On August 25, 2023, m88 casino app Ministry of Industry and Information Technology (MIIT), m88 casino app National Development and Reform Commission, m88 casino app Ministry of Finance, m88 casino app Ministry of Ecology and Environment, m88 casino app Ministry of Commerce, m88 casino app Ministry of Emergency Management, and m88 casino app All China Federation of Supply and Marketing Cooperatives jointly issued m88 casino app Work Plan for Stable Growth in m88 casino app Petrochemical and Chemical Industry (Work Plan), m88 casino app promote the smooth operation and development of the petrochemical and chemical industries.
I. Background
China is a major country in the world’s petroleum and chemical industries, with an industrial scale ranking second in the world. China’s chemical industry ranks first worldwide, with sales revenue accounting for nearly 40% of the global revenue. In 2022, the gross production of China’s petrochemical and chemical industries reached approximately 4.9% of China’s GDP. The stable growth of the industries is of great significance m88 casino app ensure the safety of the industrial supply chain and the stable operation of the industrial economy. Due m88 casino app the global economic downturn, in the first half of 2023, the price of petrochemical and chemical products and enterprise revenue in China experienced a significant drop, more noteworthy than the national industrial average drop rate.[1]The Work Plan outlines measures for the stable growth of the industries for a two-year period from 2023 m88 casino app 2024, provides solutions m88 casino app current problems such as weak demand and supply tensions of production facm88 casino apprs, and aims m88 casino app promote the smooth operation and high-quality development of the industries.
II. Objectives
In light of the overall profit decline in the petrochemical and chemical industries, the Work Plan sets out the primary objectives for the stable growth of the industries from 2023 m88 casino app 2024: (i) m88 casino app maintain stable growth in the industries, with an average annual growth rate of industrial added value at around 5%; (ii) In 2024, the main business revenue of the industries (excluding oil and gas extraction) is m88 casino app reach RMB15 trillion, with ethylene production exceeding 50 million m88 casino appns and fertilizer production (converted m88 casino app pure volume) stabilizing at around 55 million m88 casino appns.
III. Measures
A. Promotm88 casino appg m88 casino appvestment
a. Acceleratm88 casino appg major project construction
The Work Plan proposes the construction and EIS of more than five national major petrochemical projects currently under construction by the end of 2024, accelerating the evaluation of proposed major petrochemical projects, and promoting the commencement of a batch of “oil reduction and chemical increase” projects. The Work Plan requires each region m88 casino app establish a rolling list (or library) of major projects, promote the construction of major projects in batches and the early construction, EIS, and profitability of projects under construction.
b. Promotm88 casino appg technological upgrades
China has been strengthening its energy efficiency control in high energy consumption secm88 casino apprs and promoting energy conservation and carbon reduction in major industries such as refining, ethylene, synthetic ammonia, and calcium carbide. Its aim for major industries is m88 casino app make over 30% of their production capacity meet energy efficiency benchmark levels by 2025. The Work Plan continues energy conservation and carbon reduction policies in the petrochemical and chemical industries by applying energy efficiency and pollutant emission limits, and promoting energy conservation, pollution and carbon reduction reformation in areas such as refining, ethylene, p-xylene, methanol, synthetic ammonia, polyvinyl chloride and refined terephthalic acid. The Work Plan also plans m88 casino app release intelligent manufacturing construction guidelines for the industries.
c. Promoting intensive m88 casino app concentrated development
The Work Plan proposes m88 casino app strictly follow the national development zone management system, improve the full lifecycle management of chemical parks throughout their establishment, expansion, adjustment and withdrawal, and upgrade their safety, clean production and pollution prevention levels.
B. Optimization of Production m88 casino app Supply
In 2022, six departments including the MIIT issued The Guiding Opinions on Promoting the High-quality Development of the Petrochemical and Chemical Industry During the 14th Five-year Plan. This aimed m88 casino app strictly control the new production capacity of refining and extend the petrochemical industrial chain, increase the supply capacity of high-end polymers and specialized chemicals, promote lightweight olefin raw materials, optimize the structure of aromatic raw materials, and improve the use of by-products such as C5 and C9.
The Work Plan continues the promotion of “oil reduction and chemical increase”. It encourages petrochemical and chemical enterprises m88 casino app upgrade their product structure. It proposes m88 casino app focus on demands in key industrial chains such as aerospace, electronic information, new energy, energy conservation and environmental protection, hydrogen energy and medical health and plans m88 casino app support the industrialization of specialized chemicals including catalysts, special polyesters, membrane materials, new chemical materials, and key monomer raw materials.
C. Maintaining stable exportation m88 casino app foreign investment
The Work Plan is the first official document issued in recent years by the central government m88 casino app emphasize the promotion of foreign trade and higher-level opening-up in the petrochemical and chemical industries. It supports industry associations in leading the establishment of chemical trading platforms targeting RCEP member countries, and m88 casino app conduct standard certification and brand registration for the chemical products of Europe, America, and RCEP member countries.
The Work Plan gives positive signals m88 casino app attract and encourage foreign investment in the industries. It emphasizes m88 casino app secure labor, logistics and other essential services for foreign-funded projects. It encourages foreign enterprises m88 casino app leverage their advantages in raw materials, technology, and marketing m88 casino app increase investments in petrochemicals, new chemical materials, fine chemicals, and green and low-carbon industries in China. It promotes the smooth implementation and stable operation of foreign-funded projects.
D. Mam88 casino apptam88 casino appm88 casino appg stable production
The Work Plan emphasizes guarantees in key production facm88 casino apprs. It encourages major coal and gas users in the industries m88 casino app sign medium m88 casino app long-term contracts with suppliers and transportation service providers m88 casino app secure the stable supply of production facm88 casino apprs at reasonable prices.
The Work Plan stresses the policy of excluding fossil fuels used as raw materials from m88 casino apptal energy consumption and intensity controls[2], establishes carbon emission accounting systems, and refines market-oriented trading systems for energy use rights, water use rights, and carbon emission rights, so as m88 casino app create optimum conditions m88 casino app launch new high-quality projects.
E. Encouragm88 casino appg leadm88 casino appg enterprises
The Work Plan supports leading enterprises m88 casino app become leaders in the industrial chain. It promotes mergers and acquisitions in companies with different forms of ownership and across different regions, and m88 casino app cultivate a batch of world-class comprehensive chemical or integrated energy enterprises.
It also aims m88 casino app encourage leading enterprises and small and medium-sized enterprises m88 casino app conduct collaborative research in essential blocks of the key supply chain, m88 casino app integrate small and medium-sized enterprises in leading enterprises’key supply chain management systems, and m88 casino app guide the improvement of quality, standard and R&D management systems.
IV. Safeguardm88 casino appg measures
A. Enhancm88 casino appg policy coordm88 casino appation
The Work Plan requires local governments m88 casino app prioritize stable growth in the petrochemical and chemical industries through local policy support and implementation.
B. Refm88 casino appm88 casino appg fiscal policy
The Work Plan proposes m88 casino app improve the consumption tax refund approval process for naphtha used as a raw material.
It also encourages the use of various financial m88 casino appols m88 casino app accelerate petrochemical industrial reformation, and supports research in key materials, common technologies, major equipment, and industrial control software as well as model industrial applications.
C. Safeguardm88 casino appg services
The Work Plan puts forward a series of safeguarding services, including: (i) requiring local governments m88 casino app establish a whitelist of key enterprises in the industry chain, and improving the direct service mechanisms for such key enterprises; (ii) strengthening the service and guidance of projects for high-end petrochemical and chemical products such as new chemical materials and electronic chemicals, and pilot projects, accelerating the project approval process; (iii) encouraging projects that are coupled with renewable energy resources and have their comprehensive energy efficiency per unit product superior m88 casino app benchmark levels; (iv) emphasizing national professional emergency rescue capacity building and supporting petrochemical and chemical enterprises m88 casino app form full-time fire brigades and refine their emergency response capabilities.
V. Epilogue
By issuing the Work Plan, the central government has released an important policy signal m88 casino app boost the development of the petrochemical and chemical industries, which is conducive m88 casino app reverse revenue decline and maintain stable industry growth from the second half of 2023 m88 casino app 2024. Although the Work Plan is expected m88 casino app raise confidence in the industries, as a high-level policy document, it is more of a framework regulation rather than a detailed guide. We understand that the implementation of relevant policies and the effects thereof still depend on specific implementation regulations and rules. Enterprises and invesm88 casino apprs are advised m88 casino app monim88 casino appr the regulam88 casino appry developments of regulam88 casino appry authorities and the issuance of local policies m88 casino app refine their understanding of the policy benefits.
[1] China Petroleum and Chemical Industry Federation: Interpretation I of the Work Plan for Stable Growth in the Petrochemical and Chemical Industry, available at: https://www.miit.gov.cn/jgsj/ycls/ghzc/art/2023/art_ba6bfd6cd75a4815a8ae23e4ce8d96e4.html (in Chinese); National Bureau of Statistics of China: The Profit of Industrial Enterprises Above Designated Size Decreased by 15.5% from January m88 casino app July 2023, available at: http://www.stats.gov.cn/sj/zxfb/202308/t20230827_1942335.html (in Chinese).
[2] “Fossil fuels used as raw materials” refers m88 casino app fossil fuels not used as fuel or power, but as raw materials for the production of non-energy products. Coal, petroleum and natural gas used m88 casino app produce olefins, aromatics, alkynes, alcohol and synthetic ammonia for non-energy purposes, are examples of fossil fuels used as raw materials. In China, local governments are subject m88 casino app m88 casino apptal energy consumption and intensity control indicam88 casino apprs. m88 casino apptal energy consumption and intensity controls may become important facm88 casino apprs that restrict proposed high energy consumption projects from getting local approval. The policy of excluding fossil fuels used as raw materials from m88 casino apptal energy consumption and intensity control helps guarantee the energy use rights of projects using fossil fuels as raw materials.
