[2025 Chemical Industry News] CNPC Makes Another Major Investment in Controlled Nuclear Fusion Projects

On April 1, 2025, a wholly-owned subsidiary of CNPC, in partnership with Sino Salt Chemical, established \"CNPC Sino Salt (Inner Mongolia) Alkali Industry Co., Ltd.\" with a registered capital of 40 million yuan. The company operates in the industry of chemical raw materials and chemical products manufacturing, and its business scope includes the extraction of mineral resources from non-coal mines, the production of food additives, the production of feed additives, as well as the generation and supply of heat energy. This partnership marks CNPC’s expansion from traditional oil and gas to sophisticated industries.

From the perspective of market demand, the annual consumption of sodium bicarbonate for feed across the country exceeds 2 million tons, whereas the current production capacity of China Salt Chemical Industry can cover only one-third of this amount, resulting in a significant gap in the market. By entering the alkali industry, CNPC can take advantage of Sino Salt Chemical’s technical expertise and production experience in the chemical sector to quickly gain a foothold in this market ； On the other hand, by developing its alkali industry, CNPC can strengthen its control over the chemicals supply chain. Taking the 13 million tons per year soda ash production line planned in Naiman Banner as an example, 210 million kWh of waste heat can be recovered for power generation each year, which is equivalent to saving 70,000 tons of standard coal. This not only demonstrates the value of comprehensive energy utilization but also shows the development potential in this field. In addition, CNPC has transferred its own technologies to Inner Mongolia, utilizing sodium carbonate produced from trona mines as a catalyst to target the cutting-edge field of direct conversion of crude oil into various products. This approach has further expanded the depth and scope of its chemical industry operations, providing strong support for its \"oil conversion\" strategy.

In the wave of cross-sectoral development, many traditional chemical giants have taken action to find new growth drivers and opportunities in new fields. Aside from CNPC, the cross-sectoral initiatives of the following chemical companies have also attracted considerable attention: BASF: The German chemical giant BASF is active and diversified in its efforts to pursue cross-sectoral development. In the energy sector, BASF plans to invest 1.6 billion euros to acquire a 49.5% stake in a large offshore wind farm planned and operated by the Swedish energy giant Vattenfall. The green electricity generated by this wind farm will be used to power its second-largest production facility in Antwerp, a port city in Belgium, thereby facilitating the company’s transition to green energy, reducing carbon emissions during production, and keeping up with global trends in energy transformation and environmental protection. In the fields of transportation and technology, BASF has collaborated with Japan’s autonomous robot company ZMP and wireless power supply and charging system developer B&Plus to develop the automatic wireless charger MobiPOWER, entering the field of charging facilities for intelligent transportation. This cross-sector collaboration not only demonstrates BASF’s efforts to expand the application of its technologies but also enables it to move from traditional chemical manufacturing toward business areas closely related to future mobility. In addition, BASF Venture Capital has invested in Ruichu Technology, a provider of digital solutions for pig farming, thereby entering the livestock breeding industry. By leveraging digital technologies to enhance traditional farming practices, it aims to discover new sources of business growth and business models. It also seeks to apply the resources and technical advantages accumulated in the chemical industry to innovations in digital farming. In the field of lithium battery materials, BASF and Shanshan Co., Ltd. have established a joint venture named BASF Shanshan, and have expanded the production lines for lithium battery cathode materials. Once operational, BASF’s annual production capacity for such cathode materials in China is expected to reach 100,000 tons. This move is aimed at entering the market for key materials used in new energy vehicles, in order to meet the growing demand for lithium battery materials driven by the global trend toward electric vehicles.

●Wanhua Chemical: As a leading enterprise in China’s chemical industry, Wanhua Chemical is actively expanding into fields such as new energy and photovoltaics. In the field of new energy, Wanhua Chemical acquired Yantai Zhuoneng Lithium Battery Co., Ltd. to enter this sector. Subsequently, it invested 1.5 billion yuan in the Meishan High-Tech Zone in Sichuan to build a facility capable of producing 50,000 tons per year of lithium iron phosphate cathode materials for lithium batteries. Construction on this project began in 2022; its aim is to create a production base for new energy battery materials, thereby expanding its business in this area and meeting the growing market demand for cathode materials for lithium batteries. In the field of photovoltaics, Wanhua Chemical has partnered with Huaneng Group to develop the Zhujiao 93MW distributed wind power project. The first phase of this project has an installed capacity of 48MW, featuring 16 wind turbines, each with a capacity of 3000KW. By participating in the construction of this wind power project, Wanhua Chemical has entered the field of renewable energy generation, thereby diversifying its energy business operations and securing a position in the new energy generation market. This also helps the company to diversify and clean up its own energy supply amid the broader trend of energy structure adjustment.

●Junzheng Group: As a traditional giant in the chlor-alkali chemicals industry, Junzheng Group is turning its attention to the new energy sector in light of the bottlenecks in industry development and changes in the market environment. Junzheng Group and the Alxa League Administrative Office signed a Strategic Cooperation Framework Agreement for the Alxa Wind and Solar Hydrogen Production and Green Energy Integration Project. The total investment for this project is estimated to be around 19.36 billion yuan, with implementation taking place in two phases. The project scope includes the construction of a new electrolytic water hydrogen production facility with an output of 1.5 billion Nm3/year, as well as facilities for producing 300,000 tons per year of green methanol and 600,000 tons per year of green synthetic ammonia, in addition to projects aimed at replacing traditional industries with greener alternatives. Through this project, Junzheng Group aims to leverage the abundant local wind and solar resources to develop the green energy industry. This not only helps the company pursue a strategic transformation, diversify its business operations, and identify new sources of profit growth, but it also aligns with the strategic direction of energy transition and green development driven by the \"dual carbon\" goals. It enables the company to reduce its reliance on traditional chlor-alkali industries, mitigate operational risks, and enhance its sustainability.

●Shenghong Group: In the field of energy storage, on July 18, 2023, the construction of the Energy Storage Battery Super Factory and the New Energy Battery Research Institute project by Shenghong Holding Group officially commenced. The total investment in this project amounts to 30.6 billion yuan, with a planned production capacity of 60 GWh. The project aims to establish an integrated base for the research and development, testing, certification, and manufacturing of new types of energy storage batteries and their system integration. Previously, Shenghong Group had also established energy storage battery projects in Taizhou and Wujiang in Jiangsu Province, with a total investment of hundreds of millions of yuan, creating a complete industrial chain that covers cells, modules, and end products. In the field of new energy materials, in November 2022, Dongfang Shenghong, a listed company under Shenghong Group, announced its intention to invest in projects related to the production of raw materials as well as new energy materials such as iron phosphate and lithium iron phosphate. The total investment for these projects amounts to 18.684 billion yuan. Through these initiatives, Shenghong Group is able to strengthen its presence in the fields of energy storage and new energy materials; by leveraging the advantages of its own industrial chain, it aims to gain a competitive edge in the emerging energy storage market and enhance its overall competitiveness.

●Guizhou Phosphorus Chemical Group: Based on the phosphorus chemical industry, Guizhou Phosphorus Chemical Group is actively exploring new areas in new energy materials. Key projects within the group, with a total investment of over 2.5 billion yuan, are progressing in an orderly manner. Progress has been made in the construction of facilities for producing 60,000 tons of iron phosphate per year, 100,000 tons of lithium iron phosphate (50,000 tons in the first phase), and 10,000 tons of battery recycling; once these facilities come online, they will fill the gap in the industrialization of comprehensive recycling of lithium iron phosphate batteries in Guizhou. In the first half of the year, its market share in the domestic market for wet-process purified phosphoric acid was 64%, 54% in the new energy sector, and nearly 90% in the Guizhou market. At the end of July 2023, the 400,000-ton-per-year wet-process purified phosphoric acid production facility of Kailin Phosphate’s Guiyang Fertilizer Company came online, bringing the group’s annual capacity for wet-process purified phosphoric acid to 2 million tons – the highest in the country. Leveraging its technical expertise in the phosphorus chemicals industry, Guizhou Phosphorus Chemical Group has managed, through technological innovation and capacity expansion, to establish itself in the field of new energy materials. It has achieved a transition from traditional phosphorus chemicals manufacturing to the production of high-quality, advanced new energy materials, thereby enabling the company to accelerate its progress in this new sector.

Responding to changes in market demand: With the development of the economy and society, the structure of market demand has undergone significant changes. In the energy sector, China’s gasoline consumption saw negative growth for the first time in 2024. Meanwhile, the demand for new chemical materials is increasing by 12% annually, while the reliance on imported high-end polyolefins remains above 40%. Traditional chemical companies that rely solely on conventional products such as refined oil will face the challenge of a shrinking market. To adapt to this shift in market demands, companies need to explore new business areas, with emerging fields such as chemical new materials becoming important directions for their transformation and development. By entering these fields across sectors, companies can meet the market’s demand for high-end, innovative chemical products, thereby maintaining competitiveness in a changing market environment and securing new sources of profit.

Breaking through industry development bottlenecks: The utilization rate of traditional refining capacity has dropped below 73%, indicating that the traditional chemical industry is facing issues such as structural overcapacity and fierce competition. In such an industry environment, a company’s profitability and room for growth are severely restricted. Cross-border development is an effective way for enterprises to overcome bottlenecks in industry progress. By entering emerging fields, companies can avoid the fierce competition in their traditional businesses and leverage their resource advantages and technical foundations to establish a competitive edge in these new areas. For example, CNPC’s investments in controlled nuclear fusion and the alkali industry are aimed at finding new sources of business growth, breaking through the bottlenecks in the development of its traditional refining operations, and ensuring the sustainable growth of the company.

Aligning with policies and environmental protection trends: In the context of global efforts to address climate change, various countries have introduced strict environmental protection policies, and our country has also set the \"dual carbon\" goals. The negative environmental impact of traditional chemical production methods is becoming increasingly apparent, forcing companies to seek a path toward green transformation. Cross-sectoral development helps companies keep up with policy and environmental protection trends. By investing in emerging fields such as clean energy technologies like controlled nuclear fusion, companies can reduce their reliance on traditional fossil fuels, lower carbon emissions, and achieve sustainable development. At the same time, meeting environmental policy requirements also helps companies improve their image, avoids regulatory restrictions due to environmental issues, and creates a favorable policy environment for their long-term development.