Core Reading

The petrochemical and chemical industry is one of the key and key industries to promote high-quality economic development in China. It has a long industrial chain, a wide range of product types, and involves a wide range of fields, which is related to stable economic development, stable and safe industrial and supply chains, green and low-carbon transformation, and improvement of people's livelihoods.

At present, China's petrochemical and chemical industry has entered a new stage of development, facing opportunities such as improving innovation capabilities, optimizing industrial structure and layout, improving energy efficiency, and digital empowerment. It also faces challenges such as weak international competitiveness, inability to flexibly respond to market changes in existing product structures, and inability to effectively support high-quality development with existing technological levels. Faced with opportunities and challenges, China's petrochemical and chemical industry must adapt to environmental changes and development trends, continuously enhance its original and integrated innovation capabilities, and steadily enhance the stability and competitiveness of the industrial chain; Accelerate the adjustment and transformation of industrial structure, significantly enhance the guarantee capacity of new chemical materials; Optimize and adjust industrial layout, strengthen guidance and regulation, and promote high-level agglomeration development; Accelerate the digital transformation of industries and empower enterprise operation and management; Promote green, circular, and low-carbon development, and improve the level of intrinsic safety and clean production.

Opportunities and challenges coexist

Emerging industries are developing rapidly, but technological levels cannot fully match demand

There is a shortage of key core technologies, and the original innovation capability needs to be improved. Although China's petrochemical and chemical industry has made significant progress, complete sets of technologies and equipment such as ethylene and aromatics have basically achieved independence, and breakthroughs have been made in coal chemical and other technologies, there is still a lack of some key core technologies and downstream supporting technologies. Taking polyethylene as an example, the technology dependence on foreign countries exceeds 90%, and the industry is in a catch-up period of relying on imported technology for large-scale investment and construction, with weak original innovation capabilities. Overall, the innovation system inside and outside the enterprise has not yet been fully formed, and the ability for independent innovation is weak.

High end products have a high degree of external dependence, and their ability to provide independent support urgently needs to be improved. At present, China has a low self-sufficiency rate in high-end polyolefins, engineering plastics, high-performance synthetic rubber, membrane materials, high-purity electronic chemicals, etc. Among them, some high-end polyolefins such as polyolefin elastomers mainly rely on imports; Some engineering plastics such as polycarbonate, polyoxymethylene, and polyphenylene ether have a self-sufficiency rate of less than 50%, and structural deficiencies and excess coexist. In addition, the self-sufficiency rate of raw materials, monomers, and advanced equipment required for the production of new materials in China also needs to be improved.

The difficulty of developing new materials is high. Breakthroughs often stem from significant discoveries in basic sciences such as physics and chemistry, and technology owners do not transfer them to the outside world, making it difficult for domestic enterprises to meet the market's demand for high-end products. The sunk cost in the early stage of the new materials industry is relatively high, involving a wide range of fields and strong professionalism. There are very few institutions willing to empower new material startups, which restricts the development and growth of new material enterprises.

To develop and reduce carbon emissions, energy efficiency and low-carbon technology need to be improved

Carbon emissions are on the rise with the rapid growth of production capacity. From 2010 to 2020, the carbon emissions of the petrochemical industry increased at an average annual rate of 10%. The total carbon emissions of the four major sub industries/products, namely refining, ethylene, propylene, and para xylene, accounted for 55.06% of the total carbon emissions of the petrochemical industry. Since 2015, the carbon emissions in the chemical industry have entered a plateau period, mainly due to the expansion of production capacity for key chemical products such as synthetic ammonia and caustic soda occurring before 2015. Under the "dual carbon" goal, China's petrochemical and chemical industry must balance development and carbon reduction. On the one hand, the demand for chemicals and new materials continues to grow rapidly, driving the rapid growth of production capacity. On the other hand, in order to achieve China's promised goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060, green and low-carbon development in the industry is an inevitable choice.

There is still a gap between energy consumption indicators and international advanced levels, and the level of energy optimization and comprehensive utilization needs to be improved. During the 13th Five Year Plan period, the average energy consumption of China's petrochemical and chemical industry continued to decline. Among them, the comprehensive energy consumption of refining decreased by 5%; The comprehensive energy consumption of ethylene has decreased by 3%. Compared to the international advanced level, there is still significant room for improvement in energy consumption indicators such as catalytic cracking and catalytic reforming. In terms of energy optimization and comprehensive utilization, there is still a significant gap compared to international leading enterprises.

There are relatively few independent low-carbon technologies, and there is still a need to accelerate research and development. Each link in the petrochemical and chemical industry industrial chain faces the goal of promoting carbon reduction and achieving low-carbon development through technological innovation, which includes low-carbon production technologies such as carbon capture and storage (CCUS), biochemistry, waste chemical recycling, and advanced energy conservation, as well as external related industry technologies such as green power supply. At present, most of China's independently developed low-carbon technologies are in the stage of small-scale trials or demonstrations, and there is still a gap with the international leading level of the industry. Green power supply not only requires significant transformation in the energy sector, but also low-carbon transformation of all terminal energy technologies and equipment. For the petrochemical and chemical industry, electrification will be an important lever for process energy consumption and decarbonization, and corresponding infrastructure, process technology, engineering equipment, etc. need to be transformed around new electrification.

The new generation of information technology brings opportunities, but deep digital integration remains a shortcoming

The petrochemical and chemical industry is in the initial stage of digital transformation and exploration, and there is still a lack of recognized theoretical systems and application cases. The digitalization process of enterprises lacks systematic theoretical guidance and successful experience reference. There are still huge challenges in how to promote the expansion of digitalization from pilot projects to the entire enterprise, and even at the level of industry chain collaboration.

The core technology, software, and hardware are subject to human constraints and urgently need to be broken through. At present, the main process technologies and supporting industrial control systems in China's petrochemical and chemical industry rely on imports. China's software development capabilities are not strong, and the standardization level is low. Software such as engineering design, product design, process simulation, process simulation, optimization, and production process control have long been monopolized by foreign countries. Therefore, it is necessary to make up for the key technologies, software and hardware shortcomings that hinder the deep integration of "two modernizations", build a new modern intelligent petrochemical plant and operation mode, promote the digitization and intelligence of technology research and development, engineering design, production process, business management, supply chain and services, and achieve a transformation from large to strong development mode.

Since the 13th Five Year Plan, China's position as a major petrochemical and chemical country has been further consolidated. In 2022, China's ethylene production capacity will account for 21.3% of the global ethylene production capacity, continuing to maintain its position as the world's largest ethylene producer; The production of synthetic resin, synthetic rubber, and synthetic fibers has consistently ranked first in the world for many years. With the increasing supply of products and the further acceleration of industry structure adjustment, China's petrochemical and chemical industry has stood at a new starting point, entering a new stage of moving from a petrochemical and chemical power to a petrochemical and chemical power.

High quality development strategy

Enhance innovation capability, enhance supply capacity and competitiveness of the industrial chain

Currently, global technological innovation has entered an unprecedented intensive and active period, and a new round of technological revolution and industrial transformation is restructuring the global innovation landscape and reshaping the global economic structure. In order for the industry to grow from large to strong and achieve high-quality development, it is necessary to continuously enhance its technological innovation capabilities. Therefore, it is particularly important to improve innovation mechanisms, explore channels for scientific and technological investment, promote deep integration of industry, academia, research and application, build a collaborative innovation system, and provide and reserve scientific and technological resources that meet the current and future development needs of the country. On the one hand, it is necessary to attach importance to application-oriented basic research, establish a platform for understanding petroleum and other raw materials at the molecular level, form a systematic theory of the structural characteristics and core chemical reaction laws of hydrocarbons in the raw materials, develop targeted and efficient catalysts and separation and reaction processes, and achieve targeted and efficient conversion of hydrocarbon molecules; Breaking through the manufacturing technology, perception technology, control technology and other core technologies of important equipment and components such as special structure reactors and high-power electric heating furnaces, enhancing the driving force of innovation and development, and enhancing the stability and competitiveness of the industrial chain. On the other hand, focusing on strategic emerging industries and segmented markets, we will accelerate the high-end, differentiation, and greening of the three major synthetic materials through catalysts, process innovation, or post modification, forming a full range of product solutions. At the same time, we will scientifically layout the research and development of high-tech materials such as electronic chemicals and membrane materials. Innovate capital operation and business operation models, promote product supply side structural reform, and enhance the supply capacity of high-end polymers, specialized chemicals, and other products.

Optimize and adjust the structure and layout to promote high-level industrial agglomeration and development

At present, the overall development quality of China's petrochemical and chemical industry is not high, the industrial layout is not entirely scientific, the industrial structure is mostly in the middle and low end, duplicate construction still exists, the industry's profitability is limited, and there is an urgent need to change the development mode and improve the quality of development.

Active petrochemical plants need to accelerate structural adjustment and upgrading. On the one hand, with the goal of maximizing value creation for society, utilizing digital and intelligent technologies to further improve resource utilization, refine raw material processing paths, efficiently separate and utilize by-products, reduce energy and material consumption, improve device operation levels, orderly promote "reducing oil and increasing specialty" and "reducing oil and increasing chemical", expand and extend the chemical industry chain, accelerate the reform process of improving quality and efficiency, and enhance the ability to flexibly match market demand. On the other hand, based on the principles of overall planning and systematic conservation, and taking into account various factors, a reasonable indicator system should be established to scientifically evaluate and promote the mechanism for exiting inefficient and backward production capacity and relocating production enterprises.

New petrochemical projects must have strict admission conditions and a coordinated layout. Establish a high-quality development standard system at the national level, conduct a comprehensive and systematic assessment from the aspects of intrinsic safety and low-carbon environmental reliability, logistics transmission convenience, product structure and technology progressiveness, as well as innovation ability, economic benefits, international competitiveness, etc., and strictly enforce access conditions. When laying out, it is necessary to comprehensively consider conditions such as resources, market, environmental capacity, and logistics, and maximize the cluster development advantages of upstream and downstream collaboration, integration of public auxiliary engineering, integration of safety and environmental protection emergency response, and integration of management services and finance. We should promote the deep integration of "two modernizations", improve operational efficiency, enhance professional management and risk resistance capabilities, and form a world leading petrochemical industry base.

Promote green, circular, and low-carbon development, enhance the level of intrinsic safety and clean production

Under the "dual carbon" goal, low-carbon and green development is the trend. The carbon emissions of the petrochemical industry mainly come from fuel combustion emissions, followed by process emissions. We can focus on the three paths of "source, process, and end" to orderly promote energy conservation and carbon reduction in key areas. In terms of carbon reduction at the source, we will accelerate breakthroughs in technologies such as waste chemical material regeneration and recycling, low-carbon/zero carbon hydrogen production, and biochemical technology, partially replacing traditional oil and gas raw materials to achieve multiple effects such as pollution reduction, carbon reduction, and resource conservation; In terms of process carbon reduction, we will continue to develop new technologies such as heating furnace efficiency improvement, oxygen rich combustion, efficient separation, process strengthening, and new energy conservation, as well as system optimization technologies such as material optimization, energy optimization, and intelligence. We will accelerate the implementation of measures such as energy conservation and improvement, clean energy substitution, new processes and catalysts, and system optimization, promote demonstration and leadership, and achieve the reduction and low-carbon of process energy consumption, And low emissions from the process; In terms of terminal carbon reduction, we will strengthen joint innovation with low-carbon industries, focusing on the development needs of low-carbon industries such as new energy vehicles, renewable energy generation, and carbon capture and storage (CCS). We will strengthen the research and development of new materials such as lightweight materials for automobiles, wind turbine blades, and advanced energy storage materials, and carry out demonstrations of large-scale carbon dioxide capture, storage, oil displacement, and chemical production.

Currently, there is still a gap in the ability of China's petrochemical and chemical industry to prevent and resolve major safety risks compared to the world's advanced level, and the problems that constrain the safety and green development of the industry are still prominent. Especially during the accelerated pace of industrial transformation and upgrading, the continuous expansion and extension of the industrial chain, and the emergence of a large number of new processes, materials, and products, new safety hazards have been accumulated. It is necessary to aim to curb and prevent major accidents, take the prevention of systematic safety risks of hazardous chemicals as the main direction of attack, highlight the main responsibility of enterprises, strengthen regulatory responsibilities, and standardize the construction and safety management of petrochemical and chemical parks, Build a petrochemical and chemical safety governance system that is suitable for major petrochemical and chemical production countries.

(Author of this version: Wang Hongqiu, Director of the Strategy and Information Research Office of the Petrochemical Research Institute of China National Petroleum Corporation. Image author: Wang Dongliang)

(Editor in charge: Jiang Wenjuan)