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What are the key points for adjusting and revitalizing the petrochemical industry? 04-08-2009 China Chemical Information Network. After the plan for adjusting and revitalizing the petrochemical industry was approved in principle by the State Council, its specific details have remained unclear – it’s as if there’s noise coming from the stairs, but no one appears to be coming down. Regarding this document that has attracted significant attention in the industry, Cai Ronghua, head of the Petrochemicals and Chemicals Division of the Industry Coordination Department under the National Development and Reform Commission, revealed at the 2009 Industry Development Analysis Conference held in late March that the revised Plan for the Adjustment and Revitalization of the Petrochemical Industry would be officially issued in the near future. This year, the petrochemical industry aims to operate smoothly ； Over the next 3 years, the layout of the petrochemical industry will become more rational. Regarding the policy issues related to the coal chemical industry, Cai Ronghua said, “In the next three years, the focus will be on advancing the existing coal chemical demonstration projects; there will be no large-scale development of coal chemistry. Only after these demonstration projects are completed will we consider the next steps for the development of coal chemistry, and it may be necessary to implement appropriate controls.” ” The coal chemical industry demonstration projects currently underway in our country include: Shenhua Baotou’s plant with an annual production capacity of 600,000 tons of coal-derived olefins; Zhongtian Hechuang’s plant with an annual output of 3 million tons of coal-derived dimethyl ether; Xinjiang Guanghui’s plant with an annual production capacity of 1 million tons of coal-derived dimethyl ether; China National Coal Group Heilongjiang’s plant with an annual output of 600,000 tons of coal-derived olefins; Datang Keqi’s plant producing 4 billion cubic meters of coal-derived natural gas per year; Datang Fuxin’s plant also producing 4 billion cubic meters of coal-derived natural gas per year; and Ordos HuiNeng’s plant with an annual production capacity of 1.6 billion cubic meters of coal-derived natural gas. At present, in some areas, ignoring the carrying capacity of water resources, ecosystems, and the environment, there is an overemphasis on the proportion of coal resources that should be converted, leading to a surge in coal chemical projects. In his speech titled \"Thoughts on the Adjustment and Revitalization of the Petrochemical Industry,\" Cai Ronghua pointed out that \"the enthusiasm for coal chemical industry development needs to be guided.\" Coal chemical industry demonstrations should be carried out in a steady manner, adhering to the principles of controlling the total production capacity, phasing out outdated processes, protecting the ecological environment, developing a circular economy, integrating energy and chemicals, and conducting energy efficiency assessments throughout the entire life cycle. It is necessary to firmly curb the uncontrolled expansion of the coal chemical industry, with a focus on advancing existing demonstration projects such as those for coal-to-oil, coal-to-olefins, coal-to-dimethyl ether, coal-to-methane gas, and coal-to-ethylene glycol. ” Coal chemical projects are large in scale, require substantial investment, and have a significant impact on coal and water resources. Some large coal chemical projects consume 4,000 to 5,000 tons of water per year, which is equivalent to half of the flow volume of a small river. Cai Ronghua said in this regard, \"Over the past few years, we have emphasized the need to ensure proper support for coal chemical projects, and to plan and construct them in a rational manner based on the local availability of coal and water resources.\" ” Regarding the future outlook for the industry, Cai Ronghua analyzed that \"China’s consumption of petrochemical products is still on the rise; there is a persistent demand for oil products, fertilizers, and pesticides, and the market for high-end petrochemical products holds great potential.\" The petrochemical industry is at a crucial stage of transitioning from scale to strength; its comprehensive advantages for industrial revitalization still exist, and the trend of its development has not changed. Therefore, the petrochemical industry should take advantage of current favorable factors such as a easing imbalance between supply and demand in the market and falling construction costs, and use the market-driven mechanisms to accelerate structural adjustment and industrial upgrading in order to grow stronger. ” It is understood that in the future, focus will be placed on phasing out inefficient, low-quality, and outdated refining units with an annual production capacity of 1 million tons or less. Those included on the elimination list also comprise fertilizer production capacities with outdated technology and inefficient use of resources, as well as a number of highly toxic and high-risk pesticide varieties. Outdated production capacity for products such as calcium carbide and methanol is also included. Cai Ronghua emphasized that, \"In the future, strict controls will be imposed on the construction of projects for products with overcapacity. Relevant departments are working urgently to formulate (or revise) industry policies, standards, and catalogs, and to use comprehensive measures to accelerate the phasing out of outdated production capacity.\" ” Cai Ronghua revealed that efforts are being made to study the establishment of **fertilizer reserves. Improve the commercial reserve systems for fertilizers during off-seasons at both the central and local levels, support key fertilizer manufacturers in stocking up on phosphate ammonium and urea, and refine the dynamic adjustment mechanism for comprehensive subsidies for agricultural inputs. He believes that \"fertilizers are a product with seasonal demand, and therefore a well-developed inventory system is necessary.\" ” The provisions regarding commercial reserves of refined oil products have been included in the upcoming plan for the adjustment and revitalization of the petrochemical industry. Cai Ronghua said that the commercial reserve for refined oil will be established following the approach used for crude oil commercial reserves, and the relevant methods and systems for such reserves will be developed as soon as possible. Currently, China’s reserves of refined oil are primarily used for military purposes and disaster relief. “From the perspective of stabilizing the market, we need to further increase reserves of refined oil; it is difficult to control the market without having a consumption reserve for one month. ”The provisions related to refined oil reserves in the plan also include accelerating the construction of reserve facilities, increasing refined oil reserves, and focusing on acquiring oils from key enterprises.