Construction has begun on the world's first large-scale project to produce alkene, or olefin, using green hydrogen in Ordos, Inner Mongolia autonomous region, Ningxia Baofeng Energy Group announced on Wednesday.

The first phase, with a total investment of 47.8 billion yuan ($7.1 billion), is expected to be completed and put into operation in 2024.

It is also the world's largest coal-to-olefin project, with an annual alkene production capacity of 2.6 million tons from coal and 400,000 tons from green hydrogen — produced from clean energy, including solar and wind sources.

Alkene is one of the most basic raw materials in the chemical industry. It can be used to make polyolefin and synthetic rubber, which is widely used in packaging, furniture, household appliances, automobiles, aerospace and other fields. Currently, it is mainly obtained from naphtha, coal, and gas.

In this project, green hydrogen will partly replace raw coal to be added into the methanol synthesis project unit, thus reducing carbon dioxide emissions. Meanwhile, the byproduct oxygen can be added to the gasification unit to reduce energy consumption in the air separation unit.

Compared with the pure coal option, the project is expected to increase methanol production by 1.23 million tons annually, save standard coal by 2.53 million tons and reduce carbon emissions by 6.31 million tons.