How can coal-to-oil technology unlock opportunities for growth?

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This post was last edited by liaifeng on 2018-8-5 at 10:57. How can coal-to-oil production unlock new opportunities for growth? Author/Source: Date: 2017-11-14. Views: 3. Two recently released developments have sent a chill through coal-to-oil companies. One news item is that 15 departments including the National Development and Reform Commission and the Energy Administration have jointly issued the \"Implementation Plan for Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol-based Gasoline in Vehicles\", which stipulates that by 2020, ethanol-based gasoline will be available throughout the country ； Another point is that Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, publicly stated that from technical and environmental perspectives, it is inevitable to gradually cease the production and sale of traditional fuel vehicles. This makes the future prospects for coal-to-oil companies, which are already facing difficulties, even more uncertain. Looking back at the development history of coal-to-oil technology, the most important driving force behind it has been to overcome the challenges posed by high oil prices to China’s refining industry, reduce dependence on imports, and ensure international energy security. Yet the unpredictable international market played a trick on them: just as the coal-to-oil projects, for which companies had invested heavily, began operations, international oil prices plummeted sharply, leaving these projects in a difficult situation. Meanwhile, the development of new energy vehicles is advancing at a rapid pace, with electric vehicles showing strong potential to become the dominant force in the automotive industry ； Ethanol gasoline has also secured a place for itself after more than a decade of development ； Hydrogen-powered vehicles are catching up rapidly. The diversification of energy sources for transportation is gradually undermining the foundation for the development of coal-to-oil production. Faced with the new challenges brought about by the new market environment and industrial policies, it is necessary to reconsider what will become of coal-to-oil projects. In recent interviews, several industry experts have said that there have been many changes in the market and policy environments, and the focus of coal-to-oil development should be adjusted accordingly. High-endization and refinement have become the best ways for the coal-to-oil industry to overcome its current challenges and open up new avenues for growth. Li Shousheng, president of the China Petroleum and Chemical Industry Federation, said that there is still significant room for the development of coal-to-oil projects in our country, which is evident in two aspects. On the one hand, with the demand for special fuels in our country and the increasingly stringent requirements for fuel upgrading, the advantages of coal-to-oil products will be further highlighted. Direct coal liquefaction can produce oils that are difficult to manufacture through petrochemical methods, especially those suitable for use in military and civilian aircraft, rockets, as well as special armored vehicles, thereby meeting China’s growing demand for such specialty oils. Coal indirect liquefaction oil products feature a high cetane number and extremely high cleanliness, making them suitable as **clean fuels and components for oil upgrading and blending. Coal-to-oil enterprises should, based on the characteristics of the reaction product distribution, focus on developing production technologies for ultra-clean gasoline and diesel, as well as special fuels such as military diesel, high-density aviation kerosene, and rocket fuel. To date, Shenhua Group has completed test flights of coal directly liquefied fuels as well as tests of rocket engines, achieving satisfactory results. On the other hand, our country has a huge and constant demand for clean fuels, natural gas, and petrochemical raw materials. Developing coal-to-oil technology can supply high-quality clean fuels and enable a diversified source of raw materials for finished oils. At the same time, in China’s petrochemical industry, the degree of dependence on imports for basic petrochemical products such as ethylene, p-xylene, polyethylene, ethylene glycol, and styrene ranges from 30% to 60%, and there will still be a significant market gap during the 13th Five-Year Plan period. Coal-to-oil projects need to extend downstream, where they can play a significant role in addressing the supply shortages in the petrochemical industry. “The true direction for the development of coal-to-oil technology is specialty oils and high-end oils. Such oils are difficult to obtain through petroleum routes. Coal-to-oil products feature ultra-low sulfur content, low aromatic compounds, high cetane number, and low ash content – all of which exceed the requirements of China’s National V and Europe’s Euro V standards. They represent an effective means of reducing urban vehicle exhaust pollution and smog. Moreover, the synthetic oils produced through indirect coal-to-oil projects have controllable parameters and quality, offering advantages over the petroleum-based route; they facilitate the upgrading of oil products in China and can meet the special requirements of fields such as military industry, aerospace, and high-end manufacturing for high energy density, high oxygen content, and low freezing points. From this perspective, fuel ethanol and new energy vehicles have a limited impact on coal-to-oil production. ”**said Li Ye, Director of Regulation at the Energy Bureau. Wang Jiming, an academician of the Chinese Academy of Engineering, put forward some specific suggestions for the development of coal-to-oil technology. He believes that the development of the coal-to-oil industry should not focus on scale expansion; rather, while carrying out upgrading demonstrations, efforts should be made to address the key common technologies and major equipment that hinder the industry’s progress through scientific and technological research. Through systematic optimization, technological advancements, and intelligent upgrades, water and energy consumption can be significantly reduced, the conversion efficiency of coal can be improved, and the sophistication and economic viability of such projects can be enhanced. The product portfolio should be shifted toward specialty oils and fine chemicals, rather than engaging in direct competition with ordinary transportation fuel oils.