China’s Ningxia bans newbuild chemical projects close to Yellow River, regional chemical productions under pressure

In recent years, with the increased control of new entry level pesticide projects in China’s eastern coastal provinces, especially in light of the strict regulation of chemical parks in the major chemical production provinces, most notably Jiangsu, some chemical manufacturers were forced to move to inland provinces, such as Inner Mongolia, Gansu, Ningxia and Sichuan, where local governments have established chemical parks and provided incentives to accommodate the establishment of enterprises from east China. 

As an important location for industrial transfer, Ningxia has seen the launch of several chemical projects in recent years. During the 13th Five-Year Plan period, a total of Yuan6.16 billion was poured into Ningxia, forming an intermediate annual production capacity of 185,000 tons and pesticide technical capacity of 82,000 tons. However, since 2021, the central government’s environmental regulatory policies have restricted chemical productions near the Yellow River Basin. Due to its special geographical location, Ningxia has become a key province subject to environmental compliance inspections, because one-fourth of the length of the Yellow River flows through the province. Many problems have also been exposed during environmental compliance inspections. Therefore, in 2022, Ningxia implemented pollution control rules and regulations covering chemical parks, as well as restrictions covering the newbuild or expansion of chemical parks and chemical projects in key areas. Hence, manufacturers in some of chemical parks are likely to be affected the regulatory inspection and requested correction, which used to be imposed on manufacturers in the eastern provinces. From now on, the chemical industry in Ningxia will experience considerable regulation.

Serious problems of sewage discharge, high energy consumption and high pollution emission

Water resource management is a key issue in the Yellow River Basin. In December 2021, the Central Government Environmental Inspection Team circulated a typical case of environmental violation, where the Ningxia Pingluo Chemical Industrial Park was established only 200 meters away from a tributary of the Yellow River, and manufacturers within the park continued to discharge untreated waste water. Manufacturers also used water from the Yellow River without obtaining a water-intaking permit. 

In addition, in December last year, when the Fourth Central Government Environmental Inspection Team made its inspection in Ningxia, it was found that high energy consumption and high pollutant emission projects were launched illegally in some areas, some energy consumption substitution indicators were untrue, and illegal waste water has been produced for some time. The inspection team pointed out that traditional high energy consuming industries in Ningxia account for a large proportion of its economy, where the per-unit GDP energy consumption and electric power consumption are four times and two times higher, respectively, than the national average. Follow-up inspections will be continued to verify more details and request corrective actions. 

A series of regulatory actions to be implemented

At the start of 2022, the Ningxia Department of Ecology and Environment announced a working plan for the control of pollutants in key areas. For major industries, such as petrochemicals, chemicals and pesticides, action will be taken to control volatile organic compounds covering the “source, process and terminal,” and efforts will be made to accelerate the restructuring and upgrading of the chemical industrial structure to help achieve clean, cyclic and low-carbon production. 

On 23rd January at the Ningxia People’s Congress, an act was passed aimed to creating a High-Quality Yellow River Ecological Pilot Zone through ecological protection, intensified utilization of water resource and disaster prevention. The act will come into force on 1st March, 2022. 

The act will strengthen the special control of the shore of the Yellow River, as well as strict control of the industry development along the river. According to the provisions of the act, Ningxia will ban the newbuild or expansion of chemical projects or chemical parks near the main streams or tributaries of the Yellow River, as well as strengthen control of industrial pollution, enforce clean production in coal, coking and chemical industry sectors, and guide and support manufacturers’ clean production efforts towards energy-saving, environment-friendly, low-carbon and resource utilization development. 

Pesticide varieties to be affected

In 2021, the List of Chemical Industrial Park (chemical clusters) published by the People’s Government of Ningxia Autonomous Region is shown in the following table, which includes two chemical parks and eight chemical clusters, involving major herbicides, such as clethodim, glufosinate, 2,4-D, and triazole fungicides, as well as the upcoming production of oxadiazon, metamifop, thiophanate-methyl and carbendazim. Attention needs to be paid to the capacity and supply of the above products.

List of Chemical Industrial Park (chemical cluster) in Ningxia - 2021

1.Ningxia Provincial Chemical Industrial Park 

• Ningdong Energy and Chemical Base 

• Wuzhong Taiyangshan Development Zone

2.Ningxia Provincial Chemical Cluster 

• Shizuishan Economic and Technological Development Zone Zinshan-Hebin Portion 

• Pingluo Industrial Park Fine Chemical Portion 

• Pingluo Industrial Park Pharmaceutical Portion 

• Qingtongxia Industrial Park New Material Portion 

• Yanchi Industrial Park Huamachi Portion

• Yanchi Industrial Park Gaoshawo Portion

• Zhongwei Industrial Park Chemical Portion  

• Tongxin Industrial Park Fine Chemical Portion