Review of the Development of the Desulfurization and Denitrification Industry in 2024

1.1 Main Policies

The government promotes equipment updates and technological advancements within the field. In September 2024, the Ministry of Ecology and Environment announced the "National Pollution Prevention and Control Technical Guidance Catalogue (2024, Restricted and Eliminated Categories)"; In November, the National Development and Reform Commission announced the list of technologies to be included in the "Green Technology Promotion Catalogue (2024 Edition)", covering areas such as dust removal, desulfurization and denitrification, and VOCs treatment.

Coal and electricity upgrading and transformation under the new power system. In June 2024, the National Development and Reform Commission and the National Energy Administration issued the "Action Plan for Low Carbon Transformation and Construction of Coal and Electricity (2024-2027)": In July 2024, the National Development and Reform Commission, the National Energy Administration, and the National Data Administration jointly issued the "Action Plan for Accelerating the Construction of a New Power System (2024-2027)", proposing the "New Generation Coal and Electricity Upgrade Action", with clean and low-carbon, efficient regulation, rapid load change, and start stop peak shaving as the main tasks. Under the new normal, coal-fired power units are facing new working conditions and challenges in flue gas desulfurization and denitrification. Deepen the ultra-low emission transformation of the steel industry. In 2024, the Ministry of Industry and Information Technology issued the "Guidelines for Equipment Renewal and Technological Transformation in Key Industrial Industries" and the "Steel Industry Standard Conditions (Revised in 2024) (Draft for Comments)", proposing to implement a two-level evaluation of "standard enterprises" and "leading standard enterprises" for steel enterprises. "Standard enterprises" require the completion of the entire process of ultra-low emission transformation and public disclosure from 2026 onwards.

The ultra-low emission transformation of the cement and coking industries is fully underway. In January 2024, the Ministry of Ecology and Environment and five other ministries jointly issued the "Opinions on Promoting the Implementation of Ultra low Emissions in the Cement Industry" and the "Opinions on Promoting the Implementation of Ultra low Emissions in the Coking Industry", proposing that by the end of 2025, key regions strive to complete the ultra-low emission transformation of 50% of cement clinker production capacity and 60% of coking production capacity. In June 2024, the Ministry of Ecology and Environment issued a notice on the evaluation and monitoring of ultra-low emissions in cement and coking enterprises, proposing the principle of seeking progress while maintaining stability and prioritizing quality over time, and promoting high-quality ultra-low emission transformation in the cement and coking industries. The China Environmental Protection Industry Association has released the "Technical Guidelines for Ultra Low Emission Control of Coking Enterprises (Draft for Comments)" and "Technical Guidelines for Ultra Low Emission Control of Cement Enterprises (Draft for Comments)" to guide the ultra-low emission transformation work of cement and coking industries in various regions.

The ultra-low emission transformation of coal-fired boilers has been put on the agenda. In June 2024, the Ministry of Ecology and Environment issued the "Opinions on Promoting the Implementation of Ultra low Emissions from Coal fired Boilers with High Quality (Draft for Comments)", targeting the two long-standing difficulties in atmospheric governance, coal-fired boilers and self owned power plants. The renovation work of ultra-low emissions from coal-fired flue gas began to expand to a deeper level.

1.2 Industry Development

2024 is a crucial year for China to deepen its efforts in air pollution prevention and control, as well as an important milestone for the upgrading of the flue gas treatment industry. The effectiveness of the "Action Plan for Air Pollution Prevention and Control" has been demonstrated, and the "14th Five Year Plan" for improving air quality has become more clear; The ultra-low emission transformation plan for key industries has been released, opening up a new battlefield for coal-fired flue gas treatment.

The clean, efficient, and flexible transformation of thermal power is being deeply promoted. In 2023, the total emissions of smoke, sulfur dioxide, and nitrogen oxides from thermal power plants in China were 85000 tons, 484000 tons, and 785000 tons, respectively, a year-on-year decrease of about 14.1%, an increase of about 1.7%, and an increase of about 3.0%. The standard coal consumption for power supply of 6000 kW and above thermal power plants in China was 301.6 g/kWh, a decrease of 17.4 g/kWh from 2014. By the end of 2023, over 95% of coal-fired power units have achieved ultra-low emissions, over 50% of coal-fired power units have deep peak shaving capabilities, and the pollutant emissions in the power industry have decreased by more than 90% compared to 2013.

The increase in installed capacity and the decline in coal prices have boosted the market for coal-fired power desulfurization and denitrification industry. According to the statistics of China Electricity Council, as of the end of September 2024, the installed capacity of full caliber power generation in China is 3.16 billion kilowatts, up 14.1% year on year, including 1.18 billion kilowatts of coal power, up 2.1% year on year. In addition, since 2023, the price of thermal coal has fluctuated downward, coupled with an increase in trading electricity prices for coal-fired power units, which has improved the efficiency of thermal power enterprises and effectively driven the market of related coal-fired flue gas desulfurization and denitrification industries.

The characteristics of the steel industry entering the stage of "stock optimization" are becoming increasingly evident, and the ultra-low emission transformation continues to deepen. As of October 8, 2024, a total of 159 steel enterprises in China have completed or partially completed ultra-low emission transformation and evaluation monitoring. Among them, 114 enterprises have completed the entire process of ultra-low emission transformation, involving a crude steel production capacity of about 517 million tons and an investment of about 470 yuan per ton of steel for ultra-low emission transformation. 45 enterprises have partially completed ultra-low emission transformation, involving a crude steel production capacity of about 152 million tons and an average environmental operating cost of about 230 yuan per ton of steel. In a more intense market competition environment, steel enterprises must seek development through green transformation, explore ways to reduce investment and operating costs in ultra-low emission transformation, and achieve transformation, upgrading, and high-quality development of the enterprise.

The ultra-low emission transformation work in the cement industry has been fully launched. The cement industry is the third largest industry in China in terms of air pollutants and carbon dioxide emissions. Emissions of sulfur oxides, nitrogen oxides, and particulate matter account for 5.6%, 17.1%, 6%, and 19.3% of the country's total industrial emissions, respectively, while carbon dioxide emissions account for approximately 13% of the country's total emissions. Cement companies represented by companies such as Conch and Jinyu are vigorously upgrading and renovating their environmental protection facilities. According to calculations, the comprehensive implementation of ultra-low emission transformation in the cement industry will reduce nitrogen oxide and particulate matter emissions by 500000 tons and 210000 tons, and synergistically reduce carbon dioxide emissions by more than 10 million tons.

1.3 Progress in Key Core Technologies

Low carbonization and flexibility transformation have become the main tasks of thermal power units for a long time to come. Operating conditions such as deep peak shaving and rapid load changes will have an impact on the emission control of flue gas pollutants. In terms of denitrification, frequent peak shaving operation can lead to delayed response of desulfurization devices, which can easily increase energy consumption for environmental protection equipment. In terms of denitrification, low load operation can cause SCR equipment to operate at low temperatures, resulting in a decrease in denitrification efficiency and leading to increased nitrogen oxide emissions, intensified ammonia escape, and air preheater blockage. To solve these problems, technologies such as wide temperature denitrification catalysts, intelligent operation and maintenance of environmental protection facilities, and precise ammonia control have been developed. In addition, under the wave of digitalization, an intelligent low-carbon environmental protection platform that integrates intelligent regulation and precise prediction has become another research and development hotspot.

In terms of steel, sintering production is a key link in the entire steel process with ultra-low emissions. The flue gas desulfurization of sintering machine heads usually adopts lime/limestone gypsum wet desulfurization, circulating fluidized bed semi dry desulfurization, and activated carbon integrated dry desulfurization process technology. According to relevant statistics, the proportion of lime/limestone gypsum wet desulfurization is 47.75%, the proportion of circulating fluidized bed dry desulfurization is 20.78%, the proportion of rotary spray semi dry desulfurization is 10.39%, and the proportion of activated carbon integrated dry desulfurization is 12.87%. The flue gas denitrification of sintering machine heads usually adopts SCR denitrification, activated carbon integrated denitrification or a combination of both process technologies. At present, 82.25% of enterprises in the industry choose SCR technology and 15.66% choose integrated activated carbon technology.

In terms of cement, the ultra-low emission transformation is carried out in an orderly manner, and mature and applicable environmental protection technologies are selected according to the factory's production needs. In terms of source control, cement kilns are equipped with low nitrogen burners and adopt low nitrogen combustion technologies such as staged combustion and fine control of oxygen content in decomposition furnaces. SNCR, SCR and other combined denitrification technologies are used for kiln tail gas, and high-efficiency dust removal technologies such as bag type and electric bag composite are used for dust removal. According to relevant statistics, most of the winning cement ultra-low emission renovation projects in 2024 will use SCR denitrification. The market has an urgent need for flue gas treatment technologies such as SCR denitrification for high temperature and high dust, and high temperature and medium dust.

In November 2024, the National Development and Reform Commission issued the PM for the "Technology Consumption List to be included in the (2024 Edition) Green Technology Promotion Catalogue",; The zero discharge technology and equipment for agglomeration collaborative desulfurization wastewater, as well as the seamless integrated SCR circulating fluidized bed sintering (pellet) full condition ultra-low emission technology for flue gas, have been selected.

Outlook for Development in 2025

As the main industry for coal-fired flue gas desulfurization and denitrification, the installed capacity and power generation of coal-fired power will continue to grow moderately before 2030. According to the China Electricity Council, during the 14th and 15th Five Year Plans, the installed capacity of coal-fired power plants in China will increase by 150 million kilowatts and 0.3 billion kilowatts respectively. By 2025 and 2030, the installed capacity of coal-fired power plants in China will reach 1.23 billion kilowatts and 1.26 billion kilowatts respectively, with the peak of coal-fired power plant installation in 2030. The construction of new coal-fired power plants will drive the supporting construction of ultra-low emission projects. In addition, under the new power system, coal-fired power is transitioning from the main power source to a regulated power source, and low load operation and frequent start stop will become normalized conditions, which puts forward new requirements for the operation of desulfurization and denitrification devices. The ultra-low emission transformation node in the steel industry shows signs of being delayed, and the principle of seeking progress while maintaining stability and prioritizing quality over time is highlighted. In May 2024, the Ministry of Industry and Information Technology released the "Guidelines for Equipment Renewal and Technological Transformation in Key Industrial Industries", which proposed that by 2027, more than 80% of steel production capacity should complete ultra-low emission transformation. Compared to the previous policy document, which proposed to strive for over 80% of the country's production capacity to complete ultra-low emission transformation by 2025, the deadline has been postponed by two years. In November 2024, the Ministry of Industry and Information Technology released the "Steel Industry Standard Conditions (Revised in 2024) (Draft for Comments)", which stated that "standard enterprises" must complete the entire process of ultra-low emission transformation and publicize it from 2026 onwards. Relevant adjustments release a signal from the government that the ultra-low emission transformation work in the steel industry is steadily advancing and time is subject to quality.

The ultra-low emission transformation of the cement and coking industries is similar to that of the steel industry, and the progress of the latter has reference value for the future development of the former. In 2019, the issuance of the "Opinions on Promoting the Implementation of Ultra low Emissions in the Steel Industry" marked the official launch of the ultra-low emission transformation in China's steel industry. Since then, it has gone through two national environmental protection standard amendments, including the "Technical Guidelines for Ultra low Emission Assessment and Monitoring of Steel Enterprises" and the "Emission Standards for Air Pollutants from Steel Sintering and Ball Industry" (GB28662-2012), as well as key policy initiatives such as the "Approval Principles for Environmental Impact Assessment Documents of Steel/Coking Construction Projects" and the "Technical Specification for Ultra low Emission Control of Steel Industry Sintering Waste Gas (Draft for Comments)". At present, the progress of ultra-low emission transformation policies in the cement and coking industries has reached the stage of evaluation and monitoring. With the development of technology and the maturity of the market, the next step may go through the process of revising emission standards, adjusting project environmental impact assessments, and forming technical specifications.

Overcapacity and declining profits have been common challenges faced by the steel and cement industries in recent years. The 2024 Central Economic Work Conference proposed to actively use green technology to transform and enhance traditional industries. In this situation, by establishing a benchmark for green development in the industry through ultra-low emission transformation and adopting differentiated environmental management policies, enterprises with high environmental performance can truly benefit from policy dividends, drive the overall transformation and upgrading of the industry, solve the problem of "bad money driving out good money", and effectively promote the green, low-carbon and high-quality development of the industry.