Ethanol from coal: The sixth path for modern coal chemical industry?

Thread Content

Ethanol from coal: The sixth path for modern coal chemical industry? Author/Source: China Chemical Industry News Date: 2016-08-10 Clicks: 3 In recent years, there has been an overcapacity of acetic acid production in China, with costs remaining below market levels. The promotion of methanol fuel is hindered by issues such as the lack of relevant standards, its toxicity, and its corrosion to non-metallic components in the fuel system. This has prompted many research institutions and investors to pay attention to coal-based ethanol. Given current technological conditions, developing coal-to-ethanol production can not only consume large quantities of acetic acid, thereby alleviating the problem of overcapacity in acetic acid production, but also reduce China’s dependence on imported oil and automobile exhaust emissions by promoting the use of ethanol gasoline as a substitute for some petroleum. Some experts have even predicted that coal-to-ethanol is expected to become another investment hotspot and the most promising development direction in the coal chemical industry, following coal-to-olefins, coal-to-natural gas, coal-to-oil, coal-to-ethylene glycol, and coal-to-aromatics. So, can coal-based ethanol truly become the sixth pathway for modern coal chemical industry? Technological breakthroughs and a surge in projects. On April 28, the 30,000-ton/year industrial demonstration plant for producing ethanol via acetic acid hydrogenation, built by Jiangsu SuoPu (Group) Co., Ltd. using technologies developed by the Dalian Institute of Chemical Physics, Chinese Academy of Sciences, was successfully fed with raw materials for the first time and has since been operating stably. According to Ding Yunjie, a researcher at Dahuaxian Research Institute, the operation results of Sopex’s demonstration plant show that, under basically identical conditions regarding material and energy consumption, the acetic acid hydrogenation technology developed by Dahuaxian Research Institute is capable of producing anhydrous ethanol with a purity of over 99.6%. This indicator is nearly 5 percentage points higher than the acetic acid hydrogenation technology of the American company Celanese, indicating that the technology developed by Dahuasuo is at the international leading level. This is another advanced coal-to-ethanol technology publicly announced by the DHHST after a one-month interval. In early March this year, Liu Zhongmin, deputy director of the Dalian Institute of Chemical Physics and an academician of the Chinese Academy of Engineering, revealed that the 100,000-ton-per-year industrial-scale coal-to-ethanol plant operated by Shaanxi Yanchang Petroleum Group—which utilizes technologies developed by the institute for producing methanol from coal via syngas, converting methanol to dimethyl ether, synthesizing methyl acetate through the carbonylation of dimethyl ether, and finally hydrogenating methyl acetate to produce anhydrous ethanol—is scheduled to be completed and put into operation in October. Additionally, process packages for 200,000-ton-per-year and 300,000-ton-per-year facilities based on these same technologies are currently being developed. Ding Yunjie revealed that, given its optimism about the development prospects of coal-to-ethanol technology, the Dalian Institute of Chemical Physics has simultaneously conducted research on four coal-to-ethanol processes: hydrogenation of syngas via C2 oxygenates to produce ethanol; hydrogenation of syngas via acetic acid to produce ethanol; hydrogenation of olefins/acetic acid via acetate esters to produce ethanol; and carbonylation-hydrogenation of methanol/syngas to produce ethanol. Significant technological breakthroughs have been achieved in all four areas. Among them, the industrial pilot scale of producing ethanol from syngas via the hydrogenation of dicarbonyl compounds is set to be completed within this year ； The two technologies of producing ethanol from syngas via acetic acid hydrogenation, and producing ethanol from olefins/acetic acid via ester hydrogenation, have been put into industrial use ； An industrial demonstration plant for the production of ethanol via methanol/syngas carbonylation hydrogenation is under construction. To the author’s knowledge, breakthrough progress has also been made in the research on coal-to-ethanol technology by other domestic enterprises or research institutions. In 2011, Shanghai Wu Zheng Engineering Technology Co., Ltd. developed a technology for the catalytic hydrogenation of acetates to produce ethanol, and built a pilot plant with an annual capacity of 60 tons; the conversion rate of acetates in this process was over 96%, while the selectivity for ethanol was above 98% ； On July 17, 2012, the acetate hydrogenation technology for ethanol production, independently developed by the Southwest Chemical Engineering Research and Design Institute, passed the expert evaluation organized by the Sichuan Provincial Department of Science and Technology. The evaluation concluded that the catalyst developed exhibited high activity, good stability, and high selectivity; the conversion rate was as high as 97%, while the selectivity for ethanol exceeded 98% ； In early August 2012, the 600-ton/year pilot plant built using the acetate hydrogenation to ethanol technology developed by Jiangsu Danhua Group Co., Ltd. operated stably for 1,000 hours, with the conversion rate of acetates remaining at around 98% and the selectivity for ethanol reaching 99%. To date, the company has completed the preparation of process packages for capacities of 100,000 tons/year and 200,000 tons/year ； In mid-2013, the pilot plant for the production of ethanol from syngas via acetic acid hydrogenation, with an annual capacity of 600 tons, developed and built by Shanghai Pujing Chemical Technology Co., Ltd., passed the evaluation and acceptance tests. By the end of 2015, the process design documents for capacities of 100,000 tons per year and 200,000 tons per year were completed ； In January 2015, the scientific and technological development project for single-pipe experimental research on the hydrogenation of acetic acid to ethanol, as well as the development of the corresponding process package, which was carried out jointly by Sinopec Shanghai Engineering Co., Ltd., Beijing Research Institute of Chemical Technology, and Sichuan Vinylon Factory, passed the expert review organized by Sinopec’s Science and Technology Department. To date, the development and preparation of the process package for the production of ethanol via hydrogenation of acetic acid at a capacity of 100,000 tons per year have been completed. With breakthroughs in key technologies and the expansion of production processes, the construction of coal-to-ethanol projects in China is gaining momentum, with an increasing number of projects being planned. In September 2010, Henan Coal and Chemical Industry Group signed agreements with the Biology Bureau of the Chinese Academy of Sciences and New Zealand’s Lanze Company to produce ethanol fuel and other chemical products using coal gasification and biological fermentation methods ； In January 2011, the global chemical giant Solvay announced its intention to invest $300 million each in building a plant capable of producing 400,000 tons per year of industrial ethanol via the hydrogenation of acetic acid, one plant in the Nanjing Chemical Industrial Park in China and another in the Gaolan Port Economic Zone in Zhuhai ； In June 2011, Celanese announced that it intended to spend $180 million to upgrade its existing integrated coal chemical complex in the Nanjing Chemical Industrial Park, thereby increasing its industrial ethanol production capacity by approximately 200,000 tons per year ； In March 2011, a 300-ton/year pilot project for producing ethanol from exhaust gas, carried out in collaboration between Baosteel Group, New Zealand’s Lanzai Company, and the Chinese Academy of Sciences, began construction in Shanghai ； On April 16, 2012, the 200,000-ton/year industrial demonstration plant for coal-based ethanol production, built using the acetylation-hydrogenation technology developed by the Southwest Research Institute of Chemical Engineering, commenced construction at Henan Shunda Technology Co., Ltd ； On March 13, 2014, Huludao City in Liaoning Province, together with Fude Holding Group, Life Insurance Co., Ltd., and Jilin Cornell Group, planned to invest 64 billion yuan to build, in the first phase, facilities for the production of 3.6 million tons per year of coal-based fuel ethanol and methanol, as well as storage and transportation bases; in the second phase, facilities for the production of 1.2 million tons per year of coal-based p-xylene or olefins and related downstream products ； In January 2015, the 100,000-ton/year industrial demonstration plant for coal-to-ethanol production built using the technology of producing anhydrous ethanol from syngas synthesized at the Dahuazhong Research Institute through the methanol-dimethyl ether-methyl acetate-hydrogenation process was put under construction by the Yanchang Petroleum Group ； In May 2015, Zhonghong Environmental Protection New Energy Co., Ltd. entered into an investment cooperation agreement with ** in Wuhai City, Inner Mongolia. The two parties planned to invest 10.3 billion yuan to build projects for the production of 1 million tons per year of coal-based industrial ethanol and 300,000 tons per year of propylene oxide ； In August 2015, construction began on the 300,000-ton/year coal-to-ethanol project undertaken by Tangshan Zhongrong Technology Co., Ltd., with an estimated investment of 1.6 billion yuan. The project involves the construction of a 100,000-ton/year ethanol production line; the second phase will see the development of a 200,000-ton/year ethanol production facility utilizing coke oven gas ； In the fourth quarter of 2015, the 45,000-ton/year project for producing fuel ethanol from industrial gas, undertaken by Beijing Shougang Longze New Energy Technology Co., Ltd., was officially launched. According to the author’s rough estimate, by the end of 2015, there were 15 coal-based ethanol projects planned or under construction in China, with a total annual ethanol production capacity of 6.7 million tons. According to the project timeline, domestic coal-based ethanol production capacity is expected to reach 1 million tons per year by the end of 2017. What are the prospects? There is fierce debate on this topic. Optimists such as Liu Zhongmin and Ding Yunjie, Tang Hongqing, a technical advisor at Zhongke Synthetic Oil Technology Co., Ltd., and Jiang Tiebin, the marketing manager at Shanghai Pujing Chemical Co., Ltd., among other industry professionals, are optimistic about the prospects of coal-based ethanol. The prospects are no worse than those of MTO, Liu Zhongmin told the author. Ethanol is recognized worldwide as an excellent additive for gasoline; it can also be used to partially replace other substances or to produce ethylene through catalytic dehydration, and it is easily accepted by society. Globally, the annual production of ethanol is about 100 million tons; in China, it is merely 2 million tons. In China, ethanol is primarily produced through biological fermentation using grains, sugarcane, and other raw materials. This method has several drawbacks, such as competing with food production for grain and farmland, as well as resulting in high production costs. Coal-to-ethanol is different. China has relatively abundant coal resources and possesses various technologies for producing ethanol from coal; as a result, its production costs are significantly lower than those of the grain-based method, giving it strong competitiveness and broad prospects for development. “Objectively speaking, the prospects for coal-to-ethanol are no worse than those for methanol-to-lower-carbon olefins. ”In Liu Zhongmin’s view, compared to methanol, ethanol offers a wider range of downstream processing options, and its derivatives have a higher added value. Ethanol can be used to produce not only ethylene and ethylbenzene, but also a wide range of bulk chemicals and fine chemical products such as ethers, alcohols, esters, and other alcohols. Additionally, ethanol is an important organic solvent that can be widely used in various fields such as pharmaceuticals, coatings, sanitary products, cosmetics, and oils. As a basic chemical raw material, ethanol can be used to produce acetaldehyde, diethyl ether, chloroethanol, chloroethane, acetic acid, butadiene, acrylates, ethanethiol, ethylamine, and more ； It also gives rise to numerous intermediates for products such as dyes, fragrances, synthetic rubber, detergents, and pesticides; there are over 300 different end products in total. The cost advantage is significant. \"Since the technology for producing ethanol through the syngas one-step process has not yet been fully developed, among the existing methods for producing ethanol from coal, the approach that involves using coal to produce syngas and then methanol for ethanol synthesis holds the greatest potential.\" ”Ding Yunjie believes that, first of all, compared with the fermentation-based ethanol production methods commonly used domestically and internationally, coal-based ethanol has a clear cost advantage. The best efficiency level for producing grain ethanol domestically is 3.2 tons of corn per ton of ethanol produced; moreover, 12–15 tons of wastewater are generated for each ton of ethanol produced, resulting in poor economic viability and significant environmental problems. Secondly, at current coal prices, the production cost of acetic acid via coal converted to syngas, and then of ethanol via the hydrogenation of ester acids is approximately 4,200 yuan per ton. The cost of producing acetates through addition-esterification of olefins/acetic acid, followed by hydrogenation to obtain ethanol, is around 4,000 yuan per ton. Meanwhile, the estimated cost for producing ethanol using methanol/syngas through carbonylation (especially heterogeneous carbonylation) and subsequent hydrogenation is between 3,500 and 4,000 yuan per ton. Undoubtedly, the latter has the lowest cost and the strongest competitiveness. Furthermore, the methanol/syngas process can make full use of existing coal-to-methanol plants, resulting in lower investment costs and faster returns. Even if methanol is purchased from outside, it will still benefit from the severe overcapacity and low prices of methanol in the domestic market. If low-cost ethanol can be produced in this way and then ethylene is generated through dehydration, the overall benefits will be better than those of methanol-to-olefins processes that require larger investments. Jiang Tiebin is more optimistic about the prospects of producing ethanol by hydrogenating acetic acid from syngas. He said that the direct conversion of syngas into ethanol is still a long way off from industrial application. As for the processes involving the use of syngas to produce methanol, followed by the carbonylation of methanol with carbon monoxide to produce acetic acid, subsequent esterification, and finally hydrogenation to obtain ethanol, these methods have drawbacks such as lengthy processes, numerous required pieces of equipment, and high investment costs. In contrast, the process of converting syngas into ethanol through acetic acid hydrogenation features a shorter process flow, lower investment costs, and high catalyst selectivity. Moreover, this technology has been proven effective through the operation of a 275,000-ton/year industrial facility owned by Celanese in Nanjing for over a year; it is therefore a mature and reliable technology with significant cost advantages and controllable investment risks. Take the 200,000 tons per year ethanol project as an example. The investment required for a project that involves purchasing acetic acid and hydrogenating it to produce ethanol is only 180 million yuan, while a project of similar scale that involves esterifying acetic acid followed by hydrogenation requires an investment of 320 million to 350 million yuan. Compared to biological methods, the acetic acid hydrogenation method has a more significant cost advantage. When the coal price is 400 yuan per ton, the total cost of ethanol produced by the acetic acid hydrogenation method, as calculated by the model, is only 3,900–4,000 yuan per ton, which is more than 1,000 yuan lower than that of the most advanced bioethanol production processes. Sales are not a problem. “The sales of ethanol are even less of a problem.” ”Jiang Tiebin said that China’s annual ethanol production is just over 2 million tons. Meanwhile, the annual demand for ethanol as a fuel for vehicles reaches 2.6 million tons, while the liquor industry requires 2 million tons of ethanol per year. Adding the 2 million tons needed by the industrial sector each year and the demands from other sectors, the total annual domestic demand for ethanol exceeds 7 million tons. This leaves a supply-demand gap of 5 million tons. This creates a vast market opportunity for the widespread adoption of low-cost coal-based ethanol. If breakthroughs are achieved in the one-step production of ethanol from syngas and industrialization is realized, the cost of producing ethylene via dehydration of coal-derived ethanol will be even lower. By then, as long as the price of ethylene remains around 8,000 yuan per ton, producing ethylene from coal-based ethanol will be highly competitive. According to cautious observers such as Zhu Fang, deputy director of the Information and Market Department at the China Petroleum and Chemical Industry Federation, and Li Dapeng, a leading expert in coal chemical technology at Yanchang Petroleum Group, the prospects for ethanol produced from coal are far less optimistic. The timing for industrialization is not yet right. Zhu Fang said that the time for industrializing coal-based ethanol is not yet appropriate at present. First, historically, there have been petroleum-based and biological routes for ethanol production, while ethanol produced from coal represents an innovative approach. Although several pathways have undergone pilot testing and even led to the construction of small-scale industrial plants, the feasibility of large-scale industrial technologies and the economic viability of the projects still need to be further verified. Moreover, the coal-to-ethanol process has disadvantages such as high investment costs, long production processes, high consumption, and elevated overall costs. Meanwhile, the one-step process for producing ethanol from syngas, which is widely regarded as a promising approach, has yet to achieve any substantial breakthroughs; its industrialization remains a distant prospect. In this context, blindly investing in coal-to-ethanol production will entail tremendous investment risks. Second, amid current low oil prices, the cost advantage of coal-based ethanol has been significantly reduced, putting its economic viability under severe strain. Third, the market potential of coal-based ethanol is concerning. The most promising market for ethanol is as a vehicle fuel, but China’s refined oil market remains dominated by three state-owned enterprises, making it very difficult to promote the use of ethanol fuels. Fourth, currently ethanol fuel manufacturers can barely survive without **subsidies; many companies that want to produce ethanol from coal also include **subsidies in their revenue calculations during the feasibility study phase. On the one hand, **at present subsidies are only provided for bioethanol fuel, and a closed-system operation is implemented; it is uncertain whether coal-based ethanol fuel will still be eligible for such subsidies in the future**. On the other hand, even if coal-based ethanol does receive subsidies, their magnitude will likely decrease over time, resulting in significant uncertainty regarding the profitability of such projects. Fifth, compared to methanol, the downstream market for ethanol is very limited. Methanol-to-olefins, methanol-to-aromatics, M100 methanol fuel, etc. Once they reach a certain scale, they will give rise to an extremely huge market demand. Ethanol is different. As mentioned earlier, the resistance for use as vehicle fuel is very high. If used to produce ethylene, it is highly uneconomical from the standpoint of atom economy. More importantly, the advantages of the acetylene-based process for producing ethylene will become increasingly evident, making it difficult for the ethanol-based method to compete with it. Faced with competition from electric vehicles, Li Dapeng believes that an ample global oil supply and low oil prices will become the norm, and domestic refining companies are already operating at a loss. For example, Yanchang Petroleum Group incurs a loss of over 1,000 yuan for every ton of refined oil it produces. To get out of this difficult situation, many refining companies, including China National Petroleum Corporation, are planning to launch projects for converting refined oil into aromatics. Under these circumstances, the idea of launching coal-to-ethanol projects based on the favorable market expectations for ethanol fuel is clearly unwise. Furthermore, half of the world’s oil drilling sites are located in the United States. Thanks to advanced technologies such as horizontal staged fracturing, the cost of producing oil at roughly one-third of oil wells in the United States is just $30 per barrel; for most shale oil wells, the cost does not exceed $50 per barrel. In this case, as long as international oil prices exceed $50 per barrel, more oil wells will be put back into operation. Furthermore, countries such as Iran continue to increase production, while other OPEC members and major oil-producing countries like Russia are unwilling to cut production, resulting in a surplus of oil supply over demand in the medium to long term. In this context, ethanol fuel, which offers no significant economic advantages, will be difficult to promote and adopt. More importantly, as the scale of new energy vehicles continues to grow—particularly with the development of new types of high-capacity batteries—electric vehicles will become the dominant form of motor vehicles in the future. By then, even oil giants are struggling with the sale of their refined products; how could they then accept ethanol fuel? The energy utilization efficiency is low. Experts such as An Fu, deputy chief engineer at the Economic and Technological Research Institute of Sinopec Group, and Fu Xingguo, vice president of Beijing Sanju Environmental Protection Technology Co., Ltd., also pointed out that with crude oil prices remaining at low levels, coal-based ethanol production performs poorly both in terms of economic benefits and energy utilization efficiency. Some people are optimistic about ethanol fuel mainly because they hope to benefit from **subsidy policies**. But in fact, as of January 1, 2015, the policy of withholding value-added tax before its refund for enterprises that produce modified fuel ethanol on a designated basis was abolished, and the 5% consumption tax on modified fuel ethanol produced from grain as raw material for use in blending ethanol gasoline for vehicles was reinstated, indicating that policy support for grain-based ethanol is declining. As for the route of producing ethylene from ethanol, which some industry insiders are hopeful about, its economic viability is even worse. Since the raw materials for producing ethylene include not only naphtha, methanol, and ethane but also methane and acetylene, producing ethylene from ethanol would face even more intense competition, leaving its future uncertain. When launching projects, it is necessary to take local conditions into account. So, should relevant research institutions continue to work on coal-based ethanol technology development? Should companies pursue coal-to-ethanol projects? Relevant experts suggest that technological research and development should not be neglected, and projects should be implemented in a manner suited to local conditions. Li Zhijian, assistant to the director of the Petroleum and Chemical Industry Planning Institute, pointed out that coal-to-ethanol is a new route in coal chemical processing, a product of market-driven innovation; it is premature to make judgments regarding its atom economy, let alone to evaluate or dismiss its economic viability and energy efficiency too early. Zhang Xiaojun, deputy chief engineer of Shaanxi Coal and Chemical Industry Group Company, believes that on the one hand, coal-to-ethanol production is still in its infancy, and various technical approaches need further optimization and improvement. On the other hand, although ethanol is less toxic than methanol and is more readily accepted by the public as a fuel for vehicles, there are many uncertainties regarding its widespread adoption. Under such circumstances, companies should cautiously adopt the transitional technology of producing ethanol via acetic acid hydrogenation using syngas, which is currently relatively reliable and low in cost, in order to develop talent and the market. Once breakthroughs are achieved in the technology for producing ethanol from syngas in a single step, it is necessary to act swiftly to maximize both short-term and long-term corporate interests. Huang Chuanfeng, deputy director of the Petrochemical Research Institute at the Hydrocarbon Center of Yanchang Petroleum Group, said that for coal-to-ethanol production, the most reasonable approach is to produce ethanol directly through the syngas one-step process. However, since this process requires precious metals as catalysts, resulting in high costs, coupled with low one-pass conversion rates and low ethanol yields, as well as the difficulty and high energy consumption associated with separating ethanol from mixed alcohols, it is difficult to achieve significant breakthroughs in the short term. At present, the only relatively reliable processes for producing ethanol are hydrogenation of acetic acid and hydrogenation of methyl acetate. The former belongs to carbonyl reactions, while the latter belongs to hydroxyl reactions. But are these two technical approaches reasonable? What are the energy consumption levels of industrial plants, and what is their economic viability at low oil prices? Still needs to be verified. Therefore, it is possible to continue with in-depth testing, technical research and optimization, and to build up technical reserves for industrialization, but it is not advisable to invest in projects blindly. You Xiti, the executive vice president of Shaanxi Coal and Chemical Group, believes that although there are significant risks associated with investing separately in the construction of coal-to-ethanol plants, this should not lead to dismissing the prospects of such projects. Companies that possess integrated coal-based acetic acid production facilities can undoubtedly gain a significant cost advantage and higher profit margins if they obtain cheap hydrogen through technological upgrades, and then use it to react with the acetic acid they produce in order to manufacture ethanol. If a company obtains the qualifications to produce fuel ethanol and is able to sell the ethanol it produces to Sinopec and CNPC successfully, it will achieve good returns. Furthermore, companies that possess independent coal-based methanol production facilities can also consider using the methanol/syngas carbonylation hydrogenation technology to produce ethanol. By making full use of existing facilities, this approach requires less investment and yields results quickly, so it is expected to generate good returns as well. Jin Yong, an academician of the Chinese Academy of Engineering and professor at Tsinghua University, pointed out that efforts should be intensified in the research on the technology for producing ethanol from syngas in a single step, with the aim of achieving breakthroughs and industrial application at an early date. By then, coal-based ethanol will truly have investment value. Until then, it is recommended that calcium carbide and coking enterprises in the vicinity with sufficient acetic acid supply utilize the hydrogen produced from the exhaust gases of their calcium carbide furnaces or coke oven gas, and combine this hydrogen with externally purchased acetic acid to build appropriate acetic acid hydrogenation to ethanol plants based on local conditions and available resources. Li Dapeng suggested that rather than investing in coal-based ethanol projects with uncertain prospects, relevant companies should invest in the power sector in order to take advantage of the business opportunities arising from the spread of new energy vehicles and the continuous growth in electricity demand.