12th Five-Year Development Plan for the Soda Ash Industry

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Our country is a major producer of soda ash, and its output has consistently ranked first in the world for many years. The development of the soda ash industry has played an important role in promoting the growth of the national economy. However, in recent years, the rapid development of industries such as real estate and flat glass has significantly increased the demand for soda ash, leading to a swift expansion of its production capacity. To ensure the sustainable, healthy, and stable development of the soda ash industry, this plan has been formulated based on the actual conditions of the industry. I. Current Situation and Development Trends of the Industry (1) Current Situation of the Industry As of the end of 2010, there were 44 soda ash manufacturing enterprises in China. Among them, 14 enterprises had a production capacity of 600,000 tons per year or more (9 enterprises had a capacity between 300,000 and 600,000 tons per year, and 21 enterprises had a capacity of less than 300,000 tons per year). The combined production capacity of the top 10 soda ash manufacturers accounted for 62% of the total national capacity. “During the 11th Five-Year Plan period, China’s soda ash production capacity increased by about 9.4% on an annual average. By the end of 2010, China’s soda ash production capacity had reached 24.3 million tons, accounting for about 41% of the world’s total capacity. In 2010, China’s soda ash production was 20.47 million tons, accounting for about 42% of the world’s total production. (II) Problems and constraints in the soda ash industry 1. Excessive capacity growth leading to an oversupply in the market. During the 11th Five-Year Plan period, China’s soda ash production capacity expanded at a rapid pace. With the addition of new production capacity and intensified competition, market prices experienced greater volatility, resulting in a significant decline in the economic efficiency of the soda ash industry. The sudden financial crisis in the second half of 2008 exacerbated the difficult situation in this industry, causing sharp fluctuations in soda ash prices. Affected by the financial crisis, demand in the downstream sector was weak in 2009, and soda ash prices dropped to their lowest levels, resulting in losses across the entire industry. In 2010, the domestic economy stabilized and began to recover, leading to an increase in market demand. As a result, soda ash production rose rapidly, and domestic companies regained their enthusiasm for investment. It is expected that during the 12th Five-Year Plan period, additional production capacity will be brought online in large quantities, and the soda ash industry is likely to enter another downward cycle. 2. The waste liquids and residues from the ammonia-alkali process are difficult to manage. The core issue related to environmental protection in ammonia-alkali production lies in these waste liquids and residues. In the ammonia-soda process for producing soda ash, about 10 m3 of waste liquid is generated per ton of soda ash, of which the solid residue amounts to approximately 300–350 kg. Due to the large volume produced, it is difficult to make extensive comprehensive use of it, which is also a challenge plaguing the world’s soda ash industry. (3) An increase in the proportion of combined-alkali process leads to intensified competition in the ammonium chloride market. Due to the difficulties in dealing with the waste liquids and residues generated by the ammonia-alkali process, new and expanded projects mostly use this combined-alkali method. As the proportion of soda ash produced through this method increases, the production capacity for ammonium chloride also rises rapidly, resulting in increasingly fierce competition in this market. At present, over 90% of ammonium chloride is used in the production of compound fertilizers. In 2009, the operating rate of the compound fertilizer industry was only around 30%. Additionally, other nitrogen fertilizer industries such as those producing urea and ammonium phosphate also suffer from varying degrees of overcapacity. The overall downturn in the fertilizer market has had a significant impact on the sales of ammonium chloride. (III) Development trends of the soda ash industry 1. Soda ash production continues to rise, with further overcapacity. The downstream products of soda ash, namely flat glass and household glass, are experiencing rapid growth, which will continue to drive demand for soda ash; as a result, its production will also increase. By 2010, soda ash production had already exceeded 20 million tons. During the first three years of the 12th Five-Year Plan period, over 2 million tons of additional soda ash production capacity will be brought onto the market each year. It is expected that by the end of 2012, China’s soda ash production capacity will reach 30 million tons. 2. Ammonium chloride will constrain the survival and development of the caustic soda industry. As new caustic soda production facilities come online, as well as those that are relocated or upgraded, the production capacity for ammonium chloride will increase rapidly; it is estimated that by the end of 2012, this production capacity will exceed 15 million tons. At the same time, the overcapacity in the production of nitrogen fertilizers such as urea and ammonium phosphate continues to increase, putting pressure on the ammonium chloride market. Moreover, the main downstream products of ammonium chloride, namely compound fertilizers, are moving toward higher-concentration variants, which reduces the amount of ammonium chloride used. As a result, the market prospects for ammonium chloride are becoming increasingly limited. Therefore, the ammonium chloride issue will severely restrict the survival and development of union alkali. 3. New progress will be made in industry mergers and reorganizations. There are a large number of soda ash manufacturers in China, with relatively small average scales; in particular, those producing combined soda ash develop from small and medium-sized nitrogen fertilizer companies, and these enterprises lack comprehensive competitiveness on the international stage. In recent years, China’s soda ash production capacity has grown rapidly, leading to severe overcapacity. Moreover, during the 12th Five-Year Plan period, more than 6 million tons of additional production capacity will be introduced into the market, which will further exacerbate this overcapacity situation. Competition among enterprises will intensify as well, and there will be new developments in mergers and reorganizations within the industry as well as between upstream and downstream entities. II. Guiding Ideologies and Principles (1) General Approach Thoroughly implement the scientific development concept, adopt an international perspective and strategic thinking to strike a balance between the present and the long term, vigorously promote scientific and technological innovation and progress, further intensify efforts in energy conservation and emission reduction, and foster the healthy and stable development of the soda ash industry by pursuing a path of sustainable development. (II) Basic Principles: Adhere to the combination of technological transformation and independent innovation. Increase efforts to digest and absorb introduced technologies to drive industrial technological progress ； Strengthen technological transformation to promote the systematization and integration of industrial technologies ； Strengthen the research and development of key and cutting-edge technologies to enhance the role of independent innovation in driving industrial development. III. Directions and tasks for industry development
(1) Key directions for development
1. Maintain overall volume control and strictly regulate new projects
In the development of the soda ash industry, overall volume control must be upheld. Support should be given to large enterprises with high technological levels, good market prospects, and significant potential to drive industrial upgrading. These enterprises should be strengthened and expanded through technological upgrades and restructuring ； Strict control should be exercised over new projects; new soda ash projects must be approved by the provincial investment management authorities, and only after being deemed in line with industrial policies by relevant departments together with the China Soda Ash Industry Association and other parties can they be implemented. Make full use of and utilize some existing production capacities to further optimize the industrial structure ； Promote a rational layout and coordinated development among the eastern, central, and western regions. For the eastern coastal regions where production capacity is concentrated, the addition of new capacity should be strictly controlled; efforts should be focused on making breakthroughs in aspects such as quality, product variety, technological development, and corporate restructuring. 2. Encourage independent innovation and promote the application of new “energy conservation and emission reduction” technologies. Encourage enterprises to engage in independent innovation, popularize energy conservation and emission reduction technologies, improve product quality, save energy and reduce consumption, and cut costs. “During the 12th Five-Year Plan period, the use of advanced automated control technologies as well as large-scale and energy-efficient equipment in soda ash production was encouraged ； Promote the secondary filtration technology for heavy alkalis and belt-type alkali filters to reduce energy consumption ； It is more efficient and detailed for the multi-stage utilization of steam. The ammonia-alkali process promotes dry ash addition technology and vacuum distillation technology ； Promote the use of waste residues in flue gas desulfurization technologies and other comprehensive utilization technologies for waste residues. The double-alkali method promotes ammonium chloride granulation technology to increase the amount of ammonium chloride applied as a fertilizer alone ； Further improve the cold carbonization process, the thermal combined alkali process, and the new process for co-producing melamine and combined alkalis. 3. Improve the quality of soda ash products and increase the proportion of heavy soda ash and dry ammonium salts. During the 12th Five-Year Plan period, the quality of soda ash products in China was improved through adjustments to the product mix, with a focus on the quality of integrated soda ash products ； Increase the proportion of heavy soda ash production capacity and dried ammonium chloride production capacity; strive to ensure that each of these capacities accounts for over 50% of the total capacity, thereby meeting market demand. (II) Main tasks: Aiming to build China into a global leader in the soda ash industry, the following key tasks should be carried out during the 12th Five-Year Plan period: 1. Control the total output of soda ash products to maintain a basic balance between supply and demand. According to the mid-term industry plan up to 2015, the production capacity of soda ash should be kept below 30 million tons, and that of ammonium chloride below 15 million tons. 2. Control the development of ammonia-alkali and double-alkali production capacity at a reasonable ratio. Further reduce energy consumption and minimize the discharge of waste liquids and residues. 3. Make efforts to increase the export of soda ash. The export strategy is one of the basic strategies for the development of China’s soda ash industry. “During the 12th Five-Year Plan period, over 6 million tons of additional soda ash production capacity will come online in China, putting increasing pressure on the domestic market. To ease this pressure, increasing soda ash exports is a necessary measure. By 2015, efforts will be made to achieve an export volume of 2.5 million tons of soda ash. 4. Make efforts to increase sales of ammonium chloride in order to alleviate concerns regarding the integrated alkali industry. On the one hand, direct application of ammonium chloride as a fertilizer is encouraged, along with research and development of ammonium chloride granulation technologies and the creation of large-scale equipment for such granulation; on the other hand, efforts are made to increase the export of ammonium chloride. Simultaneously, research on the decomposition, modification, and deep processing of ammonium chloride is being conducted. 5. Further reduce consumption, lower costs, and enhance the market competitiveness of soda ash. By 2015, it is planned that for the ammonia-alkali process: the comprehensive energy consumption for producing light soda ash should not exceed 400 kilograms of standard coal per ton of alkali; ammonia consumption should not exceed 4.5 kilograms per ton of alkali; salt consumption should not exceed 1,500 kilograms per ton of alkali (excluding the salt content in seawater). The recycling rate of fresh water should be over 95%. Sodium carbonate production: The comprehensive energy consumption for lightweight soda ash is no more than 245 kilograms of standard coal per ton of soda ash; ammonia consumption is no more than 345 kilograms per ton of soda ash, salt consumption is no more than 1200 kilograms per ton of soda ash, and the water recycling rate is over 95%. Natural soda: The comprehensive energy consumption for producing light soda ash is no more than 550 kilograms of standard coal per ton of soda ash, with a water recycling rate of over 95%. IV. Policy and measure recommendations (1) Abolish the Salt Industry Management Regulations and fully liberalize the distribution of salt for industrial use. Salt used in the \"two-alkali\" industries accounts for about two-thirds of the total salt consumption in the country. To meet the requirements of the market economy and to promote the development of raw salt producers as well as the industries related to the production of alkalis, it is called for that the Salt Industry Management Regulations be abolished as soon as possible, that the systems of permits and authorization stamps be eliminated promptly, that fees charged at intermediate stages be stopped, and that direct transactions between producers and consumers be established, thereby fully liberalizing the distribution of industrial salt. (II) Calcium chloride products should enjoy tax incentives. Calcium chloride is obtained from the waste liquid resulting from soda ash production; it is an environmentally friendly product, and it also has a wide range of applications. It is widely used in industries such as snow melting, oil drilling, dust removal, construction, drying, rubber manufacturing, metallurgy, papermaking, chemicals, refrigeration, food processing, and printing and dyeing. Currently, soda ash manufacturers using the ammonia-alkali process recover around 400,000 tons of industrial salt and around 800,000 tons of calcium chloride from wastewater each year. The production cost is lower than that of calcium chloride produced by reacting limestone with hydrochloric acid, **and it should be encouraged. Calcium chloride is a product primarily exported, mainly to Japan and South Korea. Our country’s annual exports exceed 50% of its total production. Apply for an exemption from value-added tax on calcium chloride products, and restore export tax rebates for calcium chloride, so that calcium chloride manufacturers can survive and develop. (III) Encourage the comprehensive utilization technologies for waste residues in ammonia-alkali enterprises. Ammonia evaporation waste residues represent the primary environmental issue restricting the development of such enterprises. In recent years, ammonia-alkali enterprises such as Qingdao, Nanfang, and Haihua have used ammonia vaporization waste residues and salt sludge for the desulfurization of boiler flue gases, achieving dual-purpose treatment and thus playing a role in environmental protection. It is recommended to **encourage power plants that have the necessary resources to adopt waste residue desulfurization technology for treating boiler flue gases, and to promote the use of this technology, as it has yielded good economic benefits. (IV) Strengthen supervision and further implement industry policies. During the 11th Five-Year Plan period, a number of policies and regulations related to the soda ash industry were drafted and introduced, such as the \"Clean Production Standards for the Soda Ash Industry,\" the \"Plan for Implementing Clean Production in the Soda Ash Industry,\" the \"Access Requirements for the Soda Ash Industry,\" the \"Plan for the Adjustment and Revitalization of the Petroleum and Chemical Industries,\" and the \"Guidelines for Adjusting the Industrial Structure of the Soda Ash Industry.\" It is recommended that relevant supporting policies and measures be introduced as soon as possible to ensure that these policies and regulations can play their full role. Author: China Soda Ash Industry Association Source: China Chemical Industry News Digital Edition