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Publish time:2/8/2018 12:00:00 AM Source: CCM
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The Chinese government
is paying greater attention to environmental protection, which has a
significant effect on the agrochemical industry, which is one of the heaviest
polluting industries in the country.
The
Chinese government is paying greater attention to environmental protection.
Throughout the year 2017, the stricter environmental inspections, the
replacement of environmental protection fee with environmental protection tax,
and the pollutant discharge permit system helped cleaning the agrochemicals
market from heavy polluters and outdated production technology. In China, a
major campaign against environmental violations has so far penalized more than
30,000 companies and over 5,700 officials.
As
China’s fight against pollution is getting more fierce, CCM is analyzing how
the environmental protection measurements are affecting the agrochemicals
industry in 2018 and what international players can expect for the near future.
Notably,
the environmental tax amounts only took up a small proportion in some leading
enterprises in China, Specifically, in 2016 the companies only paid taxes
according to about 0.10% of their total revenues. According to market
intelligence form CCM, large enterprises have complete pollutant discharge
disposal facility and environmental equipment, plus the rising pesticide prices
compared to their small and medium-sized competitors, so they won't face such
great pressure in 2018.
According
to the latest announcement issued by the Ministry of Environmental Protection
of the People's Republic of China, air pollution in the industrial important
Beijing-Tianjin-Hebei region during 12–17 Januar was the longest pollution
since Dec. 2017. In response, the MEP sent letters in advance to Beijing,
Tianjin, Hebei, Shanxi, Shandong and Henan to order them to issue an orange
alert and implement related emergency measures to relieve the influences of
heavily-polluted weather.
However,
illegal pollutant discharge was still found by 28 supervision teams during the
inspection. More than 2,000 emergency response sites were inspected in the
middle of January, among which 19 were found had not suspended or cut the
production and 2 were found discharging excess pollutants or not implementing
the minimum emission standards.
The
pollutant discharge permit system can be regarded as a long-term environmental
protection supervision system in China. This move is predicted to be beneficial
for pesticide enterprises that had invested a large sum in environmental
equipment construction. They can earn money as long as they operate smoothly.
So far, less than 1000 pesticide enterprises out of the more than 2,000 total
companies have applied for the pollutant discharge licenses. Reportedly, due to
time limitation and approval process, enterprises that have already applied for
the licenses will get the licenses in 1 to 2 months at most, and if not, they
will no longer have the licenses. Hence, unqualified enterprises or those did
not apply for the licenses are destined to shut down in March at the latest.
However,
China’s efforts to clean up the environment have neither resulted in job losses
nor damaged the economy, according to environment minister Li Ganjie. According
to him, For the long-term perspective, there is no negatively impact.
Strengthening environmental protection would be beneficial for the economic
development in the country.
Companies
involved in the Chinese agrochemicals industry have to expect an overall rise
in the cost of doing business. However, the scale of the impact will depend on
the location of the affected companies, because the pollution tax rates are
decided at the provincial level.
Because
of this issue, regions with large manufacturing bases may set their tax rates
lower to retain the fiscal revenue. There are also some important exemptions to
the Environmental Protection Tax. Firms that discharge pollutants directly to
centralized sewage and waste treatment facilities and those that dispose of
solid wastes in facilities that meet the local and national standards are
exempt from the tax.
About the article
The
information for this article comes from CCM, China’s leading market
intelligence provider for the fields of agriculture, chemicals, food and feed.
For
more information on the impact of China’s pollution crackdown on the
agrochemicals industry, please have a look at CCM’s monthly published Newsletter and get a free trial to CCM’s Online Database.
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