Favorable policies for fuel ethanol: Are coal-based ethanol plants in the spotlight?
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Favorable policies for fuel ethanol: Are coal-based ethanol plants in the spotlight? Author/Source: Date: 2017-09-18 Clicks: 28 In recent days, the coal chemical industry has been agitated once again by a new policy document regarding fuel ethanol; various messages have emerged, leading to much debate on the Internet. On September 13, fifteen ministries and commissions including the **Development and Reform Commission**, the **Energy Bureau**, and the Ministry of Finance jointly issued the \"Implementation Plan for Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol-based Gasoline in Vehicles.\" According to this plan, by 2020, ethanol-based gasoline will be available throughout the country ； By 2025, efforts will be made to achieve large-scale production of cellulosic ethanol, with advanced bio-liquid fuel technologies, equipment, and the entire industry reaching international leadership levels, thereby establishing a more sophisticated market-based operation mechanism. Issued jointly across 15 departments, this reflects the **difficulty in coordination among various ministries and the determination to promote fuel ethanol. It also served as a boost for Chinese companies that are planning to produce ethanol from coal. China’s five major modern coal chemical products have been around for several years now, and the strategies and measures for their further development have already been established. Could coal-based ethanol be the sixth product to represent a breakthrough? Don’t rush; calm down and let’s sort out our thoughts together: First, is it feasible to open up sales channels for coal-based fuel ethanol? First of all, this policy relates to biofuel ethanol; it’s clear that there is no such thing as ethanol produced from coal. However, the correlation lies in the fact that all are ethanol products. Since **it is planned to achieve full coverage of ethanol-blended gasoline for vehicles by 2020, this means that sales channels for fuel ethanol will be opened up in various provinces. Sales channels are the key to the survival of fuel ethanol companies! If the CNPC and Sinopec systems can use ethanol produced by biological methods, why can’t they use that produced by syngas methods? Theoretical analysis provides feasibility for the policy-driven implementation of coal-based fuel ethanol. II. Full coverage of ethanol-blended gasoline for vehicles does not mean that it is available for sale everywhere. Traditionally, **planning itself is a guiding and motivating policy. In this new era of **streamlining regulations and bringing products to the market, whether true nationwide coverage can be achieved depends on market demand; unless there is **forced implementation through a fully closed system. Why is that said? Since the environmental benefits of ethanol-blended gasoline for vehicles are recognized worldwide, its main drawback is the lack of power. It should be the consumers who have the final say, of course, in the absence of oppressive policies. III. Will the pricing policy be adjusted? According to **the regulations**, the pricing of biofuel ethanol is calculated as gasoline of the same grade multiplied by 0.9111. Gasoline prices vary from province to province, and accordingly, the prices of fuel ethanol also differ significantly. Given its drawbacks, this price seems to offer little appeal to consumers, as well as little appeal to Sinopec and CNPC. IV. What is the cost of ethanol produced from coal, and is it profitable? Let’s take a look at gasoline prices first. Taking Shaanxi as an example, during the period of low oil prices in recent years, the prevailing tax-inclusive price of fuel ethanol in that region was between 5,000 and 6,000 yuan per ton. Based on a 17% value-added tax rate, the tax-exclusive price corresponded to 4,274–5,128 yuan per ton. During this period, oil prices have fluctuated; by looking at the cost of ethanol produced from coal, one can roughly get an idea of it. V. Can the demand potential in various provinces meet the needs for the development of coal-based syngas production? According to statistics, China’s gasoline production in 2016 was 129.32 million tons. Based on the requirement of a 10% addition, the demand for fuel ethanol was 12.932 million tons. Taking into account the production volume of ethanol produced through biological methods, the demand for coal-based fuel ethanol in the country has reached its limit of around 10 million tons. What province is the syngas ethanol produced in? VI. Is coal-based ethanol competitive compared to fuel ethanol? If the sales channels are smooth, what is the competitiveness of ethylene glycol made from two different raw materials in the same region? VII. Is coal-to-technology mature? Are there any precedents for the use of fuel ethanol? VIII. What about the impact of imported fuel ethanol? It seems to be much lower than biofuel ethanol. **High tariffs are in control of it; do you know how significant the impact would be if those tariffs were removed?** IX. What are the experiences that can be learned from foreign fuel ethanol? Globally, the United States and Brazil are the main producers of fuel ethanol, but the two use different raw materials, their products have different qualities, and the proportions in which they are blended also vary. Which country does China resemble more? Can coal-based fuel ethanol be used? X. What impact do fluctuations in crude oil prices have on coal-based ethanol? So many questions – is that really confusing? The 2017 version of the \"Market Research Report on Coal-Based Ethanol\" has been completed, and it will provide you with systematic and objective answers. The report mainly discusses the topic from the following 9 major aspects: 1. The current development status of fuel ethanol abroad – are there any aspects that China can learn from? 2. The current status of production and sales of biofuel ethanol in China; can coal-based ethanol serve as a reference? 3. The current status of ethanol production via synthetic methods in China – is the technology mature? Are there any access restrictions? 4. Development bottlenecks of industrial ethanol – are there any prospects for the future? 5. The theoretical demand volume for fuel ethanol – can this volume represent the actual demand? Where are the sales restrictions? 6. The pricing model for biofuel ethanol is **regulated and linked to gasoline; what about ethanol produced from coal? 7. Economic analysis of synthetic and biological ethanol at low oil prices? 8. What are the impacts or potential risks of importing low-cost fuel ethanol on China? 9. Is China suitable for large-scale development of coal-to-ethanol production?
The spring of ethanol made from coal has arrived, haha.
Damn it, do we have to change the project again?
Need tariff protection too? Do you want a pacifier?
Is coal-to-ethanol technology economically viable?
According to relevant plans, by 2020, nationwide coverage of ethanol-blended gasoline for vehicles will be basically achieved. In addition to biofuel ethanol, the coal-based ethanol industry in the coal chemical sector is also expected to benefit. Experts point out that coal-based ethanol currently has a cost advantage over bio-based ethanol. As the gap between supply and demand for fuel ethanol continues to widen, innovations in coal-based ethanol technology are expected to open up new avenues for its development, leading to rapid growth in the future. Cost advantage At present, there are mainly two production methods for fuel ethanol in China: one is biomass-based fuel ethanol, which is expected to continue to benefit from the industry’s growth in the future ； Secondly, coal-based ethanol in the field of coal chemical industry is expected to become the next key development direction in this sector, following coal-to-oil, coal-to-gas, coal-to-olefins, and coal-to-ethylene glycol; it will be able to compete directly with biomass ethanol thanks to its cost advantages. Analysts at Orient Securities believe that coal-based fuel ethanol has a significant cost advantage, being 300 to 800 yuan per ton cheaper than biofuel ethanol. Based on full cost calculations, the cost of biomass ethanol ranges from 4,700 to 5,600 yuan per ton, while the cost of coal-based ethanol is generally between 4,000 and 4,200 yuan per ton. Even when factors such as subsidies for grain ethanol and reductions in consumption taxes are taken into account, coal-based ethanol still possesses a significant cost advantage, with the cost difference being at least around 300 yuan per ton, and can reach up to about 800 yuan per ton. Industry experts expect that in the future, the capacity ratio of bioethanol to coal-based ethanol will be around 3:1. China possesses abundant coal resources; by the end of 2016, its recoverable coal reserves amounted to 1.6 trillion tons. That year, 40 billion tons of new coal reserves were discovered, and the country’s coal production reached 3.36 billion tons, all of which place it among the top countries in the world. Given the upgrade in the quality of refined petroleum products, as well as the goal of achieving full coverage of ethanol-blended gasoline for vehicles across the country by 2020, demand for fuel ethanol will be effectively stimulated. **Adhering to the energy policy of \"giving priority to energy conservation, relying on domestic resources, using coal as the foundation, and pursuing diversified development,\" efforts have been made to develop the coal chemical industry, thereby laying the groundwork for the future development of coal-based fuel ethanol. The aforementioned analysts believe that with the expansion of ethanol-blended gasoline, the supply-demand gap for fuel ethanol will continue to widen, which will effectively drive the standardization of coal-based ethanol energy, and coal-based ethanol will thus encounter opportunities for development.
From the perspective of raw materials, coal is a non-renewable resource, and current coal-based chemical processes are primarily used as a substitute for petroleum-based ones; certain finished products can only be obtained through these methods. In contrast, the raw materials for bioethanol are agricultural products that are renewable, thus offering sustainability for future development. Based on these two points, I believe that using coal to produce ethanol is not a viable option