Current Situation and Development Trend of China's Coal Chemical Industry

Through years of supply-side structural reforms, Chinahas strictly controlled the new capacity of the coal chemical industry withexcess capacity. In 2021, the operating rates of methanol, synthetic ammonia,and urea were 80%, 91%, and 85% respectively, and the capacity utilization ratehas increased to normal levels.

In 2021, domestic coal-to-methanol production capacityand output accounted for 79% and 86% of the total domestic methanol productioncapacity and output respectively. Compared with natural gas-to-methanolproduction accounting for only 6.6%, coal-to-methanol occupied the dominantposition.

The growth of methanol production capacity in thefuture will mainly come from the coal-to-olefins supporting project. About 7.72million t/a of urea, 4.1 million t/a of replacement capacity, and 3.62 milliont/a of new capacity are currently under construction, with a risk of excess.

China’s modern coal chemical engineering andindustrialization technology are leading the world. Short-process manufacturingand low-carbon technology integration and coupling optimization are the coredirections of the modern coal chemical industry. Through the demonstration ofindustrialization upgrading, China has mastered core and key technologies ofcoal-to-oil, coal-to-gas, coal-to-olefins, coal-to-ethylene glycol, catalysts,engineering design, core equipment manufacturing, and other key links in theentire industrial chain.

The modern coal chemical industry is an important wayfor clean and efficient utilization of coal. As China’s coal-based energyconsumption structure is difficult to change in the short term, the developmentof the modern coal chemical industry is a beneficial supplement to the petrochemicalindustry. It is of great significance to give full play to the comparativeadvantages of the country’s coal resources, ease the tension of oil resources,and ensure domestic energy security.

On 1 Nov., 2022, the National Development and ReformCommission and the National Bureau of Statistics announced the “Notice onFurther Improving the Relevant Work on Not Including the Energy Consumption ofRaw Materials in the Total Energy Consumption Control”. It is of far-reachingsignificance to realize the separate accounting of fuel and raw material energyconsumption and reduce the burden on coal enterprises, which will furtherpromote the rapid development of the country’s modern coal chemical industry.

It is expected that from 2022 to 2025, China’scoal-to-oil, coal-to-natural gas, coal-to-olefins, coal-to-ethylene glycol, andother modern coal chemical industries will continue to upgrade and demonstrate;coal-to-ethanol, coal-to-biodegradable plastic polyglycolic acid, and other newindustries will usher in development; coal-based fuels, chemicals, and newmaterials will develop synergistically. While saving energy and reducingcarbon, China’s modern coal chemical industry will move towards high-end,diversified, refined, and green.