Jin Yong discusses coal chemical industry again: Proceed cautiously with coal-to-gas projects, impose strict restrictions on coal-to-oil projects

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1. Develop coal-to-gas production cautiously and impose strict restrictions on coal-to-oil production. Reporter: Please elaborate on your views and suggestions regarding modern coal chemical industry. 　　Jin Yong: The development of modern coal chemical industry should aim at the clean and efficient conversion of coal, focus on the transformation of coal from a fuel to a raw material, and follow the approach of using coal in a manner that takes into account its different quality levels. Develop coal-to-olefins, coal-to-aromatics, and coal-to-ethylene glycol on a large scale; develop coal-to-gas cautiously; and strictly restrict coal-to-oil production. 　　This is because, compared to oil and gas, under current technological conditions, no matter how coal is transformed, it cannot be made cleaner or more energy-efficient than petrochemical processes. It is necessary to focus on cutting-edge technologies that enable the efficient and clean conversion of coal, in order to overcome the challenges of high environmental impact and high energy consumption that hinder the healthy development of the coal chemical industry and to promote its sustainable growth. 　　Looking at the supply and demand dynamics in the major markets for modern coal-based chemical products, China has an annual deficit of tens of millions of tons in olefins, while there are also deficits of several million tons in aromatics and ethylene glycol. Such high demand and significant supply-demand gaps mean that there is no risk of overcapacity in these product sectors for now. Moreover, compared to the oil-based route, even at the currently low oil prices, coal-based routes for producing olefins, aromatics, ethylene glycol, and naphtha still possess certain cost advantages over those routes, making them suitable for large-scale development. 　　Coal-to-oil is different. In terms of calorific value, 1 ton of oil is 30% higher than 1 ton of standard coal. However, with current technological capabilities, 4 to 5 tons of coal are required to produce 1 ton of oil products, resulting in low economic benefits and energy conversion efficiency. Furthermore, the production process emits large amounts of carbon dioxide. If a carbon tax is introduced during the 13th Five-Year Plan period, along with stricter taxes on fuel consumption, coal-to-oil projects will find it difficult to be profitable given that oil prices will remain low in the short to medium term. Therefore, the scale of coal-to-oil production cannot be expanded any further; instead, it should be regarded as a strategic technical reserve. A few industrial demonstration plants should be established, with **providing certain subsidies to support these projects and help improve their technology. This will enable them to reach the necessary scale quickly in case of special situations such as war, thereby ensuring **strategic security. 　　Furthermore, even if coal-to-oil production is to be carried out, it should not focus on ordinary fuel oils; instead, high-value specialty oils such as aviation fuel, base oils, lubricants, and ultra-hard waxes – products that are difficult to manufacture through traditional petrochemical processes – should be produced in order to enhance the profitability of the project. 　　Furthermore, from the perspective of mitigating haze and achieving comprehensive social benefits, it is more reasonable to develop coal-methanol-fuel additives rather than coal-to-oil technologies. For example, coal is used to produce polydimethyl methoxide (DMMn) through methanol. Currently, motor vehicle exhaust accounts for nearly one-third of PM2.5 emissions, and the main reason for this high contribution is the low cetane value of domestically produced diesel, which leads to incomplete combustion. However, adding oxygen-containing polymethoxymethane to diesel can significantly improve its cetane number and combustion efficiency, while reducing particle emissions and the production of PM2.5. Based on the production of 1 ton of poly(methoxydimethyl ether) from 1.2–1.3 tons of methanol, along with a 20% addition ratio and China’s annual diesel consumption of 150 million tons, an annual demand of 30 million tons of poly(methoxydimethyl ether) would arise, requiring 36–42 million tons of methanol. This approach can not only help alleviate the issue of excess methanol production capacity in the country but also reduce fog formation. Additionally, it would save 100 million tons of crude oil per year (as refineries typically achieve only a 30% yield from diesel production), representing multiple benefits in one solution. 　　As for coal-to-natural gas, the principle of importing as much as possible when feasible and pursuing development cautiously should be adhered to. Although, in terms of energy conversion efficiency alone, coal-to-gas is relatively high among the various modern coal chemical pathways, there are significant uncertainties regarding its market demand and the economic viability of such projects. For example, using coal-to-natural gas in industrial furnaces and the retrofitting of small coal-fired boilers can significantly reduce air pollution caused by coal burning. The energy efficiency of this process is also high, and it is possible to obtain a good price and favorable returns. In our country, hundreds of millions of tons of coal are still used for direct combustion, which constitutes a major source of coal-related pollution. Areas at the edge of cities and towns, as well as small and medium-sized towns, should be given priority in efforts to prevent coal-related pollution. If coal-based gas is used for residential gas in the aforementioned sectors, coal pollution will **be reduced, with price control being the key. Its persistently high price will be difficult for ordinary people to accept ； When coal-to-natural gas is used for power generation, its overall benefits in terms of energy efficiency, economic viability, and environmental protection are inferior to those of generating electricity from imported natural gas, and it is even not as good as generating electricity by directly burning coal. Currently, global natural gas prices are on a downward trend; the prices of domestically produced natural gas have surpassed those of imported gas, and the risks associated with coal-based natural gas are increasing. These new trends in the market should alert investors. 　　Moreover, the coal-to-natural gas projects that are already in operation or planned to be built in China largely follow the syngas methanization technology (i.e., the two-step process) used in the gasification plants on the U.S. Great Plains. The weakness of this technical approach is that, in order to obtain more methane from the gasified gas, coal-to-gas companies generally use Ruhr-type furnaces. The biggest problem with the Luchi furnace is that it generates large amounts of wastewater containing pollutants such as phenols and tar, which are highly toxic and difficult to treat. This has become a major bottleneck restricting the proper operation and profitability of coal-to-gas projects. It is recommended that new projects take a long-term perspective and adopt advanced, environmentally friendly manufacturing processes wherever possible. 　　For example, the Hebei XinAo Group, in collaboration with the American company GreatPoint Energy, has developed a high-efficiency catalytic hydrogenation methanization technology for coal (also known as Bluegas). This technology uses catalysts to produce coal-based natural gas in a pressurized fluidized-bed gasifier, with a methane content of up to 50% in the crude gas; 1 cubic meter of hydrogen can be used to produce 1 additional cubic meter of natural gas. Moreover, the gasification furnace can handle a wide range of feedstocks. The entire process is simple, requiring less investment; the consumption of coal and oxygen per unit of product is significantly reduced compared to the two-step process. The production cost is reduced by 0.12 yuan per cubic meter, resulting in considerable economic benefits as well as significant advantages in terms of energy conservation and emission reduction. This technology is in the process of industrialization. 2 The prospects for the differentiated and graded utilization of coal are even broader. Reporter: You have mentioned on many occasions that differentiated and graded utilization of lower-grade coals (lignite, bituminous coal, etc.) should serve as the overall approach for the development of the coal chemical industry. What is the reason for this? 　　Jin Yong: This is because, first of all, in the context of the differentiated and graded utilization of coal, with low-rank coal pyrolysis as a key approach, the light and volatile components of coal, which also have high added value, are separated out through mild physical methods; the remaining portion can then be used as usual. This conforms to the objective principle that high quality corresponds to high efficiency, while low quality leads to low efficiency. It is recognized as the most reasonable way of utilizing lignite and other similar materials, as well as the approach for the clean and efficient use of coal. Countries such as the United States, Germany, Japan, Hungary, and the former Soviet Union are all developing related technologies. 　　Second, since the 1980s, China’s low-rank coal pyrolysis technology has developed rapidly, with fixed-bed and fluidized-bed systems being successfully developed ； Solid heat carriers, gas heat carriers ； There are more than a dozen coal pyrolysis processes, such as belt furnaces and rotary kilns, which have helped overcome global challenges that have hindered the development of targeted utilization of coal – including pyrolysis of lump coal, pulverized coal, and whole coal; separation of oil and dust from high-temperature gas; and hydrogenation of all fractions of coal tar. Breakthroughs have also been achieved in the key technologies for treating coal tar wastewater containing high levels of chemical oxygen demand (COD), ammonia nitrogen, benzene, phenols, tar, and metals. Industrial-scale installations are set to go into operation, thereby providing a solid technical and industrial foundation for the targeted utilization of coal. 　　Third, the Ministry of Science and Technology has designated the targeted pyrolysis of million-ton quantities of low-grade coal to produce high-quality tar and gas as a key scientific and technological project under the 13th Five-Year Plan, aiming to achieve breakthroughs by 2020 and establish industrial demonstration facilities with a capacity of million tons. This shows that the differentiated and graded utilization of coal has received recognition at the highest levels and has a policy foundation. 　　Fourth, the differentiated and graded utilization of coal, led by coal pyrolysis, allows for the extraction of lightweight, high-value components such as coal tar and coal gas; thereafter, it can be easily integrated with all applications of coal, including traditional coal chemical industries, modern coal chemical processes, ultra-supercritical power generation, integrated gasification combined cycle power generation systems (IGCC), cogeneration, and construction materials. At the same time, the development of plasma-based technologies for producing acetylene from heavy tar cracking not only solves the pollution problem but also yields good economic benefits. This has led to the creation of a large-scale coal chemical industry framework that spans various sectors, thereby expanding the ways in which coal can be utilized efficiently and opening up broader prospects for its use. 　　Fifthly, the best way to utilize coal is still through ultra-supercritical power generation. Developing advanced batteries and plug-in electric vehicles, standardizing battery specifications, implementing battery leasing, and charging used batteries at night can help mitigate fluctuations in electricity demand. This approach is likely to lead to significant energy savings as well as a reduction in the shortage of petroleum resources.