be operated in a market-oriented way with professional management, making the most use of government money and social capital.

The fund management company will call for bids across China.