China’s Jiangsu Province cracks down on chemical industry

The government of China’s Jiangsu Province has released detailed regulations that restrict or eliminate some chemical manufacturing in the region. The rules are part of a planned shift away from heavy industry toward high-tech manufacturing and cleaner industries.

New chemical industrial parks and new chemical plants outside existing parks will be banned, as will expansions and renovations in parks lacking adequate environmental infrastructure and good safety records. The rules also restrict 13 types of chemical projects and prohibit 18 others.

Many activities related to scientific research, information technology, biomedicine, innovative materials, and green applications are exempted, such as electronics-grade sulfuric acid and waste reuse projects.

“Jiangsu is relatively rich and also has had a fair share of accidents in the past,” says Kai Pflug, CEO of the Shanghai-based advisory firm Management Consulting–Chemicals. “So governments need to make sure that they are seen as doing everything to avoid future accidents and environmental pollution.”

In March 2019, an explosion at a chemical plant in the city of Yancheng in Jiangsu Province killed 78 people and injured 617.

The regulations will also force industry consolidation, Pflug says. They state that many types of plants with small capacities or older technologies must be eliminated, while expansions and renovations are limited to existing chemical parks. That combination will weed out smaller and weaker firms, he says.

Pflug adds that other regions across China are making similar changes in response to the central government’s emphasis on safety and environmental protection.