[Industry Focus]：Structural Transformation of China's Chemical Industry, Seeking Breakthroughs in Restrictions and Opportunities

On December 27, 2023, the National Development and Reform Commission released the latest version of the "Industrial Structure Adjustment Guidance Catalogue (2024 Edition)", which was revised to a certain extent on the basis of 2023. As an important policy document to guide the development direction of my country's chemical industry, the "Industrial Structure Adjustment Guidance Catalog" has a clear policy orientation for the subdivision of the chemical industry. At the same time, the catalogue also defines the relevant provisions of the "encouraged", "restricted" and "eliminated" chemical industry, providing an important policy reference for policy approval, industry trends and project consultation. Within China, the implementation of this catalogue is of great significance for optimizing the industrial structure, promoting industrial upgrading and promoting sustainable economic development.

Table 1 Comparison of differences between the Guiding Catalogue of Industrial Structure Adjustment (2024 Edition) and 2023

data source: Petrochemical Federation Light Hydrocarbon Aromatics Special Committee.

First, new materials products related to new energy are rapidly entering the market.

In the 2024 edition of the "Industrial Structure Adjustment Guidance Catalogue", we saw a series of emerging fields being included in encouraged chemical projects, including the development and production of new dyes, pigments, printing and dyeing auxiliaries and intermediates required in the fields of light diagnosis and treatment, photoresist, liquid crystal display, photovoltaic cells, stock solution coloring, digital inkjet printing and functional chemical fiber dyeing. To a large extent, these new material products represent new energy-related new material products, such as photovoltaic cells, photoresist, liquid crystal display and functional chemical dyeing fibers.

With the vigorous development of the new energy industry, it has become an important driving force for the development of China's chemical industry, leading the upgrading and transformation of China's new material industry. The rise of the new energy industry has led to the continuous innovation of the new material industry. The country must keep up with the development trend of this industry, especially for the emerging new material products, and give policy support and encouragement. Therefore, the high-frequency release of the "Industrial Structure Adjustment Guidance Catalog" is a timely response to the rapid development of the chemical and new material industries, aiming to guide and promote the transformation and upgrading of the industry and sustainable development.

Second, the structure of China's chemical industry is undergoing rapid transformation.

In the newly released 2024 edition of the "Industrial Structure Adjustment Guidance Catalog", we have seen that many chemical industries have been included in the restricted development items, including "chlorine", "coking", "caustic soda", "phosphorus", "Roasting", "printing and dyeing" and other high energy consumption, high pollution, high resource industries related projects. The expanded scope and content of these restrictions indicate that the Chinese government is increasing policy restrictions on these projects to improve environmental standards and promote the green transformation of the chemical industry.

China's chemical industry has long been the problem of high pollution, high emissions and high energy consumption, which has obvious development limitations compared with other industries. However, starting from 2019, the country's policy requirements for these high-polluting and high-emission industries have gradually become clear, and gradually shifted from restrictions to elimination. Relevant powerful enterprises have made structural adjustments to meet the new development requirements.

With the improvement of national environmental protection requirements and the rapid development of the new energy industry, chemical enterprises need to accelerate technological innovation, industrial chain refinement extension and new energy related chemical transformation and other aspects of change. Only in this way can we conform to the tide of the times and remain invincible in the fierce market competition.

Third, with the gradual expansion of restricted development projects, heavy chemical enterprises need to transform as soon as possible.

In the newly released 2024 edition of the "Industrial Structure Adjustment Guidance Catalog", we noticed that there are seven changes involving restricted chemical projects. The scope of these restricted projects is constantly expanding, and the content is also increasing, indicating that the national policy is making a fundamental change in the development attitude of the traditional chemical industry. In the past, the chemical industry was often accompanied by high energy consumption and high pollution emissions. Although the country has promoted technological progress in recent years and many companies have made obvious changes, the essential characteristics of the chemical industry are still difficult to change.

However, with the rapid development of the new energy industry, the new chemical industry has shown explosive growth driven by new energy. This not only provides new ideas and directions for the adjustment of chemical policies, but also prompts many chemical companies to seize the development opportunities of new energy and achieve rapid transformation and upgrading. Judging from the current situation of the chemical industry, chemical policies and industry development trends have complied with this prediction, which is also the inevitable direction of the development of China's chemical industry. For those heavy chemical enterprises that have not yet changed, they will face great challenges under the wave of new energy chemical development, and may even be "reverse swallowed". Therefore, heavy chemical enterprises need to take action as soon as possible to adapt to the new development environment and seize market opportunities through technological innovation, industrial chain extension and new energy transformation.

Fourth, in the context of the approaching carbon peak target, the chemical industry is facing "peak" pressure.

As the carbon peak deadline approaches in 2030, the chemical industry is facing increasing pressure. Although the oil refining and ethylene industry has a clear scale requirements, but because the chemical industry covers many areas, its complexity is self-evident. Therefore, it is not possible to formulate specific peak policies for each industry. This requires development restrictions at the macro level to gradually reduce the pressure on the chemical industry before reaching its peak.

In this context, chemical enterprises must take action as soon as possible, especially in the aspects of technological innovation, fine extension of industrial chain and chemical transformation related to new energy. Otherwise, they will face tremendous development pressure and may even miss market opportunities. Therefore, it is very important for chemical enterprises to adapt to the new development requirements and seize the market opportunities.