Beijing has approved more than thirty projects aimed at producing critical raw materials from coal instead of oil, reflecting a strategic effort to reduce reliance on imported crude. The move focuses on manufacturing plastics, synthetic rubber, and fibers from domestic coal reserves, strengthening China’s energy security and industrial self-sufficiency.
Coal as a Feedstock for Olefins
China is leveraging its vast coal reserves to produce olefins, a key ingredient for tens of thousands of chemical products. While companies traditionally derive most olefins from oil, coal-based production provides significant cost advantages and reduces their dependence on imported fuel—an increasingly important factor amid global energy market uncertainties.
Scale and Scope of Coal-to-Olefins Projects
Since the initiative began, Beijing has approved a total of 36 projects, with 20 already operational, mainly in coal-rich regions like Shaanxi and Inner Mongolia. These projects together contribute an annual capacity of over 24 million tonnes of coal-derived feedstocks, according to China Science Daily.
Advanced Technology Behind the Process
The projects employ a process developed by the Dalian Institute of Chemical Physics, where coal is first converted into methanol, which is then transformed into olefins. Each plant can process 3.6 million tons of methanol per year, producing more than 1 million tonnes of olefins annually.
AI Accelerates Development
Researchers are also harnessing artificial intelligence to optimize plant operations and accelerate project development. AI-based modelling allows engineers to simulate production processes, increasing efficiency and reducing risks in scaling up coal-to-olefins facilities.
Strategic Importance for Energy Security
“This technology has driven the rapid growth of China’s coal-to-olefins industry,” said Liu Zhongmin, member of the Chinese Academy of Engineering and director of the Dalian Institute. “It plays a critical role in mitigating oil supply shortages, ensuring energy security, and supporting stable operations across the petrochemical value chain,” Zhongmin added.
