6 projects were approved during the year – Has the environmental assessment process for coal chemical industries started?
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6 projects were approved during the year – Has the environmental assessment process for coal chemical industries started? Author/Source: Date: 2016-11-22 Clicks: 30 In 2015, none of the environmental impact assessments for new coal chemical projects were approved. In 2016, did the **Ministry of Environmental Protection finally approve environmental impact assessments for coal chemical industries? To date, there are 6 new coal chemical projects for 2016 that have received approval for environmental impact assessment from the Ministry of Environmental Protection. Meanwhile, over the course of nearly half a month, the **Ministry of Environmental Protection has accepted the environmental impact assessment documents for two construction projects: the 600,000 tons per year olefin project of Qinghai Mining Group Co., Ltd., and the 1 million tons per year coal-to-oil demonstration project of Yitai Ili Energy Co., Ltd. The six coal chemical projects for which environmental impact assessments were approved, along with the specific dates of approval, are as follows: On July 8, the environmental impact report for Inner Mongolia Yitai Coal-to-Oil Co., Ltd.’s 2 million tons per year coal indirect liquefaction demonstration project was approved ； On the same day, the environmental impact assessment report for the 800,000-ton-per-year coal-based polyolefins project jointly developed by China Power Investment and Total was approved ； On April 25, the environmental impact assessment report for Inner Mongolia Beikong Jingtai Energy Development Co., Ltd.’s 4 billion cubic meters per year coal-to-natural gas project was approved ； On the same day, the environmental impact assessment report for Su New Energy and Feng Co., Ltd.’s 4 billion standard cubic meters per year coal-to-natural gas project was approved ； On March 4, the environmental impact assessment report for the integrated demonstration project for the clean utilization of high-sulfur coal for oil production, power generation, and heating by Shanxi Lu’an Mining (Group) Co., Ltd. was approved ； On the same day, the environmental impact assessment report for CNOOC’s demonstration project on the clean utilization of low-metamorphic bituminous coal in Datong, Shanxi (CNOOC’s 4 billion cubic meter coal-to-gas project) was approved. Is environmental assessment for coal chemical industries being relaxed? It is widely believed in the industry that environmental impact assessment is the most difficult approval requirement for modern coal chemical projects before they can be approved; once this assessment is passed, other approvals become much easier to obtain. Modern coal chemical industry, as opposed to traditional coal chemical processes such as coal-based coke and calcium carbide, is also known as the new type of coal chemical industry. In terms of product types, modern coal chemical industry mainly refers to coal-to-oil, coal-to-gas, coal-to-olefins, coal-to-ethylene glycol, coal-to-aromatics, etc. There are not many examples of modern coal chemical industries operating on an industrial scale around the world, and China’s tendency to invest hundreds of millions or even billions in individual projects forces all parties involved to make careful decisions. Since the second half of 2014, the difficulty associated with environmental impact assessments has gradually become an industry consensus in modern coal chemical manufacturing. According to incomplete statistics, only one new coal chemical project received approval for its environmental impact assessment in 2014. In 2015, the Ministry of Environmental Protection tightened the environmental impact assessments for new coal chemical projects; no new coal chemical projects were approved that year, and the environmental impact assessments for several large-scale coal chemical projects were rejected. These include the integrated demonstration project for the clean utilization of high-sulfur coal for oil, chemicals, electricity, and heating, carried out by Shanxi Lu’an Mining (Group) Co., Ltd., which was approved this year, as well as the coal-to-natural gas project with an annual production capacity of 4 billion standard cubic meters, developed by Su New Energy and Feng Co., Ltd. Many industry insiders believe that the approval of environmental impact assessments for several modern coal chemical projects can be seen as the Ministry of Environmental Protection lifting restrictions, but it does not mean that restrictions have been completely removed. Industry experts say that indeed a relatively large number of coal chemical projects were approved this year. On the one hand, this is because many projects were approved in previous years, resulting in a backlog of environmental impact assessments; on the other hand, those projects that failed the environmental impact assessment tests earlier have made the necessary improvements and now meet the relevant requirements. In fact, this year too, environmental impact assessments for coal chemical projects that were set to go into operation were rejected; for example, the 600,000 tons per year polyolefin project of Sinopec Great Wall Energy Chemical (Guizhou) Co., Ltd. The industry is generally optimistic about future environmental issues, believing that there are no technical obstacles; what is needed more is improved management and increased investment. However, what poses the greatest challenge for the industry is perhaps the economic difficulties resulting from current low oil prices; these modern coal chemical projects are likely to face the awkward situation of incurring losses right from the moment they begin operations. Tang Hongqing, an advisor at Beijing Zhongke Synthetic Oil Engineering Co., Ltd., analyzed that current international oil prices are hovering around $50 per barrel. However, it takes at least three to four years to complete coal chemical projects, and by then it’s difficult to predict what the price of crude oil will be. Meanwhile, the construction of these projects can boost infrastructure development and create jobs.
In fact, whether it’s coal chemical projects, natural gas, or oil. They are all forms of energy and states of matter; several state-owned enterprises are investing heavily in them, but in reality they may not have a clear idea of what to do next. Many of them are purely project-driven for the sake of showing achievements, and evaluations and such are merely a formality. The key isn’t the lack of willingness to invest one’s own money; in fact, coordinating this overall strategy still requires an international planning framework. At least in many strategic industries, it’s not acceptable for each company to be large and comprehensive, rather than large and strong. A large scale does not necessarily imply competitiveness; in fact, at our current level, even for some very small projects, the bidding process specifies that imported equipment must be used. Even including some simple terminal blocks. It’s truly baffling; can the proportion of domestically produced equipment in each coal chemical project really reach 5%? Even if there are such things, they are just low-value items in various containers; it is the Chinese tendency for excessive ambition and herd behavior that destroys the entire industrial system, not just one industry.
It should be **a plan – not international. We’re not yet powerful enough to conquer the world**
I still agree with the analysis from above. Take coal-to-natural gas as an example: the key technologies throughout this entire technological chain are now largely available in domestic forms. Our company has spent several years developing its own proprietary methanation technology, and in terms of technical specifications, it is fully capable of competing on an equal footing with foreign technologies in the market. However, during the process of promotion, we found that many companies stubbornly believe that foreign technologies are superior to domestic ones and resist using them, even though the cost of domestic technologies is less than 60% of that of foreign ones, and their service quality is even better. Of course, there are factors such as project responsibility risks involved; it is understandable that there may be risks associated with the first practical application of a technology. But foreign technologies are also first put into practical use in China, where the experience and lessons gained from projects there are used to further improve those technologies. As a developer of domestic technology, it’s truly heartbreaking to think about promoting such technology
State-owned enterprises bear the responsibility of comprehensive energy utilization as well as the localization of key equipment, and I support this approach. What’s important is to have a plan in place; we shouldn’t rush into things. In China, as long as there’s a profit margin, it won’t be profitable after three years at most. We should reflect on the fact that once we can produce such products, their prices will drop significantly. It’s essential to pay attention to the protection of intellectual property rights, as well as to the efforts and rewards of R&D personnel.
There’s a gasification plant in our area, and it seems to be a failure – it doesn’t have an advantage in terms of costs, its technology isn’t good, and there are also significant environmental pressures. It has an unpleasant smell
As a company that manufactures equipment for coal chemical projects, we consider this to be a good thing, but we are not very familiar with the situation at the upstream stage of coal chemical products.
1. There is significant downward pressure on the economy, and the mindset of relying on investment to drive economic development still persists. 2. The reality of having ample coal but limited natural gas means that China cannot completely abandon the use of coal in gas production. Although there are issues related to energy losses, for reasons of energy security, it is strategically necessary to have a number of projects for converting coal into oil and gas. 3. The clean utilization of coal cannot be achieved in just one day; finding a balance between environmental protection and coal utilization also requires verification through multiple projects.