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China sets action plan to cut emissions, enhance efficiency in oil, chemicals industries by 2025

Highlights

Sets ideal refinery CDU energy consumption target at 7.5 kgoe/mt

Bans construction of CDUs less than 10 mil mt/year capacity

China's National Development and Reform Commission has introduced a new series of action plans for key industries in an effort to enhance energy efficiency and accelerate the country's peak carbon emissions and net-zero timeline targets.

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Those industries include oil refining and petrochemicals, as well as steel, aluminum, cement, flat glass, synthetic ammonia, calcium carbide, data centers and more, according to the NDRC's action plan guideline on its website Oct. 21.

The oil refining and petrochemicals industries must ensure that more than 30% of plant capacity meets the industrial standard for energy efficiency by 2025, according to the plan.

Many companies in the two sectors would eventually become flagship model entities that outperform the industrial standards for energy efficiency, it said.

The NDRC said the actual energy consumption of a standard crude distillation unit in a refinery -- measured in terms of per kilogram of oil equivalent -- should be 8.5 kg of oil equivalent/mt multiple factor, while flagship high efficiency model CDU should be 7.5 kgoe/mt multiple factor.

A prime example of a model plant would be Sinopec's 14 million mt/year Qilu Petrochemical complex in eastern Shandong province, which has an energy consumption of about 7.5 kgoe/mt multiple factor, according to a refinery source with direct knowledge of the matter.

To meet this goal, capacities with low energy efficiency will be ruled out from the oil refining industry, according to the NDRC. Those include CDUs of smaller than 2 million mt/year.

It proposes the "orderly exit" of low-efficient production capacities and prohibits the construction of CDUs with capacity below 10 million mt/year, fluidized catalytic cracking units with capacity less than 1.5 million mt/year, and continuous catalyst regeneration reformers, including aromatics extraction units, with less than 1 million mt/year of capacity.

In addition, the plan also bans the building of new naphtha-based steam crackers with capacities less than 800,000 mt/year, and aims to facilitate the exit of outdated and idle ethylene capacities of less than 300,000 mt/year.

The adoption and usage of new equipment and technics that can help save energy and cut carbon emissions will be promoted in the oil refining industry, the NDRC said. Those include deep processing of residues in a low-carbon method, producing olefins from syngas, and direct cracking of crude oil into ethylene.

A close monitoring and evaluation system will be set up to supervise the energy consumption and carbon emission status of the oil refining and ethylene cracking facilities, according to the NDRC. The accounting, reporting, verification and evaluation of energy consumption and carbon emissions will also be promoted.

If China meets several short-term goals it developed last year, which are not yet reflected in the country's 2020 nationally determined contributions under the Paris climate accord, the country's CO2 emissions could peak several years ahead of its current 2030 goal, the International Energy Agency had said earlier.

It also could reach net-zero carbon emissions by 2050 as called for by the agreement instead of by 2060 as called for by China's current Paris climate accord pledge, the IEA said when it issued Sept. 29 a roadmap detailing how the world's largest emitter can speed up its transition from fossil fuels.

China is the world's biggest crude oil importer and the second largest oil refiner. The country imported 387.4 million mt of crude oil in the first nine months, down 6.8% year on year, according to latest data from the General Administration of Customs. It produced 262 million mt of gasoline, gasoil and jet fuel over the same period, up 6.7% year on year, according to latest data from the National Bureau of Statistics.