Chinese alkylation industry faces headwinds

摘要

Beijing’s roll-out of new road fuel standards next month is expected to be a boon for China’s growing alkylation sector. But its longer-term future is at risk from refnery integration, gasoline oversupply and a shift to low-emission vehicles. The country’s alkylation industry uses etherifed butane, which is mainly iso-butane and butylene, as feedstock to produce alkylate — a premium gasoline blendstock owing to its high octane rating and lower emissions. The country is to implement the frst phase of its China VI road fuel standards in July, and a second phase from July 2023. Similarly to the EU’s Euro VI standards, these will require reduced olefns, aromatics and benzene in gasoline. Alkylate’s comparatively low content of these substances, as well as its high octane rating and lower emissions, mean it is expected to be in even higher demand from next month, with no upper limit set in China on how much can be used in the gasoline blend. Around 8-10pc of gasoline produced in China last year was alkylate, Argus estimates.