Petrochemical Industry Policies: 2017 Keywords
By Cao Jianjun
Green and safe development
Green and safe development is the eternal theme of petrochemical industry. It is also an important part of optimization and upgrading of industrial structure, and an important way to promote supply-side structural reform. In 2017, the state issued many important policies regarding the green upgrading and safe production involving the petrochemical industry.
On January 12, the General Office of the State Council issued the "Thirteenth Five-Year Plan for Safety in Production (2016-2020)" (hereinafter referred to as "Plan"). In terms of hazardous chemicals, the "Plan" proposes that by 2020 all existing dangerous chemicals manufacturing enterprises located in densely populated urban areas and cities shall be relocated and transformed and the hazardous chemical storage enterprises that do not meet the standard of safe distance in large urban areas shall be relocated; the regional quantitative risk assessment for chemical parks and major functional zone involving hazardous chemicals shall be promoted to scientifically determine the risk capacity and promote the integration of regional safety management; the control and management of high-risk processes, high-risk substances and major hazard sources shall be strengthened.
On April 20, China Petroleum and Chemical Industry Federation officially released "Six Action Plan of Green Development of Petrochemical Industry". The action plan covers the disposal of waste water, waste gas and solid waste, energy saving and low-carbon emission, safety management and green industrial park. It puts forward the key tasks, quantitative indicators and management objectives for future development.
On May 22, CIRC officially released the "Guideline for Risk Assessment of Liability Insurance for Chemical Raw Materials and Chemical Products", becoming the first insurance industry standard for environmental liability insurance.
On June 9, the Ministry of Environmental Protection and the CIRC jointly researched, formulated and promulgated “the Measures for the Administration of Compulsory Liability Insurance for Environmental Pollution (Exposure Draft), which is China’s first compulsory environmental liability insurance implemented on the national level.
On July 27, the Ministry of Industry Information Technology, the National Development and Reform Commission, the Ministry of Science and the Technology, the Ministry of Finance and Ministry of Environmental Protection jointly promulgated the “Guiding Opinions on Strengthening the Industrial Green Development of the Yangtze River Economic Belt” (hereinafter referred to as "Guiding Opinions"). It is noteworthy that the Guiding Opinions frequently refer to the chemical industry: they clearly point out that the safe distance between the newly built chemical projects and the river band of the Yangtze River shall be further clarified in the part of “optimization of industrial layout”; and the clean-up rectification of existing chemical parks shall be carried out to strictly control the environmental risk from heavy chemical enterprises.
On September 14, the Ministry of Environmental Protection reviewed and approved in principle “the Work Program for the Prevention and Control of Volatile Organic Pollutants in the Thirteenth Five-year Plan Period (2016-2020)" (hereinafter referred to as the "Program"). The Program sets a clear emission reduction targets for the petrochemical and chemical industries: by 2020, the VOCs emission from oil refining and petrochemical industry shall be reduced by over 40%, and the VOCs emission from pesticides, pharmaceuticals, synthetic resins, rubber and plastics industries shall be reduced by more than 30%.
On October 24, the Ministry of Industry and Information Technology released "Guiding Opinions on Accelerating the Development of Environmental Protection Equipment Manufacturing Industry" (hereinafter referred to as "Guiding Opinions"). The Opinions put forward that by 2020, environmental protection equipment industry’s production value shall reach RMB1 trillion, and they also identify nine key areas for the development of the environmental protection equipment manufacturing industry: air pollution prevention and control equipment, water pollution prevention and control equipment, soil pollution remediation equipment, solid waste treatment and disposal equipment, resources comprehensive utilization equipment, environmental pollution emergency treatment equipment, environment monitoring instruments and apparatuses, special materials and pharmaceuticals for environmental pollution prevention and control, noise and vibration control equipment.
On October 19, the Ministry of Environmental Protection, the National Development and Reform Commission and the Ministry of Water Resources jointly issued the "Water Pollution Prevention and Control Plan for Major River Basins (2016-2020)" (hereinafter referred to as "Plan"). The Plan implements the requirements set out by "Water Pollution Control Action Plan" on the water pollution prevention and control for the seven key river valleys, taking into account the rivers in Zhejiang-Fujian Area, the southwestern rivers and the northwestern rivers as well. The Plan defines the pollution prevention and control priorities in each valley and the key points of water environment protection in the Beijing-Tianjin-Hebei region and the Yangtze River economic belt, and for the first time forms a water pollution prevention and control plan covering key areas across the country.
On November 14, the State Administration of Work Safety issued “the Criteria for Determining the Major Production Safety Accident Potential in the Chemicals Especially Hazardous Chemicals Production and Operation Enterprises (for Trial Implementation)”, defining 20 criteria for determining the major hazardous chemicals’ safety accident potential.
On December 13, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly issued “the Guiding Opinions on Promoting the Green Development of Petrochemical Industry” (hereinafter referred to as “Guiding Opinions”), aiming at improving the green standards of the industry, establishing a long-term mechanism for green development, and promoting sustainable development of the petrochemical industry. The Guiding Opinions put forward that the industrial layout shall be more rational, the industrial structure shall be continuously optimized, the innovative capability shall be steadily improved, and the green standards shall be improved continuously.
On December 17, Xinhua News Agency was authorized to broadcast the "Ecosystem Damage Compensation System Reform Plan" issued by the General Office of the CPC Central Committee and the General Office of State Council, which states that a compensation system for ecological and environmental damage will be implemented on January 1, 2018. It requires that by 2020, an ecological damage compensation system with clear responsibility, smooth access, standard techniques, strong protection, complete compensation and effective restoration shall be initially constructed.
Agricultural supply-side reform
In the first document issued by CPC central committed in 2017, the agricultural supply-side reform has become the focus. The promulgation of a series of policies related to fertilizers, pesticides and agricultural film will help to improve the quality and safety of agricultural products in an all-round way, vigorously push forward the consumption-reduction and efficiency-increase of chemical fertilizers and pesticides, and promote the comprehensive utilization of agricultural waste.
On May 16, the Ministry of Agriculture issued “the Action Plan for Agricultural Film Recycling” (hereinafter referred to as Plan) to strengthen the management of agricultural film pollution and improve the utilization of waste agricultural film. The Plan puts forward that by 2020, the national agricultural film recycling network shall be continuously improved, the level of resource utilization shall continue to increase, the recycling rate of agricultural film shall reach over 80%, and the "white pollution" shall be effectively prevented and controlled.
On June 1, the newly revised "Pesticide Management Regulations" was implemented. These regulations strictly control the pesticide registration and production, improving the pesticide production permit system; make clear requirements on production activities like the purchase of raw materials, product quality control, and entrusted processing and packaging; specify that pesticide manufacturers shall take responsibilities of the safety and effectiveness of the pesticides produced. It also requires manufacturers to strengthen quality management, to produce in accordance with product quality standards, and to adopt electronic information code so that to ensure that the production process is traceable, and the quality is controllable.
On June 1, the General Office of the State Council issued “the Opinions on Accelerating the Utilization of Wastes of Livestock and Poultry”. With the support of the state's policies, the problems of the organic fertilizer industry will be gradually solved. The industry is expected to make positive progress in production, registration, promotion and technology and thus lead the chemical fertilizer industry to realize the supply-side reform.
On October 1, “the List of Pesticide Restricted for Use (2017 Edition)” formally took effect. Pesticides in the List shall be labeled with the words "Restricted for Use" and shall be marked with the special restrictions and special requirements for use. Pesticides used for edible agricultural products shall also be marked with safety interval. The first 22 kinds of pesticides in the List can only be purchased at the designated places.
On December 4, Department of Science and Technology of the Ministry of Industry and Information Technology publicized the compulsory national standards of "Chemical Fertilizer Classification and Requirements". The fertilizers are divided into ecological grade, farmland grade and garden grade according to the level of content of harmful substances. The promulgation of the standards is of great significance for standardizing the fertilizer market and refining the grading of fertilizers. It also addresses the issues like antibiotics in the organic fertilizers and the unauthorized addition of hormones in fertilizers.
On December 11, the Ministry of Industry and Information Technology, Standardization Administration and the Ministry of Agriculture jointly held the release conference of mandatory national standard on "Polyethylene Blow Molding Agricultural Mulching Film" in Beijing. The newly revised "Agricultural Film" mandatory national standard will take effect on May 1, 2018, which will increase the reusability and recyclability of the film.
New chemical materials
China's new material industry has been developing rapidly with continuously improving technology. In order to realize "Made in China 2025" and promote supply-side structural reform, during the 13th Five-Year Plan period, the major needs of economic and social development and national defense construction will be taken into consideration and the new material technologies with high foreign dependency will be developed primarily. A series of policies issued in 2017 point out the development direction for the new materials.
On January 23, the "Guidelines for the Development of New Materials Industry" jointly compiled by the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology and Ministry of Finance was published. The Guidelines put forward that it is necessary to emphatically develop the key basic materials, key strategic materials and cutting-edge new materials; crack the urgently needed new materials in key fields; arrange a number of cutting-edge new materials; strengthen the construction of new material industry’s collaborative innovation system; speed up the market development of key new materials; make breakthroughs in key processes and special equipment; and improve the new material industry’s standard system.
On April 14, the Ministry of Science and Technology released the "Special Plan for Scientific and Technological Innovation in the Field of Materials for the 13th Five-Year Plan Period (2016-2020)", proposing to accelerate the development of scientific and technological innovation and industrialization in the field of materials and initially establish China's independent basic materials and new materials system.
On September 12, the Ministry of Industry and Information Technology released “Notice on Implementing the Pilot Work of Insurance Compensation Mechanism for the Key New Materials” and stated that it would carry out the pilot work on the insurance compensation for key new materials together with CIRC and the Ministry of Finance. On the same day, the Ministry of Industry and Information Technology also issued the "Guidance Catalog for the First Batch of Key New Materials’ Applications (2017 Edition)" to clarify the pilot targets and scope, and 129 key new materials are listed in the Catalogue, including more than 50 types new chemical materials.
On October 30, the Ministry of Industry and Information Technology released "Guidance on the Development of Key Industrial Generic Technologies (2017)”, which gives priority to the development of a total of 174 key generic technologies. In the field of petrochemicals, 12 technologies are selected, including the technology of making adiponitrile with butadiene, the technology of producing propylene oxide with HPPO, the industrialized production technology of 100 000 tons of DMMn, the aqueous polyurethane resin and the downstream application technologies, high melt strength polypropylene’s direct polymerization technology, and high-performance chlor-alkali perfluorinated ion film.
On December 13, in order to promote the rapid and sustainable development of the additive manufacturing industry and accelerate the cultivation of new momentum of the manufacturing industry, the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly formulated the “Action Plan for the Development of Additive Manufacturing Industry (2017-2020)” (hereinafter referred to as "Action Plan"). The "Action Plan" points out that by 2020, the additive manufacturing industry’s annual sales revenue shall be over RMB20 billion with an average annual growth rate at 30% or more.
Adjustment of the industrial layout
On March 27, the Ministry of Industry and Information Technology and National Development and Reform Commission released "Plan for Innovative Development of Modern Coal Chemical Industry" to promote the innovation and development of the modern coal chemical industry, expand the sources of petrochemical raw materials, and form an industrial pattern that complements each other with the traditional petrochemical industry.
On September 4, the General Office of the State Council promulgated the “Guiding Opinions on Promoting the Relocation and Transformation of Dangerous Chemical Production Enterprises in Densely Populated Areas of Cities and Towns”. The Opinions propose that by 2025, existing hazardous chemical production enterprises in densely populated areas that do not meet the requirements of safety and sanitation protection distance requirements shall be transformed to achieve standards, relocated to the standardized chemical parks or shut down to significantly reduce the safety and environmental risks.
On September 18, Shandong Chemical Special Operation Office promulgated the "Shandong Provincial Chemical Industry Park Accreditation Standards", stipulating that the overall development plan of the chemical industry park shall conform to the requirements of the chemical industry standards concerning overall layout, fire-fighting, safety, environmental protection and public facilities, etc. In terms of environmental protection, it is required that the waste gas treatment facilities, waste water pretreatment facilities and temporary waste storage facilities of production enterprises in the chemical parks shall be fully completed and in operating; and the issuance of pollutants discharge permit shall reach 100%.
On September 28, Hubei Provincial Commission of Economy and Information Technology promulgated the “Plan for Implementing the Special Project of Yangtze River Protection”, forbidding the construction of new heavy chemical and paper industry projects in the areas within one kilometer away from the shorelines of the mainstream of the Yangtze River and its major tributaries, and strictly controlling the construction of new petrochemical and coal chemical projects.
Reform of oil and gas industry
China's energy structure adjustment goal during the "13th Five-Year Plan" period is to increase the consumption proportion of non-fossil fuels to 15% in total primary energy consumption. To achieve this goal, the state is vigorously carrying out the oil and gas industry structural reform, developing renewable energy and promoting the development of the energy internet.
On January 5, the National Energy Administration released the "Thirteenth Five-year Plan for Renewable Energy Development (2016-2020)" and proposed that by 2020, the hydropower installed capacity should reach 380 million kilowatts (including 40 million kilowatts of pumped storage power stations), the wind power installed capacity should reach 210 million Kilowatts, the solar power installed capacity should reach 110 million kilowatts, the biomass power installed capacity should reach 15 million kilowatts, and the geothermal heating’s standard coal consumption should reach 42 million tons.
In May, the CPC Central Committee and the State Council issued “Opinions on Deepening the Reform of the Oil and Gas System” (hereinafter referred to as Opinions). The Opinions require to deepen the exploration of oil and gas, import and export management, pipe network operation, production and processing, product pricing system reform and the state-owned oil and gas enterprises reform, to release the vitality of the market and the backbone enterprises, and to improve the resources continuance guarantee ability, international and domestic resource utilization ability and market risk prevention ability.
On July 12, the National Development and Reform Commission and National Energy Administration issued the notice on "Oil and Gas Pipeline Network Planning for Medium and Long-term", aiming at overall planning and expediting the construction of the oil and gas pipe networks, which is conducive to improving the modern comprehensive transportation system, enhancing the efficiency of factor deployment, promoting the application of clear energies, and supporting the establishment of modern energy system.
On September 13, 15 departments including the National Development and Reform Commission and National Energy Administration jointly issued the “Implementation Plan on Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol Gasoline for Vehicles” (hereinafter referred to as Plan). The Plan requires that by 2020, the ethanol gasoline for vehicles shall cover the nationwide markets, a market-oriented operation mechanism shall be initially established, the advanced bio-liquid fuel innovation system shall be initially built, a demonstration operation of the 50 000 tons cellulosic fuel ethanol plant shall be realized, and the development of bio-fuel ethanol industry shall as a whole reach the international advanced level. Meanwhile, the industry shall strive to achieve scaled production of cellulosic ethanol, and the advanced biological liquid fuel technology and equipment shall as a whole reach the international advanced level, hence forming a more perfect market-oriented operating mechanism.
In October, the "Guiding Opinions on Promoting Energy Storage Technology and Industrial Development" was jointly promulgated by the National Development and Reform Commission, Ministry of Finance and Ministry of Science and Technology. It plans to complete the "two steps" in the next 10 years to realize the scaled development of the energy storage industry, establish a relatively complete industrial system, and thus become a new source of economic growth in the energy sector.