The 13th Five-Year Plan for coal chemical industry takes shape; priority is given to controlling the pace of expansion

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The coal chemical industry, moving forward amid disputes, is about to be guided by the 13th Five-Year Plan. 　　　　**Li Ye, the chief economist of the Energy Bureau, said at the recently held \"2015 China International Coal Chemicals Development Forum\" that the Energy Bureau has now developed some preliminary ideas for the 13th Five-Year Plan for the deep processing of coal, proposing six development principles, five types of model upgrades for demonstration, and seven key tasks for the next stage. 　　　　According to Li Ye, during the 13th Five-Year Plan period, the deep processing of coal should adhere to six development principles: First, it is necessary to control the scale reasonably, determining the pace and extent of industry development based on technological advancements, without pursuing large-scale capacity expansion at the current level of technology ； Second, it involves promoting upgrading demonstrations, focusing on areas such as improving energy efficiency, reducing resource consumption and pollution emissions, enhancing the optimization and integration of systems, and lowering project costs ； Third, strengthen ecological and environmental protection; subject to water resources and environmental capacity limits, construction projects shall adhere to the strictest environmental protection standards ； Fourth, strengthen independent innovation by giving priority to demonstrating proprietary technologies and equipment ； Fifth, in the case of deep coal processing, existing coal production capacity should be utilized first, so that the benefits of development can be shared with the coal industry ； Sixth, it is to coordinate development with oil and gas as well as the petrochemical industry, enhance complementary advantages, and make overall plans for the utilization of various fossil fuels. 　　　　In recent years, the coal chemical industry has faced increasingly severe challenges, with environmental constraints being the most pressing one – the regional environment’s capacity to bear such activities and the requirements for pollution control have become formidable obstacles for this industry. Last year’s exposure of pollution in the Tengger Desert caused a major shock to the industry, and this year as well, many coal chemical projects have been held up at the environmental assessment stage. Li Ye admitted that due to environmental constraints, it is difficult for all 12 coal-based fuel projects for which preliminary work has been approved to be implemented during the 13th Five-Year Plan period. To this end, \"increasing the supply of clean fuels and leveraging the positive role of coal-to-oil and coal-to-natural gas in pollution prevention and control\" has been included as one of the seven key tasks for the industry in the next phase of implementation. 　　　　At the same time, the coal chemical industry also faces an urgent need for innovation and upgrading. “‘During the 12th Five-Year Plan period, China’s coal chemical industry developed rapidly and ranked among the leaders in the world. But how much of the core technologies were actually under China’s control? ”Wang An, chairman of China Coal Energy Group, posed this question at the annual meeting of the Coal Chemicals Subcommittee of the Petrochemical Federation recently. 　　　　Wang An believes that the 13th Five-Year Plan period represents a crucial time for China’s petroleum and chemical industry to transition from being a major player to a leading force. To shift from a strategy of following others to one of taking the lead, it is necessary to find new paths for transformation and breakthroughs. 　　　　Li Shousheng, president of the China Petroleum and Chemical Industry Federation, pointed out in this regard that the concept of \"piloting\" during the 13th Five-Year Plan period emphasizes \"upgrading through piloting,\" with the focus of such upgrading lying on technological advancements. These advancements are concentrated in five areas: advanced gasification technologies, advanced synthesis technologies, key core equipment technologies, technologies for differentiating end products, and cost advantages. 　　　　Li Ye also revealed that the Energy Bureau has preliminarily proposed five types of demonstration projects for upgrading during the 13th Five-Year Plan period, namely coal-based ultra-clean petroleum products, hierarchical and quality-based utilization of low-grade coal, coal-to-natural gas, comprehensive utilization of coal and oil, and production of important chemicals from coal. 　　　　Furthermore, as a result of the substantial investment during the 12th Five-Year Plan period, the coal chemical industry has begun to experience severe homogenization, and signs of overcapacity need to be addressed promptly. Taking coal-to-olefins as an example, according to incomplete statistics from the China Petroleum and Chemical Industry Federation, there are currently 53 coal-to-olefins projects that are in the preliminary stage or have been planned, with a total production capacity of around 33 million tons. If all these projects are completed, the output of coal-to-olefins will far exceed domestic market demand. Li Shousheng pointed out that most polyethylene and polypropylene products are concentrated among a few generic brands, with very few high-end or specialty brands; if left uncontrolled, this could lead to a risk of overproduction. 　　　　Despite numerous challenges, as the top-level planning for the upcoming 13th Five-Year Plan is officially introduced, the path for industry development will become increasingly clear. The gradual implementation of a series of industrial support policies will also safeguard the development of the industry. 　　　　According to Li Ye, the **Energy Bureau will work with relevant departments to study support policies for the deep processing of coal, such as incentives for the first set of equipment. At the same time, taking full account of the differences between coal-to-oil and refining processes, research is conducted on a VAT rate suitable for coal-to-oil production. Furthermore, the differences between coal-derived oil products and petroleum-based products in terms of scarcity and cleanliness will be taken into account to establish a consumption tax applicable to coal-derived oil. 　　　　Relevant industry norms and standards will also be established, ultimately forming a comprehensive system for the coal chemical industry. Pan Aihua, deputy director of the Raw Materials Industry Department of the Ministry of Industry and Information Technology, said at the forum that it is necessary to accelerate the formulation of regulatory standards for industries such as coal-based olefins and coal-based ethylene glycol, in order to guide coal chemical enterprises to transform and upgrade through technological innovation and enhance their core competitiveness