China Yuchai's subsidiary Guangxi Yuchai Machinery (GYMCL) has started a new project to develop and produce a full portfolio of natural gas powered engines.

The new engines will complement GYMCL's line of diesel engines used in large buses, trucks, power generators and marine engines.

The gas-powered engines are being developed in response to the Chinese government policies encouraging energy conservation and emissions reduction.

China's 12th Five-Year Plan calls for between 10%-20% of municipal buses and large trucks to be powered by gas by 2020.

Currently there are about 101 liquefied natural gas (LNG) filling stations in the country with plans to expand to 380 stations by the end of this year.

Under the new project, a new facility will be constructed at GYMCL's main facility at Yulin City, Guangxi Province, for the production of natural gas engines.

The new plant is expected to start operations in early 2013 with a production capacity of 20,000 gas engines for a wide range of vehicles.