By Huang Ruqing, Lu Fenpei and Hu Nan, Shandong High-end Chemical Research Institute

CCUS technology in China

CCUS technology (Carbon Capture, Utilization and Storage) is a key to China’s dual carbon goals, i.e. halting the rise of carbon emissions by 2030 and striving for carbon neutrality by 2060.

Relying on the CCUS technique, highly concerned by many industries such as petrochemical industry, enterprises could capture carbon dioxide, utilize carbon dioxide mainly in several ways: 1) production of high value-added specific chemicals like dimethyl carbonate (DMC), methanol, polypropylene carbonate (PPC), etc.; 2) displacement of reservoir oil; 3) the areas of carbonated drinks, refrigerants, extraction agents, etc. – and store carbon dioxide in oilfields, saline aquifers, seawater, etc.

In China, some CCUS projects have been industrialized including those to manufacture DMC, PPC and methanol and those regarding oil displacement; some currently stay at a stage of pilot scale experiment like those using CO2 to make gasoline, jet fuel, triazine triol and syngas; some are in a laboratory phase such as those to synthesize formic acid and formaldehyde; projects storing CO2 in the form of aqua compound in seawater are in a preliminary research stage.

Domestic CCUS projects in 2022

In 2022, around 2.73 million tons of carbon dioxide were utilized in China, more specifically, 1.58 million tons in oil displacement and storage, 510 000 tons in DMC synthesis, 20 000 tons in PPC production, 200 000 tons in carbonated beverages, 20 000 tons in refrigerants (see Table 1 for details).

Main downstream product markets

With a compound annual growth rate of 27.7% since 2014, China’s PPC output reached 33 600 tons in 2022, when domestic demand for PPC was 32 500 tons, rising 27.8% annually since 2014 (see Figure 1 for details). Domestic capacity of methanol reached 101.71 million t/a, output 76.21 million tons, and net import 12.02 million tons in 2022. Degree of self-sufficiency in 2022 was around 98.4%. Figure 2 shows domestic methanol consumption from 2013 to 2022.

Figure 1 China’s PPC consumption from 2014 to 2022

Figure 2 China’s methanol consumption from 2013 to 2022

As for domestic DMC capacity, it rose by 39.4% YoY to 1.66 million t/a in 2022, and output reached 1.05 million tons, soaring 61.5% YoY, slower than the surge of 74.6% YoY in DMC apparent consumption, which reached 796 000 tons in 2022. Figure 3 shows China’s DMC consumption from 2018 to 2022.

Figure 3 China’s DMC consumption from 2018 to 2022

Investment in major downstream products of CCUS technology

Average methanol price has stayed at RMB2 382/t from 2018 to 2022, and RMB2 336/t from January to September 2023, according to data from Sublime China Information Co., Ltd. (SCI). At present, projects to produce methanol with CO2 generally suffer heavy losses, mainly because of high production costs. Domestic PPC capacity currently is 317 000 t/a, with effective capacity of 82 000 t/a. However, PPC output was only 33 600 tons in 2022. Serious overcapacity resulted in increasingly fierce competition among PPC producers.

Gross profit of domestic DMC units has remained high for a long period, reaching RMB3 305/t during 2018-2022, according to SCI. As solvent of lithium batteries, DMC has great development potential. China has rolled out a series of policies to propel electric vehicles, sales volume of which skyrocketed 85% YoY to 5.36 million in 2022. Hence, projects on making DMC with CO2 will be an ideal choice for petrochemical enterprises to invest.