According to a report in China Daily on January 27, 2026
China has reached a critical milestone in its long-running effort to reduce dependence on foreign suppliers of high-end industrial materials, achieving industrial-scale production of polyolefin elastomer (POE) — a key component used in photovoltaic modules, electric vehicles and advanced packaging.
The breakthrough comes as the country accelerates its push toward supply chain resilience in strategic emerging industries, particularly renewable energy and new energy vehicles, where access to advanced materials increasingly determines cost competitiveness and technological leadership.
From “Industrial Gold” to Strategic Bottleneck
Often described by industry insiders as “industrial gold,” POE is a high-performance polymer that combines the elasticity of rubber with the processability of plastic. Its unique properties make it indispensable in next-generation N-type photovoltaic modules, where it serves as an encapsulation material that improves durability, power output and resistance to environmental stress.
Despite China’s dominance in global solar panel manufacturing, POE long remained a weak link in the value chain. For years, production was controlled almost entirely by a small number of foreign chemical giants, with China relying on imports for as much as 95 percent of its domestic demand through the first three quarters of 2025, according to industry estimates.
This dependence exposed Chinese manufacturers to supply disruptions, volatile pricing and geopolitical risk — a vulnerability that became increasingly visible amid global trade frictions and tighter technology controls.
A Domestic Process Reaches Scale
That dynamic began to change in 2025, when the Dushanzi petrochemical plant in Xinjiang — a subsidiary of state-owned China National Petroleum Corp (CNPC) — produced nearly 60,000 metric tons of POE using a domestically developed gas-phase polymerization process.
The achievement marks the first successful industrialization of this technology in China, CNPC said, overcoming long-standing technical barriers related to catalyst performance, reaction stability and process control — challenges that have historically limited POE production to a handful of advanced chemical producers worldwide.
Industry analysts view the development as more than a single-plant success. “This is a structural shift,” said Hua Wei, head of the Chemical Industry and Engineering Society of China. “POE has moved from a high-tech dependency to a controllable, scalable domestic capability.”
Implications for Solar and EV Supply Chains
The timing is significant. As global solar installations accelerate and manufacturers transition toward higher-efficiency N-type cells, demand for POE has surged. At the same time, cost pressure across the photovoltaic industry has intensified, making material efficiency and price stability increasingly important.
Greater domestic availability of POE is expected to stabilize China’s renewable energy supply chains and reduce production costs for high-efficiency solar modules, reinforcing the country’s competitive edge in the global energy transition.
The impact extends beyond solar. POE is also used in lightweight automotive components, helping electric vehicles improve energy efficiency and driving range — another area where China is seeking to consolidate its lead.
From Volume to Value in Chemicals
China’s POE breakthrough reflects a broader transformation underway in its chemical industry. After decades of expansion driven by scale and volume, the sector is now pivoting toward high-value, innovation-led growth, as demand rises for advanced materials tailored to emerging industries such as energy storage, electric mobility and life sciences.
International trade frictions have accelerated this shift, raising costs for chemical producers and underscoring the risks of overreliance on external technology. Under these conditions, technological self-reliance and green transformation have become central to corporate survival and long-term competitiveness.
“Future opportunities lie in mastering catalysts, reaction engineering and specialized equipment,” Hua said, “and translating those capabilities into materials that meet precise downstream requirements.”
Global Context: Asia as an Innovation Testbed
The POE milestone also highlights Asia’s evolving role in the global chemical industry. While the region has long been the world’s largest market for chemical production and consumption, it is increasingly emerging as a testing ground for innovation in sustainable and advanced materials.
China, in particular, faces a structural imbalance: vast capacity in standard chemical products but persistent gaps in high-end materials critical to strategic industries. Closing that gap has become a policy and industrial priority.
Maximilian Butek, executive director of the German Chamber of Commerce in China, has previously noted that European and US companies once dominated technology transfer into the Chinese market. “Today,” he said, “an increasing number of Chinese enterprises and local engineers are driving innovation themselves — not only for China, but for global markets.”
Indeed, several multinational chemical companies are now shifting their China strategies toward high-tech materials research and development, seeking to tap into local ecosystems and growing downstream demand.
Scaling Up: The Next Phase
With the technology now verified at industrial scale, CNPC is moving to expand capacity rapidly. Multiple POE projects are under construction, and the company expects total annual capacity to exceed 300,000 tons by the end of 2026.
The expansion forms part of PetroChina’s broader new materials acceleration program. Since the start of China’s 14th Five-Year Plan (2021–25), the group has prioritized high-value-added chemicals, achieving growth of more than 50 percent annually in new material output for four consecutive years.
Beyond One Material
While POE alone will not determine the future of China’s manufacturing competitiveness, analysts see its industrialization as emblematic of a larger shift: from participation at scale to control over critical technologies.
In sectors ranging from renewable energy to electric vehicles, the battle is increasingly fought not only on factory floors, but in catalysts, polymers and process engineering — areas that quietly underpin global industrial power.
China’s success in bringing POE from laboratory challenge to industrial reality suggests that, at least in some strategically chosen materials, that balance is beginning to change.