(Yicai) March 7 -- Chinese chemicals giant Junzheng Energy & Chemical Group plans to make its business greener by spending CNY19.4 billion (USD2.7 billion) building a production facility that will run on renewable energy.

Junzheng will build a more than 4 gigawatts solar and wind power station in Alxa League in Inner Mongolia Autonomous Region, a northwestern area rich in renewable energy sources, the Wuhai-based company announced yesterday, citing a deal signed with the local government.

The power station will provide energy to a new chemical plant with planned annual output of 1.5 billion normal cubic meters of green hydrogen and 50,000 tons of green synthetic ammonia, the firm added.

The project will be completed in two phases. The first, costing CNY2.5 billion (USD342 million), will include a 480,000 kilowatt solar and wind power station and a plant that can turn out 81 million normal cubic meters of green hydrogen, 300,000 tons of green methanol, and 600,000 tons of green synthetic ammonia a year. The second phase will add the remaining capacity.

The chemicals business contributed 45 percent to Junzheng’s operating income in 2023, with 39 percent coming from chemical product logistics services. Its other relatively large revenue sources were ferroalloy smelting and coal-fired power production.

The company initiated its green shift in 2023, when it started building a 450 megawatt photovoltaic project, according to its latest annual financial report.

Junzheng’s shares [SHA: 601216] closed down 0.8 percent at CNY5.91 (82 US cents) each in Shanghai today, after gaining as much as 2.3 percent in morning trading.

Editor: Futura Costaglione