The Chinese government has just issued a circular on regulating
the coal-chemical industry, urging local governments to tighten
control of new projects.
The government will not approve coal liquefaction projects with
an annual production capacity under three million tons, methanol or
dimethyl ether projects under one million tons and coal-to-alkene
projects under 600,000 tons, said a circular released by the
National Development and Reform Commission (NDRC) on Friday.
Experts said the move aims to contain possible overheating in
the coal-chemical industry.
According to the NDRC, constantly rising oil prices on the world
market have prompted the development of the coal-chemical industry
in trying to find alternatives for petroleum in China.
China's methanol production capacity reached 5.36 million tons
by the end of 2005. According to incomplete statistics, current
methanol production capacity under construction is nearly nine
million tons, with over 10 million tons under planning.
As the market has not been fully developed, when all the
projects go into production, a surplus capacity is inevitable, said
NDRC.
According to the NDRC, as the technology is still in
experimental phase, coal liquefaction projects should not be
approved until a national development program for the industry is
completed.
Coal-chemical projects must meet environmental requirements and
those that fail to meet the safety requirements in transportation
should not be allowed, said the NDRC.
In the five-year period from 2006 to 2010, China will encourage
the development of coal-based chemical fertilizer. The industries
of coal liquefaction and coal-made alternatives for petroleum
should be developed steadily while the traditional coal-chemical
industries that have seen overproduction such as calcium carbide
and coke should be kept under control.
(Xinhua News Agency July 16, 2006)