China limits expansion of coal-chemical industry, prioritises energy security
27 July, 2023
China is to "strictly control" the approval and size of new coal-to-chemical projects as authorities prioritise strengthening supply of coal to power plants, according to a statement released by the state planner on Thursday.
Coal-chemical processing uses coal as a feedstock to create a variety of industrial chemicals, such as synthetic ammonia and polyester.
A policy of adding 20 million metric tons in new coal-chemical capacity in so-called demonstration zones from the previous 13th Five Year Plan would also not be continued, said the statement from the National Development and Reform Commission (NDRC).
"Priority should be given to completing the country's task of ensuring coal supply for power generation and heating," said the statement, reiterating Beijing's previous commitment to use coal to underpin the country's energy security ambitions. The statement noted the restrictions on new capacity additions would not apply to the coal-to-oil or coal-to-gas sectors. The measures are therefore targeted at coal to downstream, non-fuel petrochemical processing.
A number of such projects have been built in coal-rich provinces such as Shaanxi and Inner Mongolia, with major energy players including Sinopec entering the sector in a push to extend the coal value chain.
Alongside concerns over coal supply to power plants and energy security, the move comes amid a significant increase in China's petrochemical refining capacity, meaning that it is more able to source products created through coal-chemical processing elsewhere. China is expected to account for more than half of the growth in global petrochemical processing capacity between 2023 and 2030, according to the International Energy Agency.
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Source: www.channelnewsasia.com