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Innovation Driven by China´s Coal Resources

Posted on April 5th, 2016 by in Chemical R&D

coal miner in China

In the US, shale gas has been a huge driver of innovation – in China, development of this source is still in the early stages. However, in China the production of chemicals from coal has been a similar source of innovation, one that China is obviously proud of. In a recent government paper, this pride is explicitly expressed: “The modern coal chemical industry has become the biggest highlight of our high-end development of the petroleum and chemical industry and the growth point with the biggest competitive advantage.”

Even in the past China´s resource situation has sometimes led the country to take different routes to common chemicals than elsewhere. For example, in China PVC is produced primarily from coal via the calcium carbide route rather than from ethylene. This is considered a somewhat antiquated process. However, modern coal chemistry – the production of methanol, olefins, polyolefins and other basic organic chemicals from coal – is a route in which recent innovation plays a major role. And China´s focus on this technology, which has its rationale in both the availability of coal in China and the politically desired lower dependency on imported oil, has made the country the global center of innovation.

Future innovation in coal chemistry will focus on topics including

  • Extension of the value chain towards higher-end downstream products (e.g., Wison Engineering, a leader in the field, is working on coal to ethylene glycol technology in cooperation with Tianjin university)
  • Improved catalysts with higher activity, selectivity and lower costs (e.g., Synfuels China is looking at iron-based catalysts instead of more expensive cobalt catalysts)
  • Lowered environmental impact, e.g., via carbon capturing and concentrating
  • Utilization of step-wise liquefaction of suitable coals to increase efficiency

As coal chemicals require the setup of a new value chain, they will likely also lead to innovation in related areas, e.g., water treatment, industrial gases, air filters, etc.

In the longer term, as China becomes the global center of coal chemistry, the country may also export the technology to other coal-rich regions such as Indonesia and some countries in Eastern Europe – an approach that would fit in with China´s long-term vision.

Of course, future innovation in coal chemistry in China will partly depend on economics – current oil price developments do not look particularly favorable. However, the strong strategic government support for coal chemistry will guarantee substantial resources for innovation even in a worst-case scenario of permanently depressed oil prices.

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