In recent days, the National Development and Reform Commission and the National Bureau of Statistics issued a notice on the “Notice on Further Improvement of the Work Related to the Exclusion of Raw Material Energy Consumption from the Total Energy Consumption Control”, hereinafter referred to as the “Notice”.
“Notice” clearly stipulates that raw materials used as raw materials for energy consumption, that is, energy products are not used as fuel, power, but as raw materials for the production of non-energy products, materials used. For the production of non-energy use of olefins, aromatics, alkynes, alcohols, ammonia and other products such as coal, oil, natural gas and its products, etc., belong to the category of raw material energy; if used as fuel, power use, does not belong to the category of raw material energy.
Raw material energy consumption is not included in the total energy consumption control, is an important measure to improve the total energy consumption and intensity regulation, to protect the reasonable energy demand for high-quality development is of great significance.
Regarding the non-inclusion of raw material energy use in the total energy control, Pinto believes that it may have the following effects on the chemical industry.
First, there will be no “energy consumption double control” event in winter 2022
At present, in the policies related to total energy control, such as the “Energy Consumption “Double Control” Target and Action Plan for Promoting Energy Conservation” and “Energy Efficiency Benchmarking Levels and Benchmarking Levels in Key Areas of High Energy-Consuming Industries”, these all put forward the control target of total annual energy consumption from the national level, such as in the target of total energy consumption control in 2021. It is required to control the total energy consumption in 2021 within 5,797,400 tons of standard coal, including the incremental energy consumption control of 79,400 tons of standard coal.
For the total energy consumption control required at the national level, it is a policy constraint method for industrial industries in production and new projects, thus achieving an emission constraint for industrial industries in the field of carbon emissions.It is conducive to the overall goal of national energy conservation and emission reduction, thus achieving the “double carbon” goal in the longer term.
However, in the absence of a clear conceptual description, such policies on energy consumption control have become a hype factor in the bulk chemical market. The control of total energy consumption has had a greater impact on the chemical industry in terms of production and new projects.
In September 2021, the Ministry of Industry and Information Technology (MIIT) warned some provinces to exceed the energy consumption target, which led to the most serious “energy consumption double control” market reaction in the past 10 years in 2021. At that time, the market price of most chemical products related to energy consumption doubled within 30 days, and the market price of bulk chemicals experienced frequent and violent fluctuations, which had a huge impact on the stability of the chemical industry.
The notice issued in the past few days about the energy use of raw materials not being included in the total control will largely reduce the energy consumption of raw materials in the chemical production process, thus reducing the possibility of another double control of energy consumption in 2022 due to the excess of energy consumption. Pingtou believes that in 2022, there will be no “double control of energy consumption” event that happened last year, and the current national control of total energy consumption is effective and smooth.
Second, the new chemical projects previously stuck in the approval process are expected to be approved
For a long time, in the Chinese chemical industry, raw material energy use is included in the statistics of all energy consumption, and is not listed separately. The reason for this is that, on the one hand, the energy use of raw materials for energy consumption is relatively low, and the impact of integrated enterprises in energy consumption is not significant, so there is no need to come up with a new calculation. Second, the raw material consumption of energy statistics is very complex, there is no effective statistical methods, so the raw material energy has been included in the total energy consumption of the enterprise statistics.
The Notice does not include raw material energy use in the total energy consumption control, which is an important progress in China’s energy statistics and an important driver for the current development of China’s chemical industry.
At present, the development of China’s chemical industry comes from the development base of existing industries on the one hand, and from the promotion of new projects on the other. The approval of new chemical projects is currently mostly restricted by the energy consumption index and energy use index.
This time the raw material energy consumption is not included in the total energy consumption control, is expected to free up more energy indicators for new projects for enterprises.New chemical projects previously stuck in the approval process are expected to be approved under this policy relaxation, thus restarting the construction work of new projects.
Third, the development of China’s coal chemical industry and light hydrocarbon chemical industry will be more favorable
The “Notice” also clarifies the concept of raw materials, that is, for the production of non-energy uses of olefins, aromatics, alkynes, alcohols, synthetic ammonia and other products of coal, oil, natural gas and their products, etc., belong to the raw material energy use is not included in the total statistics of the category. Here you can see that the raw materials mainly refers to the coal, oil and natural gas. Most of the chemical industries that rely on such raw materials are integrated large-scale projects.
1、Petroleum-based chemical production. At present, more than 80% of China’s chemicals are produced from petroleum as raw materials, and there are many downstream products, and the industrial chain is very complicated. The chemical production with crude oil as raw material is also concentrated in large and leading enterprises, which have huge energy consumption, while the energy consumption of raw material is relatively small, so it has little impact on such enterprises at the energy consumption level.
1、Petroleum-based chemical production. At present, more than 80% of China’s chemicals are produced from petroleum as raw materials, and there are many downstream products, and the industrial chain is very complicated. The chemical production with crude oil as raw material is also concentrated in large and leading enterprises, which have huge energy consumption, while the energy consumption of raw material is relatively small, so it has little impact on such enterprises at the energy consumption level.
3. Chemical production with natural gas as raw material. Such as acetylene, ammonia and other downstream extension of the industrial chain, the industrial chain process than oil and coal as raw materials for the industrial chain process is significantly shorter, also leading to its product range and smaller scale. This time for raw material consumption of energy not as a statistical category, its natural gas-based chemical production has a positive impact on the impact of new projects to help enterprises to declare approval, reducing the special energy-intensive moment of instability expected to start.
4, to other raw materials for chemical production. Such as propane, butane, petroleum coke, asphalt, acetylene, etc., these products are coal, oil and natural gas as raw materials for downstream products, but also in this raw materials with energy does not count the category. Such industries, is currently China’s chemical industry to actively encourage the development of the industry, the “Notice”, the impact on such industries is minimal.
This Notice, to a large extent, implements the “refined” statistics and reduces the burden of carbon emissions for integrated enterprises that use fossil energy as raw material for processing and production, which echoes the “clean and efficient utilization of coal” policies that have been released, and has a very important and positive impact on China’s coal chemical industry. It has a very important and positive impact on China’s coal chemical industry. The future development of China’s coal chemical industry and light hydrocarbon chemical industry will usher in an explosion of policy dividends.
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