Hengyi Group's 2.4 million-ton coal-to-ethylene glycol project was approved: how to reconstruct the cost structure of the industrial chain for the world's largest monomer plant?

On December 16, 2025, the Department of Ecology and Environment of Xinjiang Uygur Autonomous Region issued an EIA approval announcement, and the 2.4 million-ton/year high-quality fiber coal-to-ethylene glycol project of Hengyi Energy Technology (Turpan) Co., Ltd. was officially approved. The world's largest single coal-to-ethylene glycol project, with a total investment of 25.7 billion yuan, will be launched in the coal-based new material recycling industrial park in Turpan Economic Development Zone and is expected to be put into operation after a 36-month construction period.

breaking the Bottleneck of Raw Materials in Polyester Industry

zhejiang Hengyi Group has a polyester production capacity of 12 million tons/year. According to the prevailing industry standard (0.35 tons of ethylene glycol is required to produce 1 ton of polyester), the annual demand for ethylene glycol exceeds 4 million tons. The 2.4 million-ton production capacity of the project can meet about 60% of the group's raw material demand, greatly increasing the self-sufficiency rate.

The current domestic supply of ethylene glycol is highly dependent on oil routes and imports. The project adopts the coal chemical route, relying on the lignite resources of Aidinghu mining area, and will form a full chain closed loop of "coal mining-synthesis gas preparation-ethylene glycol production-polyester manufacturing. This layout not only avoids the risk of international crude oil price fluctuations, but also takes advantage of Xinjiang's coal price advantage (long-term lower than the eastern region) to achieve structural cost reduction.

Technical route and device configuration

the project adopts the process route of "coal gasification-CO/H? separation-dimethyl oxalate method". The core equipment includes: 4 sets of 3000-ton/Japan Airlines Tianmaimei furnace gasification system (4 sets are not ready for operation),2 series of conversion and low-temperature methanol washing and purification units (using Dalian Institute of Technology technology),4 series of dimethyl oxalate and ethylene glycol units (single series capacity 600000 tons), supporting 40000 tons/year synthetic ammonia, 30000 tons/year nitric acid and 3 sets of 105000 cubic meters/hour air separation units.

The complete process technology and proprietary catalyst for ethylene glycol are provided by Shanghai Pujing Chemical, and the engineering design is undertaken by China Chengda Engineering Co., Ltd. From October 22 to 23, 2025, the project process package opening meeting has been held in Chengdu, marking the official start of the project design.

regional differences in raw material costs

xinjiang is rich in lignite resources and low mining costs, coupled with localized production can save long-distance logistics costs. Compared with the petroleum route ethylene glycol (raw material cost accounts for about 70%), the comprehensive cost advantage of the coal route in Xinjiang is obvious. Although the initial investment in coal chemical industry is high (the environmental protection investment of this project is 1.55 billion billion yuan, accounting for 6.03 of the total investment), the unit product cost is competitive after large-scale operation.

Potential impact on the industry landscape

the annual output of the project is 2.4 million tons of polyester-grade ethylene glycol, 52000 tons of ethanol, 76000 tons of dimethyl carbonate, 32000 tons of sulfur, 28000 tons of liquid ammonia and 24500 tons of nitric acid (50% concentration). The concentrated release of such large-scale production capacity will have a significant impact on the supply and demand pattern of the domestic ethylene glycol market.

At present, the domestic ethylene glycol industry presents a pattern of "oil route leading, coal chemical route supplement. After the project is put into production, Hengyi Group will have a complete right to speak from raw materials to terminals, and its bargaining power in the polyester industry chain will be greatly enhanced. For other polyester companies that rely on outsourced ethylene glycol, cost pressures may intensify.

the project is located in the coal-based new material recycling industrial park in Turpan Economic Development Zone, which is in line with the national "Western Development" and Xinjiang industrial structure optimization policy guidance. Through the local transformation of resources, it not only extends the coal industry chain, but also provides stable raw material guarantee for the downstream chemical fiber industry.

The supporting construction of the synthetic ammonia unit not only provides raw materials for nitric acid production, but also can be used as the denitration agent of the project itself, forming an internal cycle. The sulfur recovery process uses three-stage conventional Claus technology to convert sulfur elements in coal into industrial sulfur by-products, reflecting the concept of circular economy.

the layout of Hengyi Group reveals three major trends: first, polyester leading enterprises are accelerating their extension to the upstream raw material side to hedge market fluctuations through vertical integration; Second, the maturity of coal chemical technology has increased, making large-scale application possible. Third, Xinjiang is becoming the undertaking place of coal-based chemical industry by virtue of its dual advantages in resources and policies.

For chemical traders and supply chain practitioners, it is necessary to pay attention to the impact of the concentration of coal-to-ethylene glycol capacity on the market pricing mechanism. For polyester producers, it is necessary to re-evaluate the raw material procurement strategy and find a balance between the oil route and the coal chemical route. The project is expected to start production in 2028-2029, when the ethylene glycol market competition pattern may be reshaped.