The petrochemical and chemical industries comprise more than 27,000 large-scale production enterprises—efforts to upgrade and retrofit aging facilities are being further intensified.

The petrochemical industry is a vital pillar of the national economy and occupies a key position within China’s industrial economic system. Recently, seven departments, including the Ministry of Industry and Information Technology and the National Development and Reform Commission, jointly issued the “Action Plan for Accelerating the Renovation and Upgrading of Aging Facilities in the Petrochemical Industry (2026–2029)” (hereinafter referred to as the “Plan”), which outlines six major tasks: conducting ongoing baseline surveys and assessments; formulating renovation and upgrading plans; promoting quality improvement and technological upgrades; optimizing project management; ensuring rigorous acceptance and verification procedures; and strengthening standard‑driven guidance and support. A responsible official from the Raw Materials Industry Department of the Ministry of Industry and Information Technology stated that, in coordination with relevant authorities, they will intensify policy support, enhance guidance for local efforts, promptly address challenges encountered during implementation, and ensure the thorough and effective execution of the Plan.

   Enhance the industry’s level of technological equipment.

  China is the world’s largest producer and consumer of petrochemical products. By 2025, the petrochemical industry will account for 13.7% of industrial value added, and China leads the world in production capacity for more than 20 categories of basic chemicals, including refining, ethylene, and synthetic resins. Nevertheless, the sector faces a number of challenges.

  “China’s petrochemical and chemical industries comprise more than 27,000 large-scale production enterprises. Many of the facilities built in the early stages were designed and constructed to relatively low standards, feature outdated processes, and have limited levels of automated control, resulting in significant safety and environmental risks, suboptimal site layouts, and low operational efficiency,” said Chang Guowu, Director-General of the Raw Materials Industry Department of the Ministry of Industry and Information Technology, at a recent press conference. He added that accelerating the upgrading and retrofitting of aging equipment in the petrochemical and chemical sectors is a crucial measure for fundamentally mitigating safety and environmental risks, as well as an effective pathway for enhancing the industry’s technological and equipment standards and fostering the development of new‑type productive forces.

  Chang Guowu explained that the main challenges in upgrading and renovating aging facilities are concentrated in substantial capital investment requirements, the large-scale and technically complex nature of new‑construction projects, and the overall lag in standard‑setting. To address these issues, the Plan puts forward targeted policy measures.

  In terms of bolstering financial support, existing policy‑based funding channels—such as large‑scale equipment‑upgrade loans, science‑and‑technology innovation loans, and technology‑transformation loans—are being leveraged to facilitate the renewal and modernization of eligible aging facilities. To date, the state has expanded the scale of these reloans from RMB 500 billion to RMB 1.2 trillion and reduced the interest rate from 1.75% to 1.25%. As of the end of November 2025, banks had signed equipment‑upgrade loan agreements totaling over RMB 330 billion with 700 petrochemical and chemical enterprises, with outstanding loan balances exceeding RMB 140 billion.

  In terms of optimizing project management, the National Development and Reform Commission and the Ministry of Industry and Information Technology, when assessing the spatial planning of major petrochemical projects, give priority to supporting the upgrading and retrofitting of aging facilities. The Ministry of Industry and Information Technology, in coordination with relevant departments, will guide local authorities in establishing streamlined approval channels for such upgrade and retrofit projects, strengthen the provision of necessary resources, and streamline procedures for project filing (approval), environmental impact assessment, safety licensing, and other formalities, thereby enhancing review and approval efficiency and accelerating project implementation.

   The baseline assessment work across all regions has been completed.

  Will the upgrading and retrofitting of aging facilities have a significant impact on the production and supply of related products?

  Chang Guowu stated that, in order to gain a comprehensive understanding of the status of aging equipment, in 2025 the Ministry of Industry and Information Technology, together with the National Development and Reform Commission and other departments, issued a notice to organize local authorities to conduct baseline assessments of petrochemical and chemical facilities that have been in operation for more than 20 years. To date, these assessments have been completed nationwide, with over 1,600 sets of aging equipment reported; more than 600 of these require upgrading or retrofitting, primarily concentrated in the traditional chemical sector.

  “For newly built facilities as a whole, companies can adopt a “build‑first, dismantle‑later” approach to ensure continuity of market supply; for upgrading and retrofitting existing units, such measures can be implemented during maintenance periods, thereby minimizing disruption to market supply. Moreover, the capacity of outdated or phased‑out facilities accounts for only a small share of the relevant industries, and with ample production capacity currently available for traditional chemical products, the renewal and modernization of aging plants will not significantly affect the production and supply of these commodities,” said Chang Guowu.

  Cao Chuanzhen, Deputy Director-General of the Industrial Development Department of the National Development and Reform Commission, stated that in recent years, the NDRC, together with relevant departments and local authorities, has continuously strengthened macro‑regulation of petrochemical industry policies, implemented initiatives to upgrade and enhance the quality of the petrochemical sector, and coordinated efforts to both “refine new capacity” and “optimize existing capacity.” For example, key enterprises such as Maoming Petrochemical, Qilu Petrochemical, and Shanghai Petrochemical have been supported in upgrading the intrinsic safety of aging refining and ethylene production units through decommissioning old facilities and building new, larger ones, thereby facilitating their transformation and upgrading. The NDRC will continue to work with relevant departments and local governments to further strengthen the enforcement of industrial policies and ensure the effective implementation of the Plan. While encouraging the renovation and modernization of aging petrochemical equipment and improving unit energy efficiency, it will also coordinate and optimize the product mix, striving to increase the supply of high‑end products.

  Gui Gang, Deputy Director of the Planning and Development Department of the State-owned Assets Supervision and Administration Commission of the State Council, stated that during the 14th Five-Year Plan period, central enterprises will phase out and retire over 10 million tons of small-scale refining and chemical production capacity, while further increasing the share of advanced capacity and enhancing their self-sufficiency in high-end products currently in short supply. Moving forward, the SASAC will work with relevant departments to accelerate and intensify the upgrading and renovation of aging petrochemical facilities at central enterprises, and to develop robust contingency plans for supply assurance, thereby ensuring a stable supply of basic petrochemical products.

   Promote the green transformation of the economy and society

  The Plan stipulates that by 2029, all retrofit and upgrade projects for aging petrochemical facilities identified in 2025 will be fully completed; newly designated retrofit and upgrade tasks initiated after 2026 will proceed according to schedule. As a result, safety and environmental risks associated with aging equipment will be substantially reduced, synergistic progress in pollution reduction and carbon mitigation will yield significant results, the proportion of production capacity meeting or exceeding benchmark standards will increase markedly, and levels of intelligentization and green development will see substantial improvements.

  What role does upgrading and retrofitting play in advancing the green transformation of the economy and society? According to Zhang Haolong, Deputy Director-General of the Department of Atmospheric Environment at the Ministry of Ecology and Environment, the petrochemical industry is a major source of atmospheric pollutant emissions. In particular, it ranks first among industrial sectors in terms of volatile organic compound (VOC) emissions and offers significant potential for reduction. The “Plan” focuses on aging equipment in the petrochemical sector, which typically suffers from outdated technology, high energy consumption, and inadequate control of pollutant emissions. “Take a 3,000-cubic-meter gasoline storage tank as an example: its vent valve is a critical device for maintaining pressure equilibrium inside the tank and releases VOCs during pressure regulation. For older units, annual VOC emissions can exceed 10 tons; replacing such valves with low-leakage models could cut emissions by 80% while also delivering economic benefits,” said Zhang Haolong.

  On the front of standards upgrading, Zhu Meina, Deputy Director-General of the Standards and Technology Department of the State Administration for Market Regulation, stated that last year, the Administration, together with five other departments, issued the “Special Action Plan for Upgrading Standards of Aging Petrochemical and Chemical Facilities (2025–2026).” The plan systematically outlines and deploys tasks for building a standards framework related to aging petrochemical and chemical facilities, focusing on six key areas: accelerating the development of safety risk management standards, continuously improving standards for pollutant treatment and low-carbon practices, scientifically formulating energy efficiency and consumption standards, and vigorously advancing digital and intelligent standards. These measures aim to support and facilitate the comprehensive and orderly implementation of the renovation and upgrading of aging petrochemical and chemical facilities. To date, 22 national standards have been released, including “Centrifugal Pumps for the Petroleum, Petrochemical, and Natural Gas Industries” and “Guidelines for Thermal Insulation Design of Equipment and Pipelines.” Moving forward, the State Administration for Market Regulation will work closely with relevant departments to further enhance the guiding and safeguarding role of standards in supporting the renewal and modernization of aging petrochemical and chemical facilities. (Reporter: Wang Junling)

[Editor-in-charge: Jiao Peng]

Source: People’s Daily Overseas Edition