China achieves industrial-scale production of POE

China has successfully achieved industrial-scale production of polyolefin elastomer, a breakthrough that significantly bolsters the nation's supply chain sovereignty in the renewable energy and electric vehicle sectors while dismantling a long-standing "chokehold" on critical high-tech materials.

The Dushanzi petrochemical plant, a subsidiary of the State-owned China National Petroleum Corp and located in the Xinjiang Uygur autonomous region, produced nearly 60,000 metric tons of POE in 2025.

The milestone was achieved using a domestically developed gas-phase polymerization process, the company announced on Monday, marking the first successful industrialization of this technology in China.

Often referred to as "industrial gold," POE is a high-performance material that combines the processability of plastic with the high elasticity of rubber. It is an essential component in the manufacturing of photovoltaic modules, lightweight automotive parts and high-end packaging.

Industry analysts expect this surge in domestic production to stabilize supply chains for the renewable energy sector and significantly lower the cost of high-efficiency N-type solar modules, further cementing China's lead in the global energy transition.

The industrial-scale production of POE represents a strategic shift from high-tech dependency to supply chain sovereignty in the renewable energy sector, they say.

China used to face high technical barriers and rigorous process controls, leaving the market heavily dependent on foreign suppliers, with import dependency for POE remaining as high as 95 percent through the first three quarters of 2025, according to Hua Wei, head of the Chemical Industry and Engineering Society of China.

In recent years, China's chemical industry has transitioned from a phase of quantity-driven growth to one focusing on quality enhancement with technological innovation and industrial transformation, he said.

International trade frictions have, to some extent, increased costs for chemical enterprises. Under these circumstances, driving technological innovation and a green, sustainable transition is the inevitable path for corporate survival and development, he said.

The growth of various emerging fields, such as new energy vehicles, energy storage, and life sciences, has generated robust demand for advanced chemical materials.

This means that the industry's future business opportunities lie in utilizing technological innovation across catalysts, processes, reaction engineering, and equipment manufacturing to develop products that meet these specific downstream demands, he added.

Against the backdrop of the global dual transition toward carbon neutrality and digitalization, Asia is not only the world's largest market for chemical production and consumption but is also emerging as a critical testing ground for innovation in sustainable chemical production.

Despite holding the world's largest capacity for standard chemical products, China faces a critical structural gap in high-end chemical materials, which are increasingly vital for the development of its strategic emerging industries.

Maximilian Butek, executive director of the German Chamber of Commerce in China, said earlier that it was primarily European and US firms that brought technology to the Chinese market years ago.

Today, an increasing number of Chinese enterprises and local talent are leading technological innovation in the global chemical and manufacturing industries, he said.

An increasing number of global chemical giants are shifting their market focus in China to high-tech new material research and development, to fuel the industry's robust and ecologically sustainable growth in the country.

With the technology now verified, CNPC is accelerating the formation of industrial clusters. Several other POE projects are currently under construction, with the company's total annual capacity expected to exceed 300,000 tons by the end of 2026, it said.

The achievement is part of Petro-China's broader new materials acceleration project, it said.

Since the start of the 14th Five-Year (2021-25) period, the group has pivoted toward high-value-added chemicals, maintaining a growth rate of over 50 percent in new material output for four consecutive years.