SunSirs: The "Ballast" Role of the Coal Chemical Industry Is Irreplaceable

According to the China Chemical Industry News, geopolitical conflicts involving the United States, Israel, and Iran have recently continued to escalate, exerting a significant impact on global energy markets and petrochemical feedstock supply chains. Against this backdrop, the coal chemical industry—encompassing products such as synthetic ammonia, calcium carbide, methanol, synthetic fuels, synthetic natural gas, olefins, ethylene glycol, aromatics, and ethanol, as well as their downstream extensions—has played an irreplaceable "ballast" role in stabilizing the petrochemical industry's supply chain. Taking urea as an example: amidst the conflict involving the U.S., Israel, and Iran, international urea prices soared to between $750 and $900 per ton (primarily for gas-based production), with some regions even experiencing supply disruptions; in contrast, my country—relying predominantly on coal-based production to ensure supply—saw domestic urea prices remain stable at RMB 1,800 per ton.

Currently, my country has established a comprehensive and well-developed coal chemical industry system. By the end of 2025, the combined output of my country's four major categories of coal-based products—fuels, natural gas, olefins, and ethylene glycol—is projected to reach approximately 36.03 million tons, representing a year-on-year increase of 13.5%. This production volume entails the annual conversion of approximately 132.3 million tons of standard coal, an increase of 12.4% compared to the previous year. Specifically, in 2025, the annual output of coal-based fuels is expected to reach 7.459 million tons; coal-based natural gas output is projected at 8.07 billion cubic meters; coal-based olefin output is estimated at 15.452 million tons, accounting for 15% of the nation's total olefin production; and coal-based ethylene glycol output is expected to reach 7.624 million tons, representing one-third of the nation's total ethylene glycol production. Furthermore, within the three major sectors of synthetic ammonia, urea, and methanol, the coal chemical industry continues to demonstrate distinct advantages characterized by high production volumes, robust supply assurance capabilities, and favorable economic returns.

From a technological perspective, large-scale coal gasification technologies have reached a stage of increasing maturity; specifically, the daily coal throughput for a single entrained-flow gasifier unit has now reached 4,000 tons. Domestically manufactured large-scale air separation units—with a capacity of 100,000 cubic meters per hour—have successfully completed demonstration trials and are currently operating stably. Million-ton-scale direct coal liquefaction facilities have achieved sustained, long-cycle operational performance. Additionally, third-generation Methanol-to-Olefins (MTO) technologies are undergoing continuous optimization, resulting in a steady decline in the specific methanol consumption required per ton of olefin produced. From an operational perspective, the operational proficiency of my country's coal chemical industry continues to improve. Specifically, coal-to-oil and coal-to-gas projects have reached a level of operational maturity and are gradually achieving high-load operation. In the coal-to-olefins sector, the domestic self-sufficiency rate for olefins has risen; although the overall economic performance of the olefins industry has declined, coal-to-olefins projects have demonstrated relatively strong competitiveness. The coal-to-ethylene glycol sector has entered a phase of healthy development, characterized by high utilization rates of effective capacity and continuously improving product quality.

In terms of industrial layout, coal-to-oil and coal-to-gas projects will primarily be concentrated in strategic bases such as Zhundong (Xinjiang), Hami (Xinjiang), Ordos (Inner Mongolia), and Yulin (Shaanxi). Coal-to-olefins and aromatics projects will further converge within modern coal chemical demonstration zones located in areas such as Ordos, Zhundong, and Yulin. Meanwhile, coal-to-methanol and coal-to-ethylene glycol projects—driven by market forces—are expected to shift their focus toward the western regions, where coal resources are abundant.

I believe that, moving forward, we must accelerate strategic research into the "West-to-East Methanol Transport" initiative, with the aim of gradually achieving self-sufficiency and green transformation in the supply of chemical raw materials. my country's petrochemical industry is currently concentrated primarily in three major regions: the Circum-Bohai Sea Rim, the Yangtze River Delta, and the Pearl River Delta. These regions collectively consume approximately 80 million tons of naphtha annually. If these facilities were retrofitted to utilize "oil-methanol co-conversion" technology—a process involving the mixed conversion of naphtha and methanol into olefins and aromatics—it would create a potential demand for 40 million tons of methanol. Such a retrofit would result in an annual saving of 24 million tons of naphtha, while allowing for the continued utilization of the existing plant infrastructure within these established petrochemical bases. In the initial stages, existing crude oil and refined product pipelines could be repurposed for this transport. Furthermore, methanol production bases in the western regions could not only convert coal directly but also utilize the high-concentration CO2 emissions from coal chemical processes to synthesize "green methanol" via green hydrogen—thereby laying the infrastructural groundwork for the future large-scale development of the hydrogen energy industry.

It is essential to foster the coupled development of the coal chemical industry with green electricity and green hydrogen. We must fully leverage the advantage of the spatial co-location of coal resources and renewable energy (wind and solar) resources in China's western regions. This entails comprehensively advancing the integrated and complementary development of the coal chemical sector and new energy sources. Specifically, the substantial electricity demand of large-scale coal chemical projects can be utilized to facilitate the absorption of renewable electricity output, while the practice of hydrogen blending can serve as a mechanism to mitigate and accommodate the inherent intermittency and fluctuations associated with renewable power generation. Concurrently, by leveraging the green attributes of new-energy electricity, the coupling ratio of green hydrogen and green alcohols will be gradually increased to co-produce green alcohols, green ammonia, and sustainable aviation fuel, thereby achieving continuous pollution reduction and carbon abatement within the coal chemical industry.

It is essential to accelerate the development of coal-based new materials and fine chemicals. In the downstream sectors of olefins and aromatics, priority will be placed on developing high-end polyolefins, engineering plastics, polyurethanes, and similar products. Within the broader downstream coal chemical sector, the focus will be on developing high-value-added products—such as coal-based biodegradable plastics—and on optimizing the high-value utilization of methanol and olefins. Simultaneously, efforts will be made to advance the comprehensive utilization of high-value components—such as Fischer-Tropsch synthetic oils and naphthenes derived from coal tar—to develop specialty oils, high-end carbon materials, rubber additives, as well as pesticides, dyes, and pharmaceutical intermediates. In the downstream sector of integrated coal and salt chemicals, the focus will be on developing novel organosilicon monomers, as well as advanced silicon materials—such as high-performance silicone oils, silicone rubbers, and silicone resins—and new-energy materials. Regarding the coupled production of green chemicals through the integration of coal chemicals and new energy (specifically biomass), the application of the mass balance method to produce green ammonia, green methanol, and sustainable aviation fuel offers distinct advantages: compared to constructing dedicated production facilities for green liquid fuels, this integrated approach results in reduced capital investment and enhanced economic efficiency.

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