Sail across the sea

Chapter 567 This is an international obligation
"My biggest flaw is that I'm too good."

Gao Fan shamelessly gave a self-evaluation.

This is ridiculous! You made me protect rare earth elements first, and now you're making me protect fluorite. Shouldn't this be the job of your geological department? Why should I, a small capitalist, do it?

Do I owe your geological department something?

It seems... I really do owe something.

Gao Fan decided not to dwell on the issue and continued, "Since both the Ministry of Geology and Mineral Resources and the Ministry of Chemical Industry have this idea, then it's simple. The State Economic Commission can step in and work with the Ministry of Geology and Mineral Resources and the Ministry of Chemical Industry to propose export quotas for fluorite. That shouldn't be difficult, right? As for export prices, the Ministry of Foreign Trade should also take action and set a minimum price, for example, no less than 80% of the transaction price in the US market. That's not an unreasonable request, is it?"

"We still need to negotiate with the Ministry of Foreign Trade, the Ministry of Finance and other departments on this matter. Our country is currently facing an extreme shortage of foreign exchange. If export quotas affect foreign exchange earnings, it will be very difficult to get past the Ministry of Finance."

“You can tell the Ministry of Finance that restricting fluorite exports is precisely to increase export earnings. It’s the same principle as rare earths. The more raw materials we export, the lower the production costs for foreign companies, and the weaker our competitiveness in the finished product market. By reducing fluorite exports and increasing exports of hydrofluoric acid, F22, and polytetrafluoroethylene, the same amount of resources can generate dozens of times more foreign exchange earnings after deep processing. Why not?”

Fluorochemical products are numerous, but the main industrial chain involves producing hydrofluoric acid from fluorite, and then producing fluorocarbons from hydrofluoric acid. This includes many products, the most important of which is dichlorofluoromethane (CFM), abbreviated as F22, which is one of the most widely used refrigerants and is also known as Freon 22, HCFC-22, etc.

F22 can also be used as a raw material for the production of polytetrafluoroethylene (PTFE), which was once known as the "King of Plastics" due to its advantages such as corrosion resistance, resistance to extreme high and low temperatures, ultra-low coefficient of friction, good insulation, and strong chemical stability. It is the most widely used fluoropolymer.

时下，国际市场上一吨萤石的价格是100美元。加工后可得到0.4吨无水氢氟酸，价值600美元。再加工成0.8吨F22，价值1800美元。最后加工成0.3吨聚四氟乙烯，价值3000美元。

Gao Fan said that the same amount of resources can generate dozens of times more foreign exchange earnings, which is based on this calculation.

"Are you confident that you can increase the export of these fluorine products?" Xu Ying asked.

"You summoned me here just for this, didn't you?" Gao Fan shrugged, indicating that he was innocent.

Xu Ying smiled, but at the same time felt a little embarrassed. After all, as a high-ranking official and an elder, it was really inappropriate for her to scheme against a junior like this.

She said, "Xiao Fan, I've always known you have a talent for chemical engineering, and Canghai Chemical has always relied on technology to succeed. The main problem in the domestic fluorochemical industry right now is the backward technology and low product competitiveness."

"The import and export prices of hydrofluoric acid can differ by more than three times. According to the Ministry of Chemical Industry's calculations, processing fluorite into hydrofluoric acid domestically and then exporting it is even less profitable than exporting fluorite directly. This is because the domestic hydrofluoric acid production technology is too low, resulting in a lot of waste and low selling prices."

"After thinking it over, I feel that you're the only one who can solve this problem. I really don't trust anyone else to do it." Gao Fan said, feigning frustration, "I thought Aunt Xu would immediately think of me, but it turns out she had to think it over and over before she thought of me. Am I really not good enough?"

Xu Ying laughed in exasperation at Gao Fan's words. Pointing her finger at Gao Fan's head, she said, "You really don't appreciate kindness. When the Ministry of Geology and Mineral Resources and the Ministry of Chemical Industry submitted this issue, of course I immediately thought of you. Besides, they specifically asked you to come out of retirement."

"The reason I hesitated was because I was weighing the pros and cons, and I was afraid that putting this burden on your shoulders would put you in a difficult position. I thought about it for a long time before I made up my mind, but you didn't appreciate it at all."

"I see, thank you Aunt Xu. I knew Aunt Xu was the best to me." Gao Fan quickly flattered her, knowing that his mother-in-law was not someone he could easily offend.

Xu Ying ignored Gao Fan's nonsense and said, "You just said you wanted to restrict the export of fluorite, that's just your first demand. Go on, what other demands do you have?"

Gao Fan said, "The second requirement is of course to force the elimination of outdated production capacity. By the way, we can use the name of the Montreal Agreement to say that this is an international obligation and there is no room for negotiation."

The Montreal Protocol, also known as the Montreal Protocol on Ozone-Depleting Substances (ODS), was amended and joined by China in 1991. It stipulates that all countries in the world should gradually reduce the production of chlorofluorocarbons (CFCs).

The first to be affected are chlorofluorocarbons, such as R11, R12, and R113, which are collectively abbreviated as CFCs.

F22 belongs to hydrochlorofluorocarbons, abbreviated as HCFCs. They have a relatively low impact on the ozone layer and are used as a transitional alternative, but will eventually need to be phased out.

The ultimate goal set forth in the Montreal Protocol is to use hydrofluorocarbons (HFCs) that are completely free of chlorine as refrigerants.

In 1991, developed countries were at the height of their power, unlike 30 years later when they were declining and filled with resentment. In the Montreal Protocol, developed countries generously agreed to take the lead in fulfilling their obligations under the agreement, allowing developing countries a relatively long buffer period.

Developed countries' voluntary abandonment of CFC production provided a brief market opportunity for companies in developing countries. From 1991 to 2000, China's CFC production increased from 25,000 tons per year to 40,000 tons, while imports decreased from 20,000 tons per year to zero—but that's another story.

According to the requirements of the Montreal Protocol, China actually has some room for maneuver in phasing out CFCs production capacity. However, Gao Fan's current suggestion is to use the protocol as a pretext to force the elimination of small CFCs production enterprises in China that are technologically backward and wasteful, while accelerating the production of new refrigerants, namely HFCs. This is an act of using the protocol as a pretext to make a big deal out of nothing.

Xu Ying said, "This matter cannot be rushed; it can only be done step by step. The strength of the Economic Commission's push depends on whether you can overcome the obstacles in the process. For example, the Yanxiu Refrigerant Plant has received more than 200 million yuan in investment from Yanxiu County. If the Economic Commission were to shut it down with a single notice, the Yanxiu County government would definitely not accept it."

“I understand. Isn’t it just about using economic means to regulate things?” Gao Fan said. “I’ll go back to Maolin tomorrow to negotiate a price with the Yanxiu County government. If they’re not particularly greedy, I can guarantee they’ll get back a money tree that can lay golden eggs.”

(End of this chapter)