China has a reputation for relying on heavily polluting energy sources, such as coal. But efforts by innovative Chinese companies are under way to convert the country’s abundant coal supplies into sources of cleaner energy. One of these companies is the privately held ENN Group, better known in China for its subsidiary XinAo Gas, which is listed in Hong Kong. The chairman of ENN, Wang Yusuo, founded the company in 1989 as one of the country’s first natural-gas distributors; its debut project was piping gas to the city of Langfang, in Hebei Province. ENN, which now has more than 20,000 employees, supplies natural gas to more than 40 million people in nearly 70 cities in China and liquefied natural gas to filling stations in more than 20 Chinese cities.

Wang has ambitions for ENN beyond the distribution of natural gas. The company’s clean-coal process involves gasifying coal and then turning the product into dimethyl ether, which can be used not only for fuel in power plants, household cooking, and vehicles but also as raw material for chemical products. One of its advantages is that it generates no sulfur dioxide or soot when burned. Wang says the company is exploring ways...