The current status, challenges, and future of modern coal chemical industry

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Gu Zongqin: The Current Situation, Problems, and Future of Modern Coal Chemical Industry. Author/Source: Date: 2016-05-26. Clicks: 4. Modern coal chemical industry is a modern industry for processing and transforming coal, using coal as the main raw material with the goal of producing clean energy and chemical products. It represents an important means of achieving clean and efficient utilization of coal, facilitating adjustments in the coal industry structure, and promoting local economic development. Since the 21st century, China’s modern coal chemical industry, represented by advanced coal gasification technology, has developed rapidly. The key technologies have become mature, and multiple demonstration projects have entered commercial operation; both technological innovation and industrialization are at the forefront worldwide. Modern coal chemical industry can not only provide clean energy products such as clean fuels and natural gas, but also develop petroleum substitutes such as olefins, aromatics, and ethylene glycol. Since 2015, the sharp decline in international oil prices has led to a significant drop in the prices of domestic energy and chemical products, posing severe challenges to the economic viability of modern coal chemical industries; as a result, the progress of major projects in this sector has been slow. Looking to the future, as technology advances and engineering expertise grows, modern coal chemical industry will further improve its technical standards, enhance industrial maturity and profitability. It will also actively explore more efficient production models such as the comprehensive utilization of coal based on different quality levels, and the integrated production of oil, gas, electricity, heat, and chemicals, striving to reach higher levels of development. 1 Current Development Status of the Modern Coal Chemical Industry 1. Initial Scale of Industry Development By the end of 2015, China had an operating capacity for coal-to-oil production (through direct and indirect liquefaction) of 2.58 million tons per year, with a coal conversion capacity of around 9 million tons ； The coal-to-natural gas production capacity is 3.105 billion m3/year, while the coal conversion capacity is approximately 14 million tons ； The production capacity for olefins from coal is 4.04 million tons per year (excluding olefins produced from methanol), while the capacity for converting coal into other products is approximately 17 million tons ； The production capacity of ethylene glycol from coal is approximately 1.6 million tons per year, while the coal conversion capacity is around 2.87 million tons. At present, the main modern coal chemical projects in operation in China are listed in the table below. Sequence Number, Project Name, Location, Capacity/10,000 t•a-1, Notes: I. Coal-to-oil demonstration projects: 1. Shenhua Direct Coal Liquefaction Project, Ordos, Inner Mongolia – 10820; has been operating stably since the second half of 2010, with an operational capacity of over 80%. 2. Shenhua Indirect Coal Liquefaction Project, Ordos, Inner Mongolia – 18; operations were suspended after trial runs. 3. Yitai Indirect Coal Liquefaction Project, Ordos, Inner Mongolia – 16; came online in 2009, with an operational capacity of 90%~110%. 4. Lu’an Indirect Coal Liquefaction Project, Changzhi, Shanxi – 16; came online in 2009. 5. Yankuang Yulin Indirect Coal Liquefaction Project, Yulin, Shaanxi – 100; came online in 2015. II. Coal-to-natural gas demonstration projects: 1. Datang Keqi Coal-to-Natural Gas Project, Keqiten Banner, Inner Mongolia – 4 billion m3/a; the first phase with a capacity of 1.33 billion m3/a was completed and put into operation by the end of 2012. 2. Qinghua Yili Coal-to-Natural Gas Project, Ili, Xinjiang – 5.5 billion m3/a; the first phase with a capacity of 1.375 billion m3/a was completed and put into operation by the end of 2012. 3. HuiNeng Ordos Coal-to-Natural Gas Project, Ordos, Inner Mongolia – 1.6 billion m3/a; the first phase with a capacity of 0.4 billion m3/a was completed and put into operation. III. Coal-to-olefins demonstration projects: 1. Shenhua Baotou Coal-to-Olefins Project, Baotou, Inner Mongolia – 60; came online in 2010. 2. Shenhua Ningxia Coal-to-Olefins Project, Ningdong, Ningxia – 50; came online in 2011. 3. Datang Dolun Coal-to-Olefins Project, Dolun, Inner Mongolia – 46; started trial production in 2012. 4. China National Coal Group Yulin Coal-to-Olefins Project, Yulin, Shaanxi – 60; came online in 2015. 5. Yanchang China National Coal Group Coal-to-Olefins Project, Yulin, Shaanxi – 60. 6. Shaanxi Coal Group Pucheng Coal-to-Olefins Project, Pucheng, Shaanxi – 68. 7. Ningxia Baofeng Coal-to-Olefins Project, Yinchuan, Ningxia – 60; uses some coke oven gas as a raw material along with methanol. IV. Coal-to-ethylene glycol projects: 1. Tongliao Jinmei Chemical Coal-to-Ethylene Glycol Project, Tongliao, Inner Mongolia – 2020; came online in 2009. 2. Henan Yongjin Puyang Chemical Coal-to-Ethylene Glycol Project, Puyang, Henan – came online in 2012. 3. Henan Yongjin Anyang Chemical Coal-to-Ethylene Glycol Project, Anyang, Henan – came online in 2012. 4. Henan Yongjin Xinxiang Chemical Coal-to-Ethylene Glycol Project, Xinxiang, Henan – came online in 2012. 5. Shandong Hualu Hengsheng Coal-to-Ethylene Glycol Project, Dezhou, Shandong – came online in 2012. 6. Xinjiang Tianye Ethylene Glycol Project, Shihezi, Xinjiang; uses calcium carbide off-gas and coal as raw materials; the first phase was completed and put into operation in 2013, and the second phase in 2015. 7. Sinopec Hubei Fertilizer Coal-to-Ethylene Glycol Project, Zhijiang, Hubei – came online in 2013. 9. Ordos Xinhang Energy Coal-to-Ethylene Glycol Project, Ordos, Inner Mongolia – 30; came online in 2015. 1.2 The operational efficiency of demonstration projects is continuously improving. Through the optimization of process technologies and improved management, the operational efficiency of China’s coal-to-oil and coal-to-olefins demonstration projects is constantly improving. These projects are now able to operate stably for long periods at full capacity, with ongoing improvements in energy consumption metrics and environmental performance. Taking the Shenhua coal direct liquefaction project as an example, the plant’s operation load has remained above 80% over the past 3 years; the comprehensive energy consumption per unit of product has decreased from 2.12 tons of standard coal to 1.69 tons of standard coal, while water consumption has dropped from the designed value of 10 tons to below 6 tons. The Yitai 160,000 t/a indirect liquefaction project has been in continuous operation for 6 years, with the plant load remaining at 90%~110% throughout this period. The comprehensive energy consumption per unit of product is 3.62 tons of standard coal, while the water consumption is 12.8 tons. The Shenhua Baotou coal-to-olefins project has been operating continuously and stably for 5 years, with an average annual load factor of over 90%. The comprehensive energy consumption per unit of product has decreased from the designed value of 5.88 tons of standard coal to 5.5 tons of standard coal, while water consumption has dropped from 36.53 tons to below 30 tons. Through technical improvements, coal-to-natural gas demonstration projects such as Datang Keqi, Xinjiang Qinghua, and Inner Mongolia HuiNeng are seeing an increase in the operating time and load capacity of their facilities. 1.3 Autonomous technical equipment has been widely applied. Thanks to the development during the 12th Five-Year Plan period, the level of key technologies and equipment in China’s modern coal chemical industry has further improved, placing it at the world’s advanced level as a whole. First, autonomous gasification technology has been widely applied. Domestic gasification technologies such as multi-nozzle opposed water-coal slurry gasification, aerospace pulverized coal pressurized gasification, and Tsinghua furnace gasification using water-cooled walls for water-coal slurry have been widely applied ； Second, significant breakthroughs have been achieved in advanced synthesis technologies. The independently developed technologies for direct coal liquefaction, indirect coal liquefaction, conversion of coal to olefins via methanol, and production of ethylene glycol from coal have been put into industrial use. The fluidized-bed technology for producing aromatics from methanol has completed pilot-scale testing, providing an engineering basis for subsequent industrialization ； Third, the localization of key equipment such as large-scale air separation units, ultra-high pressure solid transfer pumps, high-pressure slurry pumps, corrosion-resistant pumps, cryogenic pumps, slag discharge valves, high differential pressure relief valves, and cryogenic valves has been achieved. In summary, our country has developed industrial technologies that use coal as a raw material to produce energy products such as oil and gas, as well as petrochemical feedstocks like olefins and ethylene glycol, thus opening up a new path toward diversifying petrochemical raw materials. 1.4 Driving the economic transformation and development of resource-rich regions: The modern coal chemical industry is characterized by high demands for resources, technology, capital, and talent, and its industrial added value is 4 to 15 times that of direct coal sales. “During the 12th Five-Year Plan period, China’s modern coal chemical industry saw a total investment of around 350 billion yuan. It was able to generate annual profits and taxes of over 10 billion yuan, creating directly more than 50,000 jobs and indirectly hundreds of thousands of jobs. This sector provided numerous employment opportunities in rural areas and small towns, promoted the development of equipment manufacturing, infrastructure construction, and related service industries, facilitated industrial structure transformation, helped resource-rich regions turn their resource advantages into economic advantages, and contributed to regional economic development. 1.5 A group of key enterprises and a pool of skilled professionals have been developed. Through the construction and operation of modern coal chemical industry demonstration projects, China has established a number of research and development institutions, with Zhongke Synthetic Oil and East China University of Science and Technology as representatives ； A group of design and construction teams, represented by Tianchen, Wuhuan, and Donghua Engineering Company, has been formed ； This has given rise to a group of operation and management enterprises represented by Shenhua Group and China Qinghua Group ； It has spurred a group of equipment manufacturing companies, represented by Shengli Blower Group and Hangzhou Oxygen Equipment Co., Ltd. There are over 100,000 professionals in this field, forming a talent pool with a complete range of specialties, mutual complementarity, and a rational structure. 2 Existing problems: The development of China’s modern coal chemical industry has achieved certain successes, but it still faces various issues in terms of technology optimization, resource utilization, environmental protection, and economic efficiency. 2.1 The process technology still needs further optimization. The level of independent core technologies and equipment in China’s modern coal chemical industry still needs to be improved; for some core technologies such as methanation, as well as key equipment and materials, reliance on imports persists. The process flow and technical integration still need to be optimized and upgraded, and the scale of the facilities requires further coordination in order to achieve a typical series-based scale. Devices such as circulating water and air separation systems generally have excessive design margins, which increases the project’s investment, energy consumption, and water consumption; further design optimization is needed in the future. Advances in environmental protection technologies lag behind the increasingly stringent environmental requirements, and technical bottlenecks lead to prominent environmental problems. Some of the key technologies required for zero wastewater discharge have not yet been industrialized, and the practicality and long-term safety of technologies for the evaporation and crystallization of concentrated brine as well as the harmless treatment of miscellaneous salts remain to be verified. There is still much room for improvement in the level of comprehensive resource utilization; energy and water-saving technologies need to be enhanced, and there are no efficient ways to utilize low-grade thermal energy, slag, and other similar materials. 2.2 The layout of the coal chemical industry is challenging. Modern coal chemical projects are large in scale, requiring substantial amounts of coal and water resources; as a result, high standards are imposed on the availability of such resources in the locations where these projects are situated. However, in our country, coal resources and water resources are distributed in opposite ways: the central and western regions are rich in coal resources but relatively short of water resources. There is significant debate both within and outside the industry regarding whether to transport coal or water, making it difficult to plan the layout of the coal chemical industry. 2.3 High pressures regarding environmental protection and carbon emissions: Modern coal chemical projects utilize advanced technologies in their production, which enables effective control of pollutant emissions and carbon emissions intensity; however, due to their large scale, the total amount of emissions remains relatively high. Regarding wastewater, the wastewater generated in modern coal chemical production can be treated technologically to meet regulatory discharge standards. However, since many of these projects are located in western regions where the ecosystem is fragile and the environmental carrying capacity is low, and there are no suitable bodies of water for discharging wastewater, \"zero discharge\" must be achieved. Currently, high-concentration brine presents challenges in terms of high treatment costs and the reuse of waste salt, while treatment and recovery technologies for organic wastewater still require further engineering validation. During 2015–2016, the environmental impact assessment reports for Suxin New Energy’s coal-to-natural gas project, Zhejiang Energy Xintian’s coal-to-natural gas project in Ili, and Lu’an Changzhi’s coal-to-oil project underwent multiple evaluations, repeated revisions, and additional approvals, which clearly demonstrates the high level of attention paid by the relevant environmental authorities to environmental protection issues in modern coal chemical projects. 2.4 Profitability is highly affected by energy prices. Modern coal chemical industry focuses on producing petroleum substitutes. Compared with the petrochemical route, modern coal chemical projects exhibit better economic efficiency, as they have longer production processes, relatively more complex technologies, and higher capital investment per unit; as a result, fixed costs account for a larger proportion of the total costs. This advantage is evident when oil prices are high and the prices of petrochemical products are also high. And when oil prices drop below $50 per barrel, the cost advantages of modern coal chemical projects will face significant challenges. 3 Development Trends: As an important means for the clean and efficient utilization of coal, the modern coal chemical industry still needs to continue with upgrades and demonstration projects. It is necessary to improve technical standards as well as the level of system optimization and integration, enhance energy conversion efficiency, reduce resource consumption and pollutant emissions, and lower construction costs. Through technological innovation and managerial improvements, the competitiveness of this industry can be enhanced, thereby facilitating its sustainable development in harmony with the ecological environment. “During the 13th Five-Year Plan period, the modern coal chemical industry should place greater emphasis on development quality and efficiency, continuously improve its independently developed and upgraded technologies, and carry out demonstration projects for industrial upgrading in areas such as energy efficiency, environmental protection, water conservation, and the localization of technical equipment. Through measures such as technological upgrades and refined production management, the industry can address the impact on profits resulting from low oil prices. “During the 13th Five-Year Plan period, the key development areas for China’s modern coal chemical industry were as follows. 3.1 Make solid efforts to ensure that the existing demonstration projects meet the required standards and achieve full capacity operation. Projects such as Shenhua Ordos’s direct coal liquefaction project, Datang Keqi and Qinghua Ili’s coal-to-natural gas projects, as well as Datang Dolun’s coal-to-olefins project will continue to be optimized, with efforts made to eliminate bottlenecks in equipment and processes. The operating patterns of these demonstration projects will be studied in order to achieve full capacity and compliance with standards as soon as possible, so that they can operate in a stable, efficient, and optimal manner. It is necessary to conduct timely calibration of major demonstration project initiatives, by summarizing and analyzing key indicators such as material consumption, energy consumption, water usage, as well as the emissions of wastewater, exhaust gases, and solid waste, as well as product quality. This helps to identify existing problems and provides a basis for guidance in the construction of subsequent projects. 3.2 Promote the orderly development of upgrade demonstration projects in a timely manner (1) Direct coal liquefaction. Based on a summary of the operational experience from Shenhua Ordos Phase I, Phase II and Phase III projects were launched in a timely manner, with an emphasis on demonstrating technological upgrades in direct coal liquefaction as well as carrying out systematic optimizations to Phase I. (2) Indirect coal liquefaction. Based on a summary of the operational experience from the 160,000–180,000 t/a projects of Yitai, Lu’an, and Shenhua, as well as the 1 million t/a project of Yankuang, the 4 million t/a coal indirect liquefaction project at Shenhua Ningdong and the 1 million t/a coal indirect liquefaction project at Lu’an Changzhi were constructed and brought into operation. Other coal indirect liquefaction projects will steadily carry out preliminary work, with construction scheduled at an appropriate time depending on oil price trends. Key development areas for coal indirect liquefaction projects include: demonstration of high-temperature iron-based slurry-bed FTO synthesis, high-temperature cobalt-based slurry-bed FTO synthesis, heat recovery from FTO synthesis reactions, water treatment in FTO synthesis processes, refining of FTO synthesis oil and further processing of specialty products, production and application of new FTO synthesis catalysts, design and manufacturing of large-scale FTO synthesis slurry-bed reactors, as well as coal fractionation liquefaction and related technologies. The goal is to achieve industrialization of plants with capacities of millions of tons and the localization of key equipment. (3) Coal-to-natural gas. After asset restructuring, the Datang Fuxin coal-to-natural gas project will commence construction at an appropriate time ； The Zhejiang Energy Xintian Yili coal-to-natural gas project will expedite the completion of the preliminary procedures in order to start the project construction as soon as possible ； Preparatory work for coal-to-natural gas projects such as CNOOC Datong, BEIKEONG Ordos, and Su New Energy will be carried out in an orderly manner. Key development areas for coal-to-natural gas projects include technologies such as demonstration of high-pressure fixed-bed gasification, efficient methanation catalysts, optimization of methanation reactor design, efficient purification, effective recovery of phenol and ammonia, and efficient treatment and reuse of wastewater. Additionally, there is focus on the integration of gasification technologies, as well as the implementation of combined production of gas, electricity, and chemicals, large-scale direct power supply, and comprehensive peak-shaving technologies. (4) Coal-to-olefins. The upgrading demonstration projects for coal-based olefins, such as those in Ordos by Zhongtian Hechuang, Huaibei in Anhui operated by Sinopec, and Dami in Qinghai, will be advanced in an orderly manner. Key development priorities for coal-based olefins: Optimize the entire process chain, including gasification, purification, and methanol synthesis, to develop a complete set of processes with independent intellectual property rights, thereby enhancing the operational stability and economic efficiency of large-scale facilities ； Carry out engineering technology demonstrations for methanol-to-olefins production on a million-ton scale, and make breakthroughs in technologies such as the scaling up of carbon-four recycling reactors and energy coupling between multiple reactors ； Construct an industrial demonstration plant for Tsinghua University’s Fluidized Bed Methanol to Propylene Technology (FMTP) ； In conjunction with the transformation of PVC production using the calcium carbide method, coal-derived olefins are used to replace PVC produced by this method, thereby adjusting the industrial structure and reducing mercury pollution ； Demonstrate coal-to-olefins coupling technology with integrated gasification combined cycle (IGCC) to improve the overall energy efficiency of the plant. (5) Ethylene glycol from coal. Currently, there are approximately 3 million tons per year of production capacity already in operation across the country, with another approximately 2 million tons per year under construction. Since Xinjiang Tianye successfully achieved industrialization in producing ethylene glycol from calcium carbide off-gases, many new ethylene glycol plants have been built across the country. According to incomplete statistics, approximately 5 million tons per year of production capacity for ethylene glycol plants is planned to be built. At present, China imports less than 10 million tons of ethylene glycol per year; at this rate of growth, an overcapacity in ethylene glycol production is bound to occur. “During the 13th Five-Year Plan period, with the trend of international oil prices remaining uncertain, it is necessary to carefully consider and make prudent decisions regarding whether newly established ethylene glycol projects will be competitive. 3.3 Vigorously enhance the capacity for domestic production of equipment. In major demonstration projects, demonstrations of the domestic production of large-scale gasification units with a coal feeding rate of 2,000–4,000 t/d and large-scale air separation plants will be carried out, with a focus on overcoming the barriers to achieving self-sufficiency in the production of large-scale methanol synthesis towers, methanation reactors, large compressors, and key pumps and valves. 3.4 Make significant efforts to improve the levels of clean production and carbon utilization. Strengthen the development and demonstration of treatment and disposal technologies for high-concentration organic wastewater and high-concentration brine, as well as technologies for the resource utilization of solid waste and the control of volatile organic compound pollution, in order to reduce pollutant emissions. Actively explore ways to reduce CO2 emissions, and carry out in-depth demonstrations of CO2 for oil and gas displacement. 3.5 Accelerate the improvement of the standardization system and establish a scientific modern coal chemical industry standard system as soon as possible. Actively carry out the development and revision of standards, accelerate and improve the quantity and quality of such standards, and strengthen the connection between standards and the market.