China Fluoride Materials Monthly Report

In Nov. 2014, the FECO released an announcement, approving 9 enterprises for their applications on the 2014 difluorochloromethane (R22) production quota transactions.

Besides, the FECO announced the first batch of enterprise list concerning the shutdown of R22 production lines in China in Sept. 2014. The shutdowns of the production lines will equivalent to reduce the total production quotas of R22 in China in 2015 by over 30,000 tonnes.

However, CCM learns that some downstream deep-processing enterprises of fluorochemical industry are building their R22 (as raw material) projects mainly because the current production quota only targets R22 used as refrigerants rather than that as raw materials. For example, tetrafluoroethylene and hexafluoropropylene, are produced by R22 (as raw material), then processed into new fluorine-enriched refrigerant and other fluoropolymer such as polytetrafluoroethylene and fluororubber.

It is disclosed that the total production capacities of the completed projects in Shandong Province, Fujian Province, Jiangsu Province and Jiangxi Province have reached 100,000 t/a.

Meantime, those enterprises also appeal to FECO to loosen the approvals of new R22 (as raw material) projects since this kind of R22 projects should pass strict approvals from FECO before launching EIA. And it will again put on record to FECO after passing through the EIA.

Newly constructing with simultaneously elimination in R22 projects, the topic of whether the newly added production capacity for R22 (as raw material) should be released has become a hot issue in China’s fluorochemical industry. For this topic, CCM learned that supporters and opponents both exist in the industry.

Some supporters hold the views that since relevant policies do not make official restrictions on the R22 (as raw material), it is understood that enterprises newly construct R22 projects to meet the downstream demand. In order to satisfy the needs of new production capacity, related departments should loosen approvals on new R22 projects.

However, the opponents stated that since now the elimination work on R22 (as refrigerant) is at initial stage and the supervision on R22 (as raw material) is encountering difficulty, complexity and uncertainty, loosening R22 approval will not only increase the elimination pressure, but also enhance the risks of implementing the Montreal Protocol on Substances that Deplete the Ozone Layer. What’s more, this will bring negative impacts on China’s international image.

The RMB/USD exchange rate in this issue is USD1.00=RMB6.1525 on 3 Nov., 2014, sourced from the People's Bank of China. All the prices mentioned in this newsletter include the VAT unless otherwise specified.

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