13 Five Coal Chemical Industry Plans

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The much-anticipated 13th Five-Year Plan for the coal chemical industry now has a draft version ready; the National Development and Reform Commission has also put forward proposals regarding the industrial layout of this sector and is seeking feedback. Currently, China’s independent coal chemical technology has entered the commercialization stage, but it still faces issues such as uncontrolled development and severe product homogenization, heavy pressure on water resources and the environment, as well as the impact of low oil prices. According to a report in the Economic Reference News on September 21, under the preliminary plan, during the 13th Five-Year Plan period, the coal chemical industry will see restrictions on its overall scale and growth rate. Upgrades to five different types of models will be carried out on a pilot basis, with six major production bases to be established in regions such as Inner Mongolia, Xinjiang, Shaanxi, and Ningxia. At the same time, efforts are being made to promote the development of industries related to petrochemicals, oil and gas, as well as the establishment of standards for these industries. It is reported that the Energy Bureau will work with relevant departments to study supportive and incentive policies related to finance and taxation. According to the plan, during the 13th Five-Year Plan period, there will be no simple expansion of scale at the existing level; instead, efforts will focus on carrying out upgrades and demonstration projects as well as fostering innovative development while controlling the overall volume. The emphasis will be on improving energy efficiency, reducing resource consumption and pollution emissions, enhancing the optimization and integration of systems, and lowering construction costs. According to Li Ye, the chief economist of the **Energy Bureau**, the bureau has proposed five types of models for demonstration purposes, namely coal-based ultra-clean petroleum products, hierarchical and quality-specific utilization of low-grade coal, coal-to-natural gas, integrated utilization of coal and oil, and production of important chemicals from coal. At the same time, it is necessary to adhere to a scientific and rational layout. The placement of coal chemical projects should be determined based on financial capabilities, technological strength, talent resources, and environmental carrying capacity, while emphasizing industrial park development, large-scale operations, flexibility in production, and product differentiation as key features. “The plan is to focus on developing six major bases over the next five years: two in Inner Mongolia, two in Xinjiang, as well as ones in Northern Shaanxi and Ningdong. **The National Development and Reform Commission is currently seeking opinions on this matter. ”Gu Zongqin said. 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. In addition, 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. Analysts at Pacific (601099) say that China’s renewed focus on developing the coal chemical industry will broaden the applications for coal and increase demand for it. The current level of coal prices has resulted in losses for over 80% of companies in this industry; such a situation cannot persist in the long term, and the likelihood of coal prices rebounding after reaching their bottom is increasing. Listed companies in the A-share market such as Guanghui Energy (600256, stock forum), Datang Power Generation, and Shaanxi Black Cat (601015) are involved in businesses related to coal chemical industry. (CNS Securities Network)