Asia Briefing: China begins to get serious on environment

Pollution is becoming a political issue in China, and the government is making a lot of noises about getting serious about resolving smog and water pollution.

Last month, it set a target of growing the annual output of the country’s environmental industries to 4.5 trillion yuan (€560 billion) by 2015, an annual expansion of 15 per cent over the next three years.

The National Development and Reform Commission reckons that cleaning China's air will cost 1.7 trillion yuan (€210 billion) over the next five years.

For this kind of expenditure to work, it has to be backed up with some kind of regulatory muscle, and commentators have long said a lack of genuine will to enforce rules on environmental protection has always stymied efforts to improve the situation.

But there are signs of change as the government races to ensure it meets its emissions-reduction target set for the 12th five-year plan (2011-15).

Last week, the ministry of environmental protection suspended approval of refinery and chemical projects for two Chinese oil and gas giants to punish them for failing to meet emission reduction targets.

An annual evaluation of all provincial regions and eight centrally administrated state-owned enterprises found the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec) respectively failed to meet the emission-reduction target of chemical oxygen demand and nitrogen oxide in 2012.

Officials had ordered CNPC to cut its emissions of chemical oxygen demand by 0.6 per cent compared with a year earlier. However, such emissions only diminished by 0.08 per cent in 2012.

The nitrogen oxide emissions of Sinopec surged 1.28 per cent, failing to meet the target of zero growth.

The People's Daily reported that an unnamed official with the ministry slammed Sinopec and CNPC, respectively ranked No 4 and No 5 on the Fortune Global 500 this year, for lagging behind the average emission reduction rate.

As punishment, the ministry has suspended environmental approval for new refining and chemical projects as well as the renovation and expansion of existing projects.