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Its strategic importance is steadily increasing — Part II of a survey on China’s modern coal chemical industry. Author/Source: China Chemical Industry News. Date: April 8, 2019. Clicks: 12. Through years of research and development, China’s modern coal chemical technologies have become increasingly mature, enabling the production of various chemical products from coal such as oil, natural gas, olefins, and ethylene glycol. This has paved the way for a cleaner and more efficient use of coal as a substitute for petrochemicals, and the strategic value of modern coal chemistry is becoming evident. According to the \"Plan for the Innovative Development and Layout of the Modern Coal Chemical Industry,\" China has planned to establish four demonstration zones for this industry in Ordos in Inner Mongolia, Yulin in Shaanxi, Ningdong in Ningxia, and Zhundong in Xinjiang. Driven by **model projects, modern coal chemical industries such as coal-to-oil, coal-to-natural gas, and coal-to-olefins have seen their scale expand in recent years, developing in a direction characterized by larger scales, integrated supply chains, and cluster formation. Shaanxi, a major province in the energy and chemical industry, is one of the few regions in China that possesses a variety of mineral resources such as coal, oil, gas, and salt. Adhering to the principle of \"three conversions,\" the province accelerates the conversion of coal into electricity, coal and electricity into industrial products that can store energy, and coal, oil, gas, and salt into chemical products. It currently has a number of modern coal chemical projects, including those for producing olefins from coal, comprehensive utilization of coal, oil, and gas, and indirect liquefaction of coal for oil production. The province has also developed leading technical systems in areas such as the production of ethanol from coal, hydrogenation of coal tar, and co-processing of oil and coal. Among them, it has the largest production capacity for coal-based olefins in the country, and the greatest variety of coal-to-oil processing routes; both in terms of production scale and technical level, it ranks among the top in the nation. The reporter learned that during the 13th Five-Year Plan period, Shaanxi planned 17 key projects in the field of modern chemicals, with a total investment of 699.8 billion yuan. These include 3 coal-to-olefins projects, 3 coal-to-aromatics projects, 2 coal-to-oil projects, 2 coal-to-natural gas projects, as well as integrated coal tar extraction and syngas production, co-production of coal-based oils and alcohols, and comprehensive utilization of light hydrocarbon resources. As one of the four modern coal chemical industry demonstration zones, Yulin in Shaanxi is actively promoting the in-depth transformation of resources. Focusing on two main areas: the differentiated utilization of coal and coal-based fine chemicals, it is driving the development of the coal chemical industry toward downstream value-added industrial chains. This year, Yulin identified seven key energy and chemical industry projects, as well as three new major transformation projects. These include the first-phase completion project for Yueneng Chemical, a project to produce new chemical materials through the differentiated utilization of coal by Shaanxi Coal Group, a project for a deep-processing base for coal by China National Coal Group, the follow-up project for the first phase of coal indirect liquefaction in the field of future energy, the Yuheng coal-to-aromatics project carried out by Yan’an Petroleum, the Yushen CCSI project, and the ethylene production project via ethane cracking at Lanzhou Petrochemical of PetroChina. Through the implementation of these projects, a new type of chemical industry base that features distinct advantages and ranks among the best in China, as well as a base for the processing of end products, will be established. After establishing China’s first million-ton-scale demonstration project for coal indirect liquefaction using its own low-temperature Fischer-Tropsch synthesis technology, Shaanxi Future Energy Chemical Co., Ltd. developed high-temperature Fischer-Tropsch synthesis technology in 2018. By combining these high/low-temperature Fischer-Tropsch synthesis technologies for indirect liquefaction, it is possible to produce more high-end chemicals that are difficult to manufacture through conventional coal chemical or petroleum chemical processes. In addition to producing products that serve as alternatives to petrochemicals, progress is also being made in technologies for producing new materials such as graphene and carbon fibers from coal, as well as fine chemicals. Newao Group has developed a technology for extracting graphene from low-calorific-value coal. The first-phase production facility with an annual capacity of 1,000 tons of graphene was put into operation in August 2018 in Dalaat Banner, Ordos City; using this technology, 1 ton of graphene powder can be obtained from 3 tons of low-calorific-value coal ； After two years of pilot testing, Eego (Inner Mongolia) Coal Chemical Technology Co., Ltd. successfully developed technologies for extracting products such as carbon fibers and super active carbon materials from high-temperature coal tar. The first production line with an annual capacity of 10,000 tons was put into operation last year in Zhungeer Banner, Ordos City ； Since the construction of the Yitai 1.2 million tons per year fine chemicals plant began, 11 upstream and downstream supporting enterprises have successively set up operations in the area surrounding it. This plant is capable of producing dozens of chemical products, including high-melting-point synthetic waxes, liquid paraffin, and stabilized light hydrocarbons. Petrochemical products are important basic raw materials for the development of the national economy, with huge market demand; currently, petrochemical processing routes remain the mainstream. As modern coal chemical projects in Inner Mongolia, Shaanxi, Ningxia, Xinjiang and other regions come online or progress, the products are evolving into end-use materials such as fibers, resins, and rubber. Industry experts say that modern coal chemical industry holds an increasingly important strategic value in replacing oil and coal and enabling their clean and efficient use, and it is of great significance for alleviating the pressure on China’s oil supply. Hu Haifeng, an advisor to the Shaanxi Petroleum and Chemical Industry Federation, told reporters that with coal prices currently at high levels, the economic viability of coal-based chemical products is not bad compared to those produced through petroleum-based methods; the manufacturing costs of products such as coal-derived olefins are lower than those using petroleum-based processes. Coal prices still have room to fall in the future, but oil prices will not decrease in the long run. At the same time, coal chemical industry can produce products that cannot be manufactured through petrochemical processes, such as anthracene, quinones, phenols, pyridines, and others found exclusively in medium- and low-temperature coal tar, which serve as raw materials for producing pharmaceutical intermediates ； High-temperature tar contains a high amount of polycyclic aromatic hydrocarbons, which can be used to produce liquid crystal materials. He Yongde, a member of the Coal Chemicals Committee of the China Petroleum and Chemical Industry Federation, and Zhang Xiangping, director of the Yulin Coal Chemicals Industry Promotion Center, also believe that coal accounts for over 96% of China’s total proven fossil energy reserves, making it the most important source of fossil energy. On the one hand, modern coal chemical technologies can be used to produce many of the products manufactured through petrochemical processes, thereby reducing reliance on crude oil and ensuring energy security. On the other hand, the range of products in the coal chemical industry is still limited at present. By extending the industrial chain, it is possible to produce high-value-added fine chemicals and coal-based carbon materials that are difficult to obtain through petrochemical methods, thereby complementing the strengths of the petrochemical industry. For example, coal indirect liquefaction is used to produce Fischer-Tropsch wax, special lubricants, and military aviation kerosene; these products have different structures from those of the petrochemical industry and offer better performance ； The yield of xylene produced from coal-based aromatics is much higher than that of the petrochemical route, and the process is simpler ； Low-temperature coal tar produced by coal pyrolysis also has a relatively high aromatic content.