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[International Petroleum Network] High consumption of oil industry carbon reduction pressure
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"Oil is currently the largest fossil energy source in the world and the second largest in our country after coal. The central government recently issued a series of "dual carbon" documents, emphasizing the need to regulate oil consumption, energy-saving and carbon reduction measures for key energy-consuming sectors. Among them, transportation, petrochemical and chemical industries are major consumers of oil and major sources of carbon emissions. Oil consumption in all of these industries has continued to grow in recent years, which poses challenges for carbon reduction efforts. As a result, there is a need to transform both the consumption and production ends of oil." Yang Lei, deputy dean of the Energy Research Institute of Peking University, pointed out at the third international Seminar on crossing the Petroleum Age recently.

In the view of many participants, accelerating the transition from energy consumption to new energy in transportation, petrochemical and chemical industries is an important path to achieve the goal of reducing oil consumption and achieving peak carbon neutrality. It is also of great significance to promote the high-quality development of the industry.

Transportation sector oil can reach peak in 3 years

Data show that China's oil consumption has been on a continuous growth trend in the past decade, rising from about 430 million tons in 2010 to nearly 700 million tons in 2020. Of this, domestic production has been around 200 million tons, while imports have risen from about 240 million tons in 2010 to about 530 million tons in 2020. The increase in consumption is mainly met by imports. This has increased China's dependence on foreign oil from about 54 percent a decade ago to more than 70 percent now.

"According to our latest analysis, oil consumption could peak in 2025 at around 730 million tonnes or less under effective total oil consumption controls. From 2025 to 2035, China will gradually reduce its dependence on foreign oil and achieve complete self-sufficiency by 2050." "The issue of oil-related energy security is not only about reducing external dependence, but also about ensuring the stability and security of the entire energy system during the transition to new energy sources," said Zheng Ping, director of the Climate Change and Energy Transition Program at Peking University's Institute of Energy Studies.

Many participants pointed out that road transportation and petrochemical chemicals are the main areas of oil consumption in China, and the direction of low-carbon transformation in transportation has been relatively clear.

"The transportation sector accounts for nearly 60 percent of China's oil consumption, so it is particularly important to analyze the factors affecting the transportation sector." "The most important thing in the transportation sector is alternative solutions, replacing traditional fuel cars with electric and new energy vehicles," Zheng said. In the last five or six years, the world and China's new energy vehicles are growing, and China's market share accounts for almost half of the world. "With the acceleration of alternatives such as electric vehicles, we expect to peak in 2023-2024 for road transport, leaving more room for petrochemicals and other sectors."

Petrochemical and chemical industries face challenges in low-carbon transformation

The direction of low-carbon transformation in transportation is clear, but the petrochemical and chemical industry still faces challenges.

Wang Min, senior engineer at the Petroleum and Chemical Industry Planning Institute, said, "The petrochemical and chemical industry is a typical manufacturing industry with a long industrial chain and a wide variety of products. Most of its energy consumption comes from fossil fuels such as natural gas, coal and oil, as well as a small part of non-fossil fuels. It is an industry with high energy consumption and carbon emissions. Therefore, the reduction of energy consumption in the petrochemical and chemical industry plays an important role in energy conservation and emission reduction in the whole society."

"The energy consumption in the petrochemical and chemical industry can be divided into two parts. One is the energy consumption caused by the use of raw materials, that is, the energy consumption caused by the loss of raw materials in the process device when using fossil energy as raw materials for processing. The second is the energy consumption caused by the use of fuel and power, that is, fuel, steam, electricity and other energy provided by engineering auxiliary facilities other than process devices in the process of processing. While these consume energy, they also produce a lot of carbon emissions. So grab both." Min said.

In 2018, the petrochemical and chemical industry consumed 690 million tons of standard coal, accounting for 16.9 percent of the country's total energy consumption and 25.7 percent of all industrial energy consumption, according to the National Bureau of Statistics. Of this, 260 million tons of coal, 620 million tons of crude oil, 51.3 billion cubic meters of natural gas and 594.9 billion KWH of electricity were consumed, accounting for 6.5%, 98.4%, 18.2% and 8.3% of the total consumption of the whole society respectively. Crude oil is the main energy consumption of the chemical industry.

"At present, China's per capita consumption of chemical products is relatively low, the demand of the chemical consumer market is growing fast, and there is a lack of low-carbon alternatives. It is difficult to make the transition, which is not only faced by China, but also in the world." Yang Lei pointed out.

We will promote integration of the whole industrial chain with new energy

It is worth noting that the recently held Central Economic Work Conference pointed out that new renewable energy and raw material energy consumption will not be included in the total energy consumption control, and that conditions should be created for the early realization of the dual control of energy consumption to the dual control of total carbon emissions and intensity.

In Wang Min's opinion, for the petrochemical and chemical industry, energy conservation and emission reduction will be more accurate in the future. "The chemical industry has been calling for feedstock energy not to be counted as energy consumption. Because a large part of the processing of fossil materials is transferred to the final product, at least this part is not accounted for energy consumption. It is good to distinguish the energy consumption of raw materials from that of fuel, and shift from 'double control' of energy consumption to 'double control' of carbon emissions. In the future, the work of energy conservation and emission reduction in the petrochemical and chemical industry will be more precise and accurate."

"However, our ultimate goal is to achieve peak carbon neutrality, and the chemical industry still faces great pressure under the 'dual control' goal of carbon emissions." Wang Min pointed out, "Raw material energy consumption is not included in the energy consumption, but in the process of turning raw materials into products, a lot of energy consumption is lost, and most of this energy consumption is also turned into carbon dioxide emissions. In other words, although raw materials are not included in the energy consumption, the carbon emissions caused by the loss of raw materials still exist, which should be taken seriously."

In this regard, Wang Min proposed that the petrochemical chemical industry should be deeply integrated with new energy. "One is to build on the momentum and adopt new energy distributed generation or purchase green electricity to solve the energy consumption caused by fuel and power. However, this does not mean to build a large number of fossil energy power plants, but to increase the proportion of new energy generation from the power generation side. Second, strengthen the process, give priority to energy conservation, and improve their own energy conservation and emission reduction level. The third is deep decarbonization to solve the energy consumption caused by raw materials. This is the ultimate energy saving and carbon reduction path for the chemical industry, such as actively replacing fossil raw materials with green hydrogen."