1. Coal to Chemicals and Petrochemicals -An efficient way of monetising coal to meet Indian Chemical demand
Sept 2017

2. India Chemicals & petrochemicals Scenario
India Chemical and Petrochemical Imports
($ billion)
Chemicals:
India's chemicals demand growth is forecasted at %.
In , India has imported USD 40 billion worth of chemicals.
In 2025, the imports would reach to more than USD 100 billion
136 53
Petrochemicals
In , India imports stand at USD 13 billion.
In 2025, the imports would reach to ~ USD 32 billion.
Forecasts show that India’s import dependency would rise from 45% in 2013 to 75-80% in 2025
Source: Chemicals and petrochemicals statistics & McKinsey report on Indian petrochemicals
For chemicals and petrochemicals, Impors CAGR is assumed 10% considering no/minimal capacity addition

3. China’s reliance on Coal Gasification
Sector-wise coal consumption
Coal to Poly-generation plan in China
Product
Production in 2015, Mt
Exp. production in 2020, Mt
Methanol 34 66
LPG 4 5
DME 12 20
Olefin 15
Ethylene glycol
1.7
n/a
Oil products
2.4 30
Urea 60
China relies heavily on gasification technology to meet Fertilizer, Energy and Petrochem needs
Around 500 MT of coal is being gassified annually by China to produce valuable chemical & fertilizer products
China clearly demonstrates the advantages of this technology for utilizing domestic energy sources to produce valuable products like chemicals & Fertilizers
Source: Sector wise coal consumption from Wison, NRDC China Plan

5. India is dependent on imports, some requiring more than 50% Imports
Domestic
Import dependency
2010 Inner ring
2025 outer ring
Historical data: Ministry of petrochemicals Report & MOFC
Demand projections : ICIS future outlook report

6. Economics support coal-to-chemical conversion
Coal to Chemical conversion is very attractive use of Indian coal
Value addition per ton of coal
Value addition to the coal is defined as the net value added to the coal in the manufacturing process.
Urea adds more value to coal than any other products
Methanol & Methanol derivatives also seems attractive
Value addition to Coal through Chemicals is attractive compared to power
Source: Internal estimates

7. Exploitation of coal for Indian Chemical needs
Key Chemicals
Demand gap by 2025
(MMTPA)
Coal required for chemical production (MMTPA)
Acetic acid
1.1 7
Methanol*
4.2 20
MEG
1.4 8
PVC
3.7 11
Poly-Olefins
7.0 87
DME*
2.3
4.8
Total
19.6
138
Coal to Chemicals sector could be frontrunner in utilisation of untapped coal reserves
Coal requirement calculation is based on Indian Coal of GCV 3300 Kcal/kg and 45% Ash
Demand supply gap taken from ICIS database.
*Assumed 5% of Methanol blending will be by Govt. DME as replacement of LPG and 5% blending in diesel would also be allowed by Govt

8. Intune with the demand gap of various chemicals by 2025 – Three Coal to Chemical clusters can be planned at mine pithead in coal rich states - Odisha, Jharkhand and Chhattisgarh

9. Syngas Network
The syngas produced from coal gasification can be distributed to Industrial/Domestic users using a syngas pipeline network.
Europe has developed and successfully operating such syngas networks.
Air Liquide has the following network in Antwerp (Belgium) and Rotterdam (Netherlands) and Most of them are laid Underground.
Type of Network
Length (KM)
Flowrate
(Nm3/Hr)
User
H2 Pipeline 35
1,35,000
Neste Oil
CO Pipeline 10
10,000
BASF, Bayer
Syngas pipeline 15
(6-8 ’’ dia)
30,000
(30 barg)
Exxon Mobil
India too can explore the option of building syngas network infrastructure at mine mouth and coastal location

10. Europe Syngas Pipelines
Antwerp - 1 M dia. H2 pipe

11. Advantages of Coal to Chemicals
Can boost the coal production of the country and save coal mining jobs.
Reduce the annual import bill in key chemicals & create energy security
Coal to chemicals offers the cheapest and best indigenized solution compared to other feedstock like Natural Gas & Naphtha
Higher value addition to coal as compared to many of its other current use.
Substantial Employment generation and revenue to both State & Central Govt.in terms of taxes and duties over the life of the project
Would attract a great deal of further investment in the downstream chemical sector
Coal to Chemical Clusters at coal pit-heads can boost coal production as well as bring regional economic prosperity

12. Steps required to catalyse Coal to Chemicals in India
Feedstock Security : Coal Block allocation for Coal to Chemicals
Feedstock Price:
Exemption of Clean Energy Cess - Gasification is a Clean Technology
Notifying Coal price similar to that of Power plant use
De-risking Investment: Capital Subsidy from Clean Energy Cess collected