The coal chemical industry in Henan calls for adjustments to industrial policies

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The coal chemical industry in Henan calls for adjustments to industrial policies Author/Source: Sinochem News Network Date: April 8, 2020 Clicks: 13 It is suggested that the phasing out of synthetic ammonia production plants with an annual capacity of 300,000 tons or less be abolished. According to Sinochem News Network, last week the Petroleum and Chemical Industry Association of Henan Province submitted a written request to the provincial authorities, suggesting that industrial policies related to the traditional coal chemical industry be adjusted, that the timeline for phasing out batch-type fixed-bed gasifiers be postponed, and that the policy of phasing out synthetic ammonia plants with an annual capacity of 300,000 tons or less be revoked. This would help avoid various risks and losses and promote stable economic development in the province’s coal chemical industry. 　　It is understood that the \"Action Plan for the Transformative Development of Henan Province’s Traditional Coal Chemical Industry (2018–2020)\", issued in December 2018 with the aim of accelerating the green transformation of this industry, clearly stipulated that fixed-bed batch gasification furnaces should be phased out by 2020, and synthetic ammonia production capacities of less than 300,000 tons per year per plant should be gradually discontinued. The \"Implementation Plan for the Campaign to Combat Air Pollution in Henan Province in 2020\", released in February this year, reiterated this policy. 　　Zhao Baojun, vice president of the Henan Petrochemical Association, said that experience over the past two years has shown that if the aforementioned plan is continued to be implemented strictly, it will likely lead to a range of risks and losses, which is not conducive to the sustainable development of the traditional coal chemical industry. Moreover, under the current circumstances, it is also not beneficial for the stable operation of the province’s economy. 　　According to statistics from the Henan Petrochemical Association, the plan affects 7 fertilizer manufacturers across the province; in total, it will result in the elimination of a production capacity of 3.07 million tons of ammonia, accounting for 48% of the current total production capacity. At the same time, the production of downstream products will also be affected, involving 2.2 million tons of urea and 1.7 million tons of ammonium chloride, among others. 　　Zhao Baojun analyzed that the continued implementation of this policy will, first, lead to a decline of more than 1/3 in Henan Province’s fertilizer production next year, affecting the supply of fertilizers; second, it will result in asset losses amounting to over 10 billion yuan; third, the large volume of bank loans and social financing will increase financial risks and factors of social instability; fourth, it affects more than 11,000 workers, thereby impacting social stability. 　　“Our two existing ammonia synthesis plants with a capacity of less than 300,000 tons per year have been recognized as national leaders in energy efficiency for 9 consecutive years, yet they are still subject to phase-out. ”A relevant official from Henan Xinlianxin Chemical Industry Group said. 　　After investigating a number of traditional coal chemical enterprises, the Henan Provincial Petrochemical Association believes that, thanks to the renovations and upgrades carried out in recent years, the existing enterprises are able to meet environmental emission standards. At the same time, although these traditional units consume slightly more energy than new gasification units, the initial investment required for new gasification units is enormous, which is difficult for most companies to bear. The investment required to upgrade fixed-bed pure-oxygen continuous gasification units, which have been developed in recent years, is only 1/10 of that needed for new gasification units. Yet their safety, environmental performance, and energy consumption metrics are similar to those of the new units, and they operate stably, making them more suitable for use by the existing traditional coal chemical enterprises in Henan Province. 　　Responsible officials from companies such as Henan Xinlianxin Chemical Industry Group, Weihui Yubei Chemical Co., Ltd., and Hebi BMW Technology Group Co., Ltd. emphasized that the basis for Henan Province to phase out synthetic ammonia production capacities of 300,000 tons per year or less was the admission standards for synthetic ammonia set by the Ministry of Industry and Information Technology; however, these admission standards were revoked by the ministry in 2019, and as a result, this policy no longer had any **industry-policy basis. 　　The heads of key coal chemical enterprises such as Xinlianxin believe that provinces like Shandong and Hebei, which are also major centers for traditional coal chemical production, do not have any policy requirements for phasing out synthetic ammonia production capacities of 300,000 tons per year or less. They suggest that **the relevant authorities should consider the practices of neighboring provinces and adjust and improve the relevant policies accordingly. For example, it is permissible for enterprises using batch fixed-bed technology to undergo upgrades without increasing their production capacity; they can choose the gasification technology based on their own circumstances and those of the local area, with individual approaches taken for each enterprise, thereby avoiding sharp fluctuations in the industry. It is recommended that the deadline for phasing out batch fixed-bed gasifiers be extended until the end of 2022, and it is also suggested that the policy requiring the elimination of synthetic ammonia production facilities with a capacity of less than 300,000 tons per year be abolished.