Coal chemical industry: Cornered, how to break free?

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Coal chemical industry: Cornered, how to break free? Author/Source: China Chemical Industry News Date: 2015-11-16 Clicks: 16 Affected by overcapacity and weak demand, coal chemical enterprises have seen their situation deteriorate in recent years. In particular, the sharp decline in international oil prices since last year has significantly reduced the cost advantage of coal-based chemical products. At present, aside from fertilizers and coal-based olefins which still generate some profits, industries such as coking, calcium carbide, PVC produced via the calcium carbide method, methanol, dimethyl ether, coal-to-oil, and coal-to-gas are all experiencing losses to varying degrees, with some even facing substantial industry-wide losses. In the long term, as environmental constraints increase and the introduction of a carbon tax approaches, coal-based chemical industries, which are characterized by high carbon emissions, will face greater challenges. Affected by overcapacity and weak demand, coal chemical enterprises have seen their conditions deteriorate in recent years. In particular, the sharp decline in international oil prices since last year has significantly reduced the cost advantage of coal-based chemical products. At present, aside from fertilizers and coal-based olefins which still generate some profits, industries such as coking, calcium carbide, PVC produced via the calcium carbide method, methanol, dimethyl ether, coal-to-oil, and coal-to-gas are all experiencing losses to varying degrees, with some even facing substantial industry-wide losses. In the long run, as environmental constraints increase and the introduction of a carbon tax approaches, the coal chemical industry, which is characterized by high carbon emissions, will be hit the hardest; rising costs and decreased competitiveness will be inevitable. 　　So, how can the already besieged coal chemical industry break free from its current predicament, avoid future constraints, and achieve sustainable development? In early November, experts attending the 2015 Symposium on Technologies for the Clean and Efficient Development and Utilization of Coal put forward their suggestions. 　　Develop ultra-supercritical power generation and improve coal-based cogeneration. Whether for its own sustainable development or to fulfill international emission reduction obligations, China must control carbon dioxide emissions. The most direct and effective way to reduce carbon dioxide emissions is to significantly increase the share of renewable energy and reduce the consumption of fossil fuels, especially high-carbon fuels such as coal. However, both the decades of experience in developed countries and China’s own practices show that it will be difficult for renewable energy to become the dominant source of energy consumption within the next three to five decades; the future development of human society and the economy will still largely depend on fossil fuels. Especially in a country like China, which is rich in coal but poor in oil and natural gas**, coal will remain the main source of energy for at least the next 30 to 50 years. However, the extensive use of coal does indeed cause severe environmental problems. How can this contradiction be resolved? I believe breakthroughs should be sought in the following three areas: First, accelerate the development of coal-fired ultra-supercritical steam power generation. Firstly, electricity is the cleanest, most efficient secondary energy source. It is easy to distribute and transmit, well-suited for distributed applications, easily integrable with other forms of energy, simple to control and highly intelligent, and readily integrable with information technology. Its demand continues to rise alongside societal progress and the improvement of people’s living standards ； Secondly, advanced ultra-supercritical power generation technology can truly enable the efficient and clean utilization of coal ； Once again, currently thermal coal accounts for only about 50% of China’s total coal consumption, a figure far lower than the generally over 80% rate observed in developed countries; it also lags significantly behind the 98% share in the United States. Therefore, there is considerable room for growth in this area. Once this technology becomes widely adopted, it will not only significantly reduce emissions and the impact on the atmospheric environment within the power industry, but also considerably lower the overall costs of China’s power generation sector. This will create room for reducing electricity prices, thereby cutting energy costs for various industries and, in particular, for ordinary citizens. It will also stimulate electricity consumption and accelerate the process of electrification in both urban and rural areas. 　　Second, actively develop research and demonstration on IGCC (Integrated Gasification Combined Cycle power generation system). IGCC combines an efficient gas-steam combined cycle power generation system with clean coal gasification technology: coal → gasification → purification (removal of ash, sulfur, and nitrogen, with direct capture of carbon dioxide) → clean syngas (carbon monoxide + hydrogen) → power generation using gas turbines → exhaust gases → waste heat boiler → steam → power generation using steam turbines. As a result, it offers significantly better performance in terms of thermal efficiency and pollutant emissions, especially carbon dioxide emissions, compared to conventional power plants; it has thus become a key area of research in the world’s major developed countries. However, due to its high capital cost per unit installed capacity and poor economic efficiency, it cannot be widely adopted at present. It is recommended that during the 13th Five-Year Plan period, focus should be placed on the research and development of new technologies, as well as on accelerating the optimization and integration of existing technologies. Through technological and engineering innovations, it is possible to significantly reduce the investment costs associated with IGCC, thereby finding practical ways to achieve the clean, efficient, and economical use of coal. 　　Third, focus on the development of coal-based cogeneration. Coal-based polygeneration involves the highly integrated coupling of coal chemical industry, IGCC, and combined heat, power, and cooling supply for cities. It is an cross-industry systems engineering approach that enables overall optimization of energy and material flows. It facilitates the rational optimization and utilization of the carbon-hydrogen ratio, as well as the cascaded use of heat and pressure, thereby reducing unnecessary chemical exothermic reactions and repeated processes of pressure increase/decrease. Ultimately, it leads to the full utilization of materials. Its products include electricity, heat/cold air, city gas, liquid fuels, oxygen, pure carbon dioxide, and chemicals such as methanol. It is also possible to avoid market and operational risks associated with relying on a single product by further processing methanol to produce more chemicals with higher added value. The pure carbon dioxide produced during the production process can be used in a wide range of applications such as cryogenic preservation, shielded welding, gas fertilizers, carbonated beverages, biodegradable plastics, and oil displacement, or it can be injected underground for solidification. Coal-based cogeneration not only helps enterprises improve efficiency and quality and break free from environmental constraints, but it can also benefit from carbon trading once a carbon tax is introduced. 　　Deploying underground coal gasification to overcome bottlenecks in coal chemical industry Underground coal gasification is the process of controlling the combustion of coal buried underground to produce combustible gases. Underground coal gasification mainly consists of five major systems: the gasification platform, the air inlet channel (for supplying air or oxygen-enriched air), the gas outlet channel (for discharging crude syngas), monitoring and control, and the underground treatment and control of “three wastes”. 　　China’s underground coal gasification technology is generally at the world’s leading level, with more than a dozen pilot sites established across the country. Among them, the underground coal gasification test facility at Anhui Liuzhuang Coal Mine, with a capacity of 140,000 cubic meters per day, and the underground coal gasification-based ammonia synthesis test facility in Xiyang, Shanxi, with a capacity of 10,000 tons per year, have both operated continuously for over two years. They now meet the prerequisites and conditions for industrial-scale promotion. 　　“During the 13th Five-Year Plan period, **building on the 100 million yuan in funding provided during the 12th Five-Year Plan period, support will continue to be given to the research on underground coal gasification technology, with efforts made to advance its industrialization. Industrial demonstration projects with capacities of 1 million cubic meters per day and 3.5 million cubic meters per day will be established in Tuha, Xinjiang, and Inner Mongolia respectively; the former will be equipped with an IGCC system, while the latter will primarily be used for producing 20,000 cubic meters per day of liquefied natural gas (LNG) as well as for power generation. At present, the feasibility studies for both projects have been approved, and it is expected that they will both be completed and put into operation in 2017. 　　Coal in-situ gasification technology not only changes the way coal is mined, significantly reducing the costs associated with traditional coal extraction and transportation, but it also transforms methane, which otherwise acts as a threat to coal mines, into a useful gas underground, thereby greatly lowering the coal costs for coal chemical enterprises (including procurement, handling, and transportation costs). Furthermore, underground gasification can be applied to lignite, bituminous coal, anthracite, and high-sulfur coal, further expanding the range of coal available for chemical use. More importantly, the gasified waste residues, wastewater, sulfides, and nitrogen oxides can be filled into the goafs locally after treatment, thereby significantly alleviating the troublesome problem of these \"three types of waste\" associated with surface gasification. 　　Additionally, since coal and oil often occur together, implementing underground coal gasification near oil fields and integrating it with chemical processing facilities allows the resulting pure carbon dioxide to be directly used for enhanced oil recovery. It can also be injected into alkaline or brackish groundwater to be sequestered. This enables coal chemical plants to avoid paying carbon taxes, while also benefiting from carbon trading and the sale of carbon dioxide, thereby breaking free from the constraints of high costs, stringent environmental regulations, and poor profitability. Jin Yong, an academician of the Chinese Academy of Engineering, advocates for the differentiated utilization of coal in order to achieve integration of coal, electricity, and chemicals. The most efficient and clean way to convert coal is through its differentiated utilization, as this method allows coal to be broken down into clean, high-calorie products such as coke, gas, and tar with minimal energy consumption. Gas can be used to generate electricity as well as to produce a variety of chemical products ； Tar can not only be used to produce clean oils, which can then be further processed into aviation fuel, base oils, and high-performance lubricants, but it can also react with hydrogen in a plasma environment to produce acetylene, which is in high demand and has a high added value ； Coke can replace bituminous coal, which is widely used in domestic and industrial furnaces, thereby significantly reducing the impact of these two sectors, which are major sources of emissions, on the atmospheric environment. If the differentiated utilization of coal is combined with technologies such as IGCC, DMTO (methanol-to-olefins), MTA (methanol-to-aromatics), and DMMn (polydimethyl methoxide) to create an integrated coal-electrochemical development model, energy consumption per unit of output will decrease significantly. Moreover, this approach will allow benefits to be derived from the growth in electricity demand in the future, as electric vehicles become more widespread. 　　From the demand side, China’s capacity for producing olefins from oil is severely insufficient, with annual imports amounting to tens of millions of tons ； Import volumes of PX will reach 12 million tons in 2020 and 15 million tons in 2025. The market potential for DMMn is greater. Currently, the cetane number of diesel is generally only 45–49; incomplete combustion not only increases vehicle fuel consumption and the burden on consumers but also produces large amounts of black smoke, leading to environmental problems such as smog. However, by adding 20% DMMn to diesel, its cetane number can be increased to 54–58, the freezing point can be reduced below -20°C, making it cleaner and more efficient. China consumes over 160 million tons of diesel per year; with a 20% addition, the annual demand for DMMn exceeds 30 million tons. Calculated based on the production of 1 ton of DMMn from 1.2–1.3 tons of methanol, its cost is less than half of the price of diesel, giving it strong competitiveness and good profitability. Therefore, with falling oil prices making the prospects of coal chemical industry unpredictable, it is undoubtedly a prudent and wise approach to focus on the differentiated utilization of coal, combined with IGCC as well as DMTO, MTP, MTA, and DMMn. Shang Jianxuan, Deputy General Manager of Shaanxi Coal Chemical Group and Director of the **Key Laboratory for Clean Transformation of Coal Based on Different Quality Grades, has achieved significant technical results in the selective use of coal. The physical properties and chemical structure of coal dictate that only through selective utilization can maximum benefits be obtained with minimal energy consumption, thereby enabling efficient transformation and use of coal. 　　Leveraging the **Key Laboratory for Clean Transformation of Energy Coal by Grade, Shaanxi Coal and Chemical Industry Group has developed a approach for the efficient and green extraction as well as graded utilization of coal. It has proposed a route for the green and efficient extraction and clean graded transformation of low-grade coal, one that takes coal as the core material and pyrolysis technology as the key element, integrating the four-stage graded transformation of coal with modern coal chemical technologies; a number of significant technical achievements have been obtained through this approach. 　　Among them, the integrated gasification-lower rank coal pyrolysis technology, and the technology for producing anthracite through rotary pyrolysis of lower rank pulverized coal have already passed evaluation ； The technology for producing clean fuels from low- and medium-temperature coal tar in the dry distillation of lump coal, as well as the complete industrialization technology for hydrogenating all fractions of coal tar to produce large amounts of intermediate distillate oil, have been put into industrial use ； Phase-wise test results are expected to be achieved within the year for 600,000 tons/year solid heat carrier moving-bed pyrolysis, 500,000 tons/year pyrolysis gas carrier moving-bed pyrolysis, 50,000 tons/year solid heat carrier fluidized-bed rapid pyrolysis, and 10,000 tons/year gas heat carrier transport-bed rapid pyrolysis ； The process packages for a 1 million tons/year integrated gasification-lower rank coal pyrolysis demonstration plant, and a 600,000 tons/year rotary pyrolysis demonstration plant for producing anthracite from lower rank pulverized coal are currently being prepared. 　　Regarding the issue of the utilization of pyrolytic semi-coke, which is of great concern to the industry, experiments have been conducted on the gasification of dry coke powder, the gasification of water-coke slurry, the combustion of semi-coke in fluidized bed boilers, the combustion of dry coke powder in boilers, as well as the combustion of semi-coke in industrial furnaces and domestic stoves ； Demonstrations are being carried out for the industrial application of semi-coke gasification, power generation, blast furnace injection, and industrial boilers. 　　“During the 13th Five-Year Plan period, Shaanxi Coal and Chemical Industry Group will plan and construct a demonstration industrial park for the high-efficiency, multi-product conversion of coal based on quality classification, with an annual capacity of 100 million tons, in the Northern Shaanxi Energy and Chemical Industry Base. This project will make full use of a series of processes and environmental protection technologies developed through independent innovation by Shaanxi Coal and Chemical Group, such as coal pyrolysis, coal tar hydrogenation, the coupling of naphtha and methanol for xylene production, and methanol-to-olefins conversion. By carrying out selective conversion and hierarchical utilization of coal, it aims to achieve efficient multiple product synthesis. That is, depending on the particle size of the coal, appropriate pyrolysis technologies are employed to convert it into pyrolysis gas, coal tar, and semi-coke. These products are then integrated with processes such as DMTO, Fischer-Tropsch synthesis, MEG production, and naphtha-methanol coupling for aromatic hydrocarbon production, thereby generating efficient clean energy sources like electricity, high-quality gasoline and diesel, specialty oils, LNG, and LPG, as well as chemical products including PP, PE, PBS, rubber, biodegradable plastics, refined phenol, and pyridine. The water used in the project comes from mine dewatering water; organic wastewater is used for the preparation of water-coke slurry, while high-salt wastewater is treated through ion exchange before being injected into salt wells to extract brine ； The carbon dioxide generated by the system is injected into nearby coal goafs for sequestration, ultimately creating a world-class demonstration site for the efficient and clean conversion of coal based on different quality grades. This site features a strong circular economy approach and helps to optimize the structure of Shaanxi Coal Chemical’s products, enabling healthy and sustainable green development. **Jiang Kejun, researcher at the Energy Research Institute of the National Development and Reform Commission: Accelerate the implementation of IGCC and CCUS technologies, and resolutely abandon coal-based fuels. China has committed to reaching a peak in carbon dioxide emissions by 2030, and will go all out to increase the share of natural gas, nuclear energy, and renewable energy in the future. Even if coal resources cannot be avoided for the time being, the pressure to reduce carbon emissions should be minimized through IGCC and CCUS (carbon capture, utilization, and storage). Although the costs of IGCC and CCUS are relatively high, they pose no problem at all if considered within the strategic framework of sustainable development and carbon emission reduction. Because **as long as certain subsidies or policy incentives are provided for relevant projects, the problem of high costs can be temporarily alleviated; thereafter, technological progress can be utilized while taking into account both the environmental impacts and the costs and benefits related to carbon emissions.** It is recommended to unremittingly accelerate the research, development, and industrialization of IGCC and CCUS, so that they can soon become practical technologies for the efficient conversion of coal and carbon emission reduction. 　　I firmly oppose coal-to-fuel processes (including coal-to-natural gas and coal-to-oil). According to model projections, global oil consumption will reach its peak in 2025 ； By 2030, China’s oil consumption will reach its peak. By then, urban rail transit in China will be highly developed; all cars will have switched to pure electric vehicles. Existing oil refining facilities will need to find new avenues for development. So, what prospects does coal-to-oil technology have? Moreover, with the changes in the world’s energy structure, international oil prices will remain low for a long time; high oil prices of over $80 per barrel will forever become a thing of the past. In this context, coal-to-liquid projects, which require high investment intensity and incur high overall costs, while also facing constraints related to water resources and carbon emissions reduction, will face increasingly greater risks. The prospects for coal-to-natural gas are even worse; aside from technical and environmental constraints, its efficiency as a secondary energy source is lower than that of supercritical coal power generation. Moreover, its environmental impact throughout its life cycle is significantly greater than that of supercritical coal power generation, making it uneconomical and environmentally unsound from both economic and ecological perspectives. Yang Zhaoqian, Chairman of Shaanxi Coal and Chemical Industry Group Co., Ltd.: Emphasizing technological innovation and developing a circular economy. The reason why coal chemical enterprises find themselves in difficult situations is, in addition to weak economic growth and declining demand, the lack of differentiated products. Why are there no differentiated products? Because no emphasis was placed on technological innovation, fundamental and forward-looking core technologies were not acquired. 　　Previously, when we talked about technological innovation, *we were used to introducing, digesting, absorbing, and then re-innovating. Today, the gap between China’s many technologies and those of developed countries has narrowed; some of these technologies have reached world-class levels while others are at the international forefront. It has become very difficult to introduce, assimilate, and then innovate upon such technologies: on one hand, foreign countries are no longer willing to readily provide us with their technologies ； On the other hand, they also have no more advanced technologies to give us. The only way is to bend down, conduct fundamental research, pursue technological innovation, and develop new products. 　　Shaanxi Coal Chemical has gained considerable experience in this area and achieved some results. Over the years, we have always placed great importance on technological innovation. “Since the 12th Five-Year Plan period, our annual investment in technology has accounted for around 4% of the company’s total revenue. We have established four national-level research and development or engineering centers, including a Local Joint Research Center for Green and Efficient Coal Mining, a Key Laboratory for Clean Conversion of Coal into Different Types of Energy, an Engineering Laboratory for Methanol-to-Olefins production, and a Local Joint Research Center for Coal-based Chemicals. In addition, we have 5 provincial-level research centers, 7 provincial-level corporate technology centers, 2 provincial-level innovative enterprises, and 4 provincial-level pilot innovative enterprises, and have achieved a series of significant technological breakthroughs. 　　The internationally leading industrial technologies such as DMTO and DMTO-II, jointly developed by us in collaboration with institutions like the Dalian Institute of Chemical Physics, Chinese Academy of Sciences, have now been licensed to 20 parties ； Several industrial-scale units have been built for the independently developed technology for producing clean fuels from medium- and low-temperature coal tar obtained through the dry distillation of lump coal, as well as for the full-range hydrogenation of coal tar to produce large quantities of intermediate distillate oil using the FTH technology ； Industrially developed technologies such as the production of aromatics and specialty oils from coal tar (FTH-Ⅱ), the production of aromatics via methanol-toluene coupling (TMTA), and the production of butylene along with propylene from methanol (CMTX) will be gradually put into industrial demonstration applications. The research on the differentiated mining and utilization of coal, carried out at the **Key Laboratory for Clean Transformation of Coal Energy by Differentiation, has also yielded results: to date, 2 pulverized coal pyrolysis technologies have passed scientific and technological achievement evaluations, 4 advanced core coal pyrolysis technologies have seen significant breakthroughs, and 2 technologies for the deep processing of coal tar have been put into industrial use. Additionally, 14 safe and efficient coal mining technologies have been proposed, implemented, summarized, and promoted for widespread application by Shaanxi Coal and Chemical Industry. Nine advanced coal mining technologies are currently under development. 　　More than a decade of development and practice by Shaanxi Coal Chemical Group has shown that only through persistent technological innovation can a company acquire advanced manufacturing processes and differentiated products, thereby establishing a foundation for sustainable growth and achieving better results in the fierce market competition. 　　There are also environmental problems related to coal chemical industry. My experience is that environmental issues are something that no energy or chemical industry can ignore; if you handle them well, not only will you not face any constraints, but you can even benefit from it ； Otherwise, it becomes a source of stress and constraints, and one may even be eliminated. To achieve coordinated development between enterprises and the ecological environment, Shaanxi Coal Chemical always adheres to the concept of circular economy when planning new projects and upgrading existing ones. 　　In Yulin, we have established a chain involving lump coal – semi-coke – calcium carbide – waste gas power generation – acetylene – polyvinyl chloride – and calcium carbide slag cement ； A multi-product integrated industrial chain featuring fractional conversion: lump coal → semi-coke → hydrogen production from coal gas/tail gas power generation → coal tar processing. In the Huangling mining area, we have established a demonstration park for multi-product circular economy, encompassing coal mining and processing, coking of clean coal, power generation from gangue, and utilization of ash and slag as building materials. In the Hikari-Choshi mining area, we established Dafosi – the only mining area in the country with zero gas emissions – developed a technology for generating electricity from waste gas, and have produced a total of 50 million cubic meters of LNG as well as 600 million kilowatt-hours of electricity. Once the projects under implementation are completed, 15.3 billion cubic meters of coalbed methane will be utilized in a differentiated manner solely in the Hita-Choshu mining area. 　　Through the circular economy, we have not only achieved the transformation and upgrading of traditional energy and chemical industries but also turned what were once industries characterized by high consumption, high emissions, and heavy resource use into models for energy conservation, emission reduction, and circular economy practices. This approach brings benefits in terms of safety, environmental protection, economic efficiency, and emission reduction to Shaanxi Coal and Chemical Industry itself, while also paving the way for a sustainable development model that balances economic interests with environmental health for the entire energy and chemical industry. http://www.nmtech.com.cn/*nwen_mhg_xx.asp?id=173236