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EstimatingCarbonEmissionsfromChina’sCoal-to-ChemicalIndustryduringthe“13thFive-yearPlan”Period

Abstract

China’s coal-and-chemical industry has long been controversial for its high level of carbonemissions.Intherecentlyreleased“13thFive-yearPlanforEnergy”,thecoal-to-chemicalindustrywas set a number of key construction regions.Meanwhile, global fossil fuel carbon emissionshaveseenazerogrowthrateforthreeyearsinarow.ThereductioninChina’scoalusageoverthepastthreeyearsisamajorcontributingfactorbehindthis.

SincetheParisAgreement,Chinahasactivelycommittedtocuttingcarbonemissions.However,data from the coal-to-chemical industry reveals that if project growth cannot be controlledduring the “13th Five-year Plan” period, it is likely to lead to a continued increase in carbonemissions.Accordingtothesummaryanalysisoftherelevant13thFive-yearPlancontent,China’scoal-to-chemicalindustryislikelytocontributearound409milliontonsofcarbonemissionsperyearin2020–morethanfourtimesthefigureof90milliontonsrecordedin2015.

1. Background

In2015,the195partiespresentattheParisClimateConferencesignedahistoricagreement.TheParisAgreementwas the firsteverglobalagreementonclimatechange.China formally joinedthe Paris Agreement in 2016, fulfilling its commitments on reducing carbon emissions. As theworld’s largest greenhouse gas emitter, the Chinese government has played an active role inboth the approval and the enforcement of The Paris Agreement. TheAgreement contains thefollowingpledge:Holdtheincreaseintheglobalaveragetemperaturetowellbelow2°Cabovepre-industrial levels andpursue efforts to limit the temperature increase to 1.5 °C abovepre-industriallevels,recognizingthatthiswouldsignificantlyreducetherisksandimpactsofclimatechange.” (Known as the ‘2 °C threshold’). Although there are still some details left to bediscussed, the2 °Cand1.5 °C thresholdsare tangible targets for theglobal implementationofgreenhouse gas emission reductions. It shouldbe a guidingprinciple for industries involved inreducingemissionsinallcountries.In China’s Nationally Determined Contribution (NDC)1submitted to the United Nations, thecountryhasstatedacleardeterminationtopeakcarbondioxideemissionsaround2030,whilemakingastrongefforttopeakearlier.Thedocumentalsopresentedaseriesofnewmeasures,including plans to close coal-fired power plants and high energy-consuming factories. ThisdemonstrateshowChinaisactivelycuttingcarbonemissionswhilealsoacceleratingtheenergytransition.The“13thFive-yearPlanforEnergy”publishedinearly2017alsomadeitclearthatby2020–theendof the13th Five-year Planperiod–China’s domestic carbonemission intensity perunit ofGDPwillbereducedby18%from2015levels.At the end of 2016, a report by the University of East Anglia2and the Global Carbon Project

1China’sNationalDevelopmentandReformCommission.[2016].http://qhs.ndrc.gov.cn/gzdt/201507/t20150701_710232.html.

2UEA.Globalcarbonemissionshavelowincreasesinthepastthreeyears[R].

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showedlittlegrowthinglobalfossilfuelcarbonemissionsin2015.Thereisexpectedtobeonlyaslight rise in2016,markingnearstagnation incarbonemissionsover thepast threeyears.Thereduction in China’s coal usage over the past three years is a significant contributing factorbehindthis.China’scoalconsumptionhasalsodeclinedinrecentyears.AccordingtodatareleasedbyChina’sNationalBureauofStatistics3,afterannual coal consumption fell for the first time,by2.9%, in2014, the figure continued to fall in 2015 and 2016 by 3.7% and 4.7% respectively. ThiscontinuousdeclineseemstosuggestthatChina’scoalconsumptionhasalreadypeaked.

Thecoal-to-chemical industry isoneof themajorcontributors tocarbonemissions inChina. In2011and2012,carbondioxideemissionsfromthecoal-to-chemicalindustryaccountedfor2.7-3.2%ofthecountry’stotalcarbonemissions,whilealsoaccountingfor21-24%ofthechemicalindustry’s emissions4. This further illustrates how the coal-to-chemical industry is indeed acarbon-intensiveindustry.

Accordingtothe“13thFive-yearPlanforEnergy”,aftertwoquietyearsforthecoal-to-chemicalindustry,itisverylikelythattheindustryexpandsduringthe13thFive-yearPlanperiod.Asoftheend of 2015, themain products of China's coal-to-chemical industry include coal liquid fuels,syntheticnaturalgas,coaltoolefins(includingmethanoltoolefins),whoseproductioncapacityreached2.54million tonsper year,3.1billion cubicmetersper yearand8.62million tonsperyear respectively. The2015annualoutput reached1.15million tons, 1.88billion cubicmetresand6.48milliontons.5

In the current market environment, coal-to-chemical products lack a competitive edge ascomparedtopetrochemicalproducts.Furthermore,duetoblind investmentsmade in thepastdecade,the industryhassufferedfromthe impactofovercapacity.Meanwhile,emissionsfromcoal-to-chemicalprojectsmayhaveanegativeimpactonChina’scarbonreductionpolicies.

http://www.globalcarbonproject.org/carbonbudget/16/files/UK_UEA_GCPbudget2016_Chinese.pdf.3ChinaNationalBureauofStatistics,http://www.stats.gov.cn/tjsj/zxfb/201702/t20170228_1467424.html

4GuZongqin,CarbonreductionisthekeytoCoal-to-Chemical’sdevelopment,http://www.coalchem.org.cn/guandian/html/800215/170064.html5China’sNationalEnergyAgency,“13thFive-yearplanforCoal-to-Chemical”

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2. Objectives

Coal-to-chemical has always been an industry characterized by high investment, high waterconsumption,highpollutionandhighcarbonemissions.China’sismakingeffortstoestablishaneffectivesystemforreducingcarbonemissionsandtobuildalow-carboneconomyandsociety.As a carbon-intensive industry, coal-to-chemical will be affected by the relevant policies. Itsdevelopmentscalehasalsocomeunderscrutinyfrompolicymakers,industryfiguresandotherstakeholders. This research paper, based on limited resources and data, strives to provideanalysisofthedevelopmentpotentialofthecoal-to-chemicalindustryduringthe13thFive-yearPlanperiodandtoestimatethecarbonemissionsthiswillbringabout.Wehopeitwillserveasavaluablereferenceforpolicymakersandindustryleaders.

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3. Methods

Thestudyyearis2015andthetargetyearis2020.2015marksthelastyearofimplementationforthe12thFive-yearPlan,and2020marksthelastyearforthe13thFive-yearPlan.Therefore,byanalyzing these two years, one can effectively reflect upon the state of the coal-to-chemicalindustryatboththebeginningandendofthe13thFive-yearPlanperiod.Basedonthesummaryofcurrentprojectstatisticsandrelevantcircumstances, it ispossibletoinferontheproductioncapacityforthecoal-to-chemicalindustryasawholein2015.Equationforthetotalamountofcoal-to-chemicalindustrycarbonemissions:Totalamountofcoal-to-chemicalcarbonemissions=∑(Totalcarbonemissionsofeachofcoal-to-chemicalproducts)Equationforthecarbonemissionsofcoalchemicalindustryproducts:Total carbonemissions froma coal-to-chemical product = total productionof coal-to-chemicalproductXCarbonemissionfactoroftheproductCarbonemissionfactorsforcoal-to-chemicalproducts:Productcarbonfactor=Industrialcarbonemissionfactor+GeneralcarbonemissionfactorTableofcoal-to-chemicalproductemissionfactors6:

Product(tenthousandtons/tons–unlessstatedotherwise)

Industrial CO2emissionfactor

Public CO2emissionfactor

Total CO2emissionfactor

Directliquefactionofcoal 3.33 2.23 5.56Indirectliquefactionofcoal 5.1 1.76 6.86Coal-to-Gas(tenthousand

tons/km3STP7) 2.7 2.1 4.8

Coal-to-Olefin 6.41 4.11 10.52Coal-to-Ethanol 3.5 2.1 5.6Coal-to-Methanol 2.06 1.79 3.85

Coal-to-DimethylEther 2.8 2.2 5Table1.Carbonemissionfactorsofcoal-to-chemicalproducts

Coal-to-oil products fall into two categories based on different types of liquefactiontechnologies–direct and indirect liquefaction processes. Because the technologies are verydifferent, they will be separated both in terms of emission factors and subsequent emissioncalculations.

There may be larger errors in the results for Coal-to-Methanol and Coal-to-Dimethyl Etherproducts, due to there being very limited information available during the survey period.Furthermore,thesetwoproductsarenon-essentialintoday’scoalchemicalindustry,andthereisa relatively low amount of data on investment and carbon emissions. Therefore, these twoproductsareignoredinthisresearch.

6Zhang,YuanYuan.CarbonemissionsindifferentCoal-to-chemicalprocess[J].CHEMICALINDUSTRYANDENGINEERINGPROGRESS,2016,35(12):4060-4064.7Thisfactor’sunitis10,000/m3,butcoal-to-gasnormallyusingbillionm3asunit.Therefore,theestimationwillchangetheunitduringthecalculation.

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Therefore, the coal-to-chemical products that will be studied in this research include: coalliquefaction(directandindirect),syntheticgas,Coal-to-OlefinandCoal-to-Ethanol.ProductionstatisticsofChina’scoalchemicalindustryduringtheTwelfthFive-yearPlanperiod8

Production

2011 2012 2013 2014 2015

Coal-to-Oil(tenthousandtons) - - 170 357 132Coal-to-Gas（onehundredmillionm3） - -

2.70 16

Coal-to-Olefin(tenthousandtons) 43 134 180 147 648

Coal-to-Ethanol(tenthousandtons) 102 14 90 58 102Table2:ProductionstatisticsofChinesecoalchemicalproductsduringthe"12thFive-YearPlan"period

Part of the capacity statistics9during the "12th Five-Year" period of China's coal-to-chemicalindustry:

Capacity

2011 2012 2013 2014 2015

Coalliquefaction(tenthousandtons) - - 241 163 278 Syntheticnaturalgas（onehundredmillionm3） - - - - 31.0

5 Coal-to-Olefin(tenthousandtons) 100 240 200 634 792 Coal-to-EthyleneGlycol(tenthousandtons) 408 80 85 130 212

Table3:Chinacoalchemicalproductsproductioncapacitystatisticsduringthe12thFive-yearPlan

Becausethisstudyprojectsresultsattheendofthe13thFive-yearplanperiod(2020),andresultswilldiffersignificantlyindifferentscenarios,therefore,thestudywillanalyzethedevelopmentofthe coal-to-chemical industry during the 13th Five-year Plan period under three differentscenarios.Theyare:

1. Planned scenario – In 2020, capacity of the main products of China’s coal-to-chemical –includes coal-to-oil and coal-to-gas –willmeet the targets set in the “13th Five-year Plan forEnergy.”Otherproductswillmaintaincurrentcapacity.2.Extremescenario– In2020,China’scoal-to-chemicalcapacitywill includeprojects thathavebegunoperations. Itwillalso includecoal-to-oil,coal-to-gas,coal-to-olefinsandcoal-to-ethanolprojectsinkeyconstructionareasoutlinedinthe“13thFive-yearPlanforEnergy”thatareunderconstructionorplanned10.3.Projectedscenario–In2020,China'scoal-to-chemicalcapacitywillincludeprojectsthathavebegun operations. Besides that, it will only include coal-to-oil, coal-to-gas, coal-to-olefins andcoal-to-ethanolprojectsthatfall intothekeyconstructionareas inthe“13thFive-yearPlanfor

8Accordingtocollectionfromofficialchannels

9Accordingtocollectionfromofficialchannels

10China’sNationalDevelopmentandReformCommission,“Masterplanforpetro-chemicaldevelopment”

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Energy”thatarealreadyunderconstruction.The above data analysis shows that production capacity utilization of the coal-to-chemicalindustry was relatively low from 2011 to 2015. Coal liquefaction’s capacity utilization wasrelativelyhigh,butstillcameunder50%in2015.Therestofthecoalchemicalproductsgenerallysawnomorethana50%productioncapacityutilizationrate.Internationaloilpricefluctuations,thevolatilityof thepriceof coal,China's supply-side reformpolicies,andothermarket factorshad a profound impact on the coal-to-chemical production capacity utilization rate in China.Constrainedby various limitations, the estimated capacity utilization rate in 2020may lead toinaccurateprojection.Inprojecting theoperationofChina’s coal-to-chemicalproduction in2020,weused theactualcapacityofeachprojecttoensureaconservativepredictionforallprojectsin202011.Assumingmaximum capacity, we will be able to get a conservative estimation of the highest possiblecarbonemissionlevelsofChina'scoal-to-chemicalproducts.

2011 2012 2013 2014 2015

Coal–to-Oil UtilizationRate - - 70.5% 73.6% 47.5%

Coal-to-Gas UtilizationRate - - - 25.8% 51.5%

Coal-to-Olefin UtilizationRate 42.6% 55.7% 48.8% 23.2% 81.8%

Coal-to-Ethanol UtilizationRate 25% 17.6% 29.9% 44.3% 48.1%

Table4:ChinaCoal-to-chemicalIndustryCapacityUtilizationSummary(2011-2015)

11Listofprojectsindifferentscenarioscanbefoundintheappendix

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4. DataAnalysis

4.1. CurrentStatus

Figure1:China’sannualCO2emissions

Figure1displaysthetotalamountofCO2emissionsinChinasince2000.China'sCO2emissionsrosesteadilyuntil2013,andonlythenwasthereasignificantdecline.2014and2015emissionlevelswereflat.

According to the latest data, China's CO2 in 2015 totaled around 9.73 billion tons, which issmallerthanthefiguresof9.74billionin2014.However,China'scarbonemissionsin2015werestillnearlytwiceashighastheworld'ssecond-largestemitter—theU.S.,accountingfornearlyone-thirdoftheworld'stotalcarbonemissions.

Comparing the growth rate of CO2 emissions in China from2002 and 2015 shows that in thethreeyears from2013 to2015, theannualCO2emissionsgrowth ratehas remained low, andtherewaseven inverse growth in2014. This also serves as indirect evidence thatChina'sCO2emissionshavebeensignificantlyinhibitedinrecentyears.

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Figure2:GrowthrateofCO2emissionsinChina(2000-2015)

In2015,China’sindustrialemissionsaccountedformorethan70%ofCO2emissions,comparedwith69.4%12in2014.Thecoal-to-chemicalindustryaccountedfor13%13ofallChina’sindustrialemissionsin2015.Thecapacity,outputandemissionsratesforthefourmaincoal-to-chemicalproducts(coal-to-oil,coal-to-gas,coal-to-olefinandcoal-to-ethanol)in2015areoutlinedinthefollowingtable14:

Product

Capacity(tenthousandtons/year)

Production(tenthousand

tons)Carbonemissions(tenthousandtons)

Coal-to-Oil 278 132 906Coal-to-Gas 3.1billionm3 1.6billionm3 768Coal-to-olefin 792 648 6817Coal-to-Ethanol 212 102 571

Total - - 906215Table5:Output,capacityandemissionsofcoalchemicalproductsin2015

Comparingthecapacitywiththeoutputinthecoal-to-chemicalindustryduringthe12thFive-yearPlan period shows that aside from coal-to-olefin, the output for all other products wassignificantly lower thancapacity.Thismaybebecauseblind investmentsover thepastdecadehave resulted in industry overcapacity16. However, carbon emissions from coal-to-chemicalprojects inChina in 2015—90million tons—wereequivalent to theentire carbonemissions inBelgiumthatyear.

12AccordingtoChinaPowerwebsiteandothersources

13Accordingto2015coal-to-chemical’scarbonemissionandChina’stotalindustrycarbonemission

14Accordingtotheindustryinstituteandmanyotherofficialsources.

15FromPetroChinaandChemistryIndustryAssociation.

16Coal-to-chemical’sboomandovercapacity,http://www.cnenergy.org/mt/mhg/201509/t20150914_192446.html

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Product 2011 2012 2013 2014 2015 Total Coal-to-Oil 0 0 1166 2447 906 4519 Coal-to-Gas 0 0 1296 0 768 2064 Coal-to-Olefin 448 1406 1894 1549 6817 11666 Coal-to-Ethanol 571 79 504 323 571 1477 Total(tenthousandtons) 1019 1485 4860 4319 9062

Table6.CarbonemissionsfromChina’scoalchemicalindustryduringthe12thFive-yearPlanperiod(tenthousandtons)

Table 6 shows carbon emission statistics for China’s coal-to-chemical products during the 12thFive-year Plan period. The results are calculated based on actual output in those years. Alongwith the increase in production projects, the coal-to-chemical industry’s carbon emissionscontinuedtoriseinthisperiod,andthegrowthratealsoincreased.Figure3illustrateshowmucheach coal-to-chemical product contributed to the industry’s CO2 emissions. In 2015, the totalcarbon emissions from coal-to-oil, coal-to-gas and coal-to-ethanol accounted for around 25%.Theremainingemissionswerecontributedbycoal-to-olefin.

Figure3:Proportionofcarbonemissionsamongcoalchemicalproducts

4.2. Forecastanalysisofcoalchemicalindustrycarbonemissionsin2020Among all the coal-to-chemical projects in China that are already under construction or inoperation,manyfallwithinthescopeofkeyconstructionprojectsoutlinedinthe13thFive-YearPlan. The total capacity of such projects significantly exceeds the 13th Five-Year Plan’s totalprojected capacity. As for coal-to-olefin and coal-to-ethanol, the 13th Five-Year Plan did notspecifytheirprojectedcapacity.Therefore,thisstudyprojectscarbonemissionsbasedonthreepossiblescenarios.

Thethreescenariosare:

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Table4.ExplanationofThreeScenarios

1. Planned scenario – In 2020, capacity of the main products of China’s coal-to-chemical –includes coal-to-oil and coal-to-gas –willmeet the targets set in the “13th Five-year Plan forEnergy.”Otherproductswillmaintaincurrentcapacity.2.Extremescenario– In2020,China’scoal-to-chemicalcapacitywill includeprojects thathavebegunoperations. Itwillalso includecoal-to-oil,coal-to-gas,coal-to-olefinsandcoal-to-ethanolprojectsinkeyconstructionareasoutlinedinthe“13thFive-yearPlanforEnergy”thatareunderconstructionorplanned.3.Projectedscenario–In2020,China'scoal-to-chemicalcapacitywillincludeprojectsthathavebegun operations. Besides that, it will only include coal-to-oil, coal-to-gas, coal-to-olefins andcoal-to-ethanolprojectsthatfall intothekeyconstructionareas inthe“13thFive-yearPlanforEnergy”thatarealreadyunderconstruction.

4.2.1. PlannedScenario

Theplannedscenarioreferstotheproposedcapacityinthe“13thFive-yearPlanforEnergy”forcoal-to-oil and coal-to-gas production—around 13 million tons / year and 17 billion squaremeters/yearrespectively.Neitherthe“13thFive-yearPlanforEnergy”northe“13thFive-yearPlan for the Demonstration of the Coal Deep Processing” set quantifiable capacity targets forcoal-to-olefin and coal-to-ethanol. Therefore, to make conservative estimates, this studyassumes in2020,coal-to-olefinandcoal-to-ethanolprojectswillmaintaincurrentcapacity,andthat the capacity of additional projectswill be negligible. According to the available statistics,coal-to-olefinandcoal-to-ethanolprojectsinoperationhavecapacityof53.38milliontons/yearand17.54milliontons/yearrespectively.

Therefore：

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Product Capacity(tenthousandtons

/year)

Carbonemissionsfactor

(tenthousandtons/year)

Carbonemissions(tenthousandtons/

year)

Coal-to-Oil 1300 6.86 8918

Coal-to-Gas 17billionm3/year 480,000/km3 8160

Coal-to-Olefin 1112 10.52 11698

Coal-to-Ethanol 243 5.6 1361

Total - 30137Table7:EstimatesofChina'scoalchemicalindustrycapacityandcarbonemissionsundertheplanned

scenarioin2020

It is clear that coal-to-oil and coal-to-gas projects’ emissions are prominent. Although coal-to-olefin capacity is relatively small, its large emission factor results in higher levels of carbonemissions. In this scenario, the total emissions from the four products of the coal chemicalindustrywouldbe301million tons.Thecarbonemissions fromcoal-to-oilandcoal-to-gas thatare within the scope of 13th Five-Year Planwould be approximately 170million tons and thecarbonemissionsfromthecurrentoperatingprojectswouldbe130milliontons.

Thehighestproportionof the total carbonemissionscomes fromcoal-to-olefin,whichhas thelargest carbon emission factor and accounts for 39% of the carbon emissions from coal-to-chemicalindustry.Secondiscoal-to-oilwith34%.Thethirdiscoal-to-gaswith27%.

Figure5:ratioofCO2emissionsfromChina'scoalchemicalindustryunderthe2020Plannedscenario

In this scenario, assuming thatall policies related toChina's coal-to-chemical industry stay thesame forprojectsalready inoperation, a conservativeestimateof the situationwouldbe thattheindustryandallrelatedenterprisesarestillconfident incontinuingtodevelopprojectsandachieving the production capacity. Thus, this situation will leading to an increase in industrycapacityandcarbonemissions.

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4.2.2. ExtremeScenario

The extreme scenario includes all the projects in operation, all the coal-to-oil and coal-to-gasprojects,within the scopeofkeyconstructionprojectsoutlined in the“13thFive-yearPlan forEnergy,” that are either under construction or planned. It also includes eligible coal-to-olefinsand coal-to-ethanol projects that are currently under construction17. The extreme scenario isintended to show how much carbon emission there will be even with the conservativeassumptionofnoadditionalcapacitybefore2020.

Product Capacity(tenthousandtons)

Carbonemissionfactor(tenthousand

tons)

Carbonemissions(tenthousandtons)

Coal-to-Oil(Direct) 253 5.56 1407Coal-to-Oil(Indirect) 2635 6.86 18076

Coal-to-Gas 78.83billionm3/year 4.8/km3 37838

Coal-to-Olefin 1622 10.52 17063.44Coal-to-Ethanol 863 5.6 4833

Total - - 79217.42Table8.EstimatesofChina'scoalchemicalindustrycapacityandcarbonemissionsunderthe2020extreme

scenario

In this scenario, coal-to-oil will no longer be the highest carbon emitter; coal-to-gas willcontribute most of the carbon emissions, around 378 million tons. The four coal-to-chemicalproductswillhavetotalemissionsof792milliontons.Theoperatingprojectswouldhavetotalemissionsof209milliontons.Theunderconstructionprojectswouldhavetotalemissionof194milliontonsandplannedprojectswouldhave389milliontons.

17China’sNationalDevelopmentandReformCommission,“Masterplanforpetro-chemicaldevelopment”

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Figure6.RatioofChina'scoalchemicalindustryCO2emissionsin2020undertheextremescenario

Inthisscenario,itisassumedthatalleligiblecoal-to-chemicalprojectswillbeabletoobtain

sufficientfundingandpolicysupportduringthe"13thFive-YearPlan"period.Itisestimatedthatthetotalamountofcarbonemissionsthatcanbeachievedafterthestartofproductionin2020isabout792million tonsperyear,which ismorethantwice the figureof301million tonsperyear in planned scenario. Because this represents the extreme scenario, conditions ofinternational oil prices, the price of coal, policy support and other factors need to beadvantageousforthistohappen.

4.2.3. ProjectedScenario

The projected scenario includes coal-to-oil, coal-to-gas, coal-to-olefins and coal-to-ethanolprojects that are already in operation, adding only the under-construction projects that fallwithin the scopeof key constructionprojectsoutlined in the “13thFive-yearPlan forEnergy.”Using conservative estimates of project developments as well as actual progress of existingprojects, this scenario estimates carbon emissions for projects that aremore likely to go intooperationby2020.

Product Capacity(tenthousandtons)

Emissionsfactor(tenthousandtons)

Carbonemissions(tenthousandtons)

Coal-to-Oil(Direct) 253 5.56 1407Coal-to-Oil(Indirect) 1585

6.8610873

Coal-to-Gas 18.83billionm3/year

480,000tons/km39038

Coal-to-Olefin 1622 10.52 17063Coal-to-Ethanol 453 5.6 2537

Total - - 40918.42Table9.EstimatesofChina'scoalchemicalindustrycapacityandemissionsunderthe2020projected

scenario

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In this scenario, the two largest contributors to carbon emissions are coal-to-oil and coal-to-olefins.Emissionsfromcoal-to-gasprojectshavedeclinedcomparedwithotherscenarios.Thisisbecause under this scenario, the number of coal-to-gas projects is relatively small, and thepropulsionrateslowsdown itssuccess inachievingproductionstatus in2020. In thisscenario,totalemissionsofthefourproductsofthecoal-to-chemicalindustryarearound409milliontons,about 35.76% higher than the planned scenario. The operating projects would have totalemissionsof215milliontonsandtheunderconstructionprojectswouldhavetotalemissionsof193milliontons.

Figure7.RatioofCO2emissionsfromChina'scoalchemicalindustryunderin2020undertheprojected

scenarioEstimated total carbonemissionsof theprojectedscenario ranksbetween thatof theplannedand extreme scenarios. But given the unpredictability of the market, the assumption that allprojectsunder constructionwillbeput intooperation in2020usesa conservativeestimateofthedevelopmentprospectsof the industry.Thisalso includesunder-constructionprojects thatdon’t fall within the scope (of key construction projects outlined in the 13th Five-year Plan.)Meanwhilegivenvariousfactorsincludingprojectiondevelopmentspeed,marketandpolicy,theprojects that are not under construction right now will not be put into operation by 2020.Therefore,thecapacityinprojectedscenarioexceedsthatintheprojectedscenario. Itsgrowthalso mainly comes from under-construction projects in the planned scope but excesses theplannedcapacity.

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5. Conclusion

Formore than a decade the coal-to-chemical industry has witnessed blind development withexcessiveovercapacityandtherearestillsomeprojectsunderconstructionorabouttoputintoproduction. While some of these projects are part of planned key construction, the totalproduction still exceeds thecapacityoutlined in relevantpolicies.Therefore, in the future, thecapacity of coal-to-chemical industry production projects is set to exceed that of the plannedscenario.IfChina'scoalchemicalprojectsarenotrestrained,itwillhaveaseriouseffectonthesuccessfulimplementationofindustry-relatedpoliciesinthefuture.

According to conservative estimates, carbon emissions from the coal-to-chemical industrywillreach301milliontons/yearby2020.Thefigureprojectedintheextremescenariois792milliontons/year.Accordingtoprojectedestimates,China'scoalchemicalindustryislikelytocontributecarbon emissions of about 409million tons/year by 2020. The above three scenarios all showsignificant growth inChina's coal-to-chemical industryCO2emissions comparedwith the2015levelof90.62milliontons–thelargestincreasebeingmorethaneighttimesthatfigure.InthecontextofChina'songoingcarbonreductionpolicy,thecoal-to-chemicalindustry'scontributiontocarbonemissionscontinuestoincrease,whichislikelytoaddgreaterpressureandburdenonChina'scarbonemissionspolicyobjectives.

Thisreportshowsthatcarbonemissionsoftheprojectedscenarioarehigherthantheplannedscenario the projected scenario includes projects in operation and key projects underconstruction,whiletheplannedscenarioisbasedonthesetcapacityforcoal-to-oilandcoal-to-gas production, 13 million tons and 17 billion cubic meters respectively. So given the samecapacity from in-operation projects, the planned scenario’s set capacity clearly restrained thedevelopmentofcoal-to-oilandcoal-to-gasproducts,whereascoal-to-olefinandcoal-to-ethanolwere not restrained. Therefore, in the projected scenario there will be rapid expansion ofcapacityforthesetwoproductsandmorecontributiontocarbonemissions.This study bases its analysis on the capacity of China's coal-to-chemical industry in 2020, andestimates carbonemissionusing themaximumcapacityutilization rate.But actualdata showsthe probability of a coal-to-chemical project operating at full capacity is not high. Therefore,some of the carbon emissions estimates will be reduced due to the reduction in actualproduction.Butinthelowestcarbonemissionsscenario,thatis,theplannedscenario,thecoal-to-chemical industry still would contribute more than twice the amount of China's coal-to-chemicalcarbonemissions in2015(90milliontons).Accordingtoanalysisofexistingdata, it isexpected that if coal-to-chemical projects have not been effectively restrained by 2020, theirproductioncapacitywillexceedthecapacityprojectedinthe13thFive-yearPlan.Therefore,thecoal-to-chemicalindustry’scarbonemissionsin2020cannotbeunderestimated.

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Figure8.EstimatesofcarbonemissionsbyChina'scoal-to-chemicalindustryin2020underthethree

differentscenarios

6. PolicyRecommendations

China'senergy transformationhasbeenat theheartofChina'smajorenergypoliciesaimedatmitigating climate change and cutting greenhouse gas emissions. However, the coal chemicalindustry’s lack of mature technology and carbon-intensive nature remain important factorsrestrictingitsdevelopment.2017isacrucialyearforChinatoestablishanationalcarbontradingmarket. In order to establish a mature and effective carbon market before 2020, carbonemissionscostswillbegraduallyincorporatedintothescopeofrelevantpolicyconsiderations.AsChina further increases thepacewithwhich it confronts climatechange, carbonmarketpriceswillgrow,andfluctuateasthepriceincreases.Thisisachallengefacedbythecoal-to-chemicalindustryandothercarbon-intensivesectors.Therefore,Greenpeacesuggests:1. As a carbon-intensive industry, coal-to-chemical project approval should be taken into

considerationaspartofChina’sbidtoreducecarbonemissions.2. During the approval process regarding coal-to-chemical projects, decision-making

departments should stop authorizing coal-to-olefins and other carbon-intensive projects.Furthermore,approvalshouldnotbegrantedtoprojectsotherthanthosekeyconstructionprojectsidentifiedinthe“13thFive-yearPlanforEnergy”.Basedonthe13thFive-yearPlan,stopplanninganyadditionalcapacityforthecoal-to-chemicalindustry.

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Appendix

ExtremeScenario

Directcoal-to-oil

ProjectName Capacity(tenthousandtons/year)

Status

ShenhuaErdos1.08milliontonsofdirectcoal-to-oilproject

108 operation

Yan’anAnyuanChemicalonemilliontonsofcoaltarhydrogenation

100 operation

YanchangPetroleum450,000tonsofco-processingofcoalandpetroleumresid

45 operation

Indirectcoal-to-oilProjectName Capacity(hundredmillion

tonstons/year)Status

Lu’an Shanxi Changzhi 160,000 tons of indirectcoal-to-oilproject

16 operation

ShenhuaErdos180,000tonsof indirectcoal-to-oilproject

18 operation

Shenhua Ningxia Coal Ningdong 4million tons ofindirectcoal-to-oilproject

400 operation

Yanchang Yulin Coal Chemical 150,000 tons ofsynthesisgas-to-liquidproject

15 operation

YankuangYulinonemilliontonsofindirectcoal-to-oilproject

100 operation

Yitai Erdos 160,000 tons of indirect coal-to-oilproject

16 operation

Yunnan Xianfeng 200,000 tons of methanol-to-gasolineproject

20 operation

Shanxi Coal Huayu onemillion tons ofmethanol-to-cleanfuelproject

100 underconstruction

Lu’anChangzhi1.8milliontonsofindirectcoal-to-oilproject


YankuangYulin4milliontonsofindirectcoal-to-oilproject


Yitai Hangjin Banner 1.2 million tons of finechemicalsproject


YitaiHuadianGanquanbao2milliontonsof coal-to-oilproject


YitaiInnerMongolia2milliontonsofindirectcoal-to-oilproject


YitaiYilionemilliontonsofCoal-to-oilproject 100 underconstruction

18

YufuEnergyGuizhou6milliontonsofindirectcoal-to-oilproject

600 proposed

Qinghua Inner Mongolia 4 million tons ofmethanol-to-gasolineproject

400 proposed

Shenmu Fuyou 500,000 tons of Coal tar-to-naphthenicoilProject

50 proposed

Coal-to-gas

ProjectName Capacity(hundredmilliontonstons/year)

Status

Hebei Construction & Investment Ordos Coal-to-gasprojectof4billioncubicmeters

40 proposed

HuanengXinjiangZhundongCoal-to-gasprojectof4billioncubicmeters

40 proposed

HuaxingNewEnergyOrdosCoal-to-gasprojectof4billioncubicmeters

40 proposed

Coal-to-gas project of 4 billion cubic meters ofInner Mongolia Mining Xing'an Energy andChemical

40 proposed

ChinaCoalTianyeZhundongCoal-to-gasprojectof4billioncubicmeters

40 proposed

XinjiangBeikongZhundongCoal-to-gasprojectof4billioncubicmeters

40 proposed

XinjiangGuanghuiZhundongCoal-to-gasprojectof4billioncubicmeters

40 proposed

XinjiangLongyuZhundongCoal-to-gasprojectof4billioncubicmeters

40 proposed

Xinmeng Energy Inner Mongolia Coal-to-gasprojectof4billioncubicmeters

40 proposed

ZhenengXinjiang ZhundongCoal-to-gas project of2billioncubicmeters

20 proposed

CPI Xinjiang Coal-to-gas project of 6 billion cubicmeters

60 proposed

CNOOCOrdosCoal-to-gasprojectof4billioncubicmeters

40 proposed

CNOOC Shanxi Datong Coal-to-gas project of 4billioncubicmeters

40 proposed

SinopecXinjiangZhundongCoal-to-gasprojectof8billioncubicmeters

80 proposed

DatangKeqiCoal-to-GasProject,PhaseI 13.3 operationInnerMongoliaHuinengOrdosCoal-to-GasProject,PhaseI

4 operation

XinjiangQinghuaYiliCoal-to-GasProject,PhaseI 13.75 operationXinjiangXintianYiliCoal-to-gasprojectof2billioncubicmeters

20 operation

Beikong Jingtai Ordos Coal-to-gas project of 4billioncubicmeters


InnerMongoliaHuinengOrdosCoal-to-GasProject,PhaseII


Suxin Energy Xinjiang Zhundong Coal-to-gas 40 under

19

projectof4billioncubicmeters constructionXinjiangQinghuaYiliCoal-to-GasProject,PhaseII 41.25 under

construction

Coal-to-olefinProjectName Capacity(tenthousand

tons/year)Status

Heilongjiang Longtai Coal-to-olefin Project of600,000tons

60 operation

Datang Duolun Coal-to-olefin Project of 460,000tons

46 operation

Wison Nanjing Methanol-to-olefin Project of300,000tons

30 operation

Comprehensive utilization project of JingbianEnergyandChemicalCo.,Ltd

60 operation

Ningbo Heyuan Methanol-to-olefin Project of600,000tons

60 operation

NingxiaBaofengcoke-ovengas-to-olefinsprojectof600,000tons

60 operation

QinghaiYanhuCoal-to-olefinProjectofonemilliontons

100 operation

Shandong Shenda Methanol-to-olefin Project ofonemilliontons

100 operation

ShandongYangmei Hengtong Methanol-to-olefinProjectof300,000tons

30 operation

PCECCoal-to-olefinProjectof700,000tons 70 operationShenhua Baotou Coal-to-olefin Project of 600,000tons

60 operation

Methanol-to-olefin Project of 500,000 tons ofShenhuaNingxiaCoalIndustryGroupCo.,Ltd

50 operation

Coal-to-olefin Project of 500,000 tons of ShenhuaNingxiaCoalIndustryGroupCo.,Ltd.

50 operation

Shenhua Urumqi 680 thousand tons of coal－basednewmaterials

68 operation

Shenhua Yulin Methanol-to-olefin Project of680,000tons

68 operation

500 thousand tons of engineering plastics projectof InnerMongoliaChinaCoalMengdaNewEnergyChemicalCo.,Ltd.

50 operation

Deep processing and comprehensive utilization ofmethanol acetic acid of China Coal Shaanxi YulinEnergy&ChemicalCo.,Ltd

60 operation

ZhongtianHechuangErdosCoal-to-olefinProjectof1.3milliontons

130 operation

Sinopec Zhongyuan Methanol-to-olefin Project of200,000tons

20 operation

TotalCPICoal-to-olefinProjectof800,000tons 80 underconstruction

Huahong Huijin Coal-to-olefin Project of 700,000tons


20

Deep processing of coal of Qinghai Damei CoalIndustryCompanyLimited


Qinghai Mining Coal-to-olefin Project of 600,000tons


Sinopec Guizhou Zhijin Coal-to-olefin Project of600,000tons


Methanol-to-olefin Project of 600,000 tons ofSinopec Henan Coal Chemical Industry GroupCo.,Ltd


Coal-to-ethanolProjectName Capacity(tenthousand

tons/year)Status

Jiangsu Yancheng 1200,000 tons of Coal-to-ethyleneglycolproject

120 proposed

InnerMongoliaEasternModernEnergy1.8milliontonsofcoal-to-ethyleneglycolproject

180 proposed

Ningxia Donglai Energy Chemical 250,000 tons ofCoal-to-ethyleneglycolproject

25 proposed

Yigao Erdos 250,000 tons of synthesis gas-to-ethyleneglycolproject

25 proposed

600,000 tons of coal-to-ethylene glycol project ofZhong'anUnionCoalChemicalCo.,Ltd

60 proposed

HualuHengsheng50,000 tonsof synthesisgas-to-ethyleneglycolproject

5 operation

10,000 tons of coal-to-ethylene glycol project ofHuayiGroup

1 operation

Tongliao Jinmei 200,000 tons of Coal-to-ethyleneglycolproject

20 operation

Xinhang Energy Erdos 300,000 tons of coal-to-ethyleneglycolproject

30 operation

Productionofethyleneglycolfromcalciumcarbidetailgas(50,000tons)ofXinjiangTianyeGroupCo.,Ltd.

5 operation

Xinjiang Tianye 200,000 tons of Coal-to-ethyleneglycolproject,PhaseII

20 operation

220,000 tons of coal-to-ethylene glycol project ofYangquanCoalGroupShenzhouChemicalFertilizerCo.,Ltd.

22 operation

400,000 tons of coal-to-ethylene glycol project ofYangquanCoalGroupShouyangChemicalCo.,Ltd

40 operation

YongjinChemicalAnyang200,000 tonsofCoal-to-ethyleneglycolproject

20 operation

YongjinChemicalPuyang200,000 tonsofCoal-to-ethyleneglycolproject

20 operation

YongjinChemicalXinxiang200,000tonsofCoal-to-ethyleneglycolproject

20 operation

YongjinChemicalYongcheng200,000tonsofCoal-to-ethyleneglycolproject

20 operation

200,000 tons of synthesis gas-to- ethylene glycol 20 operation

21

projectofSinopecHubeiChemicalFertilizerBranchYangquan Coal Pingding 400,000 tons of coal-to-ethyleneglycolproject


GuonengBaotou600,000tonsofcoal-to-ethyleneglycolproject


Cornell Inner Mongolia 600,000 tons of coal-to-ethyleneglycolproject


Weihua Binxian 300,000 tons of coal-to-ethyleneglycolproject


YongjinChemicalLuoyang200,000tonsofCoal-to-ethyleneglycolproject


PredictedScenario

Directcoal-to-oil


Status

ShenhuaErdos1.08milliontonsofdirectcoal-to-oilproject

108 operation

Yan’anAnyuanChemicalonemilliontonsofcoaltarhydrogenation

100 operation

YanchangPetroleum450,000tonsofco-processingofcoalandpetroleumresid

45 operation

Indirectcoal-to-oil


Status

Lu’an Shanxi Changzhi 160,000 tons of indirectcoal-to-oilproject

16 operation

ShenhuaErdos180,000tonsof indirectcoal-to-oilproject

18 operation

Shenhua Ningxia Coal Ningdong 4 million tons ofindirectcoal-to-oilproject

400 operation

Yanchang Yulin Coal Chemical 150,000 tons ofsynthesisgas-to-liquidproject

15 operation

YankuangYulinonemilliontonsofindirectcoal-to-oilproject

100 operation

Yitai Erdos 160,000 tons of indirect coal-to-oilproject

16 operation

Yunnan Xianfeng 200,000 tons of methanol-to-gasolineproject

20 operation

Shanxi Coal Huayu onemillion tons of methanol-to-cleanfuelproject


Lu’anChangzhi1.8milliontonsofindirectcoal-to-oilproject


YankuangYulin4milliontonsofindirectcoal-to-oilproject


Yitai Hangjin Banner 1.2 million tons of finechemicalsproject


22

YitaiHuadianGanquanbao2million tonsof coal-to-oilproject


YitaiInnerMongolia2milliontonsofindirectcoal-to-oilproject


YitaiYilionemilliontonsofCoal-to-oilproject 100 underconstruction

Coal-to-gasProjectName Capacity(hundredmillion

tons/year)Status

DatangKeqiCoal-to-GasProject,PhaseI 13.3 operationInnerMongoliaHuinengOrdosCoal-to-GasProject,PhaseI

4 operation

XinjiangQinghuaYiliCoal-to-GasProject,PhaseI 13.75 operationXinjiangXintianYiliCoal-to-gasprojectof2billioncubicmeters

20 operation

Beikong Jingtai Ordos Coal-to-gas project of 4billioncubicmeters


InnerMongoliaHuinengOrdosCoal-to-GasProject,PhaseII


Suxin Energy Xinjiang Zhundong Coal-to-gasprojectof4billioncubicmeters


XinjiangQinghuaYiliCoal-to-GasProject,PhaseII 41.25 underconstruction


tons/year)Status


46 operation


30 operation


60 operation


60 operation

Ningxia Baofeng coke-oven gas-to-olefins projectof600,000tons

60 operation

QinghaiYanhuCoal-to-olefinProjectofonemilliontons

100 operation


100 operation


30 operation


60 operation


50 operation

Coal-to-olefin Project of 500,000 tons of Shenhua 50 operation

23

NingxiaCoalIndustryGroupCo.,Ltd.Shenhua Urumqi 680 thousand tons of coal－basednewmaterials

68 operation


68 operation

500 thousand tons of engineering plastics projectofInnerMongoliaChinaCoalMengdaNewEnergyChemicalCo.,Ltd.

50 operation


60 operation


130 operation


20 operation

TotalCPICoal-to-olefinProjectof800,000tons 80 underconstruction

Huahong Huijin Coal-to-olefin Project of 700,000tons


Deep processing of coal of Qinghai Damei CoalIndustryCompanyLimited


Qinghai Mining Coal-to-olefin Project of 600,000tons


Sinopec Guizhou Zhijin Coal-to-olefin Project of600,000tons


Methanol-to-olefin Project of 600,000 tons ofSinopec Henan Coal Chemical Industry GroupCo.,Ltd



46 put intoproduction


tons/year)Status

HualuHengsheng50,000tonsofsynthesisgas-to-ethyleneglycolproject

5 operation


1 operation


20 operation


30 operation


5 operation


20 operation


22 operation

24


40 operation

YongjinChemicalAnyang200,000tonsofCoal-to-ethyleneglycolproject

20 operation

YongjinChemicalPuyang200,000tonsofCoal-to-ethyleneglycolproject

20 operation


20 operation


20 operation

200,000 tons of synthesis gas-to- ethylene glycolproject of Sinopec Hubei Chemical FertilizerBranch

20 operation

Yangquan Coal Pingding 400,000 tons of coal-to-ethyleneglycolproject


GuonengBaotou600,000tonsofcoal-to-ethyleneglycolproject


Cornell Inner Mongolia 600,000 tons of coal-to-ethyleneglycolproject


Weihua Binxian 300,000 tons of coal-to-ethyleneglycolproject


YongjinChemicalLuoyang200,000tonsofCoal-to-ethyleneglycolproject


PlannedScenario

Coal-to-oilProjectName Capacity(tenthousand

tons/year)Status

The13thFiveYearPlan 1300 planned

Coal-to-gasProjectName Capacity(hundredmillion

tons/year)Status

The13thFiveYearPlan 170 planned


tons/year)Status

DatangDuolunCoal-to-olefinProjectof460,000tons

46 operation


30 operation


60 operation


60 operation

NingxiaBaofengcoke-ovengas-to-olefinsprojectof 60 operation

25

600,000tonsQinghaiYanhuCoal-to-olefinProjectofonemilliontons

100 operation


100 operation


30 operation


60 operation


50 operation

Coal-to-olefin Project of 500,000 tons of ShenhuaNingxiaCoalIndustryGroupCo.,Ltd.

50 operation

Shenhua Urumqi 680 thousand tons of coal－basednewmaterials

68 operation


68 operation

500 thousand tons of engineering plastics projectofInnerMongoliaChinaCoalMengdaNewEnergyChemicalCo.,Ltd.

50 operation


60 operation


130 operation


20 operation


tons/year)Status

HualuHengsheng50,000 tonsof synthesis gas-to-ethyleneglycolproject

5 operation


1 operation


20 operation


30 operation


5 operation


20 operation


22 operation


40 operation

26

YongjinChemicalAnyang200,000 tonsofCoal-to-ethyleneglycolproject

20 operation

YongjinChemicalPuyang200,000 tonsofCoal-to-ethyleneglycolproject

20 operation


20 operation


20 operation

200,000 tons of synthesis gas-to- ethylene glycolprojectofSinopecHubeiChemicalFertilizerBranch

20 operation

Documents

Final- Estimating Carbon Emissions from China’s Coal-to …re.indiaenvironmentportal.org.in/files/file/Coal-to-chemical CO2... · Estimating Carbon Emissions from China’s Coal-to-Chemical