Chinese Market The Hungry Dragon: Coal-to-Chemical as a Game Changer in China
China is looking to eliminate its dependency on imported oil and utilize its domestic coal resources. PROCESS conducted an in-depth investigation to find out who stands to gain from the coal-to-chemical projects.
At a time when all eyes are focused on the shale gas bonanza in America, China is in the midst of a totally different but equally dramatic revolution. American shale gas and Chinese coal are putting Europe under pressure, warned BASF Executive Board member Harald Schwager at the Euroforum Chemical Conference. Martin Brudermüller, also a member of the Board, expressed a warning of his own at the Annual Processnet Conference.
The worldwide resource supply is now more broadly based, and chemical companies must react accordingly. The days when basic chemicals were almost exclusively oil based are gone. The use of shale gas as cracker feedstock is only the beginning. Driven by a constant increase in demand for raw materials, coal is making an unimagined and unexpected comeback in China.
According to the China National Chemical Information Center (CINC), annual imports of polyethylene rose from 5.47 megatonnes in 2002 to 8.61 megatonnes in 2013. Imports of polypropylene increased from 3.2 megatonnes to 16.1 megatonnes during the same period.
Domestic Coal in China
The Chinese Central Committee regards this as excessive. In its view, the import rate is too high, creating a dependency on volatile chemical markets and exposing the country to risks resulting from instability in some of the oil exporting countries. Since 2007 when the 11th Five Year Plan went into effect, China has increased its reliance on domestic coal and is concentrating on the production of fuel, liquid hydrocarbons, methanol and dimethyl ether (DME) from coal.
Figures released by the Chinese Ministry of Science and Technology highlight the importance of coal in the energy mix. 70% of energy consumption, 75% of fuel supply and 60% of chemical feedstock supply is coal based, creating a lucrative market for technology companies. Coal-to-chemicals is seen as a strategic technology, and its feasibility has been systematically scrutinized in recent years.
A number of plants have started up in China in recent years. All are located in Inner Mongolia near the country’s largest coal deposits. More plants are currently under construction or in the planning pipeline.
CINC estimates that completion of all these projects would create PE/PP capacity of approximately 8.4 megatonnes/a by 2015, and that figure could rise to more than 27 megatonnes/a by 2018.
This article is protected by copyright. You want to use it for your own purpose? Contact us at support.vogel.de (ID: 43089498)