China Xuyang Group: Promoting the clean and efficient use of coal and coke to drive innovation in green energy

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China Xuyang Group: Promoting the clean and efficient use of coal and coke, driving innovation in green energy. Author/Source: Collaborative Group on Advanced Processing and Hydrogenation of Coal Tar. Date: 2022-05-19. Clicks: 29. Recently, with the approval of the State Council, the People’s Bank of China increased the amount of special reloan funds allocated for the clean and efficient use of coal by 100 billion yuan, with these funds intended to support coal development and utilization as well as to enhance coal storage capacity. The new funding areas include safe coal production and storage, as well as ensuring a supply of coal for thermal power plants. As early as the end of last year, in accordance with the requirements of the State Council’s executive meeting, the People’s Bank of China introduced special reloans to support the clean and efficient use of coal. With a total amount of 200 billion yuan, these loans are intended to support seven areas including the safe, efficient, green, and intelligent extraction of coal, with the goal of ensuring China’s energy security and facilitating the scientific and orderly achievement of the \"dual carbon\" targets. With this additional 100 billion yuan, the total amount available for the special reloan aimed at promoting the clean and efficient use of coal reaches 300 billion yuan. Unlike the previous 200 billion yuan in special reloans, the additional 100 billion yuan in special reloans this time are primarily intended to support the further activation of advanced coal production capacity, ensure a stable supply of energy, and help maintain economic activity within a reasonable range. Last year, China began restricting imports of Australian coal. After the second half of 2021, the price of coking coal rose significantly, exerting certain pressure on the cost structures of industries that use coal, such as the coke industry. Given the tight supply and demand for coal, the central bank’s introduction of this targeted reloan policy will undoubtedly benefit downstream enterprises such as those in the coke industry. It is reported that those in the coal industry believe this policy helps to stabilize coal prices and reduce coal-related costs. At the same time, as important players in the clean and efficient utilization of coal, coke enterprises will undoubtedly benefit from this special loan, which provides strong support for such utilization, thereby aiding in their development. As the world’s largest independent producer and supplier of coke, China Xuyang Group operates in key business areas including coke, chemicals, operation and management services, trading, and hydrogen energy. In recent years, Xuyang Group has actively pursued an expansion strategy, driving industry consolidation and acquiring more advantageous resources through modes such as acquisitions, joint ventures, cooperation, and operational management services. In 2021, Ruiyang’s coke production capacity was 12.1 million tons; it is expected that by 2025 the group’s total coke processing volume will increase to 30 million tons, with its market share rising above 10%, thereby further solidifying its position as a leader in the industry. As for 2022, with the 3 million tons per year coking project at Xuyang’s Hohhot plant, the second phase of the 300,000 tons per year caprolactam production project at the Cangzhou plant, and the expansion project to increase caprolactam production from 200,000 to 300,000 tons per year at the Dongming plant coming online between July and August this year, Xuyang’s coking production capacity will rise to 15.1 million tons per year; it is expected that coking production will increase by 1 million tons within the course of the year ； The production capacity of Xuyang’s caprolactam will reach 750,000 tons per year. It is expected that caprolactam output will increase by 260,000 tons within this year. Building on this foundation, the company will develop high-precision material products for downstream applications, thereby creating a second industry-leading product line—ranked first in China and globally—apart from its existing coke product line. Meanwhile, in 2022, Xuyang’s light-asset businesses such as operation management services and trading are set to see significant expansion. It is expected that these activities will add 1.5 million tons to the operation management services business in the Shanxi region, 900,000 tons to other operation management services activities, and 2.6 million tons to the trading business. In total, the increase in operations management services and trading activities for the year will be no less than 5 million tons. Even more promising is the fact that, in response to the **Belt and Road Initiative**, Xuyang Group began to expand its operations overseas in 2021. Together with Qingshan Group, Delong Group, Nanjing Iron and Steel Group, and Zhongwei Group, it is working together to promote the development of its coke business abroad. The overseas projects currently being carried out by Xuyang include a joint-venture project launched last year in the Qingshan Industrial Park in Sulawesi, Indonesia, as well as two other joint-venture projects. It is expected that Xuyang’s new coal coking plant with an annual production capacity of 4.8 million tons, located in Qingshan, will come online gradually between April and June 2023. Meanwhile, the De Tian Coal Coking Plant with an annual production capacity of 4.7 million tons, and the Jinxiang New Energy Coal Coking Plant with an annual production capacity of 3.9 million tons, which are part of Xuyang’s joint ventures, are scheduled to go into operation in the fourth quarter of this year. Through excellent management and technological reforms, Xuyang Group managed to minimize the impact of rising coking coal prices on its costs in the second half of 2021, when these prices rose more than expected. It also continued to reduce energy consumption and achieved ultra-low emissions; some of its facilities have even reached extra-ultra-low emission levels. The coking and chemical industries require substantial capital investment, have high demands in terms of technology, employee competence, and systems, as well as strict requirements for controlling the production process. The level of technology and investment in research and development directly affect the quality of products. Whether manufacturing processes can achieve green or clean production also depends on these factors. All of this necessitates that companies make continuous investments in technology, employees, and production facilities, aiming for ongoing optimization and improvement. Since its establishment, Xuyang has placed great emphasis on research and development innovation, systematically pursuing technological advancement and upgrades, as well as strengthening training to improve the skills of its employees. This not only has driven continuous improvement in Xuyang’s production technologies but has also contributed to technological progress across the entire industry. To date, Xuyang Group has developed 345 proprietary technologies and 183 patented technologies. The energy consumption of Xuyang’s main production facilities is significantly lower than the industry standards; the energy consumption for processes such as coking, methanol production, ammonia synthesis, caprolactam production, **, tar processing, and benzene hydrogenation is 25%-35% lower than the industry benchmarks, while the energy consumption for phthalic anhydride production is more than 50% lower than the industry average. The energy consumption of its coking facilities is at the leading level in the industry. Among them, China Coal Xuyang made it onto the list of “leader” enterprises in energy efficiency within the coking industry for 2021, boasting the lowest comprehensive energy consumption per unit product in the industry at 96.72 kgce/t. In addition, digital transformation and upgrading is also one of the key areas that Xuyang Group is focusing on at present. Relying on research and development innovation, technological upgrades, as well as digital and intelligent capabilities, Xuyang Group continuously advances technological improvement. Through digitalization, it further enhances energy conservation and emission reduction while cutting energy consumption, thereby achieving green production. As **energy management and emission control become increasingly precise, this creates opportunities to expand Ruiyang’s operations and management services business. As an active advocate of the \"dual carbon\" goals, Xuyang Group has also implemented a range of advanced environmental protection measures, such as safety instrumented control systems, wastewater treatment systems, wet electrostatic precipitators for boilers, and flue gas treatment systems to ensure that emissions of wastewater, dust, SO2, and NOx are kept at extremely low levels. Building on these achievements, the company has pioneered new technologies for environmental management in order to further reduce emissions to even lower levels, thereby creating ecological parks, green factories, and clean production lines that meet even higher standards. In addition to continuously expanding and strengthening its presence in the coke and chemical industries to increase its market share, Xuyang Group is also actively pursuing opportunities in the field of clean energy. It is making significant efforts to develop hydrogen-related projects that cover production, storage, transportation, refueling, utilization, as well as research, thereby driving innovation in green energy development. Against the backdrop of the \"dual carbon\" goals, Xuyang Group, as a leading independent producer and supplier of coke in the industry, takes advantage of its unique strengths in terms of resources, costs, location, quality, environmental sustainability, manufacturing processes, and policy support for the development of hydrogen energy. It has established a hydrogen energy division, set up a hydrogen energy company, and founded a hydrogen energy research institute. The group has also released its Hydrogen Energy Development Plan. Following a development strategy that includes five key elements – production, storage, transportation, refueling, and utilization; a nationwide smart hydrogen supply network; technical expertise and services; and four phases of development (from individual projects to networks, and ultimately to a complete industrial chain) – Xuyang Group starts with the production of high-purity hydrogen and pilot projects for hydrogen refueling stations. It collaborates with other companies in the industry using multiple approaches, an open mindset, and a comprehensive strategy to develop applications for hydrogen energy. Through comprehensive hydrogen supply projects in cities such as Dingzhou, Xingtai, Hohhot, Baoding, Beijing, and Zhangjiakou, as well as pilot projects for converting diesel fuel to hydrogen at Tangshan Port, the group is working to build a network of hydrogen energy application sites. Internally, it is accelerating the development of a network for demonstrating hydrogen energy applications; externally, it is focusing on developing hydrogen refueling facilities along routes such as the \"Yi Li Xian\" route, the route from Gaobeidian Xinfadi to Beijing for transporting agricultural products, the route from Qingyuan’s agricultural product wholesale market to various supermarkets, restaurants, and farmers’ markets in Baoding. The group is also gradually expanding into areas such as fuel cells, key materials and components, combined heat and power systems, hydrogen-blended natural gas, hydrogen-based construction, and hydrogen metallurgy, aiming to use hydrogen energy to help achieve carbon peak and carbon neutrality goals. To date, Xuyang Group has essentially completed the establishment of the corporate entities involved in its hydrogen energy business as well as the design and organization of the relevant structural framework. It has put into operation two projects for producing electronic-grade high-purity hydrogen at a capacity of 1,000 kg/day each in the Dingzhou and Xingtai parks, as well as a demonstration hydrogen refueling station with a capacity of 500 kg/day in the Xingtai park. The commissioning of the 500 kg/day portable hydrogen refueling station in Baoding is also nearly complete. The second phase of the high-purity hydrogen production project in Dingzhou park, with a capacity of 12,000 kg/day, as well as a three-in-one hydrogen refueling station (for hydrogen, oil, and LNG) with a capacity of 500 kg/day in the same park, are expected to come online by June this year. The hydrogen energy demonstration project in Xingtai park, which aims to produce 37.5 million cubic meters of high-purity hydrogen and 160 million cubic meters of industrial hydrogen per year, is expected to be operational by the end of this year; this project is expected to generate an additional 17 million cubic meters of hydrogen output this year ； In terms of international cooperation, agreements on hydrogen energy development strategies have been signed with the people’s governments of Dingzhou and Baoding cities in Hebei Province, as well as with the people’s government of Qingshuihe County in Inner Mongolia. Hydrogen energy suppliers such as Hebei Qiming Hydrogen Energy Development Co., Ltd., Beijing Huanyu Jinghui Gas Technology Co., Ltd., Linde Gas (Shanghai) Co., Ltd., and Air Liquide (Tianjin) Co., Ltd. have also entered into partnerships. Collaborations have been established in areas such as liquid hydrogen and hydrogen fuel cell technologies, hydrogen storage and refueling equipment technologies, hydrogen station operation and hydrogen transportation, investment and operation of projects related to production, storage, transportation, refueling, and utilization of hydrogen, as well as fuel cell supply; this has resulted in the formation of a preliminary framework for comprehensive cooperation. Xuyang’s high-purity hydrogen products feature stable quality; low-carbon hydrogen is produced during the conversion of coal coke into high-purity hydrogen, while clean hydrogen is generated through the purification of coke oven gas and industrial hydrogen. The qualification rate is 100%, with a product purity of over 99.999%. This helps to fully leverage the zero-carbon properties of hydrogen as an energy source, thereby facilitating deeper decarbonization in downstream industries. Rising Sun Group provided high-quality hydrogen energy for the 2022 Beijing Winter Olympics. As of March 31, 2022, it had supplied over 50,000 cubic meters of hydrogen, thereby ensuring a supply of clean energy for the Olympics and Paralympics. This effort enhanced Rising Sun Group’s reputation as a hydrogen energy provider and showcased its image as a supplier of clean and low-carbon energy. On March 23, the **National Development and Reform Commission issued the Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021–2035)**, setting the goal for 2025 to be the advancement of the upstream hydrogen production sector. Although the domestic hydrogen production industry is still in its initial stages, Ruiyang Group has adopted it as a key direction for the development of emerging industries, with the goal of achieving green hydrogen production. The group is actively building a platform for providers of green hydrogen services, as well as an ecosystem for reducing emissions across the entire upstream and downstream supply chain, which holds the potential to create new growth points for the achievement of carbon neutrality goals.