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At the 2009 Symposium on Opportunities for the Revitalization of China’s Petroleum and Chemical Industry held yesterday, Hu Qianlin, deputy secretary-general of the China Petroleum and Chemical Industry Association, revealed that efforts are being made to introduce subsidy policies for new energy hybrid vehicles that use methanol-based gasoline. He also said that the introduction of subsidy policies for hybrid vehicles using dimethyl ether is a matter of course. Hu Qianlin also revealed that methanol gasoline is an excellent alternative to petroleum-based fuels, and it represents a viable solution to the shortage of petroleum in our country. At present, the standards for M85 methanol gasoline (gasoline mixed with 85% methanol, referred to as M85) have been submitted to the Standards Committee, where they are currently under review. Currently, there is high enthusiasm for this across various regions; once the **standards are established, the development of methanol gasoline will see significant improvements. Methanol vehicles are an important part of China’s new energy vehicle strategy; they represent the category of alcohol-ether-based vehicles. Methanol fuel and dimethyl ether have been identified as transitional alternative fuels for use in vehicles over the next 20–30 years. Once the standards for methanol gasoline are established, they will rapidly accelerate the development of vehicles powered by alcohols and ethers. At the meeting, Hu Qianlin clearly stated regarding the current status and future direction of modern coal chemical industry in China that coal-based fertilizer production should be encouraged, while the development of coal-based methanol should be pursued further – that is, efforts should be made to develop downstream products of methanol such as olefins and acetic acid produced from methanol. The development of dimethyl ether should also be actively promoted, coal-based oil production should be carried out in a scientific manner, and the development of coal-based integrated production processes should be encouraged. However, he also believes that modern coal chemical industry in our country has experienced obvious blind overheating. Almost all major coal-producing provinces have formulated 11th Five-Year Plans for coal chemical industry development, including Shanxi, Guizhou, Ningxia, Shaanxi, Xinjiang, Yunnan, and Shandong. There is also the issue of blindly introducing technologies, such as the large-scale adoption of SHELL’s gasification systems. Coal chemical industry is a sector that requires substantial capital, technology, and water resources; careful consideration should be given before developing it. According to sources from the Petrochemical Association, “currently one-third of methanol producers have completely stopped production, while half of them operate at a capacity of less than 50%.” In 2008, China’s total methanol production capacity reached 28.18 million tons, with more than 250 manufacturing enterprises involved. From 2000 to 2008, China’s methanol production capacity grew at a rapid pace, with an average annual growth rate of 23.5%; in 2007 and 2008, the growth rates were even higher, at 76% and 43% respectively. In 2008, China added 7.98 million tons of methanol production capacity. A situation of overcapacity has emerged. In addition, there are currently 57 manufacturers in China’s dimethyl ether industry, with over 20 production projects already in operation; by 2010, the production capacity is expected to reach 8-9 million tons. The coal-to-oil industry currently has four projects, with a production capacity of 8.84 million tons per year. There are 4 projects under construction in the coal-based olefins industry, with an annual production capacity of 2.56 million tons; over 20 projects are planned, with a total capacity of 18 million tons. In terms of the development of coal-based ethylene glycol, in March China’s related technology passed expert evaluation, marking a significant technological breakthrough that opens up new avenues for ethylene glycol production. (http://www.sxcoal.com Date: April 18, 2009 Source: Shanghai Securities News)