China: Capacity Reductions End of Coal-to-Chemicals in China: Country to Cut Investments in Coal

Editor: Dominik Stephan

China, the world’s largest consumer of coal, will ban the construction of new coal to chemicals plants as well as coal fired powerplants until 2018. In the same time, mining and oil refining overcapacities shall be cut to viable measures, news agency Reuters reports.

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Coal consumption in China 1998 to 2015 (in million metric tons oil equivalent)
Coal consumption in China 1998 to 2015 (in million metric tons oil equivalent)
(Picture: Statista/Source: BP)

Beijing/PR China – Insiders say that the country’s new energy four-years plan shall include capping the total national energy consumption at 5 billion tons of standard coal equivalent by 2020 while simultaneously limiting coal consumption to 4.1 billion tons.

Coal is currently China’s major source of energy, contributing to 64 percent of the national energy mix. With the plans to phase out capacities of around 500 million tons, this share could fall to 58 percent.

Market analysts expect that the Chinese administration will enforce a tighter control over coal to chemicals projects and refineries alike, making approvals for new plant projects less likely. Currently, Chinese refiners operate at a utilization rate 15 percent below the global average. New refinery projects will only be approved if they replace eliminated capacities.

Also the construction of new coal-fired power plants will be limited to around 1,050 gigawatts (GW) by 2020. Coal-to-Chemicals, syngas or coal to oil projects will be capped at 13 million tonnes.

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