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China's energy and chemical industries to enter critical period of low-carbon transition

Author : PCEC

04 January 2021

Recently, the 2021 China Energy and Chemical Industry Development Report, sponsored by Sinopec Research Institute of Economics and Technology and co-organised by Wood Mackenzie Consulting, was released and a seminar was held in Beijing. Zhang Shaofeng, Chief Accountant of Sinopec Group, attended the press conference.

Image: PCEC
Image: PCEC

During the conference, Shaofeng said that the energy and chemical industries will face great challenges in 2021, and the continuous promotion of the quality, efficiency and power reform of energy development will be the main direction of the group. 2021 is still full of expectations. Faced with a complex and changing environment, China's energy and chemical industries should actively optimise the energy demand structure, strengthen energy technology capabilities, increase energy security, and strive to enter a new stage of high-quality development.

In the forthcoming "14th Five-Year Plan" period, China's refining industry will enter a stage where new capacity is fully released, and competition is fierce. It is also a period of industry integration, transformation and upgrading. The marketisation of refined oil products will be completed, and the development of high-end and green chemical products has become a new trend.

In the future, China's refining industry will aim at transformation, upgrading and high-quality development. There are three major objectives. The first is to accelerate the adjustment of the refining structure. This includes eliminating outdated production capacity with advanced production capacity; improving the level of refining and chemical integration to produce more low-carbon olefins and chemical raw materials; integrating development with the new energy automobile industry and transform gas stations into comprehensive energy supply stations for oil, gas, electricity and hydrogen. 

The second objective is to achieve differentiated and high-end development of the chemical industry. Under this, China will try to optimise the structure of the olefin industry chain, improve the competitiveness of the aromatics industry chain, break through the technical bottleneck of high-end materials; expand the diversified channels of chemical raw materials, and increase the value chain space. 

The third objective is to pay attention to technological innovation, including heavy oil processing and transformation technology, high-end chemical material production technology, plastic recycling technology, and digital technology for refining and chemical enterprises.

The hydrogen energy industry will help China's future green energy development. In 2020, China started top-level planning of hydrogen energy, and the fuel cell vehicle "reward for subsidy" policy has been implemented. The coronavirus pandemic has not affected the growth momentum of investment in the hydrogen energy industry. It is expected that more than 8,000 fuel cell commercial vehicles and 100 hydrogen refueling stations will enter demonstration operations by the end of the year. It is estimated that by 2025, China’s hydrogen fuel vehicles and hydrogen refueling stations will still be mainly used for demonstration operations. By 2035, fuel cell vehicles are expected to reach a million commercial applications.

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