China Market Insider How Climate Protection Opens Up New Opportunities for the Chemical Industry in China

From Henrik Bork*

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Climate protection can open up new markets for the chemical industry in China on a large scale in the coming decade. This also applies to European companies. As the chemical newspaper Zhongguo Huagong Xinxi Zhoukan reports, additional market demand of around 1.4 trillion Chinese yuan (about 222 billion dollars) will arise for several specific specialty chemicals needed for climate change.

PROCESS regularly reports on the Chinese chemical and pharmaceutical market with the format 'China Market Insider'.
PROCESS regularly reports on the Chinese chemical and pharmaceutical market with the format 'China Market Insider'.
(Source: ©sezerozger -

The planned decarbonization of the Chinese economy is creating ‘a large number of new business opportunities for the chemical industry,’ writes the trade publication. It says this is especially true for new businesses such as chemicals needed for renewable energy generation and storage technologies and similar green industries.

The market for photovoltaics is cited as the most important example. ‘Demand for products in all links of the industrial value chain will explode here,’ the report says. In this context, resources that will be increasingly needed include metallic silicon, ultra-pure silicon (polysilicon), silicon wafers, silver paste, carrier films, and fluoropolymer films.

Even now – before the announced explosion – a market worth 180 billion yuan (about 283 billion dollars) had been created for all the chemicals needed for photovoltaics. No exact forecast for the future was given here. But as China plans to multiply its installed renewable energy capacity to achieve its goal of climate neutrality by 2060, the corresponding chemicals market is also likely to bear.

Focus on power generation and storage

The situation is similar for wind power. By 2030, new turbines with a total capacity of up to 300 gigawatts are expected to be installed, which will cause the market for the chemicals required for this to grow to 270 billion yuan (roughly 28.4 billion dollars). The relevant chemical product groups here include epoxy resins, carbon fibers, specialty coatings, and curing agents. Remarkably rapid growth is also predicted for the market for energy storage solutions, partly because China's wind and solar power is emerging primarily in the country's far-flung western provinces. Electrochemical storage materials, in particular, will be increasingly needed for this, including those for lithium batteries such as lithium iron phosphate or electrolytes and similar chemicals.

China is also aggressively expanding its hydrogen economy. In the next ten years, a currently non-existent hydrogen market of 550 billion yuan (about 86.4 billion dollars) will emerge, predicts the Chinese chemical trade journal. Here, there are new market opportunities for the chemical industry in proton exchange membranes and electrocatalysts. The demand for carbon fibers will also continue to grow as a result.

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Opportunity for plant manufacturers and EPCs

Not only for chemical companies but also plant manufacturers in the chemical industry, new opportunities worth billions of dollars are emerging in China's decarbonization and the associated restructuring of the chemical industry. All plants that can support China's climate targets, such as those for the circular economy like modern recycling plants for industrial parks, or those for the production of high-quality specialty chemicals, those for the expansion of renewable energies or environmental protection, will in all likelihood be able to sell in China in the coming years even better than before.

Great opportunities both for the international chemical industry and for plant construction also result from regional restructuring plans. The central planners in Beijing intend to modernize the chemical industry in the coming years. One example: A few days ago, a new national strategic plan for the ecological transformation of the industry along the Yellow River was published. The region, home to more than 100 million people, stretches along the second longest river in the People's Republic for 5,464 kilometers through the provinces of Qinghai, Sichuan, Gansu, Ningxia, Inner Mongolia, Shanxi, Shaanxi, Henan, and Shandong.

On the one hand, there are many coal deposits along the Yellow River and, therefore, traditionally a lot of heavy industry. On the other hand, water is scarce there. Beijing, therefore now wants to modernize particularly thirsty and energy-hungry industries such as the chemical industry in the region. The new plan from Beijing, which China's state and party leader Xi Jinping also takes very seriously, announces the ‘promotion of water treatment technology and equipment’ to achieve this goal. Any equipment that helps save water or energy, as well as recycling at chemical sites and industrial parks along the Yellow River, will find even better sales opportunities there from now on.

There are similar ‘top-level’ development plans for other industrial regions that Beijing wants to promote in the coming decade: the Greater Bay Area around Hong Kong and Shenzhen, the Yangtze River estuary delta, or the Beijing-Tianjin-Hebei region, for example.

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* Henrik Bork, former China correspondent of the German Süddeutsche Zeitung and the Frankfurter Rundschau, is Managing Director at Asia Waypoint, a Beijing-based consulting agency. ‘China Market Insider’ is a joint project of the Vogel Communications Group, Würzburg, and Jigong Vogel Media Advertising in Beijing.