Domestic POE Breaks Through Bottlenecks: α-Olefin Production Capacity Is the Key to Change

In the wave of iteration of photovoltaic module encapsulation materials, polyolefin elastomer (POE) has become a core supporting material for N-type cells and bifacial double-glass modules due to its excellent moisture resistance, aging resistance, and anti-potential-induced degradation (PID) performance. However, China's POE industry has long faced the dilemma of "strong demand but limited production capacity," which stems from the synthesis technology and production capacity bottlenecks of upstream key raw material alpha-olefins. As the photovoltaic industry accelerates its upgrade towards high-efficiency modules, breaking through the constraints of alpha-olefins and promoting the localization of POE has become an important topic for China's new materials industry to overcome "bottleneck" technologies.

I. POE: The Essential Material for Upgrading Photovoltaic Modules

The rise of POE encapsulants is closely linked to the technological iteration of photovoltaic modules, as their performance advantages are irreplaceable in high-efficiency components, while also giving rise to a differentiated encapsulant market landscape.

1. Performance surpasses traditional EVA, suitable for high-efficiency component requirements.

Compared to traditional EVA encapsulant, POE encapsulant demonstrates significant advantages in core performance indicators, particularly meeting the long-term reliability requirements of N-type cells (TOPCon, HJT) and bifacial double-glass modules.

Anti-PID performance: POE has a higher volume resistivity (>10¹⁴Ω·cm), which effectively suppresses potential-induced degradation of components in high-voltage environments, extending the lifespan of the components from 25 years to over 30 years.

Water resistance and moisture-proofing: The water vapor transmission rate is as low as 0.1g/(m²·d), which is only 1/5 of that of ordinary EVA, reducing the risk of hidden cracks and power degradation in the battery cells caused by moisture infiltration.

Aging resistance: Strong UV aging resistance, maintaining stable performance in extreme environments from -40℃ to 85℃, suitable for the photovoltaic power station demands in different climate zones worldwide.

To balance performance and cost, the industry has developed co-extruded EPE adhesive film (EVA-POE-EVA three-layer structure), which combines the high water resistance of POE with the strong adhesion of EVA, becoming the mainstream alternative choice for double-glass modules.

2. Market Landscape: EVA remains dominant, POE/EPE accelerating substitution

The global photovoltaic encapsulant market in 2024 presents a pattern of "coexistence of traditional and emerging materials."

Transparent EVA adhesive film: With a low price (approximately 12,000 yuan/ton), high light transmittance (93%), and strong adhesion, it still holds a market share of 41.6%, mainly used for the upper encapsulation of conventional PERC modules.

POE film: Due to its high price (approximately 25,000 RMB/ton) and weak adhesion (prone to slippage during lamination), it has a market share of about 21.4% and is mainly used in the lower layer of double-sided PERC modules and N-type modules.

EPE film: With the increase in the penetration of TOPCon technology and bifacial modules, its market share has rapidly risen to 37%. It is expected to surpass transparent EVA by 2027, becoming the largest type of adhesive film.

II. The "Sweet Troubles" of Domestic POE: Exploding Demand and Import Dependency

China is the largest consumer market for POE in the world, but it has almost no production capacity, highlighting a prominent contradiction of "high demand and low self-sufficiency." The need for domestic substitution is urgent.

1. Demand side: Driven by photovoltaics, the scale of consumption continues to expand.

In 2024, China's apparent consumption of POE reached 440,000 tons, with over 90% used for photovoltaic encapsulants, and the remaining portion used in automotive modification materials, cable insulation layers, and other fields. As the penetration rate of N-type modules in the domestic market increases from 45% in 2024 to 60% in 2025, it is estimated that the demand for POE in photovoltaic applications will exceed 550,000 tons in 2025, driving the overall consumption to increase to 600,000 tons.

In comparison to the EVA market during the same period (with a consumption of 139,000 tons and an import dependency of 31%), the situation for POE is even more severe, as it relies almost 100% on imports. The import sources are highly concentrated, with 42% from South Korea, 28% from Singapore, 15% from the United States, and 10% from Spain, making the stability of the supply chain significantly affected by geopolitical factors and shipping costs.

Supply Side: Overseas Giants Monopolize, Domestic Substitution Sees Initial Hope

The global POE production capacity is dominated by a few chemical giants, forming a pattern of "one strong leader with multiple strong followers."

- Dow Chemical: With a 48% share of global production capacity, it ranks first, monopolizing the high-end POE market. Its self-sufficiency rate for 1-octene reaches 100%, and its products hold a market share of over 50% in the photovoltaic film sector.

ExxonMobil: Accounting for 23% of production capacity, it produces alpha olefins using proprietary ethylene oligomerization technology, with a focus on automotive and industrial sectors.

LG Chem and Mitsui Chemicals rank third and fourth with production capacities of 13% and 11%, respectively, mainly supplying the photovoltaic and daily chemical sectors in the Asia-Pacific market.

In 2024, the country's first POE unit equipped with α-olefin, such as Wanhua Chemical's 200,000 tons/year project, will be gradually put into operation, leading to an 18% year-on-year decrease in the import volume of ethylene-α-olefin copolymers, marking a substantive phase of domestic replacement. However, by 2025, domestic POE production capacity will be only about 300,000 tons/year, mostly consisting of mid-to-low-end grades, with high-end photovoltaic-grade POE still relying on imports.

Core Bottleneck: α-Olefin Synthesis is Stalled, Both Technologically and in Capacity.

In the entire production chain of POE, the synthesis of alpha-olefins (especially long-chain alpha-olefins) is the key "bottleneck," and the technical difficulty and insufficient capacity directly restrict the localization process of POE.

Long-chain α-olefins: The "lifeblood raw material" of POE.

POE is a random copolymer formed by the copolymerization of ethylene and alpha-olefins (mainly 1-octene, with a small amount of 1-hexene), where the quality and cost of 1-octene directly determine the performance of POE.

- Supply gap: 80% of global 1-octene production capacity is controlled by companies such as Dow and ExxonMobil. China's annual consumption of 1-octene is approximately 150,000 tons, almost entirely reliant on imports, with prices consistently maintained at 18,000 to 22,000 yuan per ton, driving up the production costs of domestic POE.

Technical barriers: The mainstream production process for 1-octene is the ethylene oligomerization method (accounting for 70% of global production capacity), which requires the use of high-performance catalysts (such as chromium-based catalysts) to precisely control the carbon chain length. In terms of catalyst activity, selectivity, and process stability, China shows significant gaps compared to international levels and has not yet achieved industrial-scale mass production.

Three major technical shortcomings restrict industrial breakthroughs.

In addition to the supply of alpha-olefins, POE production also faces dual constraints from catalysts and polymerization processes.

Catalyst: Traditional Z-N catalysts cannot precisely control the copolymerization ratio of ethylene and α-olefins, necessitating the use of single active center metallocene catalysts. The development of metallocene catalysts started late in China, with core patents monopolized by overseas companies. Domestic enterprises need to pay high patent licensing fees (accounting for about 8%~10% of production costs).

Aggregation process: The production of POE relies on a high-temperature solution polymerization process (reaction temperature 150-200°C, pressure 3-5MPa). China lacks large-scale industrial practice experience, and the operating cycle of the equipment (about 30 days) is only half that of Dow Chemical (60 days), resulting in insufficient stability of product quality.

Supporting system: The production of α-olefins needs to be closely integrated with ethylene units (3.5 tons of ethylene are consumed per ton of 1-octene). In China, there are relatively few enterprises with integrated refining and chemical capabilities, and most POE projects face the problem of unstable ethylene supply.

3. The only breakthrough: α-C4 (1-butene) has mature production capacity but limited impact.

Compared to the lag in long-chain α-olefins, the production capacity of α-C4 (1-butene, with a carbon chain length of 4 carbon atoms) in China has matured, becoming one of the few competitive segments in the olefin industry chain.

Production capacity: By the end of 2025, the domestic production capacity of 1-butene will reach 960,000 tons per year, mainly produced through the mixed C4 separation method (accounting for 75%). The raw materials rely on by-product C4 resources from Coal-to-Olefins (CTO/MTO) and refining-chemical integration units.

Application limitations: 1-butene is primarily used for producing linear low-density polyethylene (LLDPE) and can only serve as an auxiliary comonomer for POE (accounting for less than 10%). It cannot replace 1-octene to achieve high performance in POE. Additionally, due to the impact of low-cost overseas products, domestic 1-butene is still in a phase of net importation.

IV. Breaking the Deadlock: Focusing on Alpha Olefin Advancement and Building a Domestic Industrial Chain

The core of promoting the localization breakthrough of POE lies in overcoming α-olefin synthesis technology, while simultaneously linking catalysts, polymerization processes, and downstream applications to form a full-chain collaborative innovation.

1. Tackle the technology of long-chain α-olefins and break the raw material monopoly.

To address the supply shortfall of 1-octene and other long-chain α-olefins, it is necessary to advance technological breakthroughs through multiple pathways.

Ethylene oligomerization upgrade: Collaborate with universities and research institutions (e.g., Dalian Institute of Chemical Physics, Chinese Academy of Sciences) to develop efficient chromium-based and zirconium-based catalysts, aiming to enhance catalyst activity (target >10⁶ g product/g catalyst) and 1-octene selectivity (target >80%), and reduce separation energy consumption.

Fischer-Tropsch synthesis exploration: Utilizing the heavy olefins as by-products from China's coal-to-liquid industry, develop separation and purification technology for long-chain α-olefins, aiming to establish a unique industrial chain of "coal-based resources - α-olefins - POE". Currently, Ningxia Baofeng has launched a pilot plant.

Industry-University-Research Collaboration: Drawing on Wanhua Chemical's "Introduction-Digestion-Innovation" model, quickly master basic processes through technology licensing (such as cooperation with ExxonMobil), and then continuously break through core patents through sustained R&D.

Improve the POE supporting system and enhance capacity utilization.

Integrated Layout: POE projects prioritize reliance on refining and chemical integration bases (such as Zhejiang Petrochemical and Hengli Petrochemical) to ensure stable supply of ethylene raw materials. They are also equipped with α-olefin production facilities to achieve a fully controllable "raw material-polymer-product" supply chain.

Process Optimization: To address the stability issues of high-temperature solution polymerization processes, advanced overseas equipment (such as the German Wood reactor) has been introduced to optimize reaction temperature, pressure, and material ratios, extending the operation cycle of the equipment to over 50 days and reducing unit production costs.

Product differentiation: Initially focus on the mid-to-low-end POE market (such as automotive modified materials, general photovoltaic encapsulation films), and gradually move towards high-end grades (high PID resistance photovoltaic encapsulation films, medical-grade POE) to avoid direct competition with overseas giants.

Policy and market dual drive accelerates domestic substitution.

Policy Support: Include α-olefin and POE in the "14th Five-Year Plan" key support directory for the new materials industry, providing tax reductions and R&D subsidies for technical research projects, while also leaning towards domestic POE film in photovoltaic module bulk procurement.

Market collaboration: Encourage photovoltaic film companies (such as Foster and Haiyou New Materials) to sign long-term supply agreements with POE manufacturers (such as Wanhua Chemical and Sierbang Petrochemical). Promote product iteration through "application feedback - production optimization" to form a stable domestic supply chain.

Conclusion: Breakthrough in Alpha Olefins, POE Localization Enters the "Critical Phase"

POE, as a "necessary material" for high-efficiency photovoltaic modules, is not only crucial for the cost competitiveness of China's photovoltaic industry but also reflects the technological shortcomings in the field of high-end polyolefin materials. Currently, the domestic POE production capacity is "poised for launch," but the core bottleneck of α-olefin synthesis has yet to be overcome. In the next 3 to 5 years, whoever can first achieve the industrial-scale production of long-chain α-olefins such as 1-octene will be able to dominate the competition in POE localization.

For enterprises, it is necessary to abandon the short-term thinking of "focusing on production capacity while neglecting technology" and focus on continuous innovation in alpha-olefin catalysts and processes. For the industry, it is crucial to build a "raw material-polymerization-application" collaborative ecosystem to avoid low-end production capacity surplus. Only in this way can we truly break the overseas monopoly and promote China's POE industry from "import dependence" to "global competition," injecting new impetus into the high-quality development of the new materials industry.