Shandong’s first project to refine oil from tires will be set up in Qingdao and the diesel is expected to be on market next year.

The Qingdao Fuanbo Eco-Friendly Power Co. Ltd., which is under the Qingdao Fresh Biological Energy Technology Co. Ltd., will jointly spend US$30 million with a South Korean company. Ten production lines will be imported from South Korea this year.

The project can process 100,000 tons of scrap tires to produce 40,000 tons of diesel oil every year.

The refinery, which will be located in Jiangshan Industrial Park in Laixi, will cover 13.33 hectares and construction will start in July. The 10 production lines will be installed from the beginning of December and production will start at the end of the year. The quality of the diesel is expected to meet the national standards.

The two companies will also build a base to produce refinery equipment in Laixi.

Technology for refining oil from scrap tire is well-developed in foreign countries, but is relatively new to China.