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Proposal for the construction of a new international standard liquid food CO2 plant with an annual output of 20,000 tons xxxxxxxxxxxxxxxxxxxxxxxx June 2006 Contents 1. The purpose and significance of the project construction ............................. 3 2. Preliminary market forecast analysis ............................. 5 3. Product plan and production scale........................10 4. Preliminary plan for process technology......................11 5. Supply of raw materials, fuel and power......................13 6. Factory construction conditions and preliminary site plan......................14 7. Preliminary plan for public works and auxiliary facilities......................15 8. Environmental Protection........................................16. 9. Factory organization and labor capacity estimation........................ 16 10. Preliminary planning for project implementation........................16. 11. Investment estimation and financing plan..........................17 12. Preliminary evaluation of economic and social benefits......18 13. Conclusions and Recommendations........................19. 1. The purpose and significance of project construction Carbon dioxide (CO2) is one of the most abundant chemical substances, and its sources are divided into two types: natural and those produced during chemical reactions. CO2 has three physical states: gas, liquid, and solid. It is a colorless gas with a slightly sour smell at normal temperature and pressure. Under standard conditions, one cubic meter of CO2 gas weighs 1.9769Kg. Under a standard atmospheric pressure, its sublimation temperature is -78.5°C, the critical temperature is 31.1°C, the critical pressure is 7.3967Mpa, and the relative molecular mass is 44.01. It cannot burn, easily liquefies, and its density is 1.53 times that of air. Pressurizing below the critical temperature can liquefy CO2 gas into colorless liquid CO2. According to the quality and use of CO2, it can be divided into industrial grade and food grade. According to the physical state of CO2, it can be divided into three forms: gas, liquid and solid (dry ice). The ammonia synthesis shift gas contains about 27% CO2, which must be removed before ammonia is synthesized. At present, most manufacturers use decarbonized CO2 to produce urea, ammonium bicarbonate or other uses. However, due to process limitations and the influence of ammonia balance in some companies, a large amount of CO2 is vented, which not only destroys the ecological environment, causes the greenhouse effect, but also wastes CO2, a precious resource. On February 16, 2005, the Kyoto Protocol to the United Nations Framework Convention on Climate Change officially entered into force. As the world's first legally binding international environmental agreement, it stipulates that industrialization * * Reduce greenhouse gas emissions by 5.2% between 2008 and 2012 based on 1990 levels. Because climate warming has become an unavoidable problem and one of the most serious environmental problems facing mankind. The reason for this phenomenon is the large amount of greenhouse gas emissions caused by human activities. This is especially caused by the rapid increase in C02 pollution caused by the extensive use of chemical fuels, mainly coal and petroleum. If active emission reduction measures are not taken, climate warming will pose a very serious threat to economic development and even human survival, becoming the biggest challenge to social development. At present, more than 8 billion tons of CO2 are emitted into the atmosphere each year globally, and my country accounts for about 10%, ranking second in the world. Although China is a developing country in the Kyoto Protocol * * , but the clean development mechanism is closely related to my country’s interests. Therefore, the recycling and utilization of carbon dioxide is very important. It is an important task in implementing the central government's scientific outlook on development, energy recycling, strengthening environmental protection, and building a harmonious socialist society. In fact, CO2 is a valuable resource that can be used. It has been listed as one of the most friendly gases for humans by relevant world organizations, and has been widely used in the chemical industry, food industry, mechanical processing, oil exploration and other fields. However, the current global annual utilization of C02 is less than 100 million tons, which is a huge waste. The real way out for my country's C02 is to form a CO2 industrial structure chain based on the 3R (Reduce, Reuse, Recycle) principles and meet the standards of a circular economy. Nowadays, an upsurge in vigorously developing and utilizing CO2 as a resource is rising in our country, including industrial grade and food grade liquid CO2. The fields of use are being greatly expanded. 1.1 Industrial grade CO2 is mainly used in: 1.1.1 CO2 gas shielded welding: CO2 gas shielded welding is one of the key technology projects promoted in my country's welding industry. With the increasing speed of promotion, the annual growth rate is expected to be around 10%. 1.1.2 CO2 fire extinguishing device: With the improvement of people's living standards, the allocation of CO2 fire extinguishing devices in hotels, high-end residences, automobiles, enterprises and institutions has also increased significantly, so the amount of CO2 used in fire extinguishing equipment has also increased by 8-12% annually. 1.1.3 CO2 gas fertilizer: CO2 and water are the two basic raw materials for plant photosynthesis. Industrialization of agricultural production is the only way to modernize agriculture. The establishment of grain bases and vegetable bases has opened up new areas for CO2 to be used as gas fertilizer in agriculture, and its growth rate is expected to be more than 5%. 1.1.4 C02 has made breakthrough progress in traditional Chinese medicine, food, spices, petrochemical industry, biochemical industry, oil exploration, etc. As a new low-cost technology, this technology will become more and more popular among people, and it also provides a place for C02 to use. 1.2. Food grade CO2 is mainly used in: 1.2.1 Beverage and beer industry: The beverage and beer industry is the main market for food CO2. At present, my country’s beverage and beer consumption is far lower than that of developed countries. * * , with the increasing living standards of our people, the demand for food CO2 in this industry will grow at a rate of more than 25% per year. 1.2.2 Tobacco industry: With the improvement of environmental protection requirements and the strict requirements for food additives, food CO2 has provided a great opportunity to enter the tobacco industry. The use of liquid food CO2 for puffing cut tobacco can save 2.5-3.0kg of raw cut tobacco per box of cigarettes, and the quality of puffed cut tobacco has also been greatly improved. The cigarette industry requires approximately 1.9 million tons of CO2 per year based on an annual output of 30 million boxes. 1.2.3 Preservation and preservation industry: Food-grade C02 or dry ice made from it is also the first choice for the anti-corrosion and preservation of truly "green" products such as food, vegetables, fruits, and aquatic products. It can also be used in the fields of quick-frozen food, refrigerated transportation, medical freezing, and food insecticide and storage. In the production process of nitrogen fertilizer, CO2 is used as a by-product to produce chemical fertilizers such as urea and ammonium bicarbonate. However, due to the adjustment of product structure, a certain amount of excess CO2 emissions have occurred. With the rapid development of the liquid CO2 downstream industry, the development of the liquid CO2 industry has been driven. Nitrogen fertilizer companies have technical and resource advantages in recycling CO2. Therefore, more and more nitrogen fertilizer companies have begun to utilize excess CO2. Hebei xx Chemical Co., Ltd. is a well-known nitrogen fertilizer company in Hebei Province that uses coal as raw material. After decades of development, it has reached a production capacity of 180,000 tons of total ammonia, and many indicators are at the leading level in the country. With the adjustment of product structure, a considerable part of the abundant CO2 gas is vented (see CO2 material balance sheet for details). In order to make full use of CO2 resources and improve corporate efficiency, a new 20,000t/a international standard liquid food CO2 device is installed. It is a win-win project for efficiency and environmental protection with low investment and quick results. As the application fields of carbon dioxide continue to expand, the market development prospects are getting better and better. Currently, the demand for it is strong in industries such as beverages, tobacco, food refrigeration and preservation, welding protection, foaming agents, plant gas fertilizers, and fire protection. If we take 350 kilometers as the service radius of our factory's CO2 products, there are currently no high-quality CO2 production companies in this area. There are currently only four or five small CO2 production companies in Hebei Province, and our factory's production capacity is far from meeting market demand. At the same time, after the decarbonization project of our factory is completed, there will be a large amount of CO2 gas. Therefore, fully recycling CO2 can not only meet the growing market demand and bring economic benefits to the enterprise, but also reduce greenhouse gas emissions, which has good environmental benefits. 2． Preliminary market forecast analysis 2.1. Current supply and demand status of products in domestic and foreign markets, preliminary forecasts of short-term and long-term demand and main consumption destinations 2.1.1 Overview of foreign utilization of CO2 The United States is the world's largest producer and consumer of C02. It currently has more than 90 sets of C02 production equipment, with a total production capacity of about 8 million tons/year, mainly for by-product C02 such as synthetic ammonia plants, petrochemical plants, ethanol plants, and natural gas processing plants. The utilization rate of C02 production equipment in the United States is around 60%, and the output has basically remained at 4.5 million t/a in recent years. The main sources of CO2 gas in Japan are heavy oil desulfurization and hydrogen production plants, synthetic ammonia decarbonization, blast furnace ironmaking, petrochemical plants, winery by-products, etc. Japan's C02 production capacity is 1.16 million t/a, and the market demand is about 1 million tons. Compared with the United States, its application fields are quite different. In recent years, it has grown at an annual rate of 8% to 10%. The CO2 consumption in Western Europe is about 2 million tons/year, of which more than 80% is liquid CO2. The main sources of C02 gas are CO2 separated from natural gas wells and by-product CO2 from synthetic ammonia plants. Germany has the largest CO2 production among Western European countries, with more than 30 liquid CO2 factories. The consumption growth rate of the Western European C02 market in the next few years is estimated to be 3% to 4%. The distribution of foreign CO2 consumption is shown in Table 1. Regional food industry beverages, beer oil and gas well operations metal processing steel fire extinguishing, aerosols others United States 46% 20% 11% 5% —— 8% Japan 12% 17% 44% 12% Western Europe 68% 8% 2.1.2 Overview of domestic CO2 utilization my country has very rich CO2 resources that can be developed and utilized. The main sources are (1) exhaust gas from the decarbonization process of the synthetic ammonia plant ； (2) CO2 gas field gas (3) Waste gas emissions from alcohol plants and breweries ； (4) By-product gas of hydrogen production unit ； (5) Limestone calcining kiln gas ； (6) Petrochemical by-product gas. From the 1970s to the 1980s, domestic synthetic ammonia plants and alcohol plants began to recycle CO2. Their production scale was less than 3,000 tons/year, and they were basically self-produced for self-use or based on sales. At that time, domestic CO2 production and sales were less than 30,000 tons. In the early 1990s, domestic C02 production and sales increased rapidly to more than 200,000 tons, and the market began to take shape. With the diversified development of my country's industrial and agricultural economy, domestic demand for C02 has shown rapid growth. By the end of 1997, more than 50 medium-sized synthetic ammonia plants in China had built 34 sets of CO2 recovery devices, with a total production capacity of about 230,000 tons/year, of which the smallest scale was only 1,000 tons/year, the largest was 30,000 tons/year, and 9 sets were above 10,000 tons. There are more than a hundred domestic alcohol plants and breweries that have installed C02 recovery and refining devices, with a total production capacity of 180,000 tons/year, of which the largest is 20,000 tons/year, and most are 1,000 tons/year. ； More than 10 large-scale C02 production units have also been built or under construction in refineries and petrochemical plants, accounting for approximately 50% of the domestic C02 commodity volume. Gas C02 products developed by the East China Petroleum Geology Bureau using the Huangqiao C02 gas field in Jiangsu and the Northeast Petroleum Geology Bureau using the Jilin Wanjinta CO2 gas field have also been put into the market successively, with a total production capacity of more than 150,000 t/a. After 2000, development has been faster. The average growth rate of consumption is expected to be 15%-20% in the next few years. The rapid growth of domestic C02 market demand has attracted the attention of many overseas C02 companies. The rapid development of the above-mentioned C02 production equipment is closely related to the participation of famous overseas gas companies. In recent years, major industrial gas companies in the world, such as BOC in the UK, Air Liquide in France, Praxair and CBI in the United States, Iwatani in Japan and Jingfu in Taiwan, have successively invested in China and built factories in provinces and cities with rich resources and great market potential. Among them, the British BOC Company has the largest investment, the largest number of joint ventures established in my country, and the highest output and market share of liquid CO2. BOC uses the new CO2 production equipment it developed as a form of capital investment. It has introduced 8 sets of 10,000 t/a liquid CO2 production equipment in my country, 6 of which have been officially put into operation in Fushun, Dalian, Qian'an, Jiaonan, Xingjia, Zijiang, etc. The solid CO2 project independently operated by Praxair of the United States, one of the world's three largest industrial gas companies, uses the world's most advanced technology to recover CO2 emitted by Baling Petrochemical. The first phase of the project invested US$8 million and has a designed production capacity of 30,000 t/a. Air Liquide and Jingfu Company respectively jointly develop and operate industrial gas products such as CO2 based on important open coastal cities such as Qingdao and Shanghai. In order to increase market share and competitiveness, their scale is also constantly expanding. For example, Linde and Shanghai Coking jointly plan to build a 60,000 tons/year refining plant. Cooperation with foreign companies has brought the overall technical level of our industry to a higher level. Domestic Guangzhou Nitrogen Fertilizer Factory and Jiangsu Huayang Liquid Carbon Company succeeded in using catalytic oxidation method to purify CO2 production in the 1990s. The catalysts and equipment are all based in China. The process is simple, the level of automation is high, the cost is greatly reduced, and the product quality can reach international standards. 2.1.3 Domestic CO2 consumption distribution and structure my country’s domestic market demand and consumption structure vary greatly among provinces and cities. Coastal open cities and economically developed provinces have greater demand, and their consumption structures vary depending on the industrial structure of each province and city. The CO2 market in Guangdong Province is relatively active, and the province's CO2 production capacity is more than 100,000 tons/year. The average annual CO2 consumption growth from 1997 to 2002 is estimated to be around 10%. Among them, carbonated drinks accounted for 27.77%; beer 7.36%; frozen 7.61%; dry ice 17.4%; cigarettes 10.67%; welding accounted for 25.28%; grain packaging, storage and transportation accounted for 11.05%; other uses 6.52%. The CO2 market and structure of Jiangsu Province are basically similar to those of Guangdong. The annual C02 consumption in Shanghai is more than 50,000 tons/year, with an average annual growth rate of about 11% in recent years. Shandong now has a CO2 production capacity of about 100,000 tons per year, of which beer and carbonated drinks account for 30%; tobacco 30% frozen, refrigerated 15%; welding 10%; oil field drive 6%; gas fertilizer 6%; medicine, fire protection, etc. 3%. The Northeast region is mainly used for welding 35%, oil field driving gas 21%, beverages and beer 22%, gas fertilizer for greenhouse vegetables 18%, and other uses 4%. The main uses of CO2 in Zhejiang include:: The field of industrial gas shielded welding accounts for about 60-70% of the entire Zhejiang market, and is mainly distributed in Ningbo, Zhoushan, Wenzhou, Taizhou and other coastal cities with developed industrial and shipbuilding industries. ； Followed by the food processing field, such as: Beer, beverage production, tobacco puffing industry. Mainly distributed in Hangzhou, Wenzhou, Ningbo and other places. The quality indicators on the market in Hebei Province are mainly implemented as GB/T6052-93 (industrial grade) and GB10621-89 (food grade). There are no international standard grade (Food and Beverage Association (Coca-Cola) standard) products yet. At present, there are only a few CO2 manufacturers in Hebei Province and surrounding Shandong Province, and most of the devices are products from the 1980s and 1990s. Most suppliers claim that the products can meet the food-grade requirements of the national standard GB10621-89. However, in fact, most manufacturers and suppliers in Shandong and other provinces and surrounding areas have low CO2 output, low quality, and unstable quality. Therefore, they are mainly sold to the industrial field. The high-end market of the CO2 food processing industry is basically occupied by foreign-funded companies such as Linde, Iwatani, and Praxair in Shanghai, Jiangsu and other places. From the perspective of consumption field, beverages, food preservation, cigarettes, and welding will still be the main industries in the next few years. In terms of growth rate, the highest average annual growth rate from 1997 to 2002 was container transportation at 20%, followed by dry ice at 19%, freezing and condensation at 16%, grain packaging at 16%, grain storage at 12%, cigarettes at 11%, welding at 10%, beer at 8%, beverages at 5%, and other uses at 9.60%. 2.2.CO 2 Consumption Trends Beverages and beer are the main consumer markets for food-grade CO2. According to the latest data provided by the Coca-Cola Company of the United States, the current per capita consumption of beverages and beer in my country is only 5kg, which is far lower than that of developed countries. * * The annual per capita consumption level is 150kg. China's annual per capita beverage consumption is only 1/2.5 that of the United States, and China's population is five times that of the United States. Therefore, China's beverage consumption should be 12.5 times that of the United States. The huge demand for food-grade CO2 in beverages indicates that its market prospects are very broad. According to statistics, the current total annual demand for C02 in the United States has reached 4.5 million tons, of which 3.2 million tons are food-grade C02. However, my country's current total annual C02 production is less than 1 million tons. It is estimated based on the per capita consumption level of the United States that my country's demand for food-grade liquid CO2 will reach millions of tons. As the living standards of our people continue to improve, the average annual growth rate of CO2 consumption in the beverage industry will exceed 25%. The huge demand for food-grade CO2 in beverages indicates that its market prospects are very broad. The tobacco industry also provides good opportunities for the application of food-grade C02. With the improvement of environmental protection requirements and the stricter requirements for food additives, food-grade C02 has been gradually used to replace Freon for tobacco puffing. The use of food-grade C02 puffed shredded tobacco is not only of good quality, but also saves 2.5-3.0kg of raw shredded tobacco per box of cigarettes. Zhejiang Cigarette Factory has changed all the original Freon puffing equipment to CO2 puffing equipment in 2001. Many cigarette factories in my country have successively changed the original Freon puffing equipment to CO2 puffing equipment in the past two years. The cigarette industry requires approximately 1.9 million tons of CO2 per year based on an annual output of 30 million boxes. Therefore, CO2 has very good promotion prospects in the tobacco industry. Food-grade C02 or dry ice made from it is also the first choice for "green" products for the preservation and preservation of food, vegetables, fruits, and aquatic products. It can also be used in the storage of quick-frozen foods, refrigerated transportation, medical refrigeration and other fields. CO2 gas shielded welding has always been one of the key technology projects promoted in my country. Compared with other welding methods, CO2 gas shielded welding has the advantage of low welding cost. ； High productivity ； Small welding deformation ； It has the advantages of wide application range. It is a high-efficiency and energy-saving new technology, which now accounts for about 20% of CO2 consumption. It is the second largest consumer market of CO2 in my country. In the next five years, gas consumption in this industry is expected to grow by around 11%. C02 supercritical extraction technology has made breakthrough progress in traditional Chinese medicine, food, spices, petrochemical industry, biochemical industry, environmental chemical industry, etc. As a new low-cost, easy-to-separate extraction technology, it will become more and more popular, and it will also provide a place for food-grade CO2 to be used. The CO2 consumption market has great potential, and applications have just been started or are being developed in many fields, such as: (1) Using CO2 as gas fertilizer can promote crop growth, increase yield and improve varieties. (2) Used as CO2 fruit and vegetable preservative. (3) CO2 is used as an oilfield recovery aid. (4) Used as a blowing agent instead of chlorofluorocarbons. (5) Used for sewage treatment. (6) Used to produce inorganic chemical products, and its products are widely used in metallurgy, chemical industry, building materials, light industry, electronics, medicine, machinery and other industries. (7) Application in organic chemical industry. (8) Used for supercritical cleaning. (9) As a preservative, supercritical CO2 can also be used for dyeing fabrics, drying agents, reaction accelerators, anti-cracking agents in glass manufacturing, and producing polymers. As my country's economy takes off and people's living standards improve, the demand for CO2 will continue to increase, and the market prospects have always been promising. 2.3. Preliminary forecast of product sales and market prospects 2.3.1. Development trend The liquid CO2 consumption market has great potential, conventional usage will further increase, and new application fields continue to emerge. Our company has great advantages in geographical location. Areas with large consumption such as Beijing, Tianjin, Shijiazhuang, Jinan and Bohai Rim cities and some surrounding areas in Shandong, Shanxi and Henan are all within our sales radius. ； In terms of production conditions, we have relatively advanced production equipment, sufficient, stable, and high-quality gas sources and strong technical support. Therefore, our products are highly competitive in terms of supply stability, price, and transportation. At present, our first priority is to enter the market first, and then gradually enter the high-end food market and occupy a share of the high-end market. * place, increase the added value of products and build product visibility. 2.4. The current status of product prices and preliminary forecasts of sales prices 2.4.1. The price of CO2 in my country varies widely across regions. Due to the relatively late formation of my country's CO2 market (it was truly formed in the 1990s, after multinational companies invested in CO2 production plants), and CO2 products need to be transported under heat preservation and pressure preservation conditions, a unified national market structure has not yet been formed, and its prices vary greatly depending on the region. In 2003, the market prices in areas with relatively active markets, such as Guangzhou and Shenzhen, were as high as 1,500 to 2,000 yuan/ton, while prices in Shandong, Shanghai, Jiangsu and other places were generally around 1,000 yuan/ton. In some less developed areas, the price is only 500 to 600 yuan/ton. The national average price is 700 to 800 yuan/ton. As my country's CO2 production capacity expands year by year, some large manufacturers and users are working hard to improve storage and transportation devices. There are more and more large tank trucks suitable for long-distance transportation. A unified national market will be formed within 2-3 years. Some small production plants will gradually be eliminated. Synthetic ammonia plants, alcohol plants, petrochemical plants, and gas field plants that have certain strength and are good at management will compete in separate courts. Synthetic ammonia plants will be in an advantageous position in market competition due to their rich resources, high quality, and low cost. 2.5 Provincial market price analysis The sales price of liquid CO2 in the industrial field in Hebei Province is basically between 500-650 yuan. ； In the high-end food industry, the factory price of cigarettes is about 700-900 yuan. According to the transportation cost of liquid CO2 (calculated as 0.75 yuan per kilometer, the freight for 400 kilometers is about 300 yuan per ton), the optimal sales radius of liquid CO2 should be within 400 kilometers. 3. Product plan and production scale 3.1. Product quality indicators and proposed scale product plan: International standard food grade liquid CO2 ； Product scale: 20Kt/a ； 63t/d ； product quality: Meets the International Beverage Association's liquid CO2 quality standards. See the attached table for specific quality standards. 3.2. Preliminary analysis of production scale. After the capacity expansion being implemented by our plant, the daily production of liquid ammonia will reach 520t/d, and the daily production of urea will reach 760t/d. The by-product CO2 recovery rate of the existing device is 70%, reaching 430,000 m3 per day. Calculated based on the urea device of 760t/d, CO2 is consumed 305,000 m3, and the remaining CO2 resources can produce about 60,000 tons of liquid CO2. It can meet the needs of 30,000 tons of liquid CO2 devices. See the table below for the CO2 gas balance table: CO2 Gas Balance Table Materials Total CO2 of Existing Devices Recoverable CO2 calculated as 70% Excess Mixed Gas Urea Device Consumed CO2 Remaining Resource Recovery Excess Calculated by Hours (m3) 26000 18200 7800 12700 2600 2900 Calculated by Year (10,000 m3) 18720 13104 5616 9144 1872 2088 Note: 1. 1t of liquid consumes approximately 630 m3 of gas. Therefore, based on market demand and the current resource status of our plant, the size of the new liquid CO2 unit is set at 20kt/a, with room for expansion reserved. 4. Preliminary plan for process technology 4.1. A brief description of the raw material route and production method. The raw material gas uses CO2 gas that is a by-product in the production of synthetic ammonia and methanol. According to the analysis of purified raw material gas by similar plants, its composition is as follows: Component content Component content CO2 98.4% H2S Not detected (≤0.01 mg/m3) CO 0.3~0.4% Toluene 6.3 mg/m3 O2 5PPm Ortho-xylene 0.24 mg/m3 Total hydrocarbons (methane) 0.14% (1400PPm) COS 46mg/m3 Benzene 5.8mg/m3 SO2 Not detected (≤0.01 mg/m3) p- and m-xylene 2.7 mg/m3. Judging from the above gas components, the total hydrocarbons reached 1400PPm and aromatic substances 15.04 mg/m3, both of which are more than 700 times the international standard. It is necessary to add a dehydrocarbon purification device to burn hydrocarbons, benzene and other oxygen-containing organic matter at a lower temperature to make it comply with Coca-Cola standards. Since the dehydrocarbon catalyst is very sensitive to sulfur, it is required that the gas before dehydrocarbonization contains H2S + COS