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Henan Petrochemical Association and nitrogen fertilizer companies call for the introduction of supporting measures. Author/Source: Sinochem News Network. Date: 2021-01-05. Clicks: 13. Production capacity of synthetic ammonia plants with a capacity of less than 300,000 tons each will be shut down, amounting to over 1.3 million tons in total. The \"Implementation Plan for Assessing the Work of Phasing Out Obsolete Production Capacities in Henan Province\" requires that on-site inspections and verifications of all enterprises whose obsolete production capacities are to be phased out be completed by the end of December 2020. “The key nitrogen fertilizer manufacturers in our province, in accordance with the policy requirements, shut down their ammonia synthesis plants with an annual production capacity of 300,000 tons or less by December 2020; this involved a total production capacity of over 1.3 million tons. However, the numerous problems and impacts resulting from this action cannot be underestimated. ”Recently, the Henan Petroleum and Chemical Industry Association along with the executives of several nitrogen fertilizer companies requested that **appropriate supporting measures be introduced and implemented to ensure that these enterprises can withdraw in an effective, orderly, and stable manner. In July 2020, the Office of the Leading Group for Phasing Out Backward Production Capacity in Henan Province issued a notice titled \"Notice on Setting the Targets for Phasing Out Backward Production Capacity in the Industrial Sector for 2020,\" which specified that a number of \"backward production capacity units\" needed to be phased out by the end of December 2020; these units involved 72 companies in industries such as coking, chemicals, and building materials. Among them, it involves 6 enterprises that are key nitrogen fertilizer producers in the province: Henan Xinlianxin Chemical Industry Group Co., Ltd., Xinxiang Yubei Chemical Co., Ltd., Henan Jinshan Chemical Group, Anyang Chemical Industry Group, and Hebi Bama Fertilizer Factory. These enterprises have a total of 7 production units, with an annual production capacity of around 1.35 million tons, and employ nearly 10,000 workers. “As required, after shutting down all ammonia synthesis plants with an annual production capacity of 300,000 tons or less, Henan Province will see a reduction in its fertilizer production capacity of over 2.5 million tons. In addition to reducing production capacity, this will also result in hundreds of billions of yuan worth of assets remaining unused, and it will lead to a shortage of fertilizers in the Central Plains region, causing fertilizer prices to rise and affecting the economic viability of farming for farmers. ”Su Dong, executive vice president of the Henan Petrochemical Association, said. Speaking of the impact on the company resulting from the shutdown of the facility, a responsible official from Xinchuanxin Group said that the company had already shut down two production lines by December 10, 2020. The elimination of those fixed-bed reactors will result in a loss of over 1 million tons in urea production capacity, which in turn will affect the supply of fertilizer needed for spring planting next year. A relevant official from Anyang Chemical Industry Group said that on September 30, 2020, the group shut down 46 fixed-bed batch gasification units as well as two ammonia synthesis production lines. This has affected the production capacity of the company’s main products by nearly 600,000 tons, as well as the volume of raw gas available at 510 million cubic meters. Raw materials such as liquid ammonia and methanol now need to be purchased externally, resulting in a significant increase in operating costs. The ammonia synthesis units of enterprises such as Yubei Chemical and Henan Jinshan also were shut down within the specified time frame. “After the plant stops operating, enterprises face practical challenges such as asset disposal, employee placement, and transformation and upgrading. We earnestly request that **relevant suggestions be provided as soon as possible to help these enterprises overcome their difficulties. ”The person in charge of the relevant company said. The person in charge of Henan Xinlianxin suggested that relevant authorities should, taking into account the pandemic, the supply of fertilizers for spring plowing, and the actual conditions of the industry, reevaluate the requirements set out in the Notice regarding the phasing out of fixed-bed batch gasification furnaces and the withdrawal of synthetic ammonia production capacities of 300,000 tons per year or less. For enterprises that have already carried out technical upgrades but whose progress has been affected by the pandemic, appropriate extensions should be granted, provided that they meet local safety and environmental standards. How to compensate for the costs has also been a concern for nitrogen fertilizer companies, but to date no tangible results have been achieved. Managers of several companies suggest that **policy fairness should be taken into account; by drawing on policies such as the closure of coal mines, the transition from coal to gas or electricity, the shutdown of small power plants, and the modification of boilers**, certain forms of policy support and financial assistance should be provided to enterprises that are shut down. At the same time, it is recommended that **departments assist enterprises in contacting financing platforms to alleviate their financial pressures, promote their transformation and upgrading, and seek new sources of economic growth. “The replacement of fixed-bed gasification with new coal gasification technologies is an inevitable trend for the green development of the coal chemical industry. However, due to the high initial investment and long construction period, it is recommended to **take into account factors such as the survival risks faced by chemical enterprises in Henan Province, employee employment, and the strong connection between fixed-bed processes and the lump coal industry, in order to provide a certain period of time for adjustment. At the same time, taking into account issues such as reduced production capacity, rising fertilizer prices, and increased burdens on farmers after the shutdown of the facilities, a scientific and rational plan for the replacement and upgrading of the gasification process should be developed to avoid sharp fluctuations in the industry. ”Su Dong said.