Xie Kechang: Some Thoughts on the Development of Modern Coal Chemical Industry during the 14th Five-Year Plan Period

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Xie Kechang: Some Thoughts on the Development of Modern Coal Chemical Industry during the 14th Five-Year Plan Period. Author/Source: Huahua Net Coal Chemicals. Date: 2020-07-01. Clicks: 7. Through years of development, China’s modern coal chemical industry has made significant progress. First, its overall scale is among the highest in the world. As of 2019, China’s coal-to-oil production capacity was 9.21 million tons per year, its coal-to-olefins production capacity was 13.62 million tons per year, its coal-to-ethylene glycol production capacity was 4.78 million tons per year, and its coal-to-gas production capacity was 5.105 billion cubic meters per year. Second, the operational level of demonstration or production facilities is continuously improving. The 4 million tons per year coal indirect liquefaction demonstration project, built using technology with independent domestic intellectual property rights, the million-ton scale coal direct liquefaction demonstration project, and dozens of 500,000–600,000 tons per year coal-to-olefins (MTO) projects have all achieved safe, stable, and long-term operation. There has been a continuous reduction in material consumption, energy consumption, water consumption, and emissions of various waste types, while the level of product differentiation has improved. Thirdly, a considerable portion of these technologies are at the international advanced or leading level. Specifically, large-scale coal gasification technology is at the international standard; high-temperature Fischer-Tropsch synthesis technology is at the international advanced level. Coal-to-olefins, coal-to-aromatics, low-temperature Fischer-Tropsch synthesis, coal-to-ethylene glycol, and kerosene co-processing technologies are at the international leading level, while direct coal liquefaction, medium- and low-temperature pyrolysis of pulverized coal, and tar lightening technologies represent international innovations. However, the development of modern coal chemical industry still faces some constraints. First, the strategic positioning for industrial development is unclear. Coal is the main source of energy self-sufficiency in our country. Society lacks awareness of the fact that modern coal chemical industry and green, high-end chemical industries can achieve clean and efficient operations, thereby serving as a partial substitute for petrochemical industries. As a result of this lack of understanding, there are movements toward reducing coal use, which has led to an unclear strategic positioning for China’s coal chemical industry. This, in turn, results in unpredictable policies and a situation in which companies experience constant fluctuations. Second, internal shortcomings affect the level of industrial competitiveness. Coal chemical industry itself has low efficiency in energy utilization and resource conversion, and environmental problems caused by the \"three wastes\", especially coal chemical wastewater, are prominent ； Due to the indispensable role of the hydrogen adjustment (shift) reaction in modern coal chemical processes, these processes consume a large amount of water and generate significant carbon emissions ； Due to the abundance of primary products, there is insufficient development of refined, differentiated, and specialized downstream products; as a result, the industry lacks clear comparative advantages and weak competitiveness ； Due to differences in technical integration and production management levels, product costs are high, and overall efficiency needs to be improved. Third, the external environment restricts industrial development. Oil prices and supply, production capacity and markets, resource allocation and taxation, credit financing and returns, environmental capacity and water use, greenhouse gases and emission reduction are all external factors that affect the development of coal chemical industry in our country. In certain periods and regions, these factors, either individually or in combination, not only severely hinder the healthy development of the coal chemical industry but also **reduce the economic resilience of the industries that have already been established. Energy security is a fundamental and strategic issue related to the economic and social development of our country. At present, given the severe impact of the COVID-19 pandemic on the global economic order and economic activities, the profound changes in geopolitics, and the increasing pressure on energy security, it holds great strategic significance for our country to develop modern coal chemical industries. Faced with a complex domestic and international development environment, the 14th Five-Year Plan should, in line with the requirements of \"thoroughly carrying out the ‘six stabilities’ tasks and implementing the ‘six guarantees’ measures,\" provide a robust energy system to ensure the full restoration of production and daily life order and the recovery of China’s economy. As an important part of the energy system, modern coal chemical industry should be guided by the goal of \"promoting a revolution in energy production and consumption and establishing an energy system that is clean, low-carbon, safe, and efficient.\" The basic requirements of being clean, low-carbon, safe, and efficient should serve as the guiding principles for the development of this industry during the 14th Five-Year Plan period. Accordingly, the following development recommendations are put forward. Regarding clean development, it is necessary to actively advance technologies for the efficient removal of pollutants, coordinated control of multiple pollutants, near-zero wastewater discharge technologies, as well as technologies for the resource utilization of waste materials; industrialization should be achieved as soon as possible through demonstration projects ； At the same time, it is also necessary to base the scientific planning of the coal-based energy and chemical industry on the carrying capacities of the atmospheric, aquatic, and soil environments. On the other hand, it is necessary to establish comprehensive clean production standards and relevant environmental protection policies for coal-based energy and chemical industries, improve the clean production management system that includes project approval, full-process supervision, and post-evaluation, clarify supervision responsibilities, and create an accountability system in order to guide and regulate the sustainable development of these industries. Regarding low-carbon development, it is necessary to clarify what can and cannot be done in terms of reducing carbon emissions in coal-based energy and chemical industries. On the one hand, it is important to make full use of the advantage of high-concentration CO2 generated as a by-product in these processes, and to actively explore CCUS technologies. Additionally, efforts should be made to advance research and development in cutting-edge CCUS applications such as efficient CCS, as well as the use of CO2 for driving oil production and producing olefins, in order to find more ways to utilize CO2 resources ； On the other hand, it is not possible to avoid addressing the issue altogether by ignoring the high-carbon nature of coal-based energy and chemical industries due to their technological characteristics; such an approach would hinder the sustainable development of these industries. It is necessary to overcome the bottlenecks in emission reduction and energy efficiency through breakthroughs in disruptive technologies, in order to reduce the high carbon footprint of coal-based energy and chemical industries. Regarding safe development, **it is necessary to clarify the strategic significance and industrial role of coal-based energy utilization as a cornerstone for ensuring China’s energy security, and to make the clean and efficient exploitation of coal the foundation and top priority in the process of energy transformation. In addition, it is necessary to take the lead in formulating development plans and policies for coal-based energy and chemical industries, drive innovation in disruptive process technologies, and advance the gradual upgrading, pilot implementation, moderate commercialization, and full industrialization of coal-based energy and chemical industries in an orderly manner ； Formulate relevant economic and financial support policies to enhance the profitability and competitiveness of the enterprises involved in implementation, build a certain scale of capacity for oil and gas alternatives, and create a favorable external environment for the development of modern coal chemical industries.