Environmental groups: China should stop approving coal-based chemical projects with extremely high carbon emissions

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Author/Source: China Nitrogen Fertilizer and Methanol Technology Network. In order to assess the development potential of China’s coal chemical industry during the 13th Five-Year Plan period and estimate the carbon emission equivalent generated by this industry, the international environmental organization Greenpeace recently released a study titled \"Estimation of Carbon Emissions from China’s Coal Chemical Industry during the 13th Five-Year Plan Period\" (hereinafter referred to as the \"study\"). The study reviewed all currently operational, under construction, and planned coal chemical projects in China, along with their production capacity data. Using 2015 as the reference year, it predicted the amount of carbon emissions that China’s coal chemical industry would contribute to by 2020, based on three different scenarios for the development of this industry. According to the latest data released by the International Energy Agency in 2017, global carbon emissions have shown zero growth for three consecutive years, and the reduction in China’s coal consumption is the main reason behind this slowdown in global carbon emissions over those three years. Following the adoption of the Paris Agreement, China has made **significant efforts to reduce carbon emissions. However, data from the coal chemical industry indicate that if the growth of such projects is not controlled during China’s 13th Five-Year Plan period, it is likely to lead to a continued increase in carbon emissions. In order to assess the development potential of China’s coal chemical industry during the 13th Five-Year Plan period and estimate the carbon emission equivalent it might generate, the international environmental organization Greenpeace has recently released a study titled \"Estimation of Carbon Emissions from China’s Coal Chemical Industry during the 13th Five-Year Plan Period\" (hereinafter referred to as the \"Study\"). The study reviewed all currently operational, under construction, and planned coal chemical projects in China, along with their production capacity data. Using 2015 as the reference year, it predicted the amount of carbon emissions that China’s coal chemical industry would contribute to by 2020, based on three different scenarios for the development of this industry. Studies indicate that the unchecked development of the coal chemical industry over the past decade has led to overcapacity in this sector. However, even since efforts were initiated to rectify the disorder in this industry, some projects that fall outside the scope of the 13th Five-Year Plan are still under construction or about to come online. The total capacity of these projects currently far exceeds the capacity outlined in the 13th Five-Year Plan and related plans. According to the estimates, the coal chemical industry in China will account for 409 million tons of carbon emissions per year by 2020, a figure that is nearly four times higher than China’s total coal chemical carbon emissions of 90 million tons in 2015. “During the 13th Five-Year Plan period, carbon emissions from China’s coal chemical industry will continue to rise. What is the actual status of carbon emissions in this industry? The research findings show that in China’s carbon emissions in 2015, industrial emissions accounted for over 70% of the total; among these, the carbon emissions associated with coal-based chemical products in China made up around 13% of China’s industrial emissions in that year. Data shows that in 2015, the total carbon emissions from coal chemical projects in China amounted to 90 million tons. The capacity, production volume, and carbon emissions for their four main products in that year were as follows: coal-to-oil – 2.78 million tons, 1.32 million tons, and 9.06 million tons; coal-to-gas – 3.105 billion cubic meters, 1.6 billion cubic meters, and 7.68 million tons; coal-to-olefins – 7.92 million tons, 6.48 million tons, and 68.17 million tons; and coal-to-ethylene glycol – 2.12 million tons, 1.02 million tons, and 5.71 million tons. In 2015, emissions from coal-to-gas, coal-to-oil, and coal-to-ethylene glycol accounted for about 25% of the total emissions, with the remaining emissions coming primarily from coal-to-olefins. Based on the list of key projects related to coal chemical industry outlined in the 13th Five-Year Plan for Energy Development, the capacity of existing coal-to-oil and coal-to-gas projects that are already in operation or under construction in China falls within the scope of those key projects specified in the plan; this capacity is far greater than what was planned ； As for coal-based olefins and coal-based ethylene glycol, the 13th Five-Year Plan for Energy Development does not specify any production capacity plans for them. “Based on the different scales at which coal chemical projects might come online by 2020, the study estimates the carbon emissions generated by this industry by the end of the 13th Five-Year Plan period, using planning scenarios, extreme scenarios, and forecast scenarios. ”The head of Greenpeace’s project said. Under the forecast scenario, by 2020, China’s coal chemical production capacity will include, in addition to all existing projects that are already in operation, only those coal-to-oil, coal-to-gas, coal-to-olefins, and coal-to-ethylene glycol projects that meet the criteria and are currently under construction within the areas designated as key construction projects in the 13th Five-Year Plan for Energy Development. Under this scenario, the carbon emissions associated with these four types of coal chemical products will be approximately 409 million tons. Under these circumstances, coal-based olefins and coal-based oils accounted for nearly 70% of carbon emissions, while there were relatively few coal-to-gas projects; the slow pace of development reduced the chances of these projects becoming operational by 2020. Under this scenario, the carbon emissions from projects that are already in operation amount to approximately 215 million tons, while those from projects under construction amount to about 193 million tons. Under the planning scenario (that is, by 2020, the production capacity of China’s coal chemical industry’s main products such as coal-to-oil and coal-to-gas will reach the levels specified in the 13th Five-Year Plan for Energy Development, while the capacity for other products will remain at the level of existing projects), and the extreme scenario (that is, by 2020, China’s coal chemical production capacity will include not only all existing projects but also those coal-to-oil and coal-to-gas projects that are under construction or planned for construction within the areas designated for key development projects under the 13th Five-Year Plan for Energy Development, as well as projects for producing coal-based olefins and ethylene glycol), the carbon emissions generated by the coal chemical industry by 2020 could reach 301 million tons per year under a conservative estimate, and 792 million tons per year under the more extreme scenario. The official mentioned that in all three scenarios, carbon dioxide emissions from China’s coal chemical industry increased significantly compared to the level in 2015 (90.62 million tons), with the highest increase exceeding 8 times. Against the backdrop of China’s ongoing policies to reduce carbon emissions, the carbon emission intensity of the coal chemical industry continues to rise, which will undoubtedly pose obstacles and challenges to achieving China’s carbon reduction targets. Stop approving projects with extremely high carbon emission levels, such as those involving coal-based olefins. The head of Greenpeace’s project team noted that if relevant authorities do not impose restrictions on the development of coal chemical projects in China, the enforcement of policies related to coal chemistry will be severely affected in the future. In the view of the aforementioned official, carbon emissions under the forecast scenario are higher than those under the planned scenario. Since the forecast scenario includes projects that are already in operation as well as those under construction within the designated scope, the planning scenario is based on production capacities of 13 million tons for coal-to-oil and 1.7 billion m3 for coal-to-gas. This shows that, under the same conditions of operational projects, the production capacities for coal-to-oil and coal-to-gas specified in the 13th Five-Year Plan have significantly restricted the development of coal-to-oil and coal-to-gas products. However, since coal-to-olefins and coal-to-ethylene glycol products are not effectively controlled, this will lead to a rapid expansion of production capacities in the projected scenarios, resulting in increased carbon emissions. In its efforts to mitigate climate change and reduce greenhouse gas emissions, energy transition has always been one of China’s key energy policies. However, the immature process technologies in coal chemical industry and its high carbon emission profile remain among the key factors restricting its development. 2017 was a crucial year for China in establishing a national carbon trading market. To make China’s carbon market more mature and robust by 2020, the cost of carbon emissions will also be gradually taken into account in relevant policies. This is also a challenge that business owners of high-carbon-emission projects such as coal chemical industries must face. Therefore, the aforementioned official suggested that, first and foremost, since the coal chemical industry is a sector with high carbon emissions, the approval of its projects should be taken into account within China’s overall efforts to reduce carbon emissions. Secondly, when approving coal chemical projects, decision-making authorities should stop approving projects with extremely high carbon emission levels, such as those for coal-based olefins. And halt the construction of coal chemical projects outside the key construction areas specified in the 13th Five-Year Plan for Energy Development. Building on the 13th Five-Year Plan, planning for new capacity in coal chemical industry should be halted.