Baofeng Energy Group Commences Building World's Largest Olefins Facility With an Investment of $6.9 Billion

Baofeng Energy Group, a Chinese Coal chemical products manufacturer, has begun building on the world's largest facility for manufacturing Olefins using Green Hydrogen and Coal. Ningxia Baofeng Energy Group Co., Ltd. produces and sells chemical goods. The company manufactures Methanol, Olefin, and Residue Catalytic along with Coal Tars, Petrochemical Oils, and various other products.

The factory in Ordos-China's Inner Mongolia Autonomous Region broke ground earlier this month and told the investors the first phase is expected to be finished by the end of next year.

The demand outlook for Olefins is blooming in the domestic region of China amidst its wide range of applications and increased purchases by the market consumers in the downstream Polyethylene and Polypropylene segment. In a ripple effect, the assessed market discussions for Linear Alpha Olefin C10 blent CFR Nanjing rose by 14.4% and settled at USD 1110 per tonne in February 2023 from USD 970. Again, in March 2023, the prices upsurged by 25% and stood at USD 1395 per tonne. Similarly, the pricing trends of other blends, such as C12-14, C16-18, and C20, inclined by 20-25% in the first quarter of 2023.

The 6.9 billion-dollar project will use Coal and Green Hydrogen as feedstock to reduce Carbon Dioxide emissions, with Oxygen as a byproduct replacing some Coal fuel to reduce energy usage. The company located in Ningxia previously stated that the project could create 3 million tons of Olefins per year (2.6 million tons from Coal and 400,000 tonnes from Green Hydrogen).

In comparison to pure coal projects, Baofeng Energy's 'Green Hydrogen + Coal' projects are predicted to create more than 1.2 million tonnes of extra Methanol, save more than 2.5 million tonnes of Coal, and reduce carbon emissions by an estimated 6.3 million tonnes per year. Meanwhile, the byproduct Oxygen can be added to the gasification unit to reduce the amount of energy consumed in the air separation unit.

According to sources, China's manufacturing capacity of the two most common Olefins, Polyethylene and Polypropylene, climbed 7.7 percent to 65.2 million tonnes last year from 2021. The country's overall output was 54.1 million tonnes, a 6.4 percent increase over the previous year.