Doing a Solid Job of Energy-Saving--Energy Saving Publicity Week Interview with President of China Petroleum and Chemical Industry Association Li Yongwu

During the Energy Saving Week, reporters had the opportunity to interview Li Yongwu, President of the China Petroleum and Chemical Industry Association, regarding how to achieve the energy-saving goals set during the "Eleventh Five-Year Plan" period and how the industry can take on the critical task of both producing and conserving energy. Reporter: Could you explain the significance and importance of energy conservation for the petroleum and chemical industries? Li Yongwu: For the oil and chemical sectors, energy is not only a fuel and power source but also a raw material in production. As such, these industries are major energy consumers. Annually, they account for about 17% of the country’s total energy consumption. In terms of cost structure, energy costs make up a significant portion—typically 20% to 30% for most products, and as high as 60% to 70% for energy-intensive ones. In 2004, the sector consumed 279.218 million tons of standard coal, with the chemical industry alone using 213.441 million tons. The oil and gas extraction industry used 36.277 million tons, and the refining sector used 30.6 million tons. Despite this, the industry generated an added value of 764.65 billion yuan, with an energy consumption of 3.65 tons of standard coal per million yuan of output. Thus, energy conservation holds special importance for the industry. It is not just vital for the sector itself, but also essential for its long-term sustainable development. Reporter: According to statistics, China's overall energy efficiency is around 33%, which is about 10% lower than that of developed countries. What are the main gaps in our energy-saving efforts? Li Yongwu: One key issue is the energy structure. China's chemical industry relies heavily on coal and coke, while developed countries primarily use petroleum and natural gas. This leads to lower-quality energy consumption and reduced efficiency. There are also structural challenges, including a large number of small and scattered enterprises that struggle to achieve economies of scale. Currently, 95% of chemical companies are SMEs, and many facilities do not reach economic production scales. For example, the average size of caustic soda plants in China is less than 30,000 tons per year, compared to 580,000 tons in the U.S. Similarly, the average PVC resin production capacity in China is 25,000 tons annually, while in developed countries it ranges from 150,000 to 200,000 tons, with some reaching over 635,000 tons. Additionally, product structures are not well-aligned with market demands. High-energy, low-value products dominate, while high-end, value-added products remain underrepresented. This imbalance leads to oversupply in some areas and reliance on imports in others. Reporter: The "Energy-Saving Medium- and Long-Term Special Plan" announced in 2005 aimed to save 38 million tons of oil during the "Eleventh Five-Year Plan." What efforts are needed to meet this goal? Li Yongwu: We need to focus on four key areas. First, we should promote key energy-saving projects such as oil conservation, cogeneration, and waste heat recovery. We must raise awareness and encourage active participation across the industry. Second, we should coordinate with professional associations and energy-saving organizations to identify and promote efficient technologies and equipment. We also need to establish energy efficiency standards and improve relevant laws and regulations. Third, we should introduce energy efficiency benchmarks and create reward and punishment mechanisms. Encouraging the adoption of energy-saving technologies will help reduce resource use. Finally, we should leverage the association’s influence to advocate for national funding and loans dedicated to energy conservation and emission reduction in the sector. Reporter: What specific measures has the China Petroleum and Chemical Industry Association taken recently in energy conservation? Li Yongwu: First, we have been conducting energy consumption accounting and reduction in industries like calcium carbide and fertilizers, encouraging companies to adopt energy-saving practices. We also promote energy-saving product certification and recognize those that meet or exceed standards. Second, we collaborate with universities and research institutions to implement energy-efficient technologies in sectors like fertilizer, chlor-alkali, and rubber. Third, we are promoting alcohol ether fuels and researching non-food ethanol production. We're also exploring the potential of dimethyl ether as a clean fuel. Lastly, we are working with the Beijing Olympic Organizing Committee to pilot new fuel technologies in Beijing, aiming to reduce vehicle emissions and improve fuel efficiency.

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