The one-size-fits-all approach to controlling energy consumption has led coal chemical enterprises in some areas to lament that it’s better to shut down”

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The one-size-fits-all approach to energy consumption control has led coal chemical enterprises in some areas to lament that it would be better to close down. Author/Source: Petrochemical Industry Observation Date: 2021-07-07 Clicks: 13 Since the beginning of this year, some regions in China have adopted an overly strict and crude approach to energy consumption control, creating a climate of extreme anxiety; as a result, these regional coal chemical enterprises are suffering greatly and even despairingly consider closing down. The author believes that it is neither scientific nor reasonable to fail to distinguish between fuel coal and raw coal used by coal chemical enterprises, to simply use last year’s data as a basis for determining the total energy consumption of these enterprises, and then to impose uniform cuts on the total amount of coal used. Firstly, using last year’s actual energy consumption as a benchmark is not entirely reasonable. As the author understands it, last year, the coal quotas allocated to coal chemical enterprises in a certain area in the north were all reduced proportionally based on the actual amount of coal used by those enterprises in the previous year. As is well known, last year, due to the pandemic, corporate production was severely disrupted; the actual output was less than 70% of that in normal years, with some even dropping to as low as 50%. Therefore, due to the special circumstances of last year, the coal consumption of coal chemical enterprises was not only much lower than in normal years but also fell short of the requirements for their normal production activities. It is clearly unscientific for local authorities to use this as a basis to set total energy consumption targets for enterprises. ◐A coal-to-oil company hardly produced anything during the first quarter of last year due to the pandemic, resulting in a low baseline for energy consumption. Yet the local authorities demanded that this company reduce its total energy consumption by another 50,000 tons of standard coal compared to the previous year during the first quarter of this year – which is simply absurd. ◐Another large coal-based olefins manufacturer uses 320,000 tons of coal per month, while the coal quota assigned to it by the local authorities is only 250,000 tons – clearly not enough. The situations faced by these two companies are not isolated incidents, and such practices do not occur only in the aforementioned location. “During the 13th Five-Year Plan period, some provinces and regions failed to meet their **energy consumption control targets; some of them were summoned for discussion and publicly criticized by the **National Development and Reform Commission due to their poor rankings. Therefore, since the second half of last year, many provinces and regions have successively introduced a series of local policies to fully implement the energy consumption dual control measures for the 14th Five-Year Plan period and this year. In some cases, the targets for dual control of energy consumption are broken down level by level, from provinces and regions to cities and counties, and then to individual enterprises. As a result of this cascading effect, the relevant departments, in an effort to meet their targets, are forced to adopt a one-size-fits-all approach, which harms both enterprises and the local economy. Secondly, the raw coal should be deducted from the total energy consumption. From the perspective of chemical reaction processes, coal chemistry involves using chemical methods to convert the majority of the carbon in raw coal into other energy-based products and carbon-containing chemicals, such as methanol, petroleum products, natural gas, polypropylene, etc.; only a very small amount of carbon is emitted during the production process. The energy consumption and emissions in the coal chemical industry mainly arise from the fuel coal. Therefore, it is necessary to distinguish between these two types of coal with different functions and adopt different accounting standards. However, due to the lack and inadequacy of relevant standards, in practice at the local level, coal chemical enterprises often confuse the fuel coal used in production with the raw coal, including all of the raw coal in the energy consumption calculations. As stipulated in the **Statistical Reporting System**, fuel coal and raw coal are both included as energy quantities in the calculations, while carbon-containing substances such as ethylene, propylene, methanol, and polypropylene are not taken into account as energy quantities to be deducted from these figures. This fails to take into account the fact that the conversion of raw coal used in coal chemical processes into carbon-containing chemical products also represents an output of energy, resulting in inaccuracies in the calculation of overall energy consumption. Take coal-to-olefins as an example. According to the relevant information available, there are currently no standards in China for calculating the energy consumption associated with the entire production process of polypropylene using coal-based olefins. In some areas, the comprehensive energy consumption of enterprises is merely calculated in accordance with the provisions of the **Statistical Reporting System**. In fact, there are two **standards** regarding the comprehensive accounting in coal chemical industries: the \"Limits on Energy Consumption per Unit of Coal-Based Olefins\" (GB 30180-2013) and the \"Limits on Energy Consumption per Unit of Polypropylene\" (GB 31826-2015). These two standards calculate respectively the comprehensive energy consumption from raw coal to the olefin production stage, and the comprehensive energy consumption from olefin synthesis to the polypropylene production stage. These two standards can fully serve as a reference for \"dual control,\" making policies more scientific and accurate. Unfortunately, at present, local authorities **have not calculated the energy consumption metrics for coal-based polypropylene manufacturers in accordance with these two standards, which has resulted in an unreasonably large reduction in the energy consumption figures for such companies, putting them at risk of survival. In summary, the author would like to put forward two suggestions here. 01 First, scientifically and reasonably determine the total amount of coal used by coal chemical enterprises to meet the needs of their normal production and operational activities. “In the context of \"dual control,\" it is essential to distinguish between existing and new facilities. For those coal chemical enterprises that have already been built, put into operation, and are operating normally, it is necessary to ensure an adequate supply of the raw materials required for their production, by assigning them quotas in line with their designed production capacity. For coal chemical enterprises that are capable of operating normally, energy consumption control should focus on energy conservation and emission reduction during the production process, while strictly regulating the launch of new projects. 02 Second, provide coal chemical enterprises with an appropriate amount of time for transformation and policy flexibility. For example, when calculating the overall energy consumption of coal-to-olefins plants, the above two national standards can be used to determine the overall energy consumption for the coal-to-olefins and polypropylene production processes; or the raw coal that is converted into chemical products can be excluded from the energy input calculations ； For clean energy sources such as coal-based gas production delivered to other locations, the carbon emissions are reduced in accordance with the calculation methods used for carbon emissions from thermal power generated and delivered elsewhere; for major projects that are included in the planned layout or have been approved, separate calculations of their carbon emissions are conducted.