Transportation bottlenecks hinder the further development of the dimethyl ether industry

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The industry standard for dimethyl ether for use in urban gas, issued by the Ministry of Construction in October this year, provides a policy and standard basis for the civilian use of dimethyl ether, enabling the tens of millions of tons of dimethyl ether production capacity currently under construction in the country to enter the urban gas distribution channels. However, transportation bottlenecks still hinder the development of the dimethyl ether industry, limiting the scale of dimethyl ether production facilities as well as the distribution of their products. As early as July 2006, the National Development and Reform Commission issued a notice titled \"On Strengthening the Management of Coal Chemical Industry Project Construction to Promote the Healthy Development of the Industry,\" stating that projects for dimethyl ether with a production capacity of less than 1 million tons per year should generally not be approved. However, the largest dimethyl ether plants under construction in China have a capacity of only 600,000 tons per year, while the largest ones that are already in operation have a capacity of 200,000 tons per year. When determining the scale of the device for dimethyl ether, it is essential to take into account the transportation and logistics conditions as well as the conditions of the downstream sales market. Dimethyl ether is a gaseous substance at room temperature; it must be transported in tankers equipped with pressure vessels, and pipeline transportation would require even greater investment. To achieve economies of scale and reduce costs, the methanol plants designed to support MTO and MTP processes have large capacities; as a result, the plants that produce dimethyl ether as a by-product also have relatively large scales. However, if the dimethyl ether plant is primarily intended to supply gas for domestic use and sold in the vicinity, the scale of construction should not be too large due to constraints imposed by market capacity and transportation conditions. Large dimethyl ether production facilities are being built near coal mines in the north; the price of coal is around 100 yuan per ton, while the cost of dimethyl ether is approximately 1400 yuan per ton. If it is transported to the largest markets for dimethyl ether in the future, namely the East China and South China regions, with a transportation distance of 2,000 kilometers, the cost would be around 3,800 yuan per ton, calculated at the current average price of 1.2 yuan per ton-kilometer for road tankers. Currently, the price of methanol in the southeastern coastal areas is very high, exceeding 4,000 yuan per ton. If a low-cost and stable supply of methanol cannot be ensured, the cost of building dimethyl ether production facilities in those areas is too high. Therefore, resolving the transportation issues of dimethyl ether is particularly important to ensure the competitiveness of dimethyl ether products from the central and western regions in the East China region. The current situation is that, compared to the rapidly growing capacity, production, and demand for dimethyl ether, China’s transportation infrastructure for transporting dimethyl ether is quite inadequate. Except for enterprises along the Yangtze River and in the Pearl River Delta region, which can make use of water transportation conveniently, the dimethyl ether products of the vast majority of enterprises have to be transported by road. What’s more serious is that over 80% of the large-scale dimethyl ether projects currently planned or under construction are located in central and western provinces such as Shanxi, Shaanxi, Inner Mongolia, Henan, Ningxia, and Hebei. Apart from some enterprises in Henan that utilize water transportation along the Huai River, the dimethyl ether manufacturers in the other five provinces and regions can only rely on road and rail transport. However, to date, dimethyl ether has not been included in the Railway Dangerous Goods Name List. This means that there are no standard guidelines for various stages of dimethyl ether transportation by rail, such as filling, handling, unloading, and storage, nor are there any available sites or facilities for these purposes. Therefore, the railway authority will not accept its shipping request. In other words, dimethyl ether is currently completely impossible to transport by rail. Transportation bottlenecks have increased the costs for dimethyl ether manufacturers. “We are building our own dedicated railway line so as to use rail transport to handle the company’s future production of 600,000 tons per year of dimethyl ether and 300,000 tons per year of biodiesel. ”The words of Mr. Li, the head of the sales department at Henan Jinding Group, whose 100,000 tons per year dimethyl ether production facility has just been put into operation, reflect the wishes and thoughts of most alcohol-ether manufacturers at present. In fact, many methanol dimethyl ether production projects under construction, including those of Shanxi Broccoli Group with a capacity of 1 million tons per year, Huaneng Group’s project in Ningxia with a capacity of 1 million tons per year, and Inner Mongolia Jutai Energy Co., Ltd.’s project with a capacity of 1 million tons per year, all planned to utilize efficient railway transportation to deliver their products to the main consumption areas of methanol dimethyl ether such as East China and South China. But the actual transportation conditions are very unfavorable. At present, dimethyl ether companies can only hope that **the relevant authorities will issue standards for the railway transport of dimethyl ether as soon as possible, so that it can be transported by rail legally and smoothly. Furthermore, these dimethyl ether companies also hope that **when approving or authorizing large-scale methanol and dimethyl ether projects, in addition to ensuring proper management of raw materials, water supply, as well as environmental and safety aspects, it is necessary to consider the local demand for the products produced by such projects and the availability of transportation infrastructure. They request that project owners submit feasible reports on their transportation capabilities. Overall, China currently possesses the complete set of technologies for producing dimethyl ether from methanol, holds full independent intellectual property rights, and its technical level is at the world’s leading level. The key issues hindering the development of dimethyl ether are inadequate supporting measures, an immature market, and the need to update perceptions regarding its use. Among them, transportation bottlenecks are an issue that the development of the dimethyl ether industry urgently needs to address. (Excerpt from Chemical Engineering Online Weekly, Issue 44, 2007 (Total Issue 165))