【Haichuan Chemical Salary News】Henan’s coal chemical industry calls for adjustments to industrial policies: suggests eliminating synthetic ammonia plants with a capacity of less than 300,000 tons per unit

Zhao Baojun, vice president of the Henan Petrochemical Association, said that experience over the past two years has shown that if the aforementioned plan is continued to be implemented strictly, it will likely lead to a range of risks and losses, which is not conducive to the sustainable development of the traditional coal chemical industry. Moreover, under the current circumstances, it is also not beneficial for the stable operation of the province’s economy. According to statistics from the Henan Provincial Petrochemical Association, the plan affects 7 fertilizer manufacturers in the province; together, they will eliminate a total ammonia production capacity of 3.07 million tons, accounting for 48% of the current total production capacity. At the same time, the production of downstream products will also be affected, involving 2.2 million tons of urea and 1.7 million tons of ammonium chloride, among others. Zhao Baojun analyzed that the continued implementation of this policy will, first, lead to a decline of more than 1/3 in Henan Province’s fertilizer production next year, affecting the supply of fertilizers; second, it will result in asset losses amounting to hundreds of billions of yuan; third, the large volume of bank loans and social financing will increase financial risks and factors of social instability; fourth, it affects more than 11,000 workers, thereby impacting social stability.

“Our two existing synthetic ammonia plants with a capacity of less than 300,000 tons per year have been recognized as national leaders in energy efficiency for 9 consecutive years, yet they are still subject to phase-out. ”A relevant official from Henan Xinlianxin Chemical Industry Group said. After investigating a number of traditional coal chemical enterprises, the Henan Provincial Petrochemical Association believes that, thanks to the renovations and upgrades carried out in recent years, the existing enterprises are able to meet environmental emission standards. At the same time, although these traditional units have a slightly higher energy consumption compared to new gasification units, the initial investment required for such new units is enormous, which is difficult for most companies to bear. The investment required to upgrade fixed-bed pure-oxygen continuous gasification units, which have been developed in recent years, is only 1/10 of that needed for new coal gasification units. Yet their safety, environmental performance, and energy consumption metrics are not much different from those of the new units, and they operate stably, making them more suitable for use by the existing traditional coal chemical enterprises in Henan Province.

Responsible officials from companies such as Henan Xinlianxin Chemical Industry Group, Weihui Yubei Chemical Co., Ltd., and Hebi BMW Technology Group Co., Ltd. emphasized that the basis for Henan Province to phase out synthetic ammonia production capacities of 300,000 tons per year or less was the Ministry of Industry and Information Technology’s standards for accessing such production facilities; however, this standard was revoked by the Ministry in 2019, and as a result, this policy no longer has any **industrial policy basis. The heads of key coal chemical enterprises such as Xinlianxin believe that provinces like Shandong and Hebei, which are also major centers for traditional coal chemical production, do not have any policy requirements for phasing out synthetic ammonia production capacities of 300,000 tons per year or less. They suggest that **the relevant authorities should consider the practices of neighboring provinces and adjust and improve the relevant policies accordingly. For example, it is permissible for enterprises using batch fixed-bed processes to undergo upgrades without expanding their production capacity; they can choose the gasification technology based on their own circumstances and those of the local area, with individual approaches taken for each enterprise, thereby avoiding sharp fluctuations in the industry. It is recommended that the deadline for phasing out batch fixed-bed gasifiers be extended until the end of 2022, and it is also suggested that the policy requiring the elimination of synthetic ammonia production facilities with a capacity of less than 300,000 tons per year be abolished.

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According to Party B, the market eliminates weaker entities through survival of the fittest; outdated production capacity will eventually be phased out

Delaying the phasing out of fixed-bed gasifiers through the intermittent operation method, and abolishing the policy that requires the elimination of synthetic ammonia production units with a capacity of 300,000 tons per year or less – is this meant to protect outdated production capacities, or are traditional fixed-bed gasifiers simply in need of technological upgrades? Small-scale fertilizer use causes severe environmental pollution.

I also don’t know how this 300,000-ton threshold was determined

In the early 1980s, China used foreign loans (from Japan) to import ten sets of 30/50 fertilizer production plants from countries such as Denmark – plants with a capacity of 300,000 tons of synthetic ammonia and 500,000 tons of urea per year. These plants were located in Anqing, Jinling, Jingmen and other places; at that time, China only had fertilizer production facilities with a capacity of 100,000 tons per year. By around 2005, following technical upgrades and expansions, the potential of these devices had been fully exploited; they reached the brink of being phased out, and perhaps that was the standard for such phasing out.

In the 1970s, there were several facilities in the south that used natural gas as a raw material, while in the north there were several facilities that used coal; these included Yuntianhua, Chuandianhua, and Chitianhua