From August 26 to 28, 2026, the 2026 (14th) Coal Chemical Industry Development Conference was held in Urumqi, Xinjiang. Fu Xiangsheng, Vice President of the China Petroleum and Chemical Industry Federation (CPCIF), delivered a keynote speech titled "New Requirements and Challenges, New Positioning and Opportunities: Ushering in a New Stage of High-Quality Development in the Coal Chemical Industry."
He reviewed the achievements made since the upgrade demonstration of modern coal chemicals, analyzed the situation and opportunities for the sector's development during the "15th Five-Year Plan" period, and emphasized that, to implement the new positioning, five key priorities must be well executed.
Coal chemical industry is generally divided into traditional coal chemical industry and modern coal chemical industry. Traditional coal chemical industry mainly produces coal-to-synthetic ammonia, coal-to-methanol, coke, and calcium carbide. China's traditional coal chemical industry capacity and output have ranked first in the world for many years.
Modern coal chemical industry refers to the industry that uses coal as raw material and adopts advanced technologies and processing methods to produce substitute petrochemical products and clean fuels. Currently, it is mainly represented by the "five major products" that are undergoing industrial technology upgrading demonstration: coal-to-oil, coal-to-natural gas, coal-to-olefins, coal-to-ethylene glycol, and coal-to-aromatics. Over the past decade, China's modern coal chemical industry has not only ranked first globally in capacity and output, but also maintained world-leading technological levels. The main achievements are as follows:
1. World-Leading Industrial Technology Levels Achieved Through Upgrading Demonstration
Modern coal chemical industry was successfully experimented by German chemists Fischer and Tropsch (known as F-T synthesis) in the 1920s. At that time, it mainly used synthesis gas as raw material to synthesize liquid fuels and other valuable chemicals under the action of catalysts. Industrialization first began in Germany, where 9 Fischer-Tropsch synthesis plants with a total capacity of about 700,000 tons/year were built before World War II, providing large quantities of engine fuel for Germany during the war. However, after World War II, with the large-scale exploitation of petroleum and the rapid development of petrochemical industry, Germany ceased developing coal chemical industry and transitioned to petrochemicals along with other developed countries.
Since the "13th Five-Year Plan" period, China has focused on upgrading demonstrations of coal-to-olefins and coal-to-oil technologies, systematically carried out industrialization demonstrations of coal-to-natural gas and coal-to-ethylene glycol, and steadily conducted engineering demonstrations of coal-to-aromatics. Through technology demonstration, key core technological bottlenecks were broken through, the level of system optimization and integration was enhanced, and the mastery of industrialized complete technologies and key equipment manufacturing was achieved, realizing self-reliance and controllability of core technologies and equipment for coal-to-oil and coal-to-olefins. Through industrialization demonstration, the advancement of coal-to-natural gas and coal-to-ethylene glycol process technologies, catalysts, and equipment was improved. Through engineering demonstration, the engineering principles of coal-to-aromatics technology were mastered, accelerating the transformation and industrialization of coal-to-aromatics achievements. During the upgrading demonstration process, innovative scientists, engineering designers, and demonstration enterprises addressed numerous issues including the need for scale verification of earlier technologies and equipment, integration optimization, and verification of energy consumption, material consumption, pollutant control and emissions, as well as production stability and economic viability. They carefully summarized past experience, jointly studied upgrading demonstration plans, emphasized original innovation and integrated innovation, and explored industrial coupling and collaborative innovation through demonstration projects. The "five major demonstration projects and products" achieved outstanding results.
By the end of the "14th Five-Year Plan" period, the coal-to-oil industry had not only mastered both direct and indirect liquefaction processes, but also reached a capacity of 8.23 million tons/year. Coal-to-olefins technology continued to iterate, with Dalian Institute of Chemical Physics' MTO technology upgraded to the third generation, reducing raw material consumption by over 20%. An industrialized scale of 15.42 million tons/year had been built, giving rise to internationally influential coal-to-olefins star enterprises such as Baofeng Energy and China Coal Energy. Coal-to-ethylene glycol technology was continuously upgraded, not only achieving a total capacity of 12.13 million tons/year, but also producing the world's largest single-unit industrial installation of 1.8 million tons/year at Shaanxi Coal Yulin. Coal-to-gas had reached a capacity of 7.455 billion cubic meters/year, and coal-to-aromatics via methanol had achieved a 10,000-ton-level engineering demonstration plant. All of the above demonstration technologies represent internationally leading levels.
2. World-Leading Green and Low-Carbon Levels Achieved Through Upgrading Demonstration
Compared with petrochemical and natural gas chemical industries, the "three highs" bottleneck of high energy consumption, high water consumption, and high emissions is the greatest constraint for coal chemical industry. This is inherently determined by the different raw materials and process routes. Producing refined oil from petroleum only requires the refining process, while producing oil products from coal requires at least multiple steps including gasification, purification, and synthesis. Coal-to-olefins is even more typical: coal must go through gasification, purification, methanol synthesis, and then olefin production, whereas petroleum only needs to be processed into naphtha and then cracked to produce olefins. If light hydrocarbons are used as raw materials today, only ethane (mixed light hydrocarbons) needs to be cracked in one step. Coal-to-ethylene glycol also requires coal gasification, purification, oxalate synthesis, and hydrogenation to produce ethylene glycol, while petroleum-to-ethylene glycol follows the route of petroleum, naphtha, ethylene, ethylene oxide, and ethylene glycol. If light hydrocarbons are the raw material, the route is ethane, ethylene, ethylene oxide, and ethylene glycol. Through this comparison it is clear that different raw materials and process routes—particularly coal gasification and purification, plus the additional intermediate products of methanol synthesis or oxalate synthesis—determine not only high energy consumption but also high emissions of waste residue, wastewater, and carbon dioxide. Statistics show that the carbon emission intensity per ton of coal-to-oil product is 8 times that of the petroleum route, coal-to-olefins is 3 times, and coal-to-ethylene glycol is 1.3 times. The carbon emission intensity per ton of coal-to-methanol is 3 times that of the natural gas route, and coal-to-synthetic ammonia is 1.2 times.
Facing China's resource endowment of "abundant coal, scarce oil, and limited gas," the innovation, upgrading demonstration, and industrialization of the modern coal chemical industry is both a strategic choice for national energy security and supply chain security, and a mandatory task for scientific and technological innovators. During the upgrading demonstration process, modern coal chemical green innovation technologies were actively adopted, whole-process control management was strengthened, "three wastes" emission intensity was reduced, and resource utilization of "three wastes" was enhanced, shifting from end-of-pipe treatment to process control and comprehensive management. Combined with demonstration projects, high-efficiency utilization of synthesis reaction heat and low-grade energy recovery were vigorously implemented. Energy-saving, carbon-reduction, water-saving, and pollution-reduction upgrades were extensively carried out, and the guiding and constraining role of energy efficiency, water efficiency, and pollutant emission standards was strengthened. The green and low-carbon development level continued to improve. During the "14th Five-Year Plan" period, coal consumption, energy consumption, and water consumption for coal-to-oil decreased by 2.6%, 17.4%, and 10.5% respectively. For coal-to-gas, they decreased by 12%, 18.7%, and 13% respectively. For coal-to-olefins, they decreased by 8.3%, 3.7%, and 22.2% respectively. For coal-to-ethylene glycol, coal consumption remained flat while energy and water consumption decreased by 18% and 32.3% respectively.
3. Continuous Breakthroughs in Key Equipment Scaling Through Upgrading Demonstration
Coal gasifiers and gasification technology are key to the development of the coal chemical industry, because coal must first be gasified in a gasifier to produce synthesis gas, which can then undergo synthesis reactions to produce oil products, ethylene glycol, or olefins and aromatics via methanol. It is evident that coal gasifiers and gasification technology are the cornerstone of the coal chemical industry chain. In the past, whether the earliest Lurgi gasifier, or later Shell gasifier or Texaco gasifier, all relied on complete importation with enormous patent and manufacturing fees. Today, China's independently developed coal-water slurry gasification technology, pulverized coal gasification technology, and fixed-bed pressurized gasification technology, as well as domestically manufactured multi-nozzle gasifiers, Aerospace gasifiers, Jinhua gasifiers, Donghua gasifiers, and other gasification technologies and gasifier types, have successively achieved coal processing capacities of 2,000, 3,000, and 4,000 tons per day. Suitable gasifier types can be selected based on the scale of coal chemical products. Both manufacturing and technological levels have reached world-leading status. Meanwhile, large-scale air separation units, dry dust removal, gasifier waste heat boilers, large-scale low-temperature methanol wash units, large-scale synthesis gas compressors, explosion-proof motors, large-scale low-pressure methanol synthesis towers, and intelligent air separation coolers have all achieved breakthroughs in scaling and manufacturing technology. From gasifiers, purification equipment, and main reactors to power equipment and compressors, self-reliance and controllability have been achieved.
4. Continuous Breakthroughs in Innovation Capability and Level of Modern Coal Chemical Industry Through Upgrading Demonstration
While achieving engineering and industrialization of the "four major demonstration products"—coal-to-oil, coal-to-natural gas, coal-to-olefins, and coal-to-ethylene glycol—coal-to-aromatics via methanol achieved 10,000-ton-level industrial experimental success. One-step synthesis gas to aromatics and carbon dioxide to aromatics also achieved innovative breakthroughs. Coal-to-ethanol, coal-based biodegradable materials (polyglycolic acid), coal quality-based utilization, and coal-oil-gas co-processing technologies all achieved industrialization. Synthesis gas to higher alcohols or alpha-olefins, methanol-naphtha coupling to olefins, one-step synthesis gas to olefins, one-step synthesis gas to ethylene glycol, carbon dioxide to gasoline, as well as efficient treatment of refractory wastewater, high-salt wastewater treatment technology, and CCUS (Carbon Capture, Utilization, and Storage) for storage and enhanced oil recovery have all achieved innovative breakthroughs.
5. Significant Results in Park-Based and Cluster-Based Development Through Upgrading Demonstration
In accordance with the national layout plan, adhering to "scientific layout and intensive development," demonstration zones for modern coal chemical industry were planned and constructed in regions with abundant coal resources, relatively rich water resources, and favorable environmental capacity. Following the development approach of extending modern coal chemical industry chains according to local conditions, closely integrated with modern coal chemical industry upgrading demonstration projects, four major modern coal chemical industry demonstration zones were planned: Ordos in Inner Mongolia, Yulin in Shaanxi, Ningdong in Ningxia, and Zhundong in Xinjiang.
Combined with the national main functional zone planning and large coal base construction, the promotion of park-based modern coal chemical industry, large-scale installations, product diversification, and industrial cluster development has been pursued. By the end of last year, the world-class modern coal chemical industry clusters cultivated in Ordos, Yulin, and Ningdong—representing the "Energy Golden Triangle" region—had established a solid foundation and formed world-class modern coal chemical industry scale. The Ningdong Modern Coal Chemical Industry Demonstration Zone not only possesses the first coal-to-olefins demonstration unit and 4 million tons/year indirect coal-to-oil, but also hosts Baofeng Energy, the star enterprise of coal-to-olefins. Ningdong has become the first modern coal chemical park in central and western China with output value exceeding 200 billion yuan. During his inspection of Ningdong, General Secretary Xi Jinping issued the great call to action "Socialism is achieved through hard work!" at the Shenhua coal-to-oil facility, and pointed out: "The completion and commissioning of this major project is of great significance for enhancing China's energy self-sufficiency capability, promoting clean and efficient coal utilization, and promoting development in ethnic minority regions. It is a beneficial exploration of energy security, efficiency, cleanliness, and low-carbon development, and an important achievement of the innovation-driven development strategy." Ordos's million-ton-level direct coal-to-oil, 3 million tons/year coal-to-olefins, Yulin's million-ton-level low-temperature Fischer-Tropsch coal-to-oil, 1.8 million tons/year coal-to-ethylene glycol, coal quality-based utilization technology, and coal-oil-gas co-processing technology have all become important components of world-class modern coal chemical industry clusters and demonstration bases.
6. Significant Improvement in Digitalization and Intelligence Level Through Upgrading Demonstration
During the "14th Five-Year Plan" period, efforts were intensified in building intelligent factories, and "smart engineering" was organized and implemented as one of the "five key projects" for chemical parks. Modern coal chemical demonstration enterprises and demonstration zones, as key units for smart engineering, have deeply understood General Secretary Xi Jinping's important directive that "developing the digital economy is a strategic choice for grasping the new opportunities of the new round of scientific and technological revolution and industrial transformation." Ningdong and Yulin Yushen Industrial Park have achieved remarkable results in smart construction, both having been recognized as national-level smart chemical parks.
China Coal Yulin Energy's coal-to-olefins plant achieved full-chain intelligent management from raw coal mining to product dispatch. The production parameters flashing on screens, real-time equipment video feeds, and dynamically updated energy consumption data have completely transformed the traditional coal chemical industry's "personnel-watching-site" operation mode, moving operators from the production frontline to central control rooms and from hazardous areas to safe zones. Through digital empowerment, continuous benefits are derived from production management and operations, generating approximately 10 million yuan in efficiency annually.
Shaanxi Coal Yulin's 1.8 million tons/year ethylene glycol project, targeting globally leading coal chemical intelligent manufacturing benchmark enterprises, adopted 5G, big data, and artificial intelligence technologies to create 5G + industrial internet application scenarios spanning three levels: enterprise operations, production, and control. It achieved intelligent applications including smart inspection, emergency command, special operation monitoring, and remote equipment control. Intelligent systems replaced manual operations, core production units achieved intelligent control, spatial and temporal blind spots were eliminated, and red-line areas achieved reduced-personnel and unmanned management, significantly reducing safety production management risks.
The Ningdong base accelerated the deep integration of digital economy and real economy, intensified the creation of smart chemical parks, and developed a batch of typical industrial digital transformation application scenarios including black-screen operations, automated production lines, and intelligent three-dimensional storage. The digital transformation rate of industrial enterprises above designated size exceeded 60%, and the digital empowerment ratio exceeded 50%, forming a set of replicable and promotable digital transformation models. The base also focused on dynamic elimination of safety hazards, full-element digital transformation, and building high-standard smart chemical parks, forming a digital park system with full-domain interconnection of digital infrastructure, full-chain intelligence of enterprise production, panoramic coordination of park governance, comprehensive openness of industrial ecosystems, and global controllability of security systems, creating a new benchmark for digital transformation and smart chemical parks in the national energy and chemical industry.
II. Challenges and Opportunities for Innovative Development of Modern Coal Chemical Industry
Since the "13th Five-Year Plan," based on China's resource endowment of "abundant coal, scarce oil, and limited gas" and the reality of continuously rising crude oil and natural gas import dependency, China has carried out modern coal chemical industrialization upgrading demonstrations from the perspective of energy security and economic development strategy, focusing on laying out "four major modern coal chemical demonstration zones" in northwestern coal-rich regions. Since the upgrading demonstration, among the "four major demonstration products," coal-to-ethylene glycol has consistently had low operating rates and suffered losses for many years, while the other three demonstration products maintained relatively high operating rates with generally good profitability.
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In the first half of this year, due to the impact of the US-Israel-Iran conflict and regional turmoil, the profitability of all "four major demonstration products" increased by multiples—a rare good year since the upgrading demonstration began. Modern coal chemical industry is highly correlated with petrochemical industry and is significantly affected by fluctuations in crude oil and natural gas prices. This is related to both coal prices and energy prices, and is also associated with homogeneous competition among petrochemical product types, as well as international competition from different raw material routes such as refining-petrochemical integration and light hydrocarbon-to-olefins. The setbacks and challenges encountered during the upgrading demonstration process may be one of the inevitable tests. The current situation facing the coal chemical industry is as follows:
1. Restructuring of the Global Petrochemical Landscape and Supply Chains: Both Challenge and Opportunity for Modern Coal Chemical Industry
Certain powerful nations and scholars, adhering to the Thucydides Trap and Darwin's law, have led to intensified great power competition and frequent regional turmoil. Since the Russia-Ukraine conflict, the EU followed the United States in imposing sanctions on Russia, leading to intensified EU-Russia confrontation. European natural gas, crude oil, and energy prices surged, causing severe impacts on European refining, ethylene, and basic chemical plant operations. Multinational companies including BASF, Shell, INEOS, ExxonMobil, and SABIC comprehensively re-evaluated and re-positioned their production facilities in the European region, entering a phase of large-scale closures and restructuring. Early this year, the US-Israel-Iran conflict erupted, compounded by disrupted shipping through the Strait of Hormuz, dealing another heavy blow to European, Japanese, and Korean petrochemical industries. Adjustment and restructuring deepened further, with accelerated withdrawal from basic chemicals and general-purpose materials.
China's crude oil import dependency has exceeded 70% for many years, with approximately 80% relying on maritime transport and about 40% of import volume passing through the Strait of Hormuz. Regional turmoil, increasing uncertainties, and the adjustment and restructuring of the global petrochemical landscape, combined with China's resource endowment constraints, have brought new opportunities for China's coal chemical industry to safeguard national energy security and supply chain security.
2. "Dual Carbon" Targets Usher in Critical Peak Period: Modern Coal Chemical Industry Faces More Arduous Challenges
China has solemnly committed to the world the "3060" dual carbon targets, namely "peak carbon emissions by 2030 and carbon neutrality by 2060." At the UN Climate Summit in September last year, China proposed new nationally determined contribution targets: by 2035, China's net greenhouse gas emissions across the entire economy will decrease by 7%-10% from the peak, striving to do even better; non-fossil energy consumption will account for over 30%. The final year of the "15th Five-Year Plan"—the carbon peaking year committed by the Chinese government—China is actively and steadily advancing the "dual carbon" strategy. The EU has taken the lead in globally imposing "carbon tariffs," and global climate change response is becoming a consensus. All of these pose new challenges for the coal chemical industry.
Because the carbon emissions from producing petrochemical products and materials using coal as raw material are higher than those using petroleum and natural gas, compared with developed countries and multinational companies that have completed industrial transformation and structural adjustment, China's petrochemical industry has a high proportion of coal chemical raw materials and a product structure dominated by basic products and general-purpose materials. Additionally, China is still in the primary stage of socialism, and the task of development remains arduous. This determines that our challenges for carbon peaking and carbon neutrality are more formidable. This is an important topic that the modern coal chemical industry must face and cannot avoid in its innovative development.
3. Addressing "Involution-Style" Competition: Coal Chemical Industry Is Also a Key Area
The petrochemical industry has long suffered from prominent structural contradictions. The traditional "scale-expansion" development approach of judging success by scale has led to increasingly severe supply-demand imbalances and structural imbalances of "low-end surplus, high-end shortage," with continuously intensifying "involution-style" competition. The phenomenon of "increased production and sales without increased profit" in the petrochemical industry and enterprises has continued to worsen. Since the industry's total profit hit a historic high in 2021, industry profits have experienced "four consecutive declines" over the four years of the "14th Five-Year Plan" period, falling from 1.16 trillion yuan in 2021 to 702 billion yuan in 2025, a decline of 39.5%. The operating profit margin also experienced "four consecutive declines," dropping from 8.04% in 2021 to 4.5% in 2025, with last year's 4.5% being a 10-year low. The Party Central Committee and State Council have made "thoroughly addressing 'involution-style' competition" a key task for this year's economic work.
Due to insufficient product differentiation and upgrading in the coal chemical industry, combined with highly homogeneous products with the petrochemical industry chain, "involution-style" competition continues to intensify. The operating rate of ethylene glycol demonstration units has remained low, and the profitability of the "four demonstration products" has fluctuated significantly. Therefore, the coal chemical industry is also a key area for comprehensive addressing of "involution-style" competition. While accelerating the elimination of backward, inefficient, and ineffective capacity, the coal chemical industry must strengthen industry self-discipline, establish fair market order, and resolutely address "involution-style" competition. Through both industry self-discipline and comprehensive remediation, the dilemmas of price wars, disorderly competition, and declining profitability must be resolved. At the same time, the industry should fully utilize the macro policies and opportunities of the state's in-depth remediation of "involution-style" competition to accelerate its own innovative development.
4. Raw Material Diversification Trends Bring New Opportunities for Modern Coal Chemical Industry
Since the beginning of the new century, the diversification and lightweighting of petrochemical raw materials have become new trends. On one hand, this responds to new requirements for reducing carbon emissions to address climate change; on the other hand, North America and the Gulf region utilize ethane from shale gas and light hydrocarbons from associated gas to produce olefins. Because the process of producing olefins from light hydrocarbons is shorter, with lower energy consumption, lower emissions, and prominent cost advantages, the diversification and lightweighting of petrochemical raw materials have accelerated.
However, China's resource endowment of "abundant coal, scarce oil, and limited gas" means that the ethane and propane content in natural gas is relatively low, resulting in a scarcity of light hydrocarbon resources in China. Today, China's olefins are mainly produced using traditional naphtha as raw material (over 70%). Naphtha prices are highly correlated with crude oil prices and are affected by regional turmoil and geopolitical factors. The competitiveness of naphtha-to-olefins compared with ethane cracking to ethylene and propane dehydrogenation to propylene is seriously impaired.
Since the Russia-Ukraine conflict, the naphtha-to-olefins units shut down in Europe, Japan, and Korea are all traditional naphtha-based olefins units. In comparison, although the economics of China's coal-to-olefins cannot match the light hydrocarbon processes in North America and the Gulf region, they are slightly better than traditional naphtha and imported light hydrocarbon feedstock. According to statistics from the Federation's Industry Department, the ethylene production costs for different raw material routes in China in 2025 are: coal-based at 4,300 yuan/ton, naphtha-based at 5,600 yuan/ton, and imported ethane-based at 5,070 yuan/ton. It is evident that coal-to-olefins has a clear cost advantage among domestic production units.
Of course, compared with North America and the Gulf region, which have raw material advantages (U.S. ethane cracking ethylene cost is about 2,760 yuan/ton; Saudi ethane cracking ethylene cost is about 2,390 yuan/ton), the economics are slightly inferior.
From the perspective of China's resource endowment, raw material structure, product structure, and national conditions, coal chemical industry remains one of the options for raw material diversification in China's petrochemical industry and serves as one of the "ballast stones" for China's supply chain security, economic security, and energy security.
III. Thoughts on Innovative Development Under the New Positioning of Modern Coal Chemical Industry
During the "15th Five-Year Plan" period, the new requirement for coal chemical industry development is green and low-carbon, and the new positioning is strategic reserve. Facing new requirements and new challenges, grasping new opportunities under the new positioning, we must deeply understand General Secretary Xi Jinping's important instructions on the development of the coal chemical industry: The coal chemical industry has enormous potential and great prospects. We must improve the comprehensive utilization efficiency of coal as a chemical raw material, promote the high-end, diversified, and low-carbon development of the coal chemical industry, make strengthening scientific and technological innovation the most urgent task, accelerate breakthroughs in key core technologies, and actively develop coal-based special fuels, coal-based biodegradable materials, and more. The modern coal chemical industry should focus on the following during the "15th Five-Year Plan" period:
1. Grasp the New Positioning of Strategic Reserve
The "13th Five-Year Plan" "Modern Coal Chemical Industry Innovative Development Layout Plan" positioned the industry as: promoting innovative development of modern coal chemical industry, expanding sources of petrochemical raw materials, and forming an industrial pattern of mutual complementation and coordinated development with traditional petrochemical industry. The "14th Five-Year Plan" "Notice on Promoting the Healthy Development of Modern Coal Chemical Industry" put forward new requirements of "strictly controlling incremental growth, strengthening guidance, optimizing upgrading, and ensuring safety and green development." The "15th Five-Year Plan" "Outline" points out that China will adhere to self-sufficiency in core oil and gas needs, implement medium- and long-term strategic actions for oil and gas reserve growth and production enhancement, and strengthen coal-to-oil and gas capacity and technology reserves. The new development positioning has shifted from the previous "petroleum supplement" to "strategic reserve."
The positioning established during the "13th Five-Year Plan" of "expanding sources of petrochemical raw materials and forming an industrial pattern of mutual complementation and coordinated development with traditional petrochemical industry" was based on the following context and starting point: petrochemical products are important basic raw materials for national economic development with huge market demand, but constrained by oil and gas resources, import dependency was high. The actual situation in 2015 was that the import dependency for crude oil, natural gas, ethylene, aromatics, and ethylene glycol was as high as 60.8%, 31.5%, 50.4%, 55.9%, and 66.9% respectively. The analysis at that time concluded that: China's coal resources are relatively abundant, and adopting innovative technologies to moderately develop the modern coal chemical industry plays an important role in ensuring petrochemical industry security and promoting diversification of petrochemical raw materials. It was also analyzed and judged that: China's modern coal chemical key technologies had reached world-leading levels, but the industry as a whole was still in the upgrading demonstration stage and did not fully possess the conditions for large-scale industrialization. Therefore, requirements and key contents for upgrading demonstration of the "five major demonstration products"—coal-to-oil, coal-to-gas, coal-to-olefins, coal-to-ethylene glycol, and coal-to-aromatics—were proposed, and four modern coal chemical industry demonstration zones were planned in Ordos, Yulin, Ningdong, and Zhundong.
During the "14th Five-Year Plan," the situation changed and policies tightened. Considering the implementation of the "Layout Plan" and the tasks facing industry development, in terms of "standardizing project construction management," it was emphasized that: strict and tight control of modern coal chemical capacity scale and new coal consumption should be maintained. In terms of "strengthening planning layout guidance," it was emphasized that: planning guidance should be further strengthened, industrial layout optimized, and existing modern coal chemical projects accelerated in implementing advanced technology and equipment upgrades. New modern coal chemical projects should be concentrated in areas with relatively abundant coal and water resources and better environmental capacity, promoting industrial clustering and park-based development. It was also explicitly required that new projects implement "large-for-small" capacity replacement, coal consumption substitution, and avoid homogeneous and low-level redundant construction.
This year is the opening year of the "15th Five-Year Plan," and the current situation and the situation during the "15th Five-Year Plan" have undergone many new changes. For example, the import dependency in 2025 for crude oil (72.7%) and natural gas (39.7%) is slightly higher than 10 years ago, while ethylene (4.9%), aromatics (20%), and ethylene glycol (27.5%) have all declined to varying degrees. Therefore, the new positioning for innovative development of modern coal chemical industry in the "15th Five-Year Plan" "Outline" is to "strengthen coal-to-oil and gas capacity and technology reserves." The "Coal Industry '15th Five-Year Plan' Development Plan" emphasizes promoting the transformation of coal toward equal emphasis on both fuel and feedstock, scientifically planning coal-to-oil and gas capacity and layout, orderly advancing the construction of coal-to-oil and gas strategic bases in Ordos (Inner Mongolia), Yulin (Shaanxi), Zhundong (Xinjiang), and Hami (Xinjiang), and accelerating coal-to-oil and gas capacity and technology reserves. It calls for advancing coal-to-aromatics and coal-based degradable materials to achieve industrialization breakthroughs and extending high-value-added low-carbon industry chains.
This new change and new positioning requires us to shift from the traditional "scale-expansion" development approach to emphasizing the theme of high-quality development. First, under the premise of strictly controlling total volume and new additions, efforts should focus on applying advanced technologies and equipment for upgrading existing projects. Unauthorized new coal chemical capacity must be strictly prohibited, especially capacity additions for traditional coal chemical products, as well as capacity additions for modern coal chemical basic products and general-purpose materials such as coal-to-olefins, coal-to-ethylene glycol, and coal-to-ethanol. Low-level redundant construction and blind expansion must be resolutely curbed, and the predicament of "traditional coal chemical capacity surplus, modern coal chemical high-end shortage" and intensifying "involution-style" competition must be thoroughly resolved. While prioritizing support for strategic reserve projects such as coal-to-oil and gas, special fuels, coal-to-aromatics, and coal-based degradable materials, new coal chemical projects must also strictly meet energy efficiency, water efficiency, and carbon emission standards. Accelerated elimination of backward, inefficient, and ineffective capacity that fails to meet energy efficiency, environmental protection, and emission standards, as well as capacity with long-term losses, must also be pursued.
2. Strengthen Innovation as the Core Element
The overall technological level of modern coal chemical industry is already internationally leading. Coal-to-oil (both direct and indirect processes), coal-to-natural gas, coal-to-olefins, coal-to-ethylene glycol, coal-to-ethanol, and coal-based biodegradable materials have all achieved industrialization. However, the scope for innovation is limitless. High-performance new catalysts closely related to the above industrialized projects are one of the key innovation priorities. The second category of innovation priorities includes industrialization demonstration of coal-to-aromatics, methanol-naphtha coupling to olefins, coal chemical-green hydrogen coupling, and coal chemical-biomass coupling projects, as well as innovation in related high-performance catalysts, key core equipment, and more. The third category of innovation priorities includes one-step synthesis gas to olefins and aromatics, one-step synthesis of ethylene glycol and low-carbon alcohols/ethers, alpha-olefins, and Fischer-Tropsch synthesis of high-end base oils, lubricants, and other innovations and engineering. This includes innovation in key equipment and materials for green hydrogen production and biomass gasification. International innovation efforts currently underway—such as coal powder processing through circulating fluidized bed reactors to obtain organic chemicals, and hydrocarbon processing through thin-film reactors to obtain polymers—deserve our attention and research. The fourth category of innovation priorities includes innovation and application of new energy-saving and carbon-reduction technologies and equipment, innovation in high-salt wastewater efficient treatment technology and devices and their waste resource utilization, and innovation in carbon dioxide capture, purification, and synthesis of chemicals, polymer materials, and synthetic fuels using carbon dioxide as raw material. In summary, there are still many key catalysts, core technologies, and key equipment in the coal chemical field awaiting our innovation, and many innovation topics awaiting our resolution and breakthrough.
3. Aim at High-End Development as the Key Focus
The development of coal chemical industry also faces serious homogenization issues. Beyond traditional coal chemical products such as coal-to-methanol, coal-to-synthetic ammonia, and calcium carbide acetylene-based PVC, the extended industry chain includes the methanol carbonylation-to-acetic acid product chain and the calcium carbide Reppe process (1,4-butanediol and its PBT, PBAT, PBS product chains). For example, looking at the large-scale industrialized methanol-to-olefins units, due to limitations in polymerization technology, multiple units have all licensed polymerization technology from the same company. The resulting polyolefin products are predominantly general-purpose grades, with domestic market shortages of metallocene-catalyzed high-end polyolefin grades remaining almost completely unfilled.
Another manifestation is that modern coal chemical products—whether coal-to-oil, coal-to-olefins, coal-to-ethylene glycol, coal-to-ethanol, or coal-to-aromatics—are all incorporated into the petrochemical product sequence. Oil products face homogeneous competition with petroleum refining products, and coal-based polyolefins and ethylene glycol face competition from light hydrocarbon-based polyolefins, ethylene glycol, and other products.
It is evident that the key to high-quality development of the modern coal chemical industry in the future lies in the high-end, differentiated, and diversified nature of products. Examples include high-end polyolefins and their elastomers, EVA photovoltaic materials, specialty rubbers, high-performance fibers, high-end films, degradable materials, as well as ethylene carbonylation to acrylic acid, MMA, PMMA and optical materials, and superabsorbent resins. Otherwise, if the product market converges with that of petrochemical and natural gas chemical industries, the future development space and advantages of the modern coal chemical industry will be extremely limited.
4. Emphasize Low-Carbon Development as the Key
To address climate change, green development and low-carbon transition have become an important trend in global economic structural adjustment. The World Bank's latest "2026 Carbon Pricing Development Status and Future Trends" report notes that over the past decade, coverage has expanded significantly, policy designs have become increasingly diverse, carbon prices have steadily risen, and the scale and application scenarios of carbon markets continue to expand. The EU's "carbon tariff" officially took effect on January 1 this year—this is the world's first cross-border carbon tariff mechanism, which will have far-reaching implications for international trade patterns.
China's "15th Five-Year Plan" "Outline" has put forward clear requirements for carbon assessment, carbon management, carbon evaluation, and carbon footprint. This year's "Government Work Report" proposed implementing quality improvement, cost reduction, and carbon reduction actions in key industries, implementing a dual control system of total carbon emissions and intensity, improving carbon emission statistical accounting and carbon footprint management systems, and further expanding the coverage of the carbon emission trading market. On August 13, the Ministry of Ecology and Environment officially announced that the national carbon market will cover petrochemical and chemical industries. All of these pose new and higher requirements for the development of modern coal chemical industry. Due to the different properties of raw materials and process routes, the carbon emissions of coal chemical industry are higher than those of petrochemical and natural gas chemical industries. According to estimates, the direct coal-to-oil CO2 emission is 5.8 tons/ton, indirect coal-to-oil is 6.5 tons/ton, coal-to-olefins is 10.8 tons/ton, and coal-to-ethylene glycol is 5.6 tons/ton. If low-carbon development is not well achieved, at the current carbon price of 100 yuan/ton, the cost of coal chemical products will increase significantly. At the EU carbon price of over 80 euros/ton, the market competitiveness of coal chemical products would be greatly compromised.
Low-carbon development has become the core element of the future competitiveness of modern coal chemical industry. To adapt to these new green policies and new trade barriers, and to enhance the high-quality development capability of the modern coal chemical industry, we must attach great importance to and accelerate green and low-carbon development. Through the guiding role of the "dual carbon" strategy, green and low-carbon development should become the new driving force and new engine for high-quality development of the modern coal chemical industry.
5. Base-Based and Cluster-Based Development Is an Important Direction for the Future of Modern Coal Chemical Industry
The base-based, park-based, large-scale installation, and industrial cluster-based layout of the petrochemical industry represents the successful practices of developed countries and the future trend of high-quality development of China's petrochemical industry. To promote the development of modern coal chemical industry, the state has strategically laid out four major modern coal chemical industry demonstration zones: Ningdong, Yulin, Ordos, and Zhundong. Over the past decade, the "four major demonstration bases" have achieved significant results and progress in terms of industrial scale and clustering effects, the leading role of backbone enterprises, and the level of base-based and park-based management, as well as the creation of smart and green parks. The chemical park development plan once listed the "Energy Golden Triangle" modern coal chemical industry cluster as one of the five world-class petrochemical industry clusters to be cultivated in the future. From the perspective of the overall layout of the petrochemical industry and the macro perspective of eastern and western economic strategies, the "four major modern coal chemical demonstration zones" and industrial clusters in western coal-rich regions hold equal importance and strategic significance as the "seven major petrochemical bases" in coastal regions and the "four world-class petrochemical industry clusters" around the Bohai Bay, Hangzhou Bay, and Greater Daya Bay.
In particular, the latest positioning and development requirements for the modern coal chemical industry in the "15th Five-Year Plan" "Outline" require the "four major modern coal chemical industry demonstration zones" to follow the national strategic layout and overall economic development deployment, carefully study and implement the development approach, goals, and specific measures for "base-based, park-based, and industrial cluster-based" development. If the base-based, park-based, green, and smart levels of western chemical parks represented by the "four major modern coal chemical industry demonstration zones" are significantly improved, industry chain synergy and cluster development are fully leveraged, mutual supply of raw materials, energy sharing, and shared public facilities become prominent, and ultimately energy cascade utilization, material recycling, and near-zero emissions through centralized waste treatment are achieved within parks, the modern coal chemical industry will demonstrate new vitality and competitiveness in high-quality development. The world-class modern coal chemical industry clusters will provide a new paradigm for innovative development of the global petrochemical industry!
As a strategic pivot of the national "three bases and one channel" strategy, Xinjiang is rich in coal resources and possesses unique natural endowments in wind and solar new energy resources. It is both an important承载 area for China's modern coal chemical industry and a strategic pilot zone for exploring clean and efficient coal utilization and coupling development of coal chemical with green electricity and green hydrogen. General Secretary Xi Jinping emphasized the need to explore high-quality development paths suited to Xinjiang's characteristics based on its resource endowment and industrial foundation. The "Coal Industry '15th Five-Year Plan' Development Plan" proposes "orderly advancement of coal-to-oil and gas strategic base construction in Xinjiang's Zhundong and Hami." Xinjiang is rich in coal, petroleum and natural gas, and biomass resources, with outstanding advantages for developing petrochemical, coal chemical, and bio-chemical industries. The exploration of synergistic development between petrochemical and coal chemical industries has outstanding advantages, as does the exploration and innovation of coupling development among petrochemical, coal chemical, new energy, green hydrogen, and biomass. We look forward to jointly exploring new paths for high-quality development of modern coal chemical industry in western regions, particularly Xinjiang, through this conference, opening a new future for innovative development of the modern coal chemical industry, and making new contributions to achieving the goal of becoming a petrochemical powerhouse and Chinese-style modernization!