The four major issues in Inner Mongolia’s coal chemical industry cannot be ignored

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Four Major Issues in Inner Mongolia’s Coal Chemical Industry Cannot Be Ignored Author/Source: Date: 2017-08-30 Clicks: 138 Recently, while accompanying the Inner Mongolia Autonomous Region’s Economic and Information Technology Commission as well as the Inner Mongolia Petroleum and Chemical Industry Association on visits to several representative large-scale modern coal chemical enterprises, reporters learned that during the 13th Five-Year Plan period, the focus of development in Inner Mongolia’s modern coal chemical industry will shift from creating individual model projects of this type to adopting a clustered approach and expanding into downstream areas. Efforts will be concentrated on establishing model bases for modern coal chemical industries, resulting in clusters of new-type coal chemical industry demonstration projects focused on coal-to-oil, coal-to-olefins, coal-to-natural gas, and coal-to-ethylene glycol, thereby creating a more mature and stable circular economy industrial chain. 　　 The demonstration base is taking shape. In terms of production capacity and output, as of July this year, Inner Mongolia’s coal-to-oil production capacity is 1.24 million tons, with an actual annual output of 1.044 million tons ； The designed production capacity for coal-based chemical products is 5.03 million tons, while the actual annual output is 2.785 million tons ； The designed production capacity of coal-to-natural gas is 400,000 tons, while the actual annual output is 376,800 tons. 　 In terms of technical equipment, coal gasification facilities mainly rely on three types of large-scale, commercially mature gasifiers available internationally: the Lurgi, Texaco, and Shell types ； Shenhua uses its own Shenhua furnace model, while key components of the process package, such as valves and pumps, are sourced from advanced foreign products. 　　 In terms of raw materials, North China and the Northwest are the main coal-producing and exporting regions in China. The Ordos Coal Field, Ningdong Coal Field, Huating Coal Field, Shengli Coal Field, as well as the Carboniferous-Permian coal deposits in Datong, are all large-scale raw material and thermal coal fields that have not been developed on a large scale or have only been initially developed. These areas are rich in resources, making them suitable for large-scale development and production; moreover, the types and quality of coal there are appropriate for processing. In addition, eastern Inner Mongolia has abundant lignite resources, providing favorable resource advantages for the development of new coal chemical industries. 　　 Overall, during the 11th and 12th Five-Year Plans, leveraging its resource and geographical advantages, Inner Mongolia’s coal chemical industry gave rise to a number of outstanding modern coal chemical enterprises: China Shenhua Coal-to-Oil Chemical Co., Ltd. Ordos Coal-to-Oil Branch, Inner Mongolia Yitai Coal-to-Oil Co., Ltd., Ordos Xinhang Energy Co., Ltd., Tongliao Jinmei Chemical Co., Ltd., Datang Inner Mongolia Dolun Coal Chemical Co., Ltd., Shenhua Baotou Coal Chemical Co., Ltd., Inner Mongolia Yitai Chemical Co., Ltd., Inner Mongolia Zhongmei Mengda New Energy Chemical Co., Ltd., Zhongtian Hechuang Energy Co., Ltd., Inner Mongolia Datang International Keshiketeng Coal-to-Natural Gas Co., Ltd., and Inner Mongolia HuiNeng Coal Chemical Co., Ltd., among others. 　　 With the successful commissioning of a series of production facilities in these enterprises for coal-to-oil, coal-to-olefins, coal-to-ethylene glycol, and coal-to-natural gas, as well as the continuous improvement and maturation of the commercial operations of these projects and the growing economic benefits they generate, Inner Mongolia has achieved its first major breakthrough in the development of modern coal chemical industry demonstration bases. It has become a representative example of the rise of modern coal chemistry across the country, and the framework for such demonstration bases is now taking shape. 　　 Four major issues cannot be ignored. Research has shown that at present, the development of modern coal chemical projects in Inner Mongolia is constrained by several issues. 　　 First, there is the issue of disorderly development. Liu Hu, president of the Inner Mongolia Petroleum and Chemical Industry Association, told reporters that currently, modern coal chemical projects are carried out in a scattered manner, showing a trend of widespread and unregulated development. It is hoped that industry development plans will be introduced at the policy level, so as to design the project layout for this industry through macro-control. 　　 Second, it is far from the resource areas. The investigation found that many coal chemical enterprises are located far away from coal production areas or high-quality coal mines, resulting in high transportation costs. This weakens the competitiveness of their products. Additionally, restrictions on coal production often lead to incomplete utilization of production capacity, further increasing the companies’ production costs and hindering them in competing in the market. 　　 Third, the environmental carrying capacity is becoming increasingly urgent. The coal chemical industry is a sector characterized by high pollution levels and high water consumption. There is still no effective way to treat high-concentration brine, and the practice of storing hazardous waste is not sustainable. The capacity to handle hazardous waste falls far short of the amount generated. Proper utilization of water resources and effective treatment and reduction of industrial wastewater are all significant issues that coal chemical companies must address. With environmental inspections becoming increasingly stringent, enterprises in the coal chemical industry must achieve zero wastewater discharge, emit exhaust gases only after they have been treated, and reduce and properly dispose of waste residues. 　　 Fourth, there is severe staff turnover. As part of the traditional chemical industry, the coal chemical sector faces various challenges due to its remote location: there are many inconveniences in daily life, and it is difficult for young people of working age to find spouses. As a result, the staff turnover rate is very high, at around 5%-10% per year. This high turnover rate puts the management capabilities of companies as well as the stability of their production under strain. 　　 Furthermore, the uncertainty in international oil prices and domestic coal prices in recent years has made the economic viability of future products a key factor in the success of coal chemical projects. The persistently low crude oil prices and gradually rising coal prices are also driving up the costs for coal chemical enterprises, further squeezing their profit margins. 　　 An integrated development path should be pursued. Liu Hu stated that new coal chemical industries represent the strategic direction for the development of energy technologies in China in the future. The growth of such industries will rely heavily on the exploitation of coal resources, and they will also be integrated with other energy and chemical technologies, giving rise to new industries that combine coal utilization with energy and chemical production. 　　 Fu Jun, vice president and secretary-general of the Inner Mongolia Petroleum and Chemical Industry Association, believes that the development of new coal chemical industries will focus on the establishment of large-scale enterprises, including the use of large reactors and the construction of large, modern production facilities such as coal direct liquefaction and coal indirect liquefaction plants with capacities of over one million tons, as well as large-scale integrated production systems. On the basis of building large-scale enterprises, new coal chemical industry bases and clusters will be established. Each industrial base consists of several large factories of different types, and several nearby bases form a cluster, thereby becoming a new and important energy industry in the country. 　　 In addition, the new type of coal chemical industry focuses on the clean and efficient utilization of coal, enabling effective use of coal resources. By building large-scale factories, applying advanced technologies, leveraging advantages in resources and costs, reducing capital investment in construction, lowering production costs, and improving overall economic efficiency. By making full use of resources and carrying out centralized treatment of pollution, pollutant emissions can be reduced to achieve environmental friendliness. Through the development of the new coal chemical industry, it is possible to stimulate the growth of industries such as coal mining and its processing, transportation, construction, equipment manufacturing, and services, thereby creating more jobs and making full use of China’s advantage in abundant human resources. The development of new coal chemical technology and related industries involves multiple industrial sectors such as coal, chemicals, petroleum, and electricity; it requires substantial investment and makes heavy use of high-tech technologies. Therefore, the development of modern coal chemical industry in Inner Mongolia needs to be integrated with the currently implemented strategy of large coal industry groups, pursuing a path of joint development and group-based growth. 　　 Relevant experts believe that to promote the development of modern coal chemical industry in Inner Mongolia, the following points should be considered at the macro level: first, **scientific and rational planning is necessary. Second is to optimize the industrial structure. Third, it is necessary to control the development direction of the coal chemical industry. Fourth, various models are adopted to broaden financing channels. Fifth, expand sales channels to ensure steady growth in the coal mining industry. At the corporate level, it is necessary to accelerate the development of the coal chemical industry in terms of scale, size, integration, and establishment of specialized production bases ； Emphasize the sustainable development of resources ； Accelerate the construction of coal chemical cogeneration projects.