FORM 3
        
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

SLS Holdings III, LLC

2. Date of Event Requiring Statement (MM/DD/YYYY)
9/14/2010 

3. Issuer Name and Ticker or Trading Symbol

China New Energy Group CO [CNER]

(Last)        (First)        (Middle)

445 PARK AVENUE, SUITE 1901

4. Relationship of Reporting Person(s) to Issuer (Check all applicable)

_____ Director                            ___ X ___ 10% Owner
_____ Officer (give title below)          _____ Other (specify below)

(Street)

NEW YORK, NY 10022       

(City)              (State)              (Zip)
5. If Amendment, Date Original Filed (MM/DD/YYYY)

 

6. Individual or Joint/Group Filing (Check Applicable Line)

_ X _ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person


Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security
(Instr. 4) 		2. Amount of Securities Beneficially Owned
(Instr. 4) 		3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5) 		4. Nature of Indirect Beneficial Ownership
(Instr. 5)

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 4) 		2. Date Exercisable and Expiration Date
(MM/DD/YYYY) 		3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4) 		4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5) 		6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
Convertible Promissory Note   10/15/2010   10/15/2010   Series C Convertible Preferred Stock   1.67   (2) (3)   (2) (3) D    
Series C Convertible Preferred Stock     (1)   (4) Common Stock   62314766.385     (5) D    
Series D Convertible Preferred Stock     (5)   (5) Common Stock     (5) (6) (7)   (6) (7) D    

Explanation of Responses:
( 1)  Immediately.
( 2)  In the event the Issuer repays the original principal amount in full by October 15, 2010, the holder will be issued 1.67 shares of the Issuer's Series C Convertible Preferred Stock. In the event the Issuer does not repay the original principal amount in full by October 15, 2010, the Convertible Promissory Note will automatically convert into 3.75 shares of Series C Convertible Preferred Stock.
( 3)  The Issuer's Series C Convertible Preferred Stock currently converts on a 1-for-5,647,011 basis.
( 4)  The Series C Convertible Preferred Stock automatically converts into Common Stock upon the earlier of: (i) May 31, 2011 or (ii) the Issuer's acquisition of at least 70% of the equity interests in Beijing Century Dadi Gas Engineering Co., Ltd.
( 5)  The one share of Series D Convertible Preferred Stock held by the Reporting Person automatically converts into Common Stock immediately after the conversion of all Series C Convertible Preferred Stock and upon the latest to occur of: (i) May 31, 2011 or (ii) the date upon which the Company's completes the acquisition of at least 70% of the equity interests in Beijing Century Dadi Gas Engineering Co., Ltd.
( 6)  The number of shares of the Issuer's Common Stock issuable upon conversion of each share of Series D Convertible Preferred Stock is equal to: (219,605,986*(.72/.28) - A - B)/4, whereby A is equal to the number of shares of Common Stock into which the Series C Convertible Preferred Stock may be converted on the date the Series C Convertible Preferred Stock is issued (the "Issuance Date") plus any shares of Common Stock into which shares of Series C Convertible Preferred Stock which may be converted upon conversion of any convertible promissory notes convertible into such stock outstanding on the Issuance Date, and (cont'd in footnote #7)
( 7)  (cont'd from footnote #6) whereby B is equal to the number of shares of Common Stock, plus the number of shares of Common Stock into which any convertible preferred stock, debt or other convertible securities are convertible, issued to new investors between October 1, 2010 and April 30, 2011, which result in gross proceeds to the Issuer which do not exceed $54,500,000.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
SLS Holdings III, LLC
445 PARK AVENUE, SUITE 1901
NEW YORK, NY 10022
X


Signatures
/s/ Andrew Comito, Authorized Representative of SLS Holdings III, LLC 10/5/2010
** Signature of Reporting Person Date


Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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