The focus of future development in the fluorine chemical industry

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Key focus points for the future development of the fluorine chemicals industry: Fluorinated electronic chemicals will be the main driver of growth. During the 13th Five-Year Plan period (2016–2020), high-performance fluoropolymers and fluorinated fine chemicals were the main areas for upgrading the structure of China’s fluorine chemicals industry. Currently, in China’s fluorine chemicals industry, fluoropolymers and fluorinated fine chemicals account for 14% and 23% of total output value respectively; compared to the 16% and 44% in developed countries, there is still a significant gap. Among them, fluorine-containing fine chemicals will become the main driving force for the growth of China’s fluorine chemical industry. In particular, fluorine-containing electronic chemicals used in the power lithium batteries for new energy vehicles will become crucial. In this regard, Director Zhang Fang of the Petroleum and Chemical Industry Planning Institute pointed out that with the continued development of the new energy vehicle industry, the scale of the fluorine-containing electronic chemicals industry will experience a dramatic increase. These chemicals will replace ozone-depleting substances (ODS) as the most important fluorine-based chemical products in the country, thereby driving the growth of the entire fluorine chemistry industry to new levels. According to Ximi CCM, in the current lithium battery industry chain, the use of fluorine-containing chemicals can be seen everywhere. For example, polyvinylidene fluoride (PVDF) electrode binder is used for the positive and negative electrode materials ； Fluorinated graphite can be used for the modification of anode materials ； Lithium hexafluorophosphate (LiPF6) is the main ingredient of the electrolyte ； The battery separator is coated with PVDF, among other things. Table 1: Sources of representative fluorinated electronic chemicals in China: Petroleum and Chemical Industry Planning Institute & Ximei CCM. II. Increase efforts in the development of products with low Global Warming Potential (GWP). Under the Montreal Protocol, countries have agreed to regulate hydrofluorocarbons (HFCs) within the framework of the protocol, and relevant task forces have been established to discuss issues such as conversion costs, technology transfer, and intellectual property rights. Meanwhile, a series of meetings will be held throughout 2016, with the expectation that treaty amendments will be signed at the meeting in Kigali, Rwanda, in October 2016. Therefore, China’s HFCs will, in the near future, see reductions in both production and consumption, just like HCFCs. This also means that the development of a new generation of low-GWP products is urgent. However, due to long-standing issues in China’s HFCs industry such as severe overcapacity, insufficient innovation capabilities, lagging applied research, and a lack of influence in international forums, it is facing numerous obstacles on the path to developing products with low GWP. Especially in the field of fourth-generation hydrofluoroolefins (HFOs), multinational companies such as Covestro, Honeywell, Daikin, and Arkema have made comprehensive investments in patents related to their production and application, establishing a strong patent barrier (with patent applications accounting for over 70% of the total). These companies control the production of HFO products as well as their downstream applications; currently, all HFO product production projects in China are carried out under licenses granted to Chinese enterprises, while international companies are responsible for procurement and sales. Under such circumstances, China’s room air-conditioner industry has embarked on a hydrocarbon technology pathway that is entirely different from the fluorine-based technology route. At the same time, Ximei CCM has learned that **** is making significant efforts to promote the marketization of propane (R290) room air conditioners through activities such as the development and revision of standards, technological research and development, demonstration projects, production line upgrades, subsidies for operating costs, and the issuance of environmental and low-carbon certification labels. In response to this, Zhang Jianjun, director of the Zhejiang Chemical Industry Research Institute, said that although the domestic HFCs industry will inevitably be affected by hydrocarbon refrigerants, there are still opportunities in the future. At the same time, Dean Zhang also put forward several suggestions: 1. Strengthen the development of applications for HFCs with low GWP – using difluoroethane (HFC-152a) as a substitute for 1,1,1,2-tetrafluoroethane (HFC-134a) in automotive air conditioning; using fluoroethane (HFC-161) as a substitute for dichlorodifluoromethane (HCFC-22) in household air conditioners; using difluoromethane (HFC-32) as a substitute for HCFC-22 and R410a (a mixture of HFC-32 and pentafluoroethane (HFC-125)) in both household and commercial air conditioners; and using fluoromethane (HFC-41) in low-temperature refrigeration applications. 2. Enhance research cooperation in new refrigeration application areas, and develop products and technologies with independent intellectual property rights – such as the use of low-temperature heat pumps in new energy vehicles for keeping warm in winter or in cold regions, as well as for heat management in power lithium batteries and generator sets. 3. Strengthen collaboration between upstream and downstream entities to promote the industrialization and commercialization of technological achievements. Figure 1: Proportion of patents related to major HFO products. Note: 1. HFO-1234yf refers to 2,3,3,3-tetrafluoropropene; 2. HFO-1234ze refers to 1,3,3,3-tetrafluoropropene; 3. HCFO-1233zd refers to 1-chloro-3,3,3-trifluoropropene. Source: Zhejiang Chemical Industry Research Institute & Ximei CCM. Table 2: Current status of HFO product projects in China. Source: Company announcements & Ximei CCM