SHANGHAI, July 26 -- China may soon issue policies to encourage a clean coal technology in power plants to cut pollution and improve efficiency, according to industry and company officials.

Integrated gasification combined cycle, or IGCC - gasifies coal and removes impurities from the coal gas before it is burned. It's considered one of the most environmentally friendly processes.

But high costs are the main hurdle for developing IGCC in China, said a director at the industry department of the National Development and Reform Commission. Power generated from IGCC plants generally costs 20 percent to 25 percent more than from ordinary plants.

"China's know-how in IGCC has lagged behind. A lower ratio of localization in IGCC design and construction is supporting higher costs," the NDRC official said. "We must map out unified industry standards to pave the way for large-scale use."

Compared with traditional coal-fired power plants, IGCC plants produce power from coal by emitting 93 percent less sulfur, 75 percent less nitrogen oxide and 33 percent less solid particulates, as well as consuming 30 percent less water, according to General Electric, a leader in IGCC technology.

"IGCC technology provides a cleaner, economical solution for coal-fired power generation, and I think China will issue an encouraging policy soon," said Jack Wen, president of GE Energy China. "If you take environmental and social issues into account, IGCC power plants can pay off. Government support is crucial to successful commercialization," Wen said.