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07. June 2019

CHINA: China's efforts to reduce pollution may delay CTO and MTO projects

New coal-to-olefins (CTO) and methanol-to-olefins (MTO) projects in China could be delayed due to the government's intensified efforts to meet clean energy goals by reducing coal usage and changing crude oil and coal prices, according to data and analytics firm GlobalData.

Abundant availability has made coal the low-cost advantageous feedstock for petrochemical production in China, the report said. The share of coal-based petrochemical feedstock in China has been on the growth trajectory since 2010 and has gradually increased from 3 % in 2010 to around 16 % in 2018.

"With declining crude oil prices from mid 2014, coal started losing its low-cost advantage as feedstock for petrochemical production, which may prompt producers to turn back to dominant feedstock 'naphtha'," noted GlobalData Oil & Gas Analyst Dayanand Kharade.

"With China working actively to meet its clean energy goals to reduce carbon emission and reducing the usage of coal, the upcoming CTO/MTO projects timeline are likely to be affected. The cost of environmental protection is likely to be one of the key factors dragging down the competitiveness of CTO projects," Kharade concluded.

Source: Weekly “PetroChemical News”, Durham, NC, USA; 3 June 2019
(Syed Rashid Ali, Karachi, Pakistan)

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