Coal chemical industry sees new opportunities amid high oil prices! The new projects emphasize the integration of low-carbon practices with emerging industries

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Coal chemical industry sees new opportunities amid high oil prices! New projects focus on integrating low-carbon practices with emerging industries. Author/Source: Coal Tar Deep Processing and Hydrogenation Technology Collaboration Group. Date: 2022-05-01. Clicks: 14. High oil prices may bring new development opportunities to the coal chemical industry. The crude oil price is a major constraint on the development of modern coal chemical industry. It is generally believed that under normal circumstances, when crude oil prices are below $60 per barrel, modern coal chemical industries can hardly make any profits. Due to the complex international political and economic landscape, as well as the Russia-Ukraine conflict and Western economic sanctions against Russia, international crude oil prices have returned to levels above $100 per barrel, the same level they were at 8 years ago. Experts predict that the high-level fluctuations in international crude oil prices will not be a short-term phenomenon; rather, it is likely to represent a medium-to-long-term stable trend. Li Shousheng, president of the China Petroleum and Chemical Industry Federation, believes that in order to fully leverage China’s abundant coal resources, ensure energy security and steady growth of the national economy, and take advantage of the period of high crude oil prices, it is a valuable opportunity for the development of modern coal chemical industries in China to accelerate the establishment and expansion of a number of high-quality, advanced, and profitable such projects. He suggested taking advantage of the high international crude oil prices to plan and establish several modern coal chemical projects that are of high quality, large scale, and profitable. It is recommended to locate large-scale coal chemical projects in coal-producing areas. “For new coal chemical projects today, five key principles should be followed: first, the principle of taking advantage of resource endowments – project locations should be in areas with abundant coal resources.” ； Second is the principle of high-end products: it is essential to adhere to a direction focused on advanced technology and product differentiation ； Third is the principle of integration of coal and chemical processing: new chemical projects should, as much as possible, be planned in conjunction with coal production, adopting an integrated mining and chemical processing approach ； Fourth is the principle of green and low-carbon development; it is necessary to pursue new technical approaches that make use of high-carbon raw materials while minimizing emissions ； Fifth is the principle of sustainable development; modern coal chemical industries require a stable policy environment. ”Li Shousheng said that it is recommended to establish several large-scale, high-end, diversified, and green coal chemical projects in the four coal-producing regions of Xinjiang, Inner Mongolia, Ningxia, and Yulin. In March this year, Shaanxi Province **completed the approval process for the 500,000-ton low-carbon green epoxy resin integrated industrial chain and new materials industrial park project in Yulin; construction is expected to begin in September this year. This is the world’s first project encompassing the entire industrial chain of epoxy resins and their downstream products, with coal-based methanol as the raw material. For the first time, this project will utilize China’s new generation of DMTP technology as well as the hydrogen peroxide-based process for producing epichlorohydrin. It will also feature China’s first set of facilities for integrating renewable energy into fine chemical production, as well as a demonstration plant for the capture, storage, and comprehensive utilization of CO2. It is estimated that the total output value of this project will exceed 16.6 billion yuan, with profits and taxes reaching over 3.5 billion yuan. Upon completion of the project, the annual production capacity of epoxy resin will reach 600,000 tons, filling the gap in the epoxy resin industry in the western region. It is expected that this will lead to the development of an industrial cluster for epoxy resin and related high-performance new materials in the Yulin area. On April 19, at the “Forum on the Advanced Development of Modern Coal Chemical Industry and Seminar on the Coal-Based Epoxy Resin Industry Chain” held by the China Petroleum and Chemical Industry Federation, Li Shousheng said that the coal-based low-carbon epoxy resin project in Yulin, Shaanxi, has undertaken some significant and cutting-edge explorations in terms of technological advancement, diversification, and low-carbon development; such efforts are in line with the right direction and come at an opportune time. This project should be turned into a model for the advanced, diversified, and low-carbon development of modern coal chemistry in China in the new era. Reducing carbon emissions at the source and integrating with emerging industries: Leveraging coal resources, and driven by the successful operation and profitability of domestic coal-to-olefins plants, the coal-to-olefins/methanol-to-olefins industry has seen vigorous development. Li Junfa, director of the Petroleum and Chemical Planning Institute, said that based on operational performance, China’s coal-based olefin production has strong cost competitiveness, especially in terms of relatively low cash costs, enabling it to cope well even in times of low oil prices. Li Junfa believes that the key to the development path of coal-based olefins in China lies in the \"8 aspects of transformation\": hydrogenation of raw materials, upgrading of products, regionalization of the market, low-carbon technology, larger-scale equipment, greener supporting facilities, circular industry models, and intelligent management. He suggested that, given the characteristic of coal-based syngas having high carbon content and low hydrogen content, conventional production processes require the use of shift units to adjust the carbon-to-hydrogen ratio, which results in large amounts of carbon dioxide emissions. Therefore, in line with the goal of reducing carbon emissions at the source, natural gas, coke oven gas, coalbed methane, shale gas and other hydrogen-rich feedstocks or green hydrogen resources can be appropriately introduced when conditions permit, in order to adjust the carbon-to-hydrogen ratio of the syngas. This approach allows for the reduction or elimination of shift units, thereby cutting carbon emissions while also lowering the energy consumption of the facilities. Li Junfa also mentioned the need to increase the value-added utilization of olefins, avoid simply producing dimeric products, focus on the replacement of traditional technology-based products by those developed through industrial progress, and emphasize integration with emerging industries. “For example, using an efficient ethylene oxychlorination process to replace the calcium carbide method with mercury catalysts for producing (poly)vinyl chloride, and using direct oxidation with hydrogen peroxide to replace the traditional chlorohydrin method for producing propylene oxide, epichlorohydrin, etc. For example, POE and EVA resins for photovoltaics ； Epoxy resins for wind power applications ； Chemicals for new energy batteries (such as carbonates) ； Biodegradable materials (such as PGA, PPC, PPL, PBL, etc.). ” Coal-based olefin projects exhibit significantly higher resource and energy consumption, as well as carbon dioxide and pollutant emissions, compared to integrated refining projects using petroleum as a feedstock. Li Junfa explained that, overall, the emission intensity of major pollutants such as carbon dioxide, sulfur dioxide, and nitrogen oxides for olefin products produced by these units is three times or more higher than that of olefin products manufactured through integrated petroleum refining processes. Therefore, he emphasized that in order to achieve the dual-carbon goals, it is necessary to work together to promote the transformation, upgrading, and high-quality development of the coal chemical industry, thereby creating a new development paradigm characterized by coordinated governance in terms of economic development, energy security, environmental protection, and climate change mitigation, as well as mutual benefits for all parties involved. As the sector within modern coal chemistry that features the best market conditions and the largest scale, the coal-to-olefins industry should take the lead in exploring and implementing practical strategies for achieving carbon peak and carbon neutrality, so as to foster the green and low-carbon development of this industry. Regarding the low-carbonization of technologies, Li Junfa said that advanced and mature green low-carbon technologies from home and abroad should be adopted, such as large-scale pressurized gasification technology using full (semi) waste boilers, large-scale electric-driven air separation technology, large-scale methanol synthesis technology, and new methanol-to-olefins technologies ； Construct chemical production facilities for carbon monoxide and carbon dioxide on an appropriate scale as part of the supporting infrastructure ； Exploring efficient and low-cost CCUS technology demonstrations ； Explore the technical applications of biomass gasification for the production of bio-based methanol, olefins, and synthetic materials. He also mentioned the need to explore green energy-based hydrogen production technologies, to pilot demonstration projects in suitable areas that combine green hydrogen with coal-derived olefins to reduce carbon emissions, and to encourage integration with industries such as electricity, light industry, building materials, and textiles in order to improve the efficiency of resource conversion and achieve coordinated carbon reduction.