Full text of the 13th Five-Year Plan for the chlor-alkali industry

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I. The Current Situation and Challenges in China’s Chlor-alkali Industry 　　1. Current Development of the Chlor-alkali Industry 　　1.1 The industry’s scale continues to expand, but growth rates are slowing down 　　During the 12th Five-Year Plan period, the domestic chlor-alkali industry developed rapidly. The production capacity and output of caustic soda and polyvinyl chloride remain at the top level in the world. The production capacity and output of major chlorine-based products are growing rapidly, and the production capacity of some of these products is already the highest in the world; thus, it has become a veritable major producer of chlor-alkali products. 　　By the end of 2015, there were 163 caustic soda production enterprises in China, with a total production capacity of 38.73 million tons per year; of this amount, 38.18 million tons was produced using the ion-exchange membrane process, accounting for about 98.6%. Compared to 2010, the total production capacity increased by 28.2%. It is mainly distributed in six provinces: Shandong, Jiangsu, Inner Mongolia, Xinjiang, Henan, and Zhejiang, with their combined production capacity accounting for 61.5% of the total production capacity. 　　By the end of 2015, there were 81 polyvinyl chloride production enterprises in operation in China, with a total production capacity of 23.48 million tons per year; of this amount, 19.18 million tons came from the calcium carbide process, accounting for approximately 81.7%. The production capacity is mainly concentrated in six provinces: Inner Mongolia, Xinjiang, Shandong, Tianjin, Shaanxi, and Henan; together, they account for 62.2% of the total production capacity. 　　The growth of caustic soda and PVC production capacity has slowed down, while the amount of capacity being phased out is increasing. “During the 12th Five-Year Plan period, the average annual growth rates of production capacity for caustic soda and polyvinyl chloride declined from 15.5% and 16.0% respectively during the 11th Five-Year Plan period, to 6.7% and 4.0% respectively. Since the international financial crisis in 2008, the growth rate of the domestic economy has slowed down. China’s chlor-alkali industry has shifted away from its previous trend of continuous growth, and structural problems in economic development have continued to worsen. Following a period of rapid expansive development, China’s chlor-alkali industry must now confront the issue of the phasing out of small-scale, regionally isolated facilities due to market dynamics. “During the 12th Five-Year Plan period, approximately 8.35 million tons of caustic soda production capacity and 6.25 million tons of polyvinyl chloride production capacity were phased out of the market. 　　1.2 Increased industrial concentration and gradually more rational industrial layout. The concentration level within the industry continues to rise. The proportion of caustic soda manufacturers with a production capacity of 100,000 tons per year or less (including 100,000 tons per year) decreased from 15.4% in 2010 to 9.08% in 2015. The number of companies with a production capacity of 400,000 tons per year or more (including 400,000 tons per year) increased from 17 in 2010 to 23, while their share of total production capacity rose from 27.1% to 37.7% ； The proportion of PVC manufacturers with a production capacity of 100,000 tons per year or less (including 100,000 tons per year) decreased from 9.4% in 2010 to 4.8% in 2015. The number of manufacturers with a production capacity of 400,000 tons per year or more (including 400,000 tons per year) increased from 17 in 2010 to 22, while their share of total production capacity rose from 45.8% to 55.8%. 　　The industry distribution is becoming increasingly clear. The chlor-alkali industry in the eastern provinces has a long history of development. Meanwhile, the southeastern coastal areas are also the main consumer markets for chlor-alkali products in China. Supported by the demand from downstream industries and relatively favorable conditions for foreign trade, it is easier to sell these products there. In addition, the chlor-alkali industry in the eastern region has also explored new models of cross-sectoral development by integrating with industries such as new chemical materials, fluorine chemicals, fine chemicals, and pesticides ； The chlor-alkali industry in the western region is developing rapidly, and its role in the overall structure of China’s chlor-alkali industry is becoming increasingly significant. Leveraging their resource advantages to develop large-scale, integrated \"coal-electricity-salt-chemical\" projects has become a key feature of the development of this industry in the western region ； In the central region, represented by Henan, the capacity of caustic soda facilities has seen a relatively significant increase, driven by the development of the alumina industry, which is a downstream sector of caustic soda. Chlor-alkali industry zones with different growth paths and development characteristics in the eastern, western, and central regions have gradually taken shape. 　　1.3 The market landscape is constantly changing, with diverse trading methods. Expanding into overseas markets and making use of foreign resources has become a trend in the development of China’s chlor-alkali industry. “During the 12th Five-Year Plan period, the annual export of caustic soda remained above 2 million tons, with exports going to countries and regions such as Australia, the United States, Southeast Asia, and Africa. Polyvinyl chloride is exported to dozens of countries and regions including India, Russia, Southeast Asia, and Central Asia. During the 12th Five-Year Plan period, PVC exports increased by about 40% compared to the 11th Five-Year Plan period, while imports decreased by around 30%. At the same time, the import of resources such as industrial salts and vinyl raw materials has become a useful supplement to the development of China’s chlor-alkali industry. 　　Futures and spot electronic trading have had a significant impact on and promoted the innovation of traditional marketing models in the industry. “During the 12th Five-Year Plan period, electronic trading of PVC futures and spot products was in a state of continuous exploration and development. The integration of electronic trading with spot trading not only improved the efficiency of market resource allocation but also enabled better fulfillment of enterprises’ diverse needs in areas such as trade, financing, logistics, and risk management. It opened up new avenues for changes in corporate marketing strategies and provided new options for innovating industry marketing models. 　　1.4 The production process is continuously optimized, with ongoing improvements in energy efficiency and environmental protection. As the production process gets better, energy and resource consumption decreases, while the level of comprehensive resource utilization improves. At the same time, environmental protection and clean production practices are further enhanced. Diaphragm process installations are being phased out gradually. Modifying the membrane spacing in caustic soda ion-exchange membrane electrolyzers yields significant energy-saving effects, and the waste heat and pressure generated during chlor-alkali production are made more effective use of. Compared to the end of the 11th Five-Year Plan period, energy consumption and water consumption per 10,000 yuan of output value in this industry have decreased by approximately 23% and 47%, respectively. “During the 12th Five-Year Plan period, new and expanded projects were not merely about increasing scale; they made greater use of large-scale equipment and automated control systems, which helped to reduce energy consumption, resource usage, and costs. Waste generated in the production process was treated using advanced and appropriate technologies, leading to a continuous improvement in the level of comprehensive resource utilization. Through the widespread adoption of end-of-pipe treatment technologies such as membrane-based denitrification techniques, treatment methods for polymerization centrifuge mother liquor wastewater, and calcium carbide slag desulfurization techniques, the emissions of \"three wastes\" as well as the emission levels of key pollutants such as chemical oxygen demand and sulfur dioxide have been significantly reduced. Moreover, with the continuous use of mercury pollution control technologies such as low-mercury catalysts, efficient gas-phase mercury removal techniques, salt-acid desorption techniques, and treatment methods for mercury-containing wastewater, the level of environmental protection and mercury pollution control in this industry has further improved. Furthermore, through the design of the industrial chain and innovations in technological processes, the multiple reuse of chlorine, calcium, and sodium resources can be achieved. Additionally, implementing a closed-loop cycle for resources and energy leads to more optimal integration and utilization of resources, a more rational product structure, greater environmental friendliness, and more noticeable benefits. 　　2. Problems in the chlor-alkali industry 　　2.1 Overcapacity in the chlor-alkali industry 　　During the 12th Five-Year Plan period, driven by rapid economic growth and investment in projects across various regions, there was a significant increase in the production capacity for caustic soda and polyvinyl chloride. Meanwhile, although consumption in the downstream industry has maintained a relatively stable growth trend, its growth rate lags significantly behind the growth of production capacity. As a result, overcapacity caused by a pronounced imbalance between supply and demand has worsened. In addition, there is a regional surplus in the production capacity of caustic soda and polyvinyl chloride, with an unbalanced distribution across regions. “During the 12th Five-Year Plan period, the expansion of caustic soda production in the eastern region was primarily aimed at achieving a balance in chlorine resources. However, the production capacity for various chlorine-intensive products developed as part of this effort, such as methyl chlorides, epichlorohydrin, chlorinated aromatic compounds, chloroacetic acid, chlorinated paraffins, trichlorosilane, trichloroethylene, and tetrachloroethylene, all showed signs of excess. The central and western regions have become the main supply areas for caustic soda and polyvinyl chloride products, while the main consumption areas are concentrated in the eastern and southern regions. The mismatch between capacity expansion and the distribution of downstream consumption areas results in a large amount of polyvinyl chloride and solid caustic soda having to be transported over long distances from the central and western regions to major consumption areas such as East and South China, via routes like \"goods moving from the west to the east\" and \"goods moving from the north to the south\". 　　2.2 The product structure is relatively homogeneous, with intense competition among similar products. For chlor-alkali enterprises to compete internationally, it’s not sufficient to rely solely on the scale and strength of a single product; what matters more is the overall competitiveness of the enterprise in terms of “alkali-chlorine balance” and its product structure. At present in our country, the proportion of organic chlorine products, high-end products, specialty products, deeply processed products, and products with high added value is low; there is also insufficient effort in developing fine chemical products that are of great significance to the development of the chlor-alkali industry. There are many general-purpose grades of PVC products, but few specialized resins; there are many products with low added value and few with high added value. The quality, technical level, and application areas of PVC products still lag far behind those in foreign countries. Many fields where these products are already widely used abroad have not yet been fully exploited in China, resulting in excessive competition in traditional application areas and insufficient competition in emerging ones, which fails to meet the requirements of industry restructuring and development. 　　2.3 Declining efficiency and a severe development situation
At the end of 2015, the operating rates of caustic soda and polyvinyl chloride production in China were 78% and 68%, respectively. “In the latter part of the 12th Five-Year Plan period, although the utilization rate showed a slow upward trend, the industry’s profitability declined. According to statistics from the China Chlor-Alkali Industry Association, the chlor-alkali industry suffered losses for three consecutive years from 2013 to 2015, with a loss rate of over 50%. “In the first half of the 12th Five-Year Plan period, state-owned enterprises, private enterprises, and foreign-funded enterprises stepped up their entry into the chlor-alkali industry, exerting a significant impact on the existing industry structure. “From the latter half of the 12th Five-Year Plan period through the start of the 13th Five-Year Plan, as the economy enters a “new normal,” the growth rate of product consumption will decline, and market competition will intensify. Prices of major products will continue to fluctuate at low levels. The profitability of the chlor-alkali industry is unlikely to see much improvement, and enterprises will face an even more challenging environment. 　　“During the 12th Five-Year Plan period, the domestic market continued to face competition and pressure from imported products; in particular, shale gas technology in North America and cheap oil and gas resources in the Middle East drove exports of related chlor-alkali products. As China’s chlor-alkali production capacity is brought online, export volumes are increasing, leading to increasingly fierce competition in overseas markets for primary products. As China is the largest market for chlor-alkali products, foreign companies compete for this emerging market as well as the Chinese market by imposing technical restrictions and setting up factories in nearby areas, which puts significant pressure on domestic enterprises to develop high-value-added products. 　　The capability for technological innovation needs to be further strengthened; in recent years, driven by a sense of independent innovation, the technical level of industry equipment has seen gradual improvement. For example, ion exchange membranes used in caustic soda production have been successfully manufactured domestically, and they have been tested and put into use in more than 10 enterprises ； Oxygen cathode technology and catalytic oxidation chlorine production technology, which could bring about technological changes in the future, have also seen certain progress in research and development. As the industry experiences rapid expansion of production capacity, there is an increasing demand for technological advancement, with self-developed processes, technologies, and equipment at the international advanced level being continuously put into use. However, at the same time, there is still a certain gap between technological innovation in China’s chlor-alkali industry and that of major foreign chlor-alkali countries. China’s chlor-alkali products market is characterized by low demand levels, large market potential, and an unreasonable structure. Meanwhile, technological innovation is a process full of risks and uncertainties, which leads many chlor-alkali companies to use old technologies and low-cost production methods in order to maximize short-term profits. Moreover, competition among similar companies in a disorderly manner objectively limits the space for technological innovation. Compared with developed chlor-alkali enterprises, most domestic chlor-alkali companies remain production-oriented; there is a widespread tendency to adopt advanced technologies and processes without developing them independently. The technological innovation capabilities of China’s chlor-alkali enterprises are still insufficient to support a faster shift in development patterns and to facilitate the upgrading of the industrial structure. 　　Developed countries abroad have all adopted a development strategy that combines the chlor-alkali industry with the petrochemical industry to build large-scale PVC production plants using the ethylene oxide chlorination method. Although China’s coal chemical technology continues to improve and mature, with diverse sources of ethylene and propylene, the development of PVC production via the ethylene oxychlorination method has been slow due to a long-term lack of overall coordination among different regions and industries in the country. Both the comprehensive utilization rate of limited ethylene resources and the overall competitiveness of the PVC industry are affected to a certain extent, making it difficult to achieve larger plant scales and more intensive operations. 　　 　　II. Domestic and international circumstances facing the chlor-alkali industry during the 13th Five-Year Plan period 1. International circumstances affecting the development of the chlor-alkali industry 1.1 The Minamata Convention on Mercury has a significant impact on the development of calcium carbide-based polyvinyl chloride production in China. At present, China’s total mercury consumption accounts for about 50% of the world’s total, making it one of the few countries that still extract mercury from mines. Among various industries, the polyvinyl chloride industry is the one that consumes the most mercury in China, with its mercury usage accounting for 60% of the country’s total mercury consumption; this industry relies on a large amount of mercury-containing catalysts. The Minamata Convention on Mercury was adopted at an international conference of the United Nations Environment Programme held in Kumamoto, Japan, on October 10, 2013. It is expected to enter into force in China following its ratification by the National People’s Congress in 2016. The Convention stipulates, among other things, that in the calcium carbide-based PVC industry, the mercury consumption per unit of product must be reduced by 50% by 2020 compared to the 2010 level. The calcium carbide process for polyvinyl chloride is the most important sector in China for carrying out compliance efforts. As the needs of the national economy develop, the production and demand for polyvinyl chloride will continue to increase, and so will the demand for mercury. If no effective measures are taken to reduce emissions, the calcium carbide-based polyvinyl chloride industry will not only face pressure to comply with international conventions but also encounter increasingly severe problems related to resources and the environment. 　　1.2 The development of shale gas in the United States exerts continuous pressure on the future development of China’s chlor-alkali industry. The large-scale development and production of shale gas in the U.S. are becoming an important factor that could affect changes in the global energy landscape. Today, shale gas is emerging as a new force in the global ethylene market. North America’s abundant reserves of unconventional natural gas provide U.S. petrochemical manufacturers, which generally use light hydrocarbons as feedstocks for cracking, with an ample supply of cost-effective raw materials. The development of the shale gas industry has long made North America one of the regions with the lowest costs for petrochemical production in the world. The rise of ethylene production in the United States poses a significant threat even to the highly cost-competitive Middle Eastern ethylene market. Based on the development of shale gas in the United States, the production of ethylene from light hydrocarbons and subsequent manufacture of polyvinyl chloride can result in costs that are nearly half those associated with the current crude oil-based approach as well as China’s calcium carbide-based process for producing polyvinyl chloride, giving it a significant competitive advantage in the market. If this trend continues, and U.S. shale gas extraction extends downstream into the mature petrochemical industry chain, it will further strengthen its position in the international chlor-alkali sector. The significant cost advantage gives the U.S. chlor-alkali industry an edge in competing and establishing a presence in the global market, which will undoubtedly pose a major challenge to Chinese chlor-alkali products in international competition, and may even have an impact on China’s PVC market. 　　1.3 The sustainable development of the chlor-alkali industry faces the challenge of reducing carbon emissions. The United Nations Climate Change Conference in Copenhagen marked the beginning of a journey toward a low-carbon era in global economic development, with countries around the world working together to address climate change. In September 2014, China introduced the **Rules for Addressing Climate Change (2014–2020)** as a specific plan to ensure that carbon emission intensity by 2020 is reduced by 40%-45% compared to 2005 levels. As a crucial industry for producing basic chemical raw materials, the chlor-alkali industry is also a traditional energy-intensive sector. Approximately one-third of chlor-alkali enterprises have built their own cogeneration plants, which generate roughly 40 billion kWh of electricity annually. It is estimated that these plants emit about 31.4 million tons of carbon dioxide each year. In compliance with international conventions, low-carbon development, energy conservation and emission reduction, improved energy efficiency, and industrial structure adjustment will be among the key factors determining the sustainable development of this industry during the 13th Five-Year Plan period. 　　1.4 New changes in the global economic and trade landscape As negotiations within the multilateral framework of the World Trade Organization (WTO) have stagnated over the past decade or so, the world’s major economies have begun to pursue negotiations on new trade frameworks. The U.S.-led \"Trans-Pacific Strategic Partnership\" (TPP) and \"Transatlantic Trade and Investment Partnership\" (TTIP) will account for around 40% of the world’s GDP each, yet China, as the world’s second-largest economy, is not part of either. The era of significant progress in current multilateral trade negotiations has come to an end; the world is at a turning point in the trading system. The scale of trade determines the pace of economic growth in our country, while the structure of export products and trade methods determine the extent of industrial restructuring and transformation in our country. Developed countries are formulating new rules for international trade that serve their own interests, which undoubtedly poses a huge challenge to the transformation and upgrading of China’s industries. 　　2. Domestic situation facing the development of the chlor-alkali industry 　　2.1 China’s economic “new normal” presents both opportunities and challenges for the development of the chlor-alkali industry 　　After more than 30 years of rapid growth, China’s economy has officially moved away from that phase of rapid expansion and entered a “new normal” stage. Products from the chlor-alkali industry are widely used in various fields of industrial production, and they are closely linked to the development of the national economy; over the years, increases in product output have shown a high degree of correlation with GDP growth. “During the 13th Five-Year Plan period, China’s economy will continue to grow at a steady pace, and downstream demand will also maintain a certain rate of growth. This means that China’s chlor-alkali industry still has room for development. 　　“During the 12th Five-Year Plan period, the domestic chlor-alkali industry experienced rapid growth, characterized by factor-driven and investment-driven development. As the industry shifted from high-speed growth to low-speed development, it continued to face a series of fundamental issues that affected its sustainable development, such as low industrial concentration, relatively scattered layout, and structural overcapacity. Entering the 13th Five-Year Plan period, further reducing excess production capacity and adjusting the industrial structure, as well as using innovation to improve the quality of industry development, require overcoming numerous difficulties and challenges in order to transition from a major country in chlor-alkali production to a strong producer in this field. 　　2.2 Integration into the **Belt and Road Initiative**: New opportunities for international trade in the chlor-alkali industry 　　The main destinations of China’s chlor-alkali product exports are generally in line with those covered by the **Belt and Road Initiative**. Currently, China’s annual exports of caustic soda remain stable at over 2 million tons. These exports **basically cover all 64 countries along the Belt and Road Initiative**. As a basic chemical raw material, caustic soda serves as an important supplement to meet the development needs of various fundamental industries such as chemical products, textiles, printing and dyeing, and the non-ferrous metals industry. At the same time, China’s annual export volume of polyvinyl chloride is around 1 million tons, of which about 90% goes to countries along the \"Belt and Road\" initiative. Countries such as India, Russia, Vietnam, Kazakhstan, Malaysia, and Thailand have become key markets for China’s polyvinyl chloride exports; exports to India alone account for 30% of the total exports. In 2015, China’s per capita consumption of caustic soda was 22 kilograms, while the per capita consumption of polyvinyl chloride was 12 kilograms. With the development of infrastructure construction under the Belt and Road Initiative and the improvement of people’s living standards, there is huge potential for demand for caustic soda and polyvinyl chloride in this initiative. 　　2.3 Development is constrained by resources and the environment. Developing clean production, green chemistry, energy conservation and emission reduction, as well as circular economy models has become the main focus of industrial policy and an inevitable trend. This shift is primarily reflected in specific industrial policies such as energy conservation and emission reduction measures, regulations restricting the development of high-energy-consuming industries, the abolition of preferential electricity pricing to implement differential electricity rates, and industry access rules. Given the characteristics of the chlor-alkali industry, particularly the polyvinyl chloride industry, energy, raw materials, resource structure, and technical equipment have a significant impact on its healthy development. “During the 13th Five-Year Plan period, **a policy of high energy prices under macroeconomic regulation is still likely to be adopted. Meanwhile, with the continued advancement of reforms regarding the mineral resource tax and fee system, prices of refined oil and natural gas, and electricity pricing policies, the prices of primary raw materials, energy, and mineral resources will continue to rise. This will lead to an overall increase in the prices of basic production materials as well as a corresponding rise in labor costs. 　　In terms of environmental protection, looking at the production stage, the chlor-alkali industry produces a wide variety of products, which generates numerous by-products. As a result, large amounts of wastewater, waste gas, and solid waste are emitted, placing significant strain on the environment. Polyvinyl chloride is the most important chlorine-consuming product, accounting for about 40% of the country’s total chlorine production. The main factor affecting the sustainable development of polyvinyl chloride produced by the calcium carbide method is the control of mercury pollution. As China’s mercury resources become increasingly depleted and the international Minamata Convention on Mercury is set to take effect in our country, the importance of addressing mercury pollution in the calcium carbide process for PVC production becomes even more evident. 　　 　　III. Guiding Principles and Objectives for Development during the 13th Five-Year Plan Period 1. Guiding Principles Fully implement the spirit of the Party’s * guidelines, guided by Deng Xiaoping Theory, the important thought of \"Three Represents,\" and the Scientific Outlook on Development. With the transformation of the development model as the main focus and technological innovation as the driving force, efforts will be made to adjust and upgrade the industry’s structural layout, thereby helping China advance from a major chlor-alkali producer to a strong one in this field. ---Adhering to the transformation of the development model as the main focus, we will further alleviate the pressure of overcapacity and shift from an extensive development approach based solely on expanding production capacity to one that is more refined, characterized by higher added value, as well as resource conservation and environmental friendliness ； 　　Adhering to technological innovation as the driving force, accelerating industrial applications, developing a range of processes, technologies, and equipment with independent intellectual property rights, enabling the export of chlor-alkali technologies and equipment, steadily promoting technological progress, comprehensively enhancing energy conservation and emission reduction capabilities, and achieving technological upgrades in the industry ； 　　Advocate intensive and clustered development, foster a number of competitive large enterprises and corporate groups, enhance the industry’s concentration and overall competitiveness through mergers, reorganizations, and the elimination of outdated entities, and bring about a more rational layout ； 　　Vigorously promote the construction of an ecological civilization, intensify the application of technological innovations, increase the proportion of clean production processes, improve the efficiency of energy and water resource utilization, and continue to advance circular and low-carbon development ； Strengthen the renovation of environmental protection facilities to reduce pollutant emissions, and ensure that the use and emission of mercury in calcium carbide-based polyvinyl chloride production meet the requirements set by international conventions ； 　　Actively promote integrated development with the petrochemical and new coal chemical industries, achieve diversification in raw material and product pathways, extend the value chain of chlorine and alkalis, and broaden development prospects ； ---Improve the ability to make coordinated use of both domestic and international markets as well as various resources; strengthen China’s influence in the market for low-end products; boost the import substitution and export of high-end products; and help China’s chlor-alkali products move up the global value chain. 　　2. Development Goals By 2020, through industrial policy regulation, market guidance, improvements in raw material sourcing and production processes, as well as corporate consolidation, efforts will be made to achieve the restructuring and upgrading of China’s chlor-alkali industry. “By the end of the 13th Five-Year Plan period, China’s operating rates for caustic soda and polyvinyl chloride were to be raised to over 85% and 80% respectively, with the capacity generated by the calcium carbide method for polyvinyl chloride dropping to around 75%. Strive to maintain a proper balance in chlor-alkali production, increase the proportion of organochlorine products, and meet market demands. Cultivate and develop enterprises and enterprise groups with international competitive advantages ； It possesses a range of products with international influence, as well as the capabilities in operation, trading, and management, along with skilled management personnel. 　　In the eastern region, efforts will be made to develop new material industries related to chlorine as well as chlorine-based fine chemical industries, thereby achieving integrated development of the chlor-alkali industry and related sectors ； In the central region, by leveraging regional and resource advantages, further strengthen coordinated development with related industries and adjust the product structure ； In the western region, full use should be made of resource advantages to further improve the integrated circular economic development model of “coal, electricity, salt, and chemical industries”. Efforts should also be made to strengthen integration with the coal-to-olefins industry, so as to foster several competitive industrial clusters. By 2020, efforts will be made to reduce the number of enterprises, achieve a more rational industry layout, and significantly improve the level of industrial concentration and competitiveness. 　　“During the 13th Five-Year Plan period, the application rate of membrane electrodes in proton membrane electrolyzers was to exceed 60%, while the application rate of domestically produced ion membranes was to exceed 30%. Industrial projects for caustic soda production using oxygen cathodes and catalytic oxidation for chlorine production were to be established and promoted for widespread use ； Build integrated demonstration projects for \"coal olefins–polyvinyl chloride,\" with the production capacity of polyvinyl chloride-specific materials and special resins accounting for over 20%; make breakthrough progress in the development of mercury-free catalysts for calcium carbide-based polyvinyl chloride; and develop and construct other demonstration projects using non-mercury processes. 　　Active efforts are being made to promote clean production in the chlor-alkali industry; by the end of the 13th Five-Year Plan period, energy consumption and water consumption per 10,000 yuan of output value were reduced by 15% and 20%, respectively, while the mercury usage per unit of PVC produced by the calcium carbide method was reduced by 50% compared to 2010. 　　-Actively promote the informatization development of the chlor-alkali industry, strengthen its deep integration with traditional chlor-alkali production methods, and move from \"digital manufacturing\" to \"smart manufacturing\" by optimizing and enhancing the existing digital capabilities. 　　 　　IV. Development path of the chlor-alkali industry during the 13th Five-Year Plan period 1. Establish and improve market access and exit mechanisms, and optimize industrial layout Strictly control new production capacity, establish sound market mechanisms, phase out outdated production capacities, promote clustered development of the industry, and achieve a rational layout for the chlor-alkali and related industries. Strict control over industry expansion is exercised through adjustments to industrial policies, outdated production capacity is phased out, and mergers and reorganizations of chlor-alkali enterprises are guided and promoted. Establish and improve market entry and exit mechanisms to optimize the rational allocation of resources in the chlor-alkali industry and enhance its overall competitiveness. By taking into account the resource conditions, environmental carrying capacity, industrial foundations, and development advantages of the eastern, central, and western regions, and by comprehensively considering the regional industrial structure and layout, efforts will be made to promote the intensive development of the chlor-alkali and related industries. This will lead to the creation of industrial clusters characterized by clear leading industries, agglomeration of related industries, shared resources and facilities, centralized pollution control, and recycling of waste. The strong driving and radiating effects of these industrial parks will enable coordinated, chain-based, clustered, intensive, and cooperative industrial development in the region. 　　2. Optimize raw materials and technical approaches to promote product structure adjustment. During the 13th Five-Year Plan period, efforts should continue to be made to advance the use of energy-efficient, cleaner, and lower-cost raw materials and technical methods in the production of chlor-alkali products. Increase efforts in technological innovation, accelerate the development of industrial demonstration projects for oxygen cathode technology and catalytic oxidation chlorine production technologies, and diversify methods for chlorine production ； Promote the integrated development of the petrochemical, coal chemical, and chlor-alkali industries, increase efforts to integrate new processes for producing olefins from coal and methanol, and establish integrated demonstration projects for \"coal olefins–polyvinyl chloride\" to facilitate industrial restructuring. Increase efforts in the research, development, and transformation of cleaner production processes for traditional methods used in the manufacture of major chlorine-based products; adjust the product structure related to chlorine, extend the industrial chain, and focus on the overall competitiveness in terms of raw material sources, costs, and environmental sustainability, in order to achieve sustainable development in the chlor-alkali industry. 　　3. Drive the transformation and upgrading of the chlor-alkali industry through independent innovation and technological progress. Strengthen independent innovation to promote technological advancement in the industry, encourage enterprises to adopt new technologies for clean production and energy conservation, and reduce emissions. Promote the use of membrane electrode ion exchange cells, domestically produced ion membranes, and low-mercury catalysts across the industry. Accelerate the development of mercury-free catalysts for calcium carbide-based polyvinyl chloride production as well as other mercury-free processes. Actively push for the localization of advanced technologies and equipment such as caustic soda oxygen cathode technology and catalytic oxidation processes for chlorine production, so as to develop a range of core technologies and equipment with independent intellectual property rights. Continuously develop alkali- and chlorine-consuming products with high added value to further expand their application areas. Enterprises are encouraged to adopt new technologies, new processes, new equipment, and new materials to drive product innovation. Focusing on emerging industries, serving them and integrating into them, we drive the sustainable development of the chlor-alkali industry through independent innovation and technological progress. 　　Strengthen the expansion of polyvinyl chloride into processing and application fields. Strengthen research and development on new varieties of polyvinyl chloride and specialized materials, enhance studies on processing aids, processing technologies, and the suitability of processing equipment, deepen cooperation with downstream processing enterprises, develop a series of specialized polyvinyl chloride material grades that are tailored to specific needs, facilitate the transition of polyvinyl chloride resins in China from general-purpose types to specialized ones, improve the quality of polyvinyl chloride plastic products, consolidate their use in traditional fields such as profiles and pipes, and further explore new consumer markets. 　　4. Strengthen ecological and environmental protection efforts to promote the green development of the industry. Taking the implementation of the Minamata Convention on Mercury and the prevention and control of heavy metal pollution as opportunities, efforts will be made to \"enhance the efficient use of low-mercury materials and technological upgrades for mercury pollution control, standardize the management of mercury-containing waste, and accelerate research and development of mercury-free alternatives\". This will facilitate the transformation and upgrading of the calcium carbide-based PVC industry, so that by 2020 the requirements set out in the convention can be met, with significant progress being achieved in the development of mercury-free catalysts. 　　“During the 13th Five-Year Plan period, emphasis was placed on strengthening the prevention and control of pollution from wastewater and waste gas, increasing efforts in technological innovation to reduce the pollutant emissions per unit of product, vigorously promoting the recycling of waste, and enhancing the economic and environmental benefits associated with reducing wastewater and waste gas emissions ； Conserve water and increase the rate of recycling of water resources. 　　Enterprises are encouraged to establish organizational frameworks for environmental emergency management, conduct environmental risk assessments, develop emergency response plans for sudden environmental incidents and carry out regular drills, strengthen the construction of emergency rescue teams and the stockpiling of necessary resources, strictly implement various measures to prevent and control environmental risks, and regularly identify and address potential environmental safety hazards. 　　5. Further deepen the development model of circular economy 　　Advance the development of a circular economy in the chlor-alkali industry; improve the enterprises’ circular economy development models, enhance innovation in industrial chain design and technological processes, achieve more optimal utilization of resources, a more rational product structure, a better environmental impact, and greater economic benefits ； Regarding the development model of circular economy in industrial parks, enterprises are encouraged to gather and develop in high-end chemical parks that possess favorable conditions in terms of environment, resources, logistics, industrial chain connectivity, and advanced technology. Through mergers and acquisitions, and by employing commercial operation models, it integrates into the circular economy industry chain of the park. In accordance with **relevant regulations and management measures, cogeneration facilities should be developed and direct power purchasing should be carried out to improve energy utilization efficiency. 　　6. Strengthen coordinated development with productive service industries 　　Enhance coordinated development with productive service industries, and guide chlor-alkali enterprises to separate and outsource non-core operations in order to move up the value chain. Strengthen marketing and brand services, develop a modern sales system, and enhance the coordination capabilities among enterprises along the industrial chain ； Enhance the functions of futures and spot trading platforms ； Strengthening the exploration of outsourcing in chemical storage and logistics ； Encourage the use of financial leasing for equipment renewal, technological upgrades, and expanding into international markets ； Encourage collaborative disposal of industrial \"three wastes\" and social waste with related industries, and develop energy-saving and environmental protection services such as investment and financing for energy conservation and emission reduction. 　　7. Strengthen information technology development to improve the manufacturing standards of traditional industries. Encourage the integrated use of process control, production management, and information decision-making systems to enhance production efficiency. Chlor-alkali enterprises are encouraged to establish energy management centers and develop information systems for safe production, in order to promote energy conservation, emission reduction, and safe production ； Chlor-alkali enterprises are encouraged to adopt new technologies such as e-commerce, industrial clouds, and big data to improve the level of integration between industry and information technology. 　　8. Implementing responsibility care across the industry, and strengthening health, safety, and environmental management systems. During the 13th Five-Year Plan period, responsibility care was promoted throughout the industry to enhance companies’ safety and environmental protection efforts; strict management systems were established, and capabilities for accident prevention and response were improved, thereby further enriching and elevating the quality of responsibility care practices in the chlor-alkali industry. 　　 　　V. Policy and Measure Recommendations 　　1. Strengthen industrial policies, regulations, and industry standards, strictly control new production capacity, and enhance supervision and management. 　　Revise and issue new industry entry requirements, strengthen industry supervision and management, establish a management system for phasing out outdated production capacity based on criteria such as safety, environmental protection, and energy consumption, eliminate outdated production processes, and improve incentive mechanisms for such phasing out. Aiming at the construction of an ecological civilization and using constraints such as carbon emissions, energy consumption, and pollutant discharges as means, dynamic regulation of production capacity is achieved. 　　By making use of the pilot programs for carbon emission trading currently underway in our country, a market-based mechanism can be established through which carbon emission trading facilitates the dynamic regulation of production capacity. To conduct research on the calculation of carbon emissions for the main products in the chlor-alkali industry, it is necessary first to include the new and removed caustic soda and polyvinyl chloride production capacities in the provinces and cities that are part of the carbon emission trading pilot programs within this trading system, thereby exploring the relationship between changes in chlor-alkali production capacities and the market-based operating mechanisms of the carbon trading market. 　　In line with the total pollutant emission control targets set out in China’s 13th Five-Year Plan, a quota system for pollutant emissions is implemented for chlor-alkali enterprises in key areas, with efforts being made to establish a market for pollutant emission rights. By adopting a market-based approach, trading of pollutant emission allowances among enterprises is enabled, giving rise to various forms of allowance trading such as those related to new production capacity, capacity reduction, and technological upgrades, thereby ensuring control over the total amount of pollutants emitted in the region. 　　2. Establish a sound exit mechanism to phase out outdated production capacity and technologies. A proper exit mechanism within the industry should be put in place; enterprises that voluntarily eliminate outdated production capacity **should be given subsidies and incentives in terms of funding and taxes. Financial compensation should be provided for the destruction of such outdated facilities on-site, and policy support should be offered to address the employment issues arising from the elimination of these facilities. 　　3. Promote and drive industry consolidation to enhance competitiveness 　　Vigorously advance the reform and restructuring of chlor-alkali industry enterprises across regions, industries, and ownership structures. Advanced enterprises in the eastern regions are encouraged to strengthen cooperation with enterprises in the central and western regions through various means such as acquisitions, mergers, restructurings, and joint ventures. Promote the integrated development of upstream and downstream industries, increase industry concentration, and develop economies of scale. 　　Globally, efforts are being made to include advanced material industries that offer support and significant growth potential in the scope of mergers and acquisitions, thereby achieving a fundamental shift from the bulk chemicals industry to the advanced materials industry. Address the issues faced by the industry’s development, such as reliance on bulk basic chemical raw materials characterized by low profits, large price fluctuations, weak competition, and strong cyclicality, in order to enhance its core competitiveness. 　　4. Use specific policies to guide the scientific planning and rational layout of the chlor-alkali industry. It is recommended that a relevant department take the lead, in collaboration with industry associations and experts, in formulating plans for the development and layout of this industry. Such plans should set clear requirements and provide specific guidance regarding project development, the distribution of production capacity, and the development models, so as to ensure scientific planning, rational layout, and sustainable growth of the chlor-alkali industry. It is recommended to provide policy support in terms of land and taxation for the relocation of established enterprises, so as to facilitate their better development after the relocation. 　　Encourage diversification of PVC raw material sources. Encourage areas in the east with port advantages to build new PVC production capacity using the ethylene method ； Strengthen the integration of new coal-based olefin projects in the western regions with ethylene-based PVC production, and guide enterprises in different regions to adopt various processes and raw material routes to build competitive industrial clusters. 　　5. Formulate reasonable and effective energy regulation policies. During the 13th Five-Year Plan period, industrial policies will continue to provide a favorable electricity pricing scheme for caustic soda produced by the ion exchange membrane method, given its significant energy-saving benefits. For outdated production technologies that have been phased out, as well as newly established enterprises and related projects subject to industrial policy restrictions, restrictive measures such as raising the standards for differential electricity prices should continue to be applied to encourage their closure and phasing out. 　　The chlor-alkali industry is encouraged to adopt cogeneration and direct power supply to large consumers, in order to improve energy efficiency and promote coordinated development of the alkali and electricity industries. In line with the principles of a market economy and the experiences of developed countries, the chlor-alkali industry should be granted reasonable electricity prices that differ from those applied to other industries. Policy support should also be provided to this industry for energy conservation and emission reduction, the utilization of waste energy, and the rational use of resources. It is recommended that the electricity price for alkali electrolysis should be 20% lower than the standard rate for large-scale industrial use. 　　6. Actively promote technological progress in the chlor-alkali industry and increase support for independent innovation. The research and development of technologies for mercury pollution control, the use of domestically produced ion exchange membranes, oxygen cathode technology, catalytic oxidation methods for chlorine production, as well as the adoption of advanced processes such as low-mercury catalysts, salt-acid desorption techniques, technologies for treating mercury-containing wastewater, and the utilization of waste heat from hydrogen chloride synthesis, are all strategic elements that will determine the sustainable development of China’s chlor-alkali industry in the future. Policy support and subsidies are key factors that determine whether these energy-saving and emission-reduction technologies can be successfully implemented within the industry. 　　It is recommended to encourage and increase financial support for energy conservation, emission reduction, and technological upgrades aimed at cleaner production in the chlor-alkali industry; to support the adoption of domestic ion exchange membrane technologies; and to provide policy-based subsidies to all enterprises that use domestically produced ion exchange membranes in their caustic soda production. 　　7. Actively support the research and development of new products with high added value. In response to the issue of low-level, repetitive production of low-end, general-purpose products in China’s chlor-alkali industry, the industry will make significant efforts over the next few years to develop and apply specialized resins and special-type resins, as well as chlorine/alkali-consuming products with high added value; this is a key aspect of upgrading the industrial structure of the chlor-alkali industry. In this process, **departments at all levels should increase policy and financial support to provide substantial assistance to enterprises that engage in independent innovation. 　　8. Actively promote the prevention and control of mercury pollution to meet **compliance requirements. Issue relevant industrial policies to prohibit the establishment of new PVC production facilities that use mercury-based processes, and strengthen the supervision and enforcement of existing policies. Encourage and support the widespread use of low-mercury catalysts as well as further research and development in this area, by providing appropriate policy and financial support to reduce mercury usage even further. Strengthen the research and development, as well as the industrial application demonstration of mercury-free catalysts and mercury-free process technologies. Increase financial investment and policy support for research and development, and provide policy and financial assistance for the construction of demonstration facilities for industrial application. 　　9. Implement more rational import and export policies, and take necessary measures to enhance the effectiveness of trade remedy measures. With the increase in domestic production, increasing exports and capturing international markets has become an important strategy for the industry. It is recommended to provide reasonable policy support for the export of major chlor-alkali products and the import of raw materials. It is recommended to further increase the export tax rebate rate for PVC and to provide a certain export tax rebate rate for caustic soda, while abolishing import tariffs on raw materials such as ethylene, EDC, and VCM, which are heavily relied upon domestically. 　　Processed trade has become an important means for countries involved in anti-dumping cases to circumvent trade restriction measures and continue to export to our country at dumped prices, thereby significantly reducing the effectiveness of anti-dumping measures. It is recommended to **include anti-dumping products in the list of items prohibited under processing trade, implement anti-dumping measures, enhance the effectiveness of trade remedy actions, and promote the healthy development of related industries. (Source: China Chlor-Alkali Network)