China’s oil refineries are investing billions of yuan in the production of chemicals for the renewables industry, as the country’s clean energy boom reaches even its dirtiest industries.
Source: National Energy Administration
Beijing’s ambitious climate ambitions are attracting fresh investment across the economy. The added issue for oil processors is figuring out how to replace revenue from traditional, carbon-intensive industries like transportation, where demand for gasoline is nearing a peak as electric vehicles take a growing percentage of the market.
“Chinese companies have been investing heavily in EVA capacity and POE technology to reduce dependence on imported materials and improve supply chain security,” said Shaohua Feng, chemicals analyst at S&P Global Commodity Insights. New materials for wind, solar and battery production provide “huge growth opportunities” for petrochemical firms, he said.
The investment in Zhenhai is worth 38 billion yuan ($5.3 billion), and it includes 18 new projects, including three units with a total capacity of 800,000 tons that deliver EVA and POE, among other compounds. Earlier this month, Sinopec announced a 3 billion yuan investment in a 100,000-ton EVA unit at its Guangdong plant and a 50,000-ton POE unit at its Maoming refinery.