Investigation on China's Modern Coal Chemical Industry: Face the Challenge

Despite years of efforts, the scale, technology and equipment of China's modern coal chemical industry have made considerable progress, and the key technology level occupies the leading position in the world; however, the industry as a whole is still in the stage of upgrading and demonstration, and does not fully meet the conditions for large-scale industrialization, the level of system integration and pollution control technology need to be improved, the stability and economy of production need to be verified, and the industry standards need to be verified. The quasi-market system needs to be improved. Journalists interviewed understand that the challenges facing the development of modern coal chemical industry mainly lie in the increasing pressure of environmental protection, the impact of international oil prices, the lack of core technology and the risk of overcapacity.

In recent years, the state has implemented strict policies on the management of ecological environment and water resources. The absolute consumption of water resources and energy in modern coal chemical industry is large. The water resources and environmental capacity of the four modern coal chemical industry demonstration zones are limited. Most of the projects are located in the western region. The pressure of environmental protection is increasing. Some projects are explicitly required to discharge ultra-low exhaust gas and zero waste water when they are newly built.

"In order to meet the new requirements of environmental protection, the cost of environmental protection in coal chemical project construction investment will be greatly increased." Han Hongmei, Deputy Engineer of the Institute of Petroleum and Chemical Industry Planning, said that for example, the "zero discharge" investment of wastewater in a coal chemical project accounts for more than 10% of the total investment, and the cost of wastewater treatment per ton exceeds 34 yuan, more than five times that of the general wastewater treatment; moreover, the utilization technology of waste residue, sludge, miscellaneous salt and CO2 is still immature.

He Yongde, member of the Coal Chemical Committee of the China Petroleum and Chemical Industry Federation, told reporters that the treatment of high-concentration organic wastewater from coal chemical industry is very difficult and technology needs to be broken through. With the increasing scale of projects, carbon emissions have become a major constraint on industrial development. Carbon taxes have been introduced in Europe, and China is ready to pilot. It is reported that China, as the largest carbon emitter in the world, currently emits about 8.5 billion tons of carbon per year, of which the power generation industry accounts for more than 60% and the coal chemical industry is estimated to be less than 10%. According to the different conversion rates of carbon elements, the CO2 produced per ton of products is different, such as 5.8 tons of direct coal liquefaction, 6.1 tons of indirect coal liquefaction, 4.8 tons of natural gas from coal, 9 tons of olefins from coal and 6.8 tons of ethylene glycol from coal.

"Coal chemical engineering projects can only increase investment to meet environmental protection requirements, but it also increases production costs and reduces economy." Zhang Xiangping, director of Yulin Coal Chemical Industry Promotion Center, told reporters that coal chemical industry itself has large fixed investment, high financial costs, and also encounters high coal prices and low oil prices. When the oil price is below $60 a barrel, coal chemical industry is not competitive. According to Han Hongmei, in recent years, coal price has risen sharply, oil price has been running at a low level, while the price of coal chemical products has declined in general, which makes enterprises "squeezed at both ends". At the same time, the Environmental Protection Tax Law was formally implemented on January 1 last year, which will increase the cost of enterprises. Expert analysis shows that the influencing factors of international oil price are complex at present. If there are no special events, the operation of oil price in the lower range will become normal. Institutions predict that during the 13th Five-Year Plan period, the operating probability of domestic oil price ranges from $50 to $75 per barrel, and that modern coal chemical projects will be near the break-even point. The lack of key technologies is also one of the shortcomings of modern coal chemical industry. Although China's modern coal chemical technology is becoming more and more mature, there is a lack of downstream high value-added coal-based carbon materials and fine chemicals production technology. The industrial chain is relatively short, and there is a big gap with the world's advanced level.

China's market demand is huge, crude oil, natural gas, olefins, ethylene glycol and other dependence on imports. However, with the layout of modern coal chemical industry in succession, the repetitive construction of projects and the emergence of homogeneity, the shortage of ethylene glycol, polycarbonate and PX will be changed from shortage to supply-demand balance or even excess this year. If the ethylene glycol industry is boosted by downstream demand, the production capacity of completed projects is about 3 million tons, and the total capacity of 10 projects under construction is nearly 3 million tons. The scale of individual projects is constantly expanding. In addition, there are a large number of proposed and planned projects, with a single project size of 1.8 million tons per year. If these projects are completed on schedule, ethylene glycol will enter an era of intense cost competition. At the same time, experts believe that modern coal chemical industry belongs to the emerging demonstration industry with high investment and deserves policy support. However, the current efforts are obviously insufficient and the institutional mechanism hinders it greatly. For example, the appeal for reduction and exemption of consumption tax on coal-based oil has been fruitless for many years. The inverted price of coal-based natural gas encounters the monopoly of pipeline network, and coal-based ethanol has not entered the scope of national automotive ethanol gasoline. These issues also need to be resolved through unified deployment at the national level.