Chunyang Zeng,Qianlin Hu*

1 Chemical Industry Productivity Promotion Center of China,Beijing 100723,China

2 China Petroleum Chemical Industry Federation,Beijing 100723,China

Keywords:China Petroleum and chemical industry Profit Main business income Production Consumption Technological innovation

ABSTRACT In 2018,the petroleum and chemical industries of China achieved steady economic growth.The main business income of the entire industry was 12.4 trillion CNY,an increase of 13.6%over the previous year.The total profit was 83.93 billion CNY,an increase of 32.1%over the previous year.The total national oil and gas production reached 334 million tons of oil equivalent,increasing by 2.4%year-on-year.Among the total production,crude oil production was 189 million tons,decreased 1.2%,and natural gas production was 161.02 billion cubic meters,increased 7.5%year on year.Imported crude oil production was 462 million tons,an increase of 10.1%over the last year.Imported gas production was 125.72 billion cubic meters,increased 31.9%.The annual processing capacity of crude oil was 604 million tons,up by 6.8%.The refined oil production was 360 million tons,up by 3.6%.The industry structure was optimized for production growth in 2018,the transformation and upgrading of enterprises and products structure adjustment were sped up,energy efficiency was improved,and overall industrial benefit was rebounded.At present,the economic operation of the industry is still not very stable,and downward pressure is still great,mainly being reflected in the overcapacity of some industries,high cost operation of enterprises,increased tax burden,and weak investment.With the slow recovery of the global economy and the key support of high-quality development through technological innovation,it is expected that the petroleum and chemical industry of China will achieve the general objective of steady growth in 2019.

1.Introduction

In 2018,the world economy continued to recover slowly.Economic growth and growth expectations kept in a reasonable region,however,uncertainties and unstable factors increased,unilateralism and trade protectionism escalated,geopolitical risks further intensified,and the market fluctuation of oil and chemical bulk products was exacerbated.2018 is the third year for China's petroleum and chemical industry to carry out“structural adjustment of the petrochemical industry”.The whole industry had a profound comprehension of new characteristics and new changes of major contradictions in the new era,firmly grasped the fundamental requirements of high quality development,adhered to the new development concept,continued to push the supply-side structural reform,vigorously promoted the major strategies of“innovation drive and green development”,and guaranteed to improve quality,efficiency,transformation,upgrading and healthy development by eliminating production capacity,reducing consumption,reducing emissions,making up for shortcomings,adjusting layout,promoting safety,and expanding the field and vision of international exchange and cooperation.China's petroleum and chemical industry was moving towards high-quality development.

2.Development of China's Petroleum and Chemical Industry in 2018

2.1.Economic performance of the industry

The data from the National Bureau of Statistics showed that the number of enterprises above designated size in the petroleum and chemical industry in 2018 was 27,813,0.6%higher than 2017,the annually added value increased by 4.6%on a year-on-year basis.The main business income,total assets,total profits,imports and exports of petrochemical enterprises above designated size respectively reached 12.4 trillion CNY,12.81 trillion CNY,83.338 million CNY and 754.34 billion USD,and respectively increased by 13.6%,5.3%,32.1%and 29.3%than those of 2017(Fig.1).

The profit rate of main business income of the petroleum and chemical industry was 6.77%,increased by 0.95%as compared with the end of last year.The cost per 100 CNY of main business income was 81.32 CNY,decreasing by 0.50 CNY on a year-to-year basis.The main business income and total profits respectively accounted for 12.1%and 12.7%of the main business income and total profits of the national scale-sized industry;the total assets accounted for 11.3%of total assets of the national scale-sized industry.The debt-to-asset ratio was 54.56%,down 1.4%from 2017.The inventory turnover days of finished products were 16.1;the average payback period of accounts receivable was 29.5 days.The scale of losses in the industry reached 16.7%.

Fig.1.The operation of China's petrochemical and chemical industry in 2014-2018.

According to the customs data,the total imports and exports of the petroleum and chemical industry in 2018 were 754.335 billion USD,up 29.3%year-on-year.Specifically,the total imports were 518.795 billion USD,up 32.9%year-on-year;the total exports were 235.540 billion USD,22.1%higher than last year.

In 2018,China's oil production,natural gas production,and crude oil processing capacity ranked the seventh,the seventh and the second respectively in the world,and the productions of inorganic materials,ethene,carbinol,chemical fertilizers,pesticides,synthetic resin and synthetic rubber steadily took the forefront in the world.

According to the data analysis,the economical operation of China's petroleum and chemical industry in 2018 mainly has the following characteristics:First,the profit growth was significant.In 2018,the total profit growth rate of the whole industry exceeded 30%,which was significantly ahead of the national average industrial profit growth rate(10.3%).Among them,the profits of the oil and gas exploitation industry increased by 5.8 times,and the contribution rate exceeded 65%.Second,the income growth is generally stable.In 2018,the income from the whole industry increased by 11.4%in the first quarter,13.2%in the first half of the year,and 14.8%in the first three quarters.The annual fluctuation was not large.Specifically,the chemical industry increased by 8.6% in the whole year,9.8% in the first quarter,10.3% in the first half of the year,and 10.7% in the first three quarters.Third,the industry's loss situation continues to improve.In 2018,the loss of loss-making enterprises in the whole industry was 116.23 billion CNY,decreases by 36.9%from that in the same period of last year.Among them,the oil and gas mining industry fell by 63.0%,and the chemical industry fell by 14.4%.The loss of the whole industry was 16.7%,which was 2.0 percentage points lower than that in the first half of the year.

2.2.Overall development of the industry

2.2.1.Production of major products

2.2.1.1.Oil and natural gas.In 2018,the number of enterprises above designated size in the oil and gas exploitation industry was 286,and the cumulatively added value increased by 5.0%,increasing by 5.5 percentage points on a year-on-year basis;the total production of crude oil and gas in the whole year was 334 million tons(oil equivalent),with a year-onyear increase of 2.4%.Specifically,the production of crude oil was 189 million tons,down 1.2%;the production of gas[1-5](including coalbed methane,the same below)was 161.02 billion cubic meters,an increase of 7.5%;the production of liquefied natural gas(LNG)was 9.002 million tons,decreasing by 0.9%(Fig.2).

In 2018,China's total crude oil processing capacity reached 813 million tons per year,with an added capacity of 13.9 million tons per year,11.65 million tons per year eliminated,and a net increase of 2.25 million tons per year.Crude oil processing volume increased by 6.8%higher than that in the same period of last year,and the capacity utilization rate was 74.2%,3.2%higher than that in the same period of last year.Apparent consumption of refined oil reached 322 million tons in the whole year with a growth rate of 0.2% and exported 46.08 million tons of refined oil with the 12.8%growth rate.Specifically,the production of diesel oil reduced by 1.9%and that of kerosene increased by 12.7%.

Fig.2.The production of crude oil and refined oil in 2018.

2.2.1.2.Basic petrochemical materials.In 2018,the production of ethene,propylene,para-xylene and ethylene glycol was about 23.72 million tons,30.5 million tons,11.09 million tons,and 6.793 million tons,respectively.The growth rate was 7.5%,9.2%,9.3%and 18.9%higher than those in the same period of last year,respectively.The average annual capacity utilization rate reached 93%,83%,75%,and 64%,respectively(Table 1).

The domestic support capacity of basic petrochemical materials such as olefins and aromatic[6-9]has been further enhanced,but some products still faced a greater demand-supply gap.Among them,the total production capacity of ethylene and propylene have accounted for 14.3% and 26.2% of the world's total production capacity respectively.Apparent consumption increased by 4.4%and 5.8%,equivalent to the consumption of 50.1 million tons and 38.69 million tons,and the growth rates are 9.2%and 5.9%higher than those in the same period of last year.Polyethylene,ethylene glycol and other downstream products imported the net equivalent of 23.8 million tons,imported polypropylene,acrylonitrile and other downstream derivatives propylene equivalent of 5.8 million tons,demand has increased further.

2.2.1.3.Fertilizers and basic chemical products.In 2018,the utilization of fertilizer capacity became better,and the backward production capacity of the industry has accelerated.There were 201 enterprises with nitrogen fertilizer[10-13]above designated size,down 52%year-on-year.The total production capacity decreased by 6.4%.The total annual production of synthetic ammonia was 56.01 million tons(down 0.5%year-on-year).The domestic demand for phosphorus compound fertilizer has stabilized slightly,the increase in international demand has promoted the price increase,and the company's efficiency has increased.The total annual production of phosphate fertilizer is 16.3 million tons(P2O5)(Table 2).

Domestic demand has been in a downward trend due to the agricultural policies and shrinking of the cultivation area.The export market greatly affected the operation of the domestic fertilizer industry(Fig.3).

Specifically,the apparent consumption of nitrogen fertilizers in the total year increased by 0.6%year-on-year.The agricultural fertilizers declined slightly,down about 1.1%year-on-year,while the consumptionof carbamide in melamine,boiler flue gas denitrification,and other fields increased by 7.9% year-on-year,which reached 16.8 million tons,and the rate of urea for industrial use increased.The exports fell sharply and the exports of nitrogen fertilizers in 2018 were 4.706 million tons(converted to pure nitrogen),down 15.1%year-on-year.

Table 1 Production capacity of basic petrochemical materials in 2018

Table 2 Fertilizer production capacity in 2018

Fig.3.Annual production and rate of capacity utilization of chemical fertilizer products in 2018.

The export of phosphate fertilizer was increased substantially because of the increasing international demand and higher prices.Cumulative export of various phosphate compound fertilizers(equivalent to P2O5)was 4.566 million tons.The export volume of monoammonium phosphate decreased by 9.8%,while diammonium phosphate increased by 16.7%,and NPK compound fertilizer was increased by 27.5%,about 1.235 million tons year-on-year.

The production of potassium fertilizer remained growing in 2018.The domestic production of resource type potash(K2O,the same below)was increased by 1.3%than last year,and the production capacity was about 7.58 million tons[14,15].With the market share increased to 55%,the apparent consumption of domestic potash fertilizer was 10.18 million tons.Domestic production of potassium sulfate was still in adjustment because of the by-product of hydrochloric acid(Fig.4).

The capacity utilization of basic chemical products was basically stable.Compared with the last year,the production of caustic soda increased by 0.55 million tons and soda ash production decreased by 1.16 million tons.Meanwhile,capacity utilization was decreased by 2%and 6%respectively.Profit margin of the caustic soda industry maintained good ratio,but declined slightly in the soda ash industry due to the serious environmental protection pressure.Downstream product markets were basically stable,except the slight increase of ordinary glass.Compared with previous years in the calcium carbide industry,the actual production rate of calcium carbide equipment had been greatly improved,even beside a total of 0.65 million tons of conversed or eliminated production capacity and another 6.8 million tons of invalid production capacity which discontinued for a long-term(Table 3).

2.2.1.4.Modern coal chemical industry.Compared with the same period of 2017,the total production capacity of coal-to-liquid and coal-to-gas was unchanged,and the total production increased by 2.948 million tons and 380 million cubic meters respectively in 2018.The total production capacity of coal(methanol)to olefins increased by 4.8%,and the total production increased by 0.914 million tons.Eight new projects of coal(synthesis gas)to ethylene glycol were built,the total production capacity increased by 65.9%,and the total production increased by 0.899 million tons(Fig.5 and Table 4).

2.2.1.5.Fine chemicals(pesticides,coatings,dyestuffs).In 2018,the national chemical pesticide production was 2.083 million tons,declined about 9.5%than previous years.The annual sales revenue was about 329 billion yuan due to the rising prices and development of bio-pesticides.In particular,the demand for pesticides in cash crops such as cotton and infrastructure was expanding.Overall,the growth rate of sales revenue of China's pesticide industry had shown a significant downward trend.From January to October 2018,pesticide exports of China were 1.25 million tons,5.30%lower than last year.The export value was 4.381 billion USD,and it had increased by 15.99%.

In 2018,the number of enterprises above designated size in the coating[16,17]industry in China was 1998.Among the top 100 enterprises in the coating industry,the annual production of building decorative coating and industrial coating was 4.3777 million tons,the annual output of industrial coatings was 3.9176 million tons;the main business income of architectural decorative coatings was 38.668 billion CNY,and the income from industrial coatings main business was 70.038 billion CNY.The production of industrial coating was lower than that of building decorative coating,while the main business income was much higher than that of architectural decorative coating.

Fig.4.Annual production and rate of capacity utilization of basic chemical products in 2018.

Table 3 The capacity of basic chemical products in 2018

Fig.5.Capacity of modern coal chemical industry in 2018.

Table 4 Capacity of modern coal chemical industry in 2018

In 2018,China's total production capacity of titanium dioxide was 3.4 million tons,with an actual output of 2.9543 million tons,an increase of 0.0848 million tons and 2.95%over the same period last year.The annual import volume of titanium dioxide was 0.2092 million tons,a decrease of 2.70%compared with the previous year,while the export volume was 0.9083 million tons,an increase of 9.30%compared with the last year.The apparent consumption is 2.255 million tons,which is consistent with that in 2017.

In 2018,the production of disperse dyes in the dyestuff industry would reach 503,400 tons[18],and the production of reactive dyes should reach 0.2787 million tons.However,according to dye market analysis statistics,China's current production capacity of disperse dyes is only about 0.5 million tons,and that of reactive dyes is only about 0.45 million tons.According to the previous start-up rate,the superimposition of environmental protection supervision in 2018 is far ahead of the previous years,and the supply and demand of dyes are in a tight balance[19].

2.2.1.6.Synthetic rubber and high-end synthetic materials.In 2018,the total production capacity of main synthetic rubber varieties in China was 5.93 million tons per year,with a total output of 3.67 million tons,an increase of 3.2%year on year,and the productivity utilization rate was 61.9%.Among them,some of the devices of butadiene rubber,isoprene rubber,styrene-butadiene rubber(milk-polymer)and butyl rubber[20-22]have been discontinued for a long time,due to the lack of economic advantages of raw materials,homogenization of products,as well as the downstream market is not implemented.The capacity of equipment that has been discontinued for more than one year is as high as 0.78 million tons per year,accounting for 13.1%of the total capacity.In 2018,a total of 1.22 million tons of rubber were imported(of which natural rubber accounted for about 67%),a decrease of 9.7%compared with the previous year,and export of 0.15 million tons,an increase of 9.1% compared with the previous year.The apparent consumption of rubber in China is 4.74 million tons.

In 2018,some high-end synthetic materials still need to be imported in large quantities.In recent years,the production capacity of polyethylene in the international market has increased rapidly,and the supply of polyethylene is relatively sufficient.As a major importer of polyethylene[23-25],China's imports increased by 21.25%year-on-year,which has a certain bargaining advantage(Table 5).

There were 2 sets of polyethylene plants and 4 sets of polypropylene plants put into production in 2018,the production of polyethylene increased by 13.3%[26-28]year-on-year,and the capacity utilization rate increased by 5%compared with the previous year;with the completion and commissioning of several polycarbonate projects,domestic supply capacity continues to increase,polycarbonate productioncapacity has accounted for more than 20%of global production capacity,and the capacity growth rate has exceeded 20% for five consecutive years;there are currently more than 300 domestic PMMA production enterprises,including about 40 enterprises with an annual output of more than thousand tons,and 9 enterprises with an annual output of ten thousand tons;the capacity of nylon 66 is limited due to the monopoly of dinitrile by key raw materials,and the self-sufficiency rate is 60%;the production of polyformaldehyde increased slightly by 20,000 tons,and the utilization of capacity increased by 5%compared with the previous year(Fig.6).

Table 5 The production of some high-end synthetic materials in 2018

2.2.1.7.High-end chemicals.The newly-increased capacity of downstream enterprises of caprolactam was far higher than the newlyincreased capacity of caprolactam[29,30]and the exports of major downstream product,polyamide fiber,grew significantly from the previous year.The demand support was strong,which the apparent consumption rose 24.28% sharply and reached 3.0213 million tons.The profit level in the industry improved significantly.The introduction of new plastic track national standards had a positive significance for driving the MDI demand,which the annual production of MDI had a yearon-year growth of 8.3%.The domestic supply and demand of TDI were basically balanced,and the consumption was 780,000 tons,up to 3%year-on-year.The production of epoxy propane increased by 3%as compared with last year and the apparent consumption was 3.08 million tons,but the total annual imports were 282,000 tons,increased by 21%on a year-on-year basis(Table 6).

2.2.2.Green development

In 2018,the profit rate of main business income of the petroleum and chemical industry increased again,by 6.77%,setting a new record in recent 7 years.In the recent two years,the benefit level of the economic operation in the whole petrochemical industry has continued to be improved.The high-quality development of the petrochemical industry requires“quality first,benefit priority”,and the implementation of green development strategy is a fundamental strategy to promote the high quality development of the industry,the quality and the benefits.In 2018,the whole petrochemical industry implemented the Guiding Opinions on Promoting Green Development of the Petrochemical Industry by the National Development and Reform Commission and the Ministry of Industry and Information Technology,further promoted the Petrochemical Industry Green Development Action Plan and its“six major special action plans”,especially investigated and formulated the Overall Implementation Plan for Promoting Green Development in 2018,quickened the construction of the green manufacturing system,intensified the improvement of industry safety management level,focused on solving the prominent environmental problems in the industry,and continuously pushed the construction of the green standardization system.The Guidelines for Assessment of Green Factory in the Petroleum Refining Industry and other 3 green factory evaluation standards as well as 6 group standards were completed.50 green factory evaluation guidelines and green product evaluation code standards were initiated.Green development demonstrations were cultivated that 44 green factories,133 varieties of green products,3 green industrial zones,and 9 environment protection centers were identified.The industry energy efficiency leader activities were continued to be carried out,which newly added oil refining and methanol industries based on the existing ethylene and synthetic ammonia industries,covering over 60%of the value-of-production products in the oil refining and chemical industries.According to the development idea of the green chemical industry,the chemical equipment manufacturing industry gradually transformed from end pollution control to source emission reduction,not only reduced pollutant by environmental protection equipment and technology,but also raised clean and green production technology and production process to a more important position,therefore provided lots of innovative opportunities for the development of the equipment industry.In 2018,China Petroleum and Chemical Industry Federation(CPCIF)firstly released the“Responsible Care Annual Report and Three-year Action Plan”.The level of green development in the whole industry has been continuously improved,and the international influence of the petrochemical industry's responsible care has been continuously enhanced.

Table 6 The production capacity of high-end chemicals in 2018

Fig.6.The production and rate of capacity utilization of some high-end complex materials in 2018.

2.2.3.Scientific innovation

In 2018,the innovation abilities and levels of the petrochemical industry in key technologies,generic technologies,core technologies and major equipment were improved continuously.In accordance with the Guidelines for Technology Development in Petrochemical Industry during the Period of the“13th Five Year Plan”,as well as the deployment and requirements of the Guide for the Development of Key Industrial Generic Technologies(2018)by the Ministry of Industry and Information Technology,the petrochemical industry strengthened the organization recommendation and implementation of national key R&D projects based on the 2018 Technology Guidance Plan of the Federation to ensure the completion of tasks of tackling essential problems in national science and technology.In the whole year,CPCIF newly identified 7 industry innovation platforms,20 technological innovation demonstration enterprises,appraised 234 excellent scientific and technical workers in the petrochemical industry,and ceremoniously honored 241 scientific and technological achievements through Technical Invention Awards and Scientific-technical Progress Awards.In the aspect of indigenous innovation,the number of applied patent awards set a new record in history,that there were 9 patents winning gold medals and 45 patents winning excellence records.Since the identification of achievements started in 2001,the Federation identified a total of 1530 technological achievements and 4 soft science reviews as of 2018.

In the 2018 National Science and Technology Awards,a total of 41 projects in petroleum,chemistry and chemical engineering were conferred,including 11 natural science awards,13 technical invention awards,and 17 scientific-technical progress awards,which covered the fields of oil,gas,and new materials to ensure the supply of national energy and important raw materials,as well as environmental protection governance,energy saving and emission reduction to improve people's livelihood and build environmentally friendly industries.

2.2.4.International cooperation

2018 marked the 40th anniversary of China's reform and opening up,and China's petrochemical industry continuously expanded the width and depth of international exchange and cooperation in order to deepen the reform and start again.CPCIF officially became a member of the International Council of Chemical Associations(ICCA)in 2018,and actively conducted cooperation,exchanges and duologues with ICCA,WPC,IFA,AICM and other international organizations,as well as industry organizations and transnational enterprises in the developed countries including the USA,Europe,Japan and South Korea.Through ICCA Board of Directors,technical annual conference and joint holding of international petrochemical conference,circular economy forum,and other forms,CPCIF made exploration and exchange to promote deep cooperation on responsible care,sustainable development,climatic change,and other subjects attracting the global attention.2018 also marked the 5th anniversary of the“One Belt and One Road”Initiative,and during the 5 years,China's petroleum and chemical industry had made outstanding contributions to the“One Belt and One Road”Initiative.In 2018,CPCIF mainly focused on the international capacity cooperation,and the whole industry sped up the overall strategy of“four major clusters”and“four major bases”,namely:to accelerate the four major industrial clusters of organizational resource cooperation,capacity cooperation,energy conservation and environmental protection,and productive service industry;to actively construct the four major bases of international capacity cooperation of the“One Belt and One Road”Initiative,which with the domestic petrochemical industrial clusters as the head,the petrochemical industrial clusters in Central and Eastern Europe as the tail,and the chemical industrial clusters in Middle East,South East Asia and South Asia,Central Asia Russia as the intermediate node,radiating Africa,North America,South America,and Australia,namely,Middle East Petrochemical Capacity Cooperation Base,South East Asia Petrochemical Capacity Cooperation Base,Central Asia Russia Capacity Cooperation Base,and Central and Eastern Europe Capacity Cooperation Base.Centering around the“One Belt and One Road”Initiative,CPCIF helped China's petrochemical enterprises to enter the international market,judiciously selected 20 countries including Iran,Pakistan,Canada,Oman and Hungary to compile the Research Report on International Capacity Cooperation in Petrochemical Industry,signed bilateral strategic cooperation agreements with 20 countries including Saudi Arabia,the United Arab Emirates,Poland,France and Germany,Switzerland,Russia,etc.,actively promoted the deep international cooperation of China's petrochemical enterprises in the field of overseas investments,project contracting,technical cooperation,equipment export,communication and exchanges,and project docking.

3.Challenges Facing Industrial Development

3.1.The product structure still required to be adjusted

In order to implement the Guiding Opinions on Adjusting Structure,Promoting Transformation and Improving Effectiveness of the Petrochemical Industry by the State Council,CPCIF investigated and released the Implementation Plan for Carrying out the Guiding Opinions of the State Council to provide guidance for the whole petrochemical industry to closely center around the main line of supply-side structural reform.In the previous three years,a total of 121 sets of oil refining facilities were eliminated with the total capacity reaching 91.75 million tons.The net reductions of chemical fertilizer products as synthetic ammonia,nitrogen fertilizer,and phosphate fertilizer reached 2.05 million tons,4.65 million tons,and 200,000 tons,respectively.The net reductions of urea(physical quantity),chemical pesticides(converted to pure amount),sulfuric acid,and calcium carbide reached 11.33 million tons,120,000 tons,2 million tons,and 4 million tons,respectively.Due to the high prices of petrochemical products,the impetus of some industries and enterprises in new construction and extension of capacities rose again and the productions of some products also increased:net increase of pure caustic soda,sodium carbonate,and polyvinyl chloride reached 1.02 million tons,3.14 million tons,and 780,000 tons,respectively.The structural contradictions of products in the whole industry were still prominent,especially in the traditional industries and bulk basic chemicals with severe excess capacities.Although the average rate of capacity utilization of emphatically monitored 30 varieties of major petrochemical products by CPCIF was 76%,increased by nearly 3 percentage points compared with the previous year,the rate of capacity utilization in some industry still had a large gap with the global average level.

3.2.The resource constraints are getting worse

In 2018,China imported 462 million tons of crude oil,up 10.1%yearon-year,and its dependence on foreign countries was 70.8%,creating a new record in history;imported 125.72 billion cubic meters of natural gas with an increase of 31.9%,and external dependence was 43.2%.China has become the world's second largest petrochemical country and the largest chemical power.China's resources are characterized by lack of oil and gas,and crude oil and natural gas rely heavily on imports.Imported energy prices have become one of the key factors affecting the operation of the Chinese petrochemical industry.Taking imported crude oil as an example,the international crude oil price in 2018 basically took an upward trend,and the fourth quarter began to fluctuate sharply.In November,there was a cliff-like decline.The Brent oil price was lower on November 23 than on October 3 with the high point falling by 31%;the average price of Brent is 71 per barrel USD per year.In November,WTI and Brent oil prices all recorded the largest monthly decline in 10 years.The fluctuation of international crude oil and natural gas prices and the increasing dependence of China's energy sources on foreign countries have made China's petrochemical industry face serious challenges in its high-quality development.At the same time,the extensive development model of high energy consumption,high input and high emissions in the petrochemical industry has not been fundamentally changed.As a key industry in China's six high-energyconsuming industries,the petrochemical industry ranks in the forefront of the industrial sector in terms of energy consumption and carbon emissions,and has a greater impact on the realization of energysaving and carbon-reduction targets.

3.3.The environmental safety situation is very serious

In recent years,the wastewater discharge of the petrochemical industry has exceeded 4 billion tons,accounting for about 20% of the total industrial wastewater discharge;the exhaust gas emissions are about 6 trillion cubic meters,ranking first in the industrial field,and only VOCs emissions account for about 40%of the total industrial source emissions;solid waste emissions of 370 million tons,the second in the industrial sector.In addition,the unit energy consumption of some petrochemical products even exceeds 20%to 30%of the average level of developed countries.The petrochemical industry is still a major resource for energy consumption and“three wastes”,and is also a key industry for ecological management of the Yangtze River;there are still a number of pollution prevention and control problems that need to be solved in the industry,such as high-salt wastewater,mercury-containing catalysts,and phosphogypsum treatment.The imperfect factors of the standard system also restrict the solution to the problem of environmental protection in the industry.

With the continued efforts of the“Blue Sky Defence War”and“Prevention of Pollution to Fight the Strong”,a number of new environmental protection policies and standards have been announced,and the operating costs of petrochemical enterprises have continued to increase.In some areas or departments,in the process of supervising discipline,regardless of whether the enterprise meets the standards,the implementation is simple“one size fits all”;when implementing policies and standards,the layers are overweight,one-sided emphasis on environmental protection,and the inability to dialectically grasp the relationship between environmental protection and economic development.Protection is opposed to economic development.These have adversely affected the normal production and operation of petrochemical enterprises.The Central Economic Work Conference has placed special emphasis on“maintaining positions,consolidating achievements,not relaxing,and not going back.”The new environmental protection policy can only be more and more strict and more standardized,which will inevitably pose challenges for petrochemical enterprises.At the same time,the security situation in the petrochemical industry is very serious.In particular,several major or major accidents in the recent period have caused great losses to the lives and property of the people,which have greatly affected the production and operation of the industry and its social image.

3.4.Technological innovation capability needs to be improved

In 2018,the total import and export trade of China's petrochemical industry was about 754.335 billion USD,and the trade deficit of the whole industry was as high as 283.254 billion USD,an increase of 43.5%.This gap fully reflects the current situation that domestic supply cannot meet the demand and the ability of scientific and technological innovation is insufficient.Among the top 100 global innovation companies and institutions selected by the professional information service provider Clarivate Analytics,the United States and Japan,as global innovation centers,accounted for more than 70%of the top 100,and none of China's petrochemical companies are on the list.

4.Key Directions of Industrial Technological Innovation

The petrochemical industry is an important pillar industry of the national economy.In view of the outstanding problems of the current high-end petrochemical industry lagging behind and some products relying too much on imports,it is necessary to strengthen overall planning,scientific demonstration and rational distribution,and promote the petrochemical industry to accelerate transformation and upgrading and enhance domestic support capabilities.The overall improvement of the innovation capability and efficiency of the petrochemical industry needs to increase the implementation of the innovationdriven strategy and strengthen the construction of the innovation system.With the goal of“leading the scientific research direction of the industry,supporting the economic development of the industry,and enhancing the innovation capability of the industry”,the company will strengthen the construction of an innovation system with enterprises as the mainstay.

4.1.Break through a number of“filling short board”technologies and products

The short-board of the petrochemical industry is mainly concentrated in the field of new chemical materials and high-end specialty chemicals.Its technical content,high added value and large market demand require concentrated efforts to fill the“short board”and promote structural reform of the supply side.Alpha-olefins and polyolefin elastomers(POE)have become polyolefins because of their good elasticity,thermoplasticity,transparency,aging resistance,UV resistance and excellent physical and mechanical properties,sensitivity and processability.The family is popular with users and has a high profit.The current annual production of POE in the world has exceeded 1 million tons.China still needs to work hard to achieve its industrial production stage.

4.2.Popularize a batch of advanced technology and equipment

Innovative technologies should be used to upgrade and transform traditional industries and vigorously promote advanced and mature technologies,new products,new equipment and new materials to accelerate the upgrading of the technical level of the petrochemical industry.For example,in 2018,China Petroleum and Chemical Industry Federation had completed scientific and technological achievements appraisal as following:5000 t·a-1new technology of hydrogen peroxide legal epoxy chloropropane(DECH)can not only solve the problem of corrosion and pollution of the traditional craft route,but also high concentration of salt and organic wastewater to reduce emissions of 200,000 tons,10,000 tons of waste residue,save 200,000 tons of fresh water,energy conservation and emissions reduction benefits significantly,has significant social benefits.The technological achievements of“VOCs waste gas ultra-low emission treatment technology and key technical equipment in rubber factory”have opened up a solution for the control of rubber smelting waste gas in rubber industry and realized the clean and green production in rubber factory.All these projects had made another contribution to the industry,in the practice of the country's rubber plant energy conservation and emission reduction,solve environmental pollution,create green production and personal safety,etc.

4.3.To develop a number of environmentally-friendly and waste-recycling technologies

By using clean production technology and environment-friendly technology，it cloud make the production process of chemical products green and environmentally friendly.It is established depending on“Technology of Preparing DMC/EG from CO2Catalyzed by Immobilized Ionic Liquids”,the industrial plant of ten thousand tons producing DMC and EG from CO2and ethylene oxide catalyzed by immobilized ionic liquids was the first one in the world and was leading in the international level.It was a successful example of green engineering and green chemical application,opening up a new way for the resource utilization of carbon dioxide,the energy saving of existing ethylene glycol process and the industrial chain of ethylene oxide.

4.4.To tackle a number of disruptive and commanding height technologies

By breaking through a number of short-process technologies of the modern coal chemical industry,like one-step preparation of olefins from syngas,one-step preparation of dimethyl ether from syngas,coproduction of aromatic hydrocarbons from methane by anaerobic coupling of olefins,ethylene production by methane/carbon dioxide coupling,direct production of ethylene chemicals from crude oil,production and application of trans-isoprene rubber(Eucommia ulmoides rubber),key technologies of industrialization of bio-based rubber,application technology of high strength and high modulus polyimide fibers,micro-channel reactor and micro-reaction technology and other process strengthening technologies and bio-based material technologies,the technological commanding position of petrochemical industry has been seized.

5.Conclusions

In 2019,facing the pressure of uncertainties and increased downside risk,the petrochemical industry should further strengthen technological innovation,take technological innovation as the key support for high-quality development,and concentrate efforts to tackle essential problems collaboratively by focusing on major key technologies with“market demands,R&D basis,and possible breakthrough”.Essential problems in the exploration and development technologies of unconventional oil and gas resources,like shale gas,coalbed gas,dense oil,biomass energy and hydrogen energy,etc.should be vigorously tackled.Development of new exploration and development technologies of low grade hydrocarbon resources,such as deep zone,deep water,and low permeability hydrocarbon resources should be aimed,the recovery ratio of resources should be further increased,the development and utilization of new energy should be quickened,and the proportion of shale gas,and other new energies in the supply of energy resources should be significantly increased.Major breakthroughs in specific fields with relative advantages such as high-end polyolefin materials,new polyurethane materials,special nylon engineering plastics,thermoplastic elastomer materials,organosilicon materials,organic fluorine materials,specialty rubber materials,functional membrane materials should be made,and creation of strategic opportunities of corner overtaking in China's new chemical materials should be attempted.The development of a number of electronic chemicals,water treatment chemicals,high performance catalysts,special additives,adhesion agents,surfactants,high performance coatings,dyestuffs,and green&efficient pesticides should be prioritized,the high-end development of special chemicals should be accelerated,and the“areas of weakness”in the market should be bolstered.Essential problems in science&technology should be actively tackled by closely centering around the major key generic technologies and major equipment restricting the development of modern coal chemical industry,the current passive situation of homogenized terminal product structure should be changed as soon as possible,the formation of high-end and differentiated new pattern of terminal products should be sped up,and the unique advantages of the modern coal chemical industry should be taken.Research resources should be organized and a number of key technologies in high efficiency and energy conservation,safety and environmental protection should be tackled,resources should be recycled,and a number of advanced applicable energy system optimization technologies and end-of-pipe treatment technologies should be developed,so as to provide support for the green development of the industry.Intelligent equipment,intelligent control,core process software package,industry internet technology,intelligent measuring and controlling devices and components,etc.should be developed and promoted,the“smart workshop”and“smart factory”should be constructed,and the intelligent manufacturing level of the whole industry should be increased.