Ministry of Ecology and Environment: Firmly curb the unchecked expansion of “high-pollution, high-energy-consumption” projects! Approval processes for chemical projects in many regions have been tightened.

On May 31, the Ministry of Ecology and Environment issued the “Guiding Opinions on Strengthening Source‑Level Environmental and Ecological Protection for High‑Energy‑Consuming and High‑Emission Construction Projects,” aiming to accelerate green and low‑carbon development and resolutely curb the unchecked expansion of such projects.

The Opinions call for strengthening the effectiveness of strategic environmental assessments. They urge coal‑power energy bases, modern coal‑chemical demonstration zones, petrochemical industrial clusters, and other such areas to conduct follow-up environmental impact assessments of their plans, refine ecological and environmental protection measures, and make timely optimizations and adjustments to the plans.

The Opinions stipulate that petrochemical and modern coal‑chemical projects shall be incorporated into the national industrial development plan. New and expanded petrochemical, chemical, and coking projects must be located within industrial parks that have been established in accordance with the law and approved through planning‑level environmental impact assessments.

With regard to newly proposed “two high” projects, the Opinions stipulate that a corresponding regional pollutant reduction plan must be formulated, effective measures for reducing pollutants at the regional level must be implemented, and sufficient environmental capacity must be secured. Furthermore, within key national areas for air pollution prevention and control, any new coal‑consuming project must strictly adhere to prescribed requirements for coal‑consumption reduction and substitution, and may not use highly polluting fuels as substitutes for coal‑consumption reductions.

The Opinions emphasize that, for project categories with significant environmental impacts or high environmental risks—such as oil refining, ethylene production, steelmaking, coking, and coal chemical processing—no arbitrary delegation of environmental impact assessment (EIA) approval authority or relaxation of approval requirements shall be permitted under the guise of reform pilot programs.

To ensure the effective implementation of the policy, the Opinions stipulate that provincial ecological and environmental authorities shall conduct review and verification of “two high” projects for which environmental impact assessment documents have already been approved by grassroots ecological and environmental departments and administrative approval authorities. For “two high” projects that commence construction without legally submitting and obtaining approval for their environmental impact assessment documents, or that undergo significant changes without legally re‑submitting such documents for approval, authorities shall order an immediate halt to construction and impose strict legal penalties; where ecological and environmental access requirements are not met, authorities shall, in accordance with the law, mandate restoration to the original state.

According to the “Opinions,” “two high” projects are currently categorized and counted under six industrial sectors: coal-fired power, petrochemicals, chemicals, iron and steel, nonferrous metal smelting, and building materials.

Tightening oversight of “high energy consumption and high pollution” projects and implementing dual‑control measures, many localities have tightened the approval process for chemical‑industry projects.

“Since we submitted an equivalent‑replacement project to the municipal authorities at the beginning of the year, it still hasn’t been approved—mainly because it’s stuck at the environmental impact assessment stage. At present, both provincial and municipal authorities have suspended approvals for new coal‑use and energy‑consumption projects, as well as for equivalent‑replacement initiatives,” said the head of a chemical enterprise in Shandong on May 30. He added that, since the start of this year, the province has significantly tightened the review process for “high‑energy‑consumption, high‑emission” chemical projects, requiring all new projects to meet four types of substitution: capacity replacement, reduction in coal consumption, energy‑efficiency improvement, and total pollutant‑emission reduction.

According to reports, on May 19 this year, nine departments including the Shandong Provincial Development and Reform Commission and the Department of Industry and Information Technology issued the “Notice on Further Conducting a Review and Screening of ‘Two High’ Projects,” thereby launching the screening of such projects. This marks the second stringent measure adopted by Shandong Province this year to strictly regulate “two high” projects.

The head of the investment department at a chemical enterprise in Shandong stated that, to achieve the goals of peaking carbon emissions and achieving carbon neutrality and to rigorously implement the dual control system on energy consumption, the Shandong Provincial Development and Reform Commission issued in January this year the “Notice on Promptly Conducting Inspections of ‘Two Highs and One Resource‑Intensive’ Projects,” mandating strict controls over new “two highs and one resource‑intensive” projects—including expansion, renovation, and technological upgrades—strengthening the handling of non‑compliant projects, and reinforcing accountability. Moreover, during the post‑pandemic economic recovery across the province in 2020, in order to prevent a resurgence in the construction of “two high” projects, the province had also made specific arrangements to further standardize the approval process for projects in industries with excess capacity and high energy consumption and to enhance ongoing and ex‑post supervision.

It’s not just Shandong; in recent weeks, several major energy and chemical‑producing provinces, including Shaanxi and Inner Mongolia, have also tightened the approval process for chemical projects.

In Shaanxi, a major province for energy and chemical industries, the “Notice from the General Office of the CPC Central Committee and the General Office of the State Council on Resolutely Curbing the Uncontrolled Development of ‘Two High’ Projects” has recently been circulated to the provincial Development and Reform Commission. According to the head of the Environmental Protection and Resource Conservation Division of the provincial commission, they are currently formulating specific implementation measures, with the overarching principle being that new projects must achieve equivalent energy‑consumption substitution.

Li Chunlin, Secretary of the Yulin Municipal Party Committee and Mayor, stated that Yulin has adopted a new approach to low-carbon development for a high‑carbon city and has systematically optimized and refined its 14th Five-Year Plan. Within the original project portfolio, the city has proactively scaled back more than 40 “two high, one resource‑intensive” projects with a total investment exceeding RMB 700 billion.

Liaoning Province has proposed rigorously controlling access to “two high” projects by taking a comprehensive approach across seven areas: approval procedures, investment access, energy‑conservation reviews, dual‑control management of energy consumption, environmental impact assessments, safety reviews, and ongoing and post‑project supervision.

In this regard, a senior executive at a chemical company noted that, against the backdrop of accelerating progress toward carbon‑peak and carbon‑neutral goals, “high‑carbon, high‑energy‑consumption” projects have become a key focus of containment in several provinces. During the 14th Five-Year Plan period, many regions have planned large‑scale investments in basic chemical projects, which typically entail substantial energy use and emissions; as a result, numerous projects are now being revised or restructured.

Feng Liang, Chairman of Inner Mongolia Shengyuan Technology Co., Ltd., stated that it is essential to rigorously screen project approvals and curb the unchecked expansion of “two high” projects. However, at present, Inner Mongolia’s review process for such projects primarily hinges on the principle of controlling total emissions. Regardless of whether a project employs new processes or technologies, any newly launched initiative risks exceeding the overall emission cap and thus faces rejection. “Even cutting-edge technologies inevitably generate some emissions. Meanwhile, existing high-emission enterprises within the region have already consumed a portion of the available emission allowances, yet their operations remain largely unrestricted. Conversely, some companies seeking to expand their scale and extend their industrial chains through new high-tech projects are instead constrained by the lack of available emission quotas—this hardly aligns with the national intent behind curbing the development of ‘two high’ projects. Relevant authorities should, while steadfastly phasing out outdated capacity and restraining the growth of established high-emission firms, appropriately promote the development of low‑emission, new projects,” Feng Liang said.

Guiding Opinions on Strengthening Source‑Level Ecological and Environmental Prevention and Control for High‑Energy‑Consuming and High‑Emission Construction Projects

To the Departments (Bureaus) of Ecology and Environment of all provinces, autonomous regions, and municipalities directly under the central government, and to the Bureau of Ecology and Environment of the Xinjiang Production and Construction Corps:

To fully implement the decisions and arrangements of the Fifth Plenary Session of the 19th CPC Central Committee on accelerating green and low-carbon development, resolutely curb the unchecked expansion of high-energy‑consumption and high-emission (“two high”) projects, and promote green transformation and high-quality development, the following guiding opinions are hereby issued to strengthen source‑level ecological and environmental prevention and control for “two high” projects.

I. Strengthening Ecological and Environmental Zoning Management and Planning Constraints

(1) Deeply implement the “Three Lines and One List” framework. Ecological and environmental authorities at all levels should accelerate the application of the “Three Lines and One List” outcomes in industrial layout and structural adjustment within the “two high‑carbon” sectors, as well as in the site selection of major projects. When local ecological and environmental authorities undertake the implementation, refinement, and subsequent updating and adjustment of the “Three Lines and One List” at the city level, they should further specify environmental access and control requirements for “two high‑carbon” projects within the ecological and environmental access list. Regions receiving industrial transfers—such as steel and electrolytic aluminum—must strictly enforce ecological and environmental zoning and control measures, treating environmental quality bottom lines as binding constraints.

(2) Strengthen the effectiveness of strategic environmental assessment. Ecological and environmental authorities at all levels shall rigorously review the environmental impact assessments of comprehensive plans and sector‑specific plans—such as those for industry and energy—that involve “two high” industries. In particular, for plans revised to facilitate the launch of “two high” projects, the EIA review process must strictly cap the scale of development in these sectors and optimize planning layouts, industrial structures, and implementation timelines. For park‑level plans where “two high” industries are the dominant sectors, EIA assessments should incorporate analyses of carbon emissions and emission‑reduction potential, thereby promoting green and low‑carbon development of such parks. Furthermore, coal‑power energy bases, modern coal‑chemical demonstration zones, petrochemical industry clusters, and similar entities should conduct follow‑up environmental impact assessments of their plans, refine ecological and environmental protection measures, and make timely adjustments to the planning framework as needed.

II. Strict Review and Approval of Environmental Impact Assessments for “Two High” Projects

(3) Strictly enforce environmental access requirements for construction projects. New, renovated, or expanded “two high” projects must comply with laws and regulations on ecological and environmental protection as well as relevant statutory plans, and must meet the total emission control targets for key pollutants, the carbon‑peak goals, the ecological and environmental access list, the environmental impact assessment requirements of related plans, and the environmental access criteria applicable to projects in the respective industries, as well as the approval principles set forth in environmental impact assessment documents. Petrochemical and modern coal‑chemical projects shall be incorporated into the national industrial plan. The establishment of new or expanded petrochemical, chemical, coking, nonferrous metal smelting, and flat‑glass projects shall be confined to industrial parks that have been legally and compliantly designated and approved through a planning‑level environmental impact assessment. Ecological and environmental authorities at all levels, together with administrative approval agencies, are required to exercise rigorous oversight; any project that fails to comply with relevant laws and regulations shall be denied approval in accordance with the law.

(4) Implement regional emission reduction requirements. Newly built “two high” projects shall, in accordance with the requirements of the “Notice on Strengthening Supervision and Management of Regional Emission Reduction Measures for Key Industry Construction Projects,” formulate corresponding regional pollutant reduction plans based on regional environmental quality improvement targets, adopt effective regional pollutant reduction measures, and ensure sufficient environmental capacity is available. Within the national key areas for air pollution prevention and control (hereinafter referred to as the “key areas”), newly built coal‑consuming projects must also strictly implement coal consumption reduction and substitution measures as prescribed; the use of highly polluting fuels as substitutes for reduced coal consumption is prohibited.

(5) Rationally delineate responsibilities. Provincial ecological and environmental authorities shall strengthen oversight and evaluation of the EIA approval procedures and outcomes for “two high” projects at the grassroots level, and, in accordance with the law, reassess and assume jurisdiction over those projects where local approval capacities are inadequate. For project categories—such as oil refining, ethylene production, iron and steel, coking, coal chemical processing, coal-fired power generation, electrolytic aluminum, cement clinker, flat glass, and copper–lead–zinc–silicon smelting—that have significant environmental impacts or pose high environmental risks, no arbitrary delegation of EIA approval authority or relaxation of approval requirements shall be permitted under the guise of reform pilot programs.

III. Promoting Coordinated Pollution Reduction and Carbon Emission Reduction in the “Two High” Industries

(6) Enhance clean production and pollution prevention and control. Newly built or expanded “two high” projects shall adopt advanced, state-of-the-art technologies and equipment, ensuring that unit‑product consumption of materials, energy, and water meets leading clean‑production standards, and that measures to prevent and control soil and groundwater contamination are formulated in accordance with the law and rigorously implemented. For “two high” industry projects in sectors where national or local authorities have already established ultra‑low emission requirements, such requirements must be met. The use of clean fuels is encouraged, and, in key regions, new coal‑fired captive boilers should, in principle, not be constructed. In key regions, blast‑furnace–basic‑oxygen‑furnace long‑process steel enterprises are encouraged to transition to electric‑arc furnace short‑process operations. Bulk materials should, wherever feasible, be transported by rail, pipeline, or waterway, while short‑haul feeder transport should prioritize vehicles powered by new energy sources.

(7) Integrate carbon‑emission impact assessment into the environmental impact assessment system. Ecological and environmental authorities at all levels, as well as administrative approval agencies, should actively advance pilot programs for conducting EIAs of “high‑carbon” and “high‑energy‑consumption” projects, ensuring alignment with and implementation of policy requirements such as regional and sectoral carbon‑peak action plans, clean‑energy substitution, clean transportation, and total coal‑consumption control. In EIA processes, comprehensively carry out source‑identification and source‑strength accounting for both pollutants and carbon emissions, conduct feasibility assessments of pollution‑reduction and carbon‑reduction measures, and perform comparative analyses of alternative schemes to propose optimal integrated control solutions. Regions and enterprises that are well‑positioned are encouraged to explore and implement pilot and demonstration projects for synergistic pollution‑and‑carbon‑reduction governance, as well as for carbon capture, storage, and comprehensive utilization.

IV. Strengthening Regulatory Oversight and Law Enforcement in Accordance with the Pollutant Discharge Permit System

(8) Strengthen the management of pollutant discharge permits. Local ecological and environmental authorities, together with administrative approval agencies, shall, during the review and issuance of discharge permits for “two high” enterprises, comprehensively verify the implementation of all ecological and environmental protection measures and regional emission reduction measures as specified in the environmental impact assessment reports and their approval documents. For “two high” enterprises subject to key permit‑based management, on-site inspections shall be intensified, and permits shall be denied in accordance with the law where conditions are not met. Enhance oversight of the quality of discharge permits and the submission of compliance reports by “two high” enterprises, and urge these entities to maintain accurate records, prepare compliance reports, conduct self‑monitoring, and disclose environmental information as required. With respect to “two high” enterprises holding notices of限期整改 (deadline‑driven rectification) or having remediation items listed in their discharge permits, closely track the progress of corrective actions; if delays in completing remediation or unlicensed discharges are detected, such violations shall be investigated and prosecuted strictly in accordance with the law.

(9) Strengthen law enforcement and regulatory oversight based primarily on pollutant discharge permits. Local ecological and environmental authorities should include “two high” enterprises in the “double-random, one-public” regulatory framework. Intensify inspections of these enterprises to ensure compliance with permit‑based discharge requirements and lawful public disclosure of environmental information. In particular, for “two high” enterprises subject to key management under the pollutant discharge permitting system, promptly verify the implementation of permit‑authorized items, with a focus on compliance with limits on pollutant concentrations and emissions, controls on fugitive emissions, and emission restrictions during special periods. Severely crack down on all illegal activities by “two high” enterprises, including discharging without a permit or failing to comply with permit conditions, and promptly publicize typical cases of violations of the pollutant discharge permitting regime.

V. Ensuring the Effective Implementation of Supporting Policies

(10) Establish management ledgers. Ecological and environmental authorities and administrative approval agencies at all levels shall establish management ledgers for “two high” projects, incorporating into these ledgers all projects that have had their environmental impact assessment (EIA) documents accepted or approved since 2021, as well as those listed in relevant plans by competent departments. The ledgers shall record basic information such as the project name, construction site, industry sector, construction status, date of EIA document acceptance, approving authority, approval date, and approval document number. For projects involving capacity replacement, additional details on the decommissioned equipment and capacity to be replaced must also be recorded. Existing “two high” projects shall undergo review in accordance with applicable requirements. For the time being, “two high” projects are categorized into six industries—coal-fired power, petrochemicals, chemicals, iron and steel, non‑ferrous metal smelting, and building materials; should the state subsequently issue specific regulations defining the scope of “two high” projects, those regulations shall prevail. Provincial ecological and environmental authorities shall coordinate and monitor the status of “two high” projects within their administrative jurisdictions and submit reports to the Ministry of Ecology and Environment by the end of October 2021, with subsequent updates every six months.

(11) Strengthen supervision and inspection. Local ecological and environmental authorities shall establish a working mechanism for the supervision and inspection of environmental impact assessments and pollutant discharge permits for “two high” projects. For “two high” projects whose EIA documents have already been approved by grassroots ecological and environmental departments and administrative approval authorities, provincial-level ecological and environmental authorities shall conduct review and verification. For projects that have commenced construction or are under construction, priority should be given to verifying whether environmental protection measures have been implemented concurrently and whether any significant changes have occurred. For projects that have already entered production or are in operation, particular attention must be paid to assessing the implementation of environmental protection measures and requirements—such as regional reductions and substitutions of key pollutants—as stipulated in the EIA documents and approval decisions, as well as the status of pollutant discharge permit applications and compliance with permit conditions. Local ecological and environmental authorities shall promptly record any issues identified during supervision and inspection in the management ledger for “two high” projects. The Ministry of Ecology and Environment will further strengthen its oversight and guidance.

(12) Strengthen accountability. Project developers of “two high” projects shall conscientiously fulfill their primary responsibility for ecological and environmental protection. For “two high” projects that commence construction without legally submitting and obtaining approval for an environmental impact assessment (EIA) document, or that undergo significant changes without re‑submitting and obtaining EIA approval as required by law, local ecological and environmental authorities shall order an immediate halt to construction and impose strict legal penalties. Where such projects fail to meet ecological and environmental准入 criteria, they shall be ordered by law to restore the site to its original condition. For “two high” projects that do not comply with EIA requirements or the “three simultaneities” system, corrective measures shall be mandated; if substantial environmental pollution or ecological damage has occurred, production or use shall be ordered to cease in accordance with the law, or, upon approval by the people’s government with the relevant authority, the project shall be ordered to shut down. With respect to staff members of approval and regulatory agencies who fail to perform their duties in accordance with the law or exercise inadequate oversight, disciplinary actions shall be imposed in accordance with the law; where significant losses or adverse impacts result, the responsible individuals shall be held legally accountable. In cases where local governments demonstrate serious deficiencies in implementing ecological and environmental prevention and control measures for “two high” projects, regional restrictions on project approvals shall be imposed in accordance with the law, and such cases shall be subject to central and provincial ecological and environmental protection inspections.

Ministry of Ecology and Environment

May 30, 2021

Source: China Chemical Industry News Authors: Liu Haijun, Li Jun, Yu Hong