China's environmental pollution crackdown review is going to start 06-06-2018

The Chinese government announced to have the first review of its first environmental inspections and measurements. This will add pressure on companies, as local authorities are urged to keep their environmental quota. The second round of environmental inspections is also on the rise. 


China had first started to get real on environmental regulations back in January 2015. The first steps included overhauling its environmental protection law, which hadn’t seen any updates for about 25 years. The new effort against pollutions was backed up by dangerously high pollution levels in China’s big cities, such as the capital Beijing. 

The new environmental protection law was designed to give the government a larger role in protecting the environment. For example, the government is now required to draft mandatory emission standards. The new law has also removed a cap on how much non-compliant enterprises can be fined. 

China's laws have been strengthened in a number of specific areas, such as air pollution, water and soil contamination, and the disposal of solid waste. In January, the government furthermore began with the collection of an environmental tax, based on the amount of pollution discharged by each company. 

According to market intelligence firm CCM, on May 25, 2018, the Ministry of Ecology and Environment of the People's Republic of China (MEE) disclosed that the review of the results of the first round of nationwide environmental inspections will be initiated soon. Six inspection teams have been assigned to different regions in China and will stay at the target places for a month, delivering the first results of the new strict measurements. 


The key taken into account for the review contain a variety of different angles on the topic. Some examples of measured results are the implementation of the plan for rectification of major environmental problems, the establishment of effective, long-term ecological preservation mechanisms, and the perfunctory and ostensible rectification of enterprises and the dereliction of duty of local regulators. 


This review will impose a stronger pressure on local governments to force them to fulfil their environmental protection responsibility and make the environmental inspection regular. Through this measure, the Chinese government demonstrates its determination to improve environmental protection. Hence, the pressure on companies is not going to lose in the near future, as local governments are urged to keep their quota. Companies have to expect continuously strict environmental policies and production slow-downs. 

The second round of environmental inspections

On the same day, the MEE also unveiled the plan for the second round of the national environmental inspections, which will be performed in some central departments and state-owned enterprises. Both unannounced visits without advanced notice and targeted inspections will be employed to check for severe problems in key sections. 

The second round of environmental inspections would start in 2018 and is scheduled to be completed in three years. 31 provinces have been covered in 2017, and almost 30,000 enterprises were punished during the inspections for violations of environmental protection. According to market intelligence firm CCM, the fine totalled USD224.60 million. Over 18,000 individuals were involved in the punishment. 

The first round of inspections targeted long-existing problems studied the environmental impact on the economy and tried to balance environmental protection and economic growth. On the other hand, the second round will focus on the neglected, ineffective rectification and provinces where the regulations and law have been poorly implemented, and their ecology has been significantly damaged. 

The environmental protection measurements of China’s government have led to a supply shortage of several products, especially in heavy polluting industries like chemicals, pharmaceuticals, and energy. Many Chinese enterprises are running on low production rate, due to the enforced environmental protection measurements by the government. 

According to CCM, large enterprises have complete pollutant discharge disposal facility and environmental equipment, compared to their small and medium-sized competitors, so they won't face such great pressure in 2018 and the years ahead.

About the article

The information about this article comes from CCM, China’s leading market intelligence provider for the fields of chemicals, agriculture, food and feed. 

Get insights in China’s chemicals market and the impact of the environmental pollution crackdown, by looking at CCM’s chemical market coverage. 

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