SlideShare a Scribd company logo
1 of 8
Download to read offline
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
230
Petrochemicals, Chemicals and Refining (PCR) Working Group
Key Recommendations
1.	 Standardise Penalties Imposed on Pollutants in the Chemical Industry
•	 Provide guidance on how to adjust operations in order to adhere to local emission standards, and
recommend third-party agents to advise on local compliance issues.
•	 Set up a corresponding punishment mechanism for each specific market, and regulate the
environmental services market.
•	 Examine the Articles 21, 22 and 23 of the Environmental Protection Law (EPL) in terms of its
operability, rather than focusing on the macroscopic description.1
2.	 Optimise the Allocation Methodology in China’s Emissions Trading System
(ETS) to Encourage Advanced Technologies in the Chemical Industry
•	 Involve industry experts in the detailed definition of China’s ETS related to the chemical industry.
•	 Establish a fair and consistent process—from one region to another, from expansion to new
projects—for initial free allocation, reflecting the nature of industries, the energy intensity of
installations and technological levels.
•	 Invite industry experts to work out fuel-specific emissions benchmarks per unit product for the
chemical industry so that grandfathering or tons of CO2 per gross domestic product (GDP) (tCO2/
CNY 10,000) output can be substituted for free allowances allocation.
3.	 Reduce Data Requirements on New Chemical Notification for Intermediates
in China
•	 Recognise that intermediates present a lower risk than other regular substances.
•	 Revise current data requirements on intermediates to treat isolated-intermediates as a special group
of substances, and lower their notification requirements.
4.	 Promote Legislation to Optimise Administration on Hazardous Chemicals
(HCs)
•	 Clarify the administration scope of relevant licence/permit/registration applications—especially for
distribution, storage, production and transportation¬—and publish the corresponding guidelines to
ensure regulatory compliance of all industry players.
•	 Complete supporting documents related to identification of hazardous physical property, and
publicise the “Inventory exempted from identification”.
•	 Adopt international, advanced practices on chemical identification and classification, for example
(EC) No. 1272/2008 on Classification, Labelling and Packaging (CLP).
•	 Accept classification results from companies for pure substances and mixtures based on reliable
resources such as Good Laboratory Practice (GLP) laboratories, worldwide authoritative databases
and the technical United Nations (UN) calculation principle for the Globally Harmonised System
(GHS) of classification.
•	 Accept compliant material safety data sheets (MSDS) based on the Safety Data Sheet for Chemical
Products (GB/T 16483-2008), and continue implementing the transition period for the 2013
1  Environmental Protection Law of the People’s Republic of China, Ministry of Environmental Protection, 25th
April, 2014, viewed 29th
April, 2015, <http://www.gov.cn/
xinwen/2014-04/25/content_2666328.htm>
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
231
European Business in China Position Paper
欧盟企业在中国建议书 2015/2016
Guidance on Compilation of Safety Data Sheet for Chemical Products (GB 17519-2013).
•	 Award appropriate exemptions for the import of low volume hazardous chemicals (HCs) for laboratory
and research and development (R&D) usage.
5.	 Take Prudent Steps in Consumption Tax Reform
•	 Publicise the selection criteria and list of potential categories that may be subject to consumption tax
for public opinion.
•	 Involve experts to discuss the standards and measurement of particular matters (e.g. consumption
tax rate, tax production stage or retail stage) according to the current development of chemical
industry in China.
•	 Involve industry experts to analyse the impact of the draft consumption tax reform on related
enterprises and end customers.
Introduction to the Working Group
The Petrochemicals, Chemicals and Refining (PCR)
Working Group represents the leading European
companies in the petroleum and chemical industry in
China, many of which are global Fortune 500 companies.
The aim of the working group is to help our members
adapt to the China market by facilitating communication
between the member companies, and the government as
well as Chinese industrial associations, providing up-to-
date information and presenting common challenges and
making recommendations on regulatory issues.
Recent Developments
The working group has a continued strategic dialogue
with the Chinese Government and relevant institutions,
including high-level meetings with Chinese and European
authorities, such as: the Ministry of Environmental
Protection (MEP); the Ministry of Commerce (MOFCOM);
the State Administration of Taxation (SAT); the State Food
and Drug Administration (SFDA); the China Petroleum
and Chemical Industry Federation (CPCIF); the State
Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ); and senior European Commission
(EC) officials.
The working group greatly appreciates both the
constructive dialogue between European industry and
Chinese officials, and the market-driven orientation of
much of the new domestic legislation regulating the
PCR industry.
The Petrochemicals, Chemicals and Refining Working
Group is keen to continue constructive dialogues with all
relevant Chinese ministries and institutions and to bring
in relevant expertise in terms of the latest technologies,
as well as best available techniques, for both industrial
practises and regulatory approaches.
Key Recommendations
1.	 Standardise Penalties Imposed on Pollutants
in the Chemical Industry
Concern
Local governments are setting stringent local pollutant
discharge standards for pollutants not specified in
the national pollutant discharge standards, which has
created a complex series of emissions standards across
different provinces and municipalities.
Assessment
According to Article 16 of Environmental Protection
Law of the People’s Republic of China, the people’s
governments of provinces, autonomous regions, and
municipalities directly under the central government
may establish their local standards for the pollutant
discharge of items not specified in the national pollutant
discharge standards and may set local pollutant
discharge standards that are more stringent than the
national ones.
In light of this clause and their own environmental
capacities, provinces and municipalities can create
their own legislation for a series of emissions standards
of pollutants. For instance, the Shanghai Municipal
Environmental Protection Bureau and the Shanghai
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
232
Third Plenum Reality Check
What did the Third Plenum’s Decision2
say?
What is the reality?
We will persist in equality of rights,
opportunities and rules, abolish all
forms of irrational regulations for
the non-public economy, remove all
hidden barriers, and adopt specific
measures for non-public enterprises
to enter franchising fields.
Over the past two years, with the streamlining of government
approvals, the scope of projects requiring government approvals
has narrowed, and more project approval power is now controlled
by local governments. Working group members hope that this will
help to shorten the project approval time for their investments, and
that the central government will strengthen “overall balancing” to
minimise the risk of overcapacity.
	
The National Layout Plan for seven major petrochemical parks
was adopted by the State Council in June 2014. Private firms
have been granted more access to invest in refinery, cracker and
downstream products in these parks. Working group members hope
that the Chinese Government will publicise more details of this plan. 	
	
In the revised Foreign Investment Industrial Guidance Catalogue
promulgated in March 2015, caps on equity ratios for foreign direct
investment (FDI) have been removed for sectors like cracker and
refinery. Working group members see more opportunities in cracker
downstream investments.
Any price that can be determined by
the market must be left to the market,
and the government is not to carry
out improper interventions. We will
push ahead with pricing reforms of
water, oil, natural gas, electricity,
transportation, telecommunications
and some other sectors while relaxing
price control in competitive areas.
The price of natural gas increased unexpectedly in 2014. This placed
a severe burden on the operations of Petrochemicals, Chemicals
and Refining Working Group members’ facilities that use natural gas
a raw material. On top of that, more factors such as the increased
consumption tax on naphtha and other petrochemical feedstocks,
increasing costs for hazardous waste treatment, adoption of
consumption tax on chemicals like coatings, the introduction of the
national emissions trading scheme (ETS) (to be launched in 2016),
environmental and carbon taxes, all combine to create additional
cost burdens for working group members’ investments in China.  
We will encourage non-public
enterprises to participate in SOE
reform, foster mixed enterprises with
non-public capital as the controlling
shareholder, and encourage qualified
private enterprises to establish the
modern corporate system.
Working group members noted positive developments in the reform
of ‘mixed ownership’ in central SOEs, and the promotion of the
public-private partnerships (PPP) model in sectors like infrastructure
and environmental protection.
We will have the same laws and regulations
on Chinese and foreign investment, and
keep foreign investment policies stable,
transparent and predictable.
Working group members noted China’s progress in adopting
negative lists in pilots FTZs and the drafting of Foreign Investment
Law.  
2   The Third Plenum of the 18th
National Congress of the Communist Party of China Central Committee was held in November 2013, and concluded with a decision laying out
new economic and policy initiatives – the Decision.
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
233
European Business in China Position Paper
欧盟企业在中国建议书 2015/2016
Bureau of Quality and Technical Supervision released
the Air Pollutant Emissions Standards in the Printing
Industry (DB 31/872-2015) in the first quarter of this
year. They proposed the limitation of the maximum
allowable emissions concentration and maximum
allowable emissions rate on five types of substances
related to the printing industry: benzene, toluene,
xylene, non-methane hydrocarbon and particulate
matter. These standards are mandatory for any new
formulation. Enterprises guilty of discharging pollutants
exceeding the standards will incur a penalty of Chinese
Yuan (CNY) 8,000 per ton for every day they continue
to pollute.
Enterprises are at risk of involuntarily violating local
emissions standards due to this complex regional
legislation. Also, it can be difficult and costly to adjust
operations to local standards whilst trying to supply the
entire market. Access to clear and coherent guidance
on local emissions standards is not easily accessible
making compliance unnecessarily difficult and
potentially costly.
Recommendation
•	 Provide guidance on how to adjust operations in order
to adhere to local emission standards, and recommend
third-party agents to advise on local compliance issues.
•	 Set up a corresponding punishment mechanism for
each specific market, and regulate the environmental
services market.
•	 Examine the Articles 21, 22 and 23 of the EPL in
terms of its operability, rather than focusing on the
macroscopic description.
2.	 Optimise the Allocation methodology in
China’s Emissions Trading System (ETS)
to Encourage Advanced Technologies in
the Chemical Industry.
Concern
The Chinese ETS is underdeveloped in comparison
to international equivalents: without properly taking
into account the chemical sector’s specificities and
its sub-sectors’ heterogeneity, ETS rules can (i)
introduce undue biases among similar activities, (ii)
lead to counter-effective outcomes and (iii) favour more
emitting technologies over efficient ones.
Assessment
Under the current rules of China’s ETS, allocation of
free allowances is mostly based on historical emissions
levels for petrochemical and chemical sectors. Whereas
petro-chemical multinational corporations (MNCs) have
invested in the most efficient plants with best available
technologies (BAT), under current ETS policies based
on historical emission levels those players are put at a
disadvantage compared to their peers who would have
invested in low-cost, less-efficient technologies. This
allows  historically high polluting companies to become
more competitive while only slightly improving their
operations and still emitting more CO2 than those with
a BAT. In other words the Grandfathering scheme is not
fair.
Moreover, under the current rules, capacity expansions
or debottlenecking on existing installations are treated
differently (grandfathering) to new projects (benchmarking).
This may have a counter-effective impact as it would
discourage investment in expansion plans that could
improve efficiency.
The working group welcomes the decision to have
the Chinese ETS evolve into a ‘benchmark’ for future
allocation methodology. The European Chamber regrets
that the current proposed outcome of the benchmarking
process (a general output ratio expressed in tCO2/
RMB) does not accurately reflect the energy efficiency
of the production processes within the petrochemical
and chemical industry.
Due to the diversity of its industry, the working group
is advocating for a benchmark methodology similar
to what has been applied in other regions, such as in
Europe. Such a benchmark would be done by category
of products, thereby differentiating the most energy-
intensive sub-sectors (ammonia, ethylene oxide,
industrial gases, nitric acid) from the less energy
intensive ones, based on BAT for the available fuel/
feedstock (e.g. coal, natural gas). This measure would
improve extraction efficiency and create added value
from resources.
Petrochemicals and chemicals are by nature energy
and carbon intensive, but indispensable as a pillar of
the economy. Without a fuel-specific benchmark by
product, the ETS will not encourage the deployment
of energy-efficient and low-emitting technologies, and
will limit the development of the necessary industrial
infrastructure in China.
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
234
The Chinese ETS is in a crucial phase of design and
testing. Fair treatment for initial free emissions allowances
allocation is fundamental to the long-term success of
the scheme. It is also essential that the scheme be
applied consistently throughout the country under a
clear allocation policy that will guide the implementation
within the different regions. Petrochemical, Chemical and
Refining Working Group members have rich experience
in a wide variety of issues in these fields, both in the EU
and globally, and can assist the Chinese Government in
this regard.
Recommendation
•	 Involve industry experts in the detailed definition of
China’s ETS related to the chemical industry.
•	 Establish a fair and consistent process—from one
region to another, from expansion to new projects—for
initial free allocation, reflecting the nature of industries,
the energy intensity of installations and technological
levels.
•	 Invite industry experts to work out fuel-specific
emissions benchmarks per unit product for the
chemical industry so that grandfathering or tons of
CO2 per gross domestic product (GDP) (tCO2/Chinese
Yuan (CNY)3
10,000) output can be substituted for free
allowances allocation.
3.	 Reduce Data Requirements on New
Chemical Notification for Intermediates
in China
Concern
The data requirements for notifying a new intermediate
in China are the most stringent in the world and the time
taken for notification is the longest, which puts Chinese
intermediate manufacturers at a big disadvantage.
Assessment
Chemical intermediates are a common necessity during
the synthesis of many products such as pesticides,
pharmaceuticals, cosmetics and dyes. Industrial
applications usually require intermediates to be produced
in high volumes. An intermediate is a chemical substance
that is only produced in order to be consumed in a
subsequent chemical reaction. As such, an intermediate
is only handled in the industrial setting and will—due to
its consumption in the reaction—not be used as a direct
ingredient in formulations, and the exposure will be very
low. For some intermediates there are even dedicated
3 In China, for the measurement tons of CO2 per GDP (tCO2/GDP), GDP equates
to CNY 10,000.
technical and organisational measures in place to keep
the substance contained and controlled. To reduce the
data requirements for the registration of intermediates
is therefore a process that follows the scientific principle
that risk is a function of hazard and exposure. Low
exposure lowers the resulting risk. Good regulatory
practice benefits from such principles by balancing the
regulatory burden through effective provisions in order
to protect human health and the environment. That was
the reason why reduced registration requirements were
introduced into almost all chemical regulations in the
world.
The current guidance for New Chemical Notification
does not differentiate an intermediate (manufactured
or imported in annual quantities greater than one ton
(>1t/y)) from a regular substance in terms of notification
data requirements, which is unusual when compared
to international chemical regulations. The European
Chamber hopes the Ministry of Environmental
Protection (MEP) can consider the special situation
of lower exposure risk of intermediates which will be
consumed in further reactions, and difficulties faced
by the industries in treating isolated-intermediates as
a special group of substances, and therefore lower
their notification requirements for the companies with
proper exposure management measures. Differentiating
intermediates from general substances and lowering
registration requirements for intermediates will align
with the MEP's chemical risk management guidelines,
making it more refined and scientific. Enterprises who
wish to benefit from reduced registration requirements
must provide strict risk management measures to
reduce exposure and commit to implementing them,
thereby reduced registration requirements can result
from the scientific basis that a substance poses a lower
risk if the exposure is lower. Enhanced supervision on
the annual reporting of intermediates and downstream
manufacturers’ clarification can be initiated by the
relevant authority to ensure that the reduced registration
requirements are not claimed incorrectly.
Intermediates are distinguished from other substances
and different provisions on reduced requirements for
intermediates exist in other major industrial countries
and regions including the United States (US), the
European Union (EU), Switzerland, Canada and Japan.
For example, the provisions below are implemented in
the European Regulation on Registration, Evaluation,
Authorisation and Restriction of Chemicals (REACH):
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
235
European Business in China Position Paper
欧盟企业在中国建议书 2015/2016
Type of Intermediates Registration Requirement Notes
Non-isolated intermediates Exempt  
On-site isolated intermediates
manufactured or used under
strictly-controlled conditions
 <1 ton: exempt from registration.
1-1,000 tons: only existing
data is required.
>1,000 ton: only need to follow
the 1-10t/y standard registration
requirement.
Reduced data requirements;
if the intermediates are sold, the
manufacturer or importer needs confirmation
from the customer that they observed that
the conditions were  strictly controlled.
Transported isolated intermediates
manufactured or used under strictly-
controlled conditions
Isolated intermediates that are not
manufactured or used under strictly-
controlled conditions
Standard registration requirement
according to 4 tonnage levels.
Data requirements on standards registration is
less than those stipulated in the Environmental
Management Measures on New Chemical
Substances (2010 revision)
Order No. 7 of the Ministry of Environmental
Protection.  
Recommendations
•	 Recognise that intermediates present a lower risk than
other regular substances.
•	 Revise current data requirements on intermediates
to treat isolated-intermediates as a special group of
substances, and lower their notification requirements.
4. Promote Legislation to Optimise
Administration on Hazardous Chemicals
(HCs)
Concern
The Catalogue of Hazardous Chemicals (2015 Version)
implemented on 1st
May, 2015, introduces Globally
Harmonised System (GHS) classification and the
building block principle in addition to 2,828 listed items,
which greatly exceeds the scope and compliance
requirements of previous versions.
Assessment
Under State Council decree 591 (Regulations on Safe
Management of Hazardous Chemicals), hazardous
chemicals in the Catalogue of Hazardous Chemicals
must meet the safety management requirements for HC
production, storage, use, operation and transportation.
This regulation implements a licensing system for
producers/operators/users of hazardous chemicals in
Catalogue. The scope of the Catalogue of Hazardous
Chemicals will directly influence the controlled scope
of relevant licensing and registration applications,
e.g. the safety production licence, the trading licence,
hazardous chemical registration, etc. Though the
2015 version appears smaller in size compared with
its 2002 predecessor (total items have been reduced
from 2,936 to 2,828),4
the actual scope has expanded
with the introduction of the ‘building brick’ principle.
The application scope of each relevant permit/
licence/registration is ambiguous and will impede HC
compliance procedures in China.
So far the corresponding guideline of the 2015
catalogue includes GHS classification information, but
the United Nations (UN) number has not been released.
Meanwhile, the “Inventory exempted from identification”
mentioned in Method No. 66 for hazardous chemicals
has been delayed several times, which has led to
unnecessary workload for companies who now have to
identify the hazardous chemicals within officially-known
hazard classifications.
Material safety data sheets (MSDS) play a significant
4 The new catalogue of hazardous chemicals will come into effect on May 1, China
Quality News, 30th
March, viewed 30th
April, 2015, <http://www.cqn.com.cn/news/
zggmsb/diliu/1021450.html>
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
236
role in HCs registration. The Safety Data Sheet for
Chemical Products Content and Order of Sections (GB
16483-2008)5
was set up to define the structure, content
and generic forms of the Safety Data Sheet (SDS). In
September 2013, GB 17519-20136
was issued and
serves as the supporting document to GB 16483-
2008, which introduced more stringent rules to cover
MSDS format and content. It appears vastly changed
compared with the previous version. Even though GB
17519 is a recommended standard, it is still taken as a
mandatory requirement in some inspection processes.
Since the MSDS maintenance and management of
most multinational chemical companies relies on a
complex and comprehensive SAP Enterprise Resource
Planning (ERP) software system, even a minor change
of the MSDS results in high costs in system adjustment.
Multi-level administration of HCs registration for large-
scale industry use and for research and development
(R&D) use should be applied in a way that is consistent
with similar international and domestic regulations
(e.g. REACH, the MEP’s Environmental Management
Measures on New Chemical Substances (2010 revision)
Order No. 7).
Current requirements for registration procedures for
regular chemicals, such as waiving registration for HCs
for quantities less than 1t/y, should be revised for R&D
use for the purpose of cost savings, workload reduction
and to control supply chain shortage risks.    
Recommendations
•	 Clarify the administration scope of relevant licence/
permit/registration applications—especially for
distribution, storage, production and transportation¬—
and publish the corresponding guidelines to ensure
regulatory compliance of all industry players.
•	 Complete supporting documents related to identification
of hazardous physical property, and publicise the
“Inventory exempted from identification”.
•	 Adopt international, advanced practices on chemical
identification and classification, for example (EC) No
1272/2008 on Classification, Labelling and Packing
5 Safety data sheet for chemical products-Content and order of sections, 18th
June, 2008, Ministry of Industry and Information Technology, viewed 30th
April,
2015, <http://www.miit.gov.cn/n11293472/n11293877/n14505342/n14506895/
n14514379/14514476.html>
6 Guidance on the compilation of safety data sheet for chemical products,
Standardisation Administration of the People's Republic of China, 6th
September,
2015, viewed 30th
April, 2015, <http://www.sac.gov.cn/SACSearch/search
?channelid=160591&templet=gjcxjg_detail.jsp&searchword=STANDARD_
CODE=%27GB/T 17519-2013%27>
(CLP).
•	 Accept classification results from companies for pure
substances and mixtures based on reliable resources
such as GLP laboratories, worldwide authoritative
databases and the technical United Nations (UN)
calculation principle for the GHS of classification.
•	 Accept compliant MSDS based on the Safety Data
Sheet for Chemical Products (GB/T 16483-2008), and
continue implementing the transition period for the
2013 Guidance on Compilation of Safety Data Sheet
for Chemical Products (GB 17519-2013).
•	 Award appropriate exemptions for the import of low
volume HCs for laboratory and R&D usage.
5. Take Prudent Steps in Consumption Tax
Reform
Concern
The reform of consumption tax and the introduction of
environment taxes, as proposed by the Third Plenum
in 2013, needs a solid impact assessment in order to
incentivise the industry to develop energy-saving and
environmental procedures and minimise the impact on
consumers.7
Assessment
A consumption tax was firstly imposed in 1994 on
consumer goods that have a high energy cost to produce
and are highly polluting, in order to guide production
and consumption toward being environmentally-friendly
and to promote a sustainable economic growth model.8
Tax adjustment of petroleum products is a global trend
and underlines the urgent need to promote a green
economy worldwide. Recently, China announced that it
will impose consumption tax on some chemical-related
products, such as certain types of batteries and paint,
which are currently not subject to consumption tax
in China, and raise consumption tax rate on some
products to encourage environmental protection and
sustainable development.9
While this is a welcome
step towards a more sustainable and environmentally-
7 Notice on the 12th
Five-year Plan about the State Environmental Protection,
State Council, 2011, viewed 14th
April, 2015, <http://www.gov.cn/zwgk/2011-
12/20/content_2024895.htm>  (Alternatively: Expert: Green taxes meet a difficult
in the choosing time and the early effect is not too big, China Environment, 6th
December, 2010, viewed 14th
April, 2015 <http://www.chinaenvironment.com/
view/viewnews.aspx?k=20101206171437500>)
8 The Interim Regulations on Consumption Tax of the People's Republic of China,
SAT, 1993, implemented 1st
January, 1994, viewed 14th
April, 2015, <http://
hd.chinatax.gov.cn/guoshui/action/GetArticleView1.do?id=547&flag=1>
9 Notice on New Consumption Tax of Battery Coating, SAT & MOF, 2015, viewed
14th
April, 2015, <http://www.chinatax.gov.cn/n810341/n810755/c1489741/
content.html>
Petrochemicals, Chemicals & Refining (PCR) Working Group
SectionThree:TradeinGoods
237
European Business in China Position Paper
欧盟企业在中国建议书 2015/2016
friendly development model, there are concerns about
efficiency and equality in the application of the revised
consumption tax.
In November 2014, the Ministry of Finance (MOF) and
the State Administration of Taxation (SAT) announced
that it will impose consumption tax on crude oil products
to help cut emissions and boost the green economy.10
  
The tax involves other petroleum products including
naphtha, lubricating oil and jet fuel, while small-
displacement motorcycles, tyres and ethyl alcohol were
exempted in order to reduce burdens on the low and
middle-income group.
It is counterproductive to impose a blanket consumption
tax on chemical enterprises without taking into account
the individual company’s environmental record in terms
of energy use and pollutant emissions. It is in the
interests of the industry to promote a tax system that
incentivises environmentally-friendly business practices.
In light of the adjustment on petrochemical-related
products, boosting consumption tax may not satisfy
the goal of more efficient social income redistribution.
Most enterprises in the chemical industry are aware of
their social responsibilities in terms of environmental
impact. Therefore, it is counterintuitive not to align
environmental best practices with profit, i.e. lower
consumption tax for lower emissions. Otherwise, an
increased tax liability for enterprises will ultimately be
passed onto customers in the form of higher prices.  
Recommendations
•	 Publicise the selection criteria and list of potential
categories that may be subject to consumption tax for
public opinion.
•	 Involve experts to discuss the standards and measurement
of particular matters (e.g. consumption tax rate, tax
production stage or retail stage) according to the current
development of chemical industry in China.
•	 Involve industry experts to analyse the impact of the
draft consumption tax reform on related enterprises and
end customers.
10 Notice on the Further Increase on Consumption Tax of Oil Products, SAT &
MOF, 2015, viewed 14th
April, 2015, <http://www.gov.cn/xinwen/2015-01/12/
content_2803343.htm>
Abbreviations
CNY	 	 Chinese Yuan
CLP	 	 Classification, Labelling and Packaging
ERP	 	 Enterprise Resource Planning
ETS	 	 Emissions Trading System
EPL	 	 Environmental Protection Law
EC	 	 European Commission
EU	 	 European Union
FTZs	 	 Free Trade Zones
GHS	 	 Globally Harmonised System
GLP	 	 Good Laboratory Practice
GDP	 	 Gross Domestic Product
HCs	 	 Hazardous Chemicals
MSDS	 	 Material Safety Data Sheets
MOFCOM	 Ministry of Commerce
MEP	 	 Ministry of Environmental Protection
MOF	 	 Ministry of Finance
MNCs	 	 Multinational Corporations
PCR	 	 Petrochemicals, Chemicals and Refining
PPP	 	 Public-Private Partnerships
REACH 		 Registration, Evaluation, Authorisation 	
	 	 and Restriction of Chemicals
R&D	 	 Research and Development
SDS	 	 Safety Data Sheet
SAP	 	 Standard Assessment Procedure
AQSIQ	 	 StateAdministration of Quality Supervision, 	
	 	 Inspection and Quarantine
SAT	 	 State Administration of Taxation
SFDA	 	 State Food and Drug Administration
UN	 	 United Nations
US	 	 United States

More Related Content

What's hot

Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2
Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2
Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2globalchemreg
 
Risk Management of Per- and Polyfluoroalkyl substances in Canada
Risk Management of Per- and Polyfluoroalkyl substances in CanadaRisk Management of Per- and Polyfluoroalkyl substances in Canada
Risk Management of Per- and Polyfluoroalkyl substances in CanadaOECD Environment
 
Regulatory Briefing | Overview of REACH Directive | Caltha LLP
Regulatory Briefing | Overview of REACH Directive | Caltha LLPRegulatory Briefing | Overview of REACH Directive | Caltha LLP
Regulatory Briefing | Overview of REACH Directive | Caltha LLPLoren Larson, CHMM, CSO, CEI
 
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...OECD Environment
 
Webinar on greener water and oil repellents in the textile industry: Recommen...
Webinar on greener water and oil repellents in the textile industry: Recommen...Webinar on greener water and oil repellents in the textile industry: Recommen...
Webinar on greener water and oil repellents in the textile industry: Recommen...OECD Environment
 
The summary WTO and SPS agreement
The summary WTO and SPS agreementThe summary WTO and SPS agreement
The summary WTO and SPS agreementFrancois Stepman
 
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can Help
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can HelpMarike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can Help
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can HelpTHL
 
GOTS & REACH for Textile Industry
GOTS & REACH for Textile IndustryGOTS & REACH for Textile Industry
GOTS & REACH for Textile Industrykanhaiya kumawat
 
Regulatory aspects of packaging
Regulatory aspects of packagingRegulatory aspects of packaging
Regulatory aspects of packagingNEHA SINGH
 
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...Antigua Epa
 
Chapter VII: Sanitary and phytosanitary measures chapter
Chapter VII: Sanitary and phytosanitary measures chapterChapter VII: Sanitary and phytosanitary measures chapter
Chapter VII: Sanitary and phytosanitary measures chapterBalo English
 
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...THL
 
Review mop decisions & oewg discussions
Review mop decisions & oewg discussions Review mop decisions & oewg discussions
Review mop decisions & oewg discussions UNEP OzonAction
 
Implementation of the Integrated Chemical Safety and Security Program in Ukra...
Implementation of the Integrated Chemical Safety and Security Program in Ukra...Implementation of the Integrated Chemical Safety and Security Program in Ukra...
Implementation of the Integrated Chemical Safety and Security Program in Ukra...East European Security Research Initiative
 

What's hot (20)

Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2
Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2
Pira 2009 Sept. Arlington Taiwan New Chemical Regulation2
 
Risk Management of Per- and Polyfluoroalkyl substances in Canada
Risk Management of Per- and Polyfluoroalkyl substances in CanadaRisk Management of Per- and Polyfluoroalkyl substances in Canada
Risk Management of Per- and Polyfluoroalkyl substances in Canada
 
Regulatory Briefing | Overview of REACH Directive | Caltha LLP
Regulatory Briefing | Overview of REACH Directive | Caltha LLPRegulatory Briefing | Overview of REACH Directive | Caltha LLP
Regulatory Briefing | Overview of REACH Directive | Caltha LLP
 
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...
Webinar on Best Environmental Practices (BEP) for Textiles (per- and polyfluo...
 
Webinar on greener water and oil repellents in the textile industry: Recommen...
Webinar on greener water and oil repellents in the textile industry: Recommen...Webinar on greener water and oil repellents in the textile industry: Recommen...
Webinar on greener water and oil repellents in the textile industry: Recommen...
 
The summary WTO and SPS agreement
The summary WTO and SPS agreementThe summary WTO and SPS agreement
The summary WTO and SPS agreement
 
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can Help
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can HelpMarike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can Help
Marike Kolossa-Gehring: The Chemical Challenge - How HBM4EU Can Help
 
Cafan Workshop Fao
Cafan Workshop   FaoCafan Workshop   Fao
Cafan Workshop Fao
 
GOTS & REACH for Textile Industry
GOTS & REACH for Textile IndustryGOTS & REACH for Textile Industry
GOTS & REACH for Textile Industry
 
Role of sanitary and phytosanitary measures in trade
Role of sanitary and phytosanitary measures in tradeRole of sanitary and phytosanitary measures in trade
Role of sanitary and phytosanitary measures in trade
 
REACH
REACH  REACH
REACH
 
Regulatory aspects of packaging
Regulatory aspects of packagingRegulatory aspects of packaging
Regulatory aspects of packaging
 
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...
Technical Barriers to Trade - Dianne Lalla-Rodrigues - Director of the Antigu...
 
Chapter VII: Sanitary and phytosanitary measures chapter
Chapter VII: Sanitary and phytosanitary measures chapterChapter VII: Sanitary and phytosanitary measures chapter
Chapter VII: Sanitary and phytosanitary measures chapter
 
ECHA_Newsletter_August_2012
ECHA_Newsletter_August_2012ECHA_Newsletter_August_2012
ECHA_Newsletter_August_2012
 
Quy định về tính toàn vẹn dữ liệu trong bộ tiêu chuẩn GLP của OECD
Quy định về tính toàn vẹn dữ liệu trong bộ tiêu chuẩn GLP của OECDQuy định về tính toàn vẹn dữ liệu trong bộ tiêu chuẩn GLP của OECD
Quy định về tính toàn vẹn dữ liệu trong bộ tiêu chuẩn GLP của OECD
 
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...
Jukka Malm: European Regulatory Framework for Chemicals - Protecting Citizens...
 
Review mop decisions & oewg discussions
Review mop decisions & oewg discussions Review mop decisions & oewg discussions
Review mop decisions & oewg discussions
 
Implementation of the Integrated Chemical Safety and Security Program in Ukra...
Implementation of the Integrated Chemical Safety and Security Program in Ukra...Implementation of the Integrated Chemical Safety and Security Program in Ukra...
Implementation of the Integrated Chemical Safety and Security Program in Ukra...
 
ABPI briefing on the Falsified Medicines Directive (FMD) OCT 2016
ABPI briefing on the Falsified Medicines Directive (FMD) OCT 2016ABPI briefing on the Falsified Medicines Directive (FMD) OCT 2016
ABPI briefing on the Falsified Medicines Directive (FMD) OCT 2016
 

Viewers also liked

EURObiz 2015 NOV-DEC_P12
EURObiz 2015 NOV-DEC_P12EURObiz 2015 NOV-DEC_P12
EURObiz 2015 NOV-DEC_P12Dan Sellers
 
2016 Resume after Bruss N.A., Douglas A. Kalvig
2016 Resume after Bruss N.A., Douglas A. Kalvig2016 Resume after Bruss N.A., Douglas A. Kalvig
2016 Resume after Bruss N.A., Douglas A. KalvigDouglas Kalvig
 
Agricultural effects
Agricultural effects Agricultural effects
Agricultural effects JessG94
 
Yuwa security profile pune. ppt.
Yuwa security profile pune. ppt.Yuwa security profile pune. ppt.
Yuwa security profile pune. ppt.7719060007
 
Quiz agriculture
Quiz agricultureQuiz agriculture
Quiz agricultureJessG94
 
Middle East Countries
Middle East CountriesMiddle East Countries
Middle East CountriesKapil Sahni
 
Toyota Strike Karnataka 2005
Toyota Strike Karnataka 2005Toyota Strike Karnataka 2005
Toyota Strike Karnataka 2005Kapil Sahni
 

Viewers also liked (11)

EURObiz 2015 NOV-DEC_P12
EURObiz 2015 NOV-DEC_P12EURObiz 2015 NOV-DEC_P12
EURObiz 2015 NOV-DEC_P12
 
推广网站
推广网站推广网站
推广网站
 
memoria,verdad y justicia
memoria,verdad y justiciamemoria,verdad y justicia
memoria,verdad y justicia
 
Safe phone
Safe phoneSafe phone
Safe phone
 
2016 Resume after Bruss N.A., Douglas A. Kalvig
2016 Resume after Bruss N.A., Douglas A. Kalvig2016 Resume after Bruss N.A., Douglas A. Kalvig
2016 Resume after Bruss N.A., Douglas A. Kalvig
 
Marca faber castell
Marca faber castellMarca faber castell
Marca faber castell
 
Agricultural effects
Agricultural effects Agricultural effects
Agricultural effects
 
Yuwa security profile pune. ppt.
Yuwa security profile pune. ppt.Yuwa security profile pune. ppt.
Yuwa security profile pune. ppt.
 
Quiz agriculture
Quiz agricultureQuiz agriculture
Quiz agriculture
 
Middle East Countries
Middle East CountriesMiddle East Countries
Middle East Countries
 
Toyota Strike Karnataka 2005
Toyota Strike Karnataka 2005Toyota Strike Karnataka 2005
Toyota Strike Karnataka 2005
 

Similar to Petrochemicals Chemicals andRefining (PCR) CN_07242015_0729(2)

Regulation as opportunity for chemicals in china
Regulation as opportunity for chemicals in china Regulation as opportunity for chemicals in china
Regulation as opportunity for chemicals in china Kai Pflug
 
Toxic Partnership
Toxic PartnershipToxic Partnership
Toxic Partnershipv2zq
 
Progress on VOC Control and Management for the Petrochemical Industry In China
 Progress on VOC Control and Management for the Petrochemical Industry In China  Progress on VOC Control and Management for the Petrochemical Industry In China
Progress on VOC Control and Management for the Petrochemical Industry In China BREEZE Software
 
опис дерегуляція
опис дерегуляціяопис дерегуляція
опис дерегуляціяtmelnik
 
GHG Protocl Supply Chain and Product Standard High Level Overview
GHG Protocl Supply Chain and Product Standard High Level OverviewGHG Protocl Supply Chain and Product Standard High Level Overview
GHG Protocl Supply Chain and Product Standard High Level OverviewRanping Song
 
Impact of REACH regulation on European space industry
Impact of REACH regulation on European space industryImpact of REACH regulation on European space industry
Impact of REACH regulation on European space industryPaavo Heiskanen
 
New Product Registration - Key Considerations when Registering New Products
New Product Registration - Key Considerations when Registering New ProductsNew Product Registration - Key Considerations when Registering New Products
New Product Registration - Key Considerations when Registering New ProductsCovance
 
The Policy and Regulatory Framework for Renewable Energy
The Policy and Regulatory Framework for Renewable EnergyThe Policy and Regulatory Framework for Renewable Energy
The Policy and Regulatory Framework for Renewable EnergyMirzo Ibragimov
 
Curb it balance it emission management &amp;cc using sap (2)
Curb it   balance it emission management &amp;cc using sap (2)Curb it   balance it emission management &amp;cc using sap (2)
Curb it balance it emission management &amp;cc using sap (2)Prakash Wagh
 
Lena Perenius of Cefic discusses global chemicals regulation
Lena Perenius of Cefic discusses global chemicals regulationLena Perenius of Cefic discusses global chemicals regulation
Lena Perenius of Cefic discusses global chemicals regulationajagger
 
Conference with Ukrainian Healthcare Procurement Experts
Conference with Ukrainian Healthcare Procurement ExpertsConference with Ukrainian Healthcare Procurement Experts
Conference with Ukrainian Healthcare Procurement ExpertsUN SPHS
 
Final Chemical Project
Final Chemical ProjectFinal Chemical Project
Final Chemical ProjectSanket Patil
 
techUK Environment and Compliance Programme
techUK Environment and Compliance ProgrammetechUK Environment and Compliance Programme
techUK Environment and Compliance ProgrammetechUK
 
Toward a Toxic Partnership - A critique of the EU position on chemicals under...
Toward a Toxic Partnership - A critique of the EU position on chemicals under...Toward a Toxic Partnership - A critique of the EU position on chemicals under...
Toward a Toxic Partnership - A critique of the EU position on chemicals under...v2zq
 
Statutory Regulations Related to Hazardous Chemical Transportation - India
Statutory Regulations Related to Hazardous Chemical Transportation - IndiaStatutory Regulations Related to Hazardous Chemical Transportation - India
Statutory Regulations Related to Hazardous Chemical Transportation - IndiaHarsh Pandya
 
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025Vinalab
 

Similar to Petrochemicals Chemicals andRefining (PCR) CN_07242015_0729(2) (20)

Regulation as opportunity for chemicals in china
Regulation as opportunity for chemicals in china Regulation as opportunity for chemicals in china
Regulation as opportunity for chemicals in china
 
Toxic Partnership
Toxic PartnershipToxic Partnership
Toxic Partnership
 
Qc 08000
Qc 08000Qc 08000
Qc 08000
 
Progress on VOC Control and Management for the Petrochemical Industry In China
 Progress on VOC Control and Management for the Petrochemical Industry In China  Progress on VOC Control and Management for the Petrochemical Industry In China
Progress on VOC Control and Management for the Petrochemical Industry In China
 
опис дерегуляція
опис дерегуляціяопис дерегуляція
опис дерегуляція
 
GHG Protocl Supply Chain and Product Standard High Level Overview
GHG Protocl Supply Chain and Product Standard High Level OverviewGHG Protocl Supply Chain and Product Standard High Level Overview
GHG Protocl Supply Chain and Product Standard High Level Overview
 
Impact of REACH regulation on European space industry
Impact of REACH regulation on European space industryImpact of REACH regulation on European space industry
Impact of REACH regulation on European space industry
 
New Product Registration - Key Considerations when Registering New Products
New Product Registration - Key Considerations when Registering New ProductsNew Product Registration - Key Considerations when Registering New Products
New Product Registration - Key Considerations when Registering New Products
 
The Policy and Regulatory Framework for Renewable Energy
The Policy and Regulatory Framework for Renewable EnergyThe Policy and Regulatory Framework for Renewable Energy
The Policy and Regulatory Framework for Renewable Energy
 
Curb it balance it emission management &amp;cc using sap (2)
Curb it   balance it emission management &amp;cc using sap (2)Curb it   balance it emission management &amp;cc using sap (2)
Curb it balance it emission management &amp;cc using sap (2)
 
Lena Perenius of Cefic discusses global chemicals regulation
Lena Perenius of Cefic discusses global chemicals regulationLena Perenius of Cefic discusses global chemicals regulation
Lena Perenius of Cefic discusses global chemicals regulation
 
Conference with Ukrainian Healthcare Procurement Experts
Conference with Ukrainian Healthcare Procurement ExpertsConference with Ukrainian Healthcare Procurement Experts
Conference with Ukrainian Healthcare Procurement Experts
 
Final Chemical Project
Final Chemical ProjectFinal Chemical Project
Final Chemical Project
 
techUK Environment and Compliance Programme
techUK Environment and Compliance ProgrammetechUK Environment and Compliance Programme
techUK Environment and Compliance Programme
 
Toward a Toxic Partnership - A critique of the EU position on chemicals under...
Toward a Toxic Partnership - A critique of the EU position on chemicals under...Toward a Toxic Partnership - A critique of the EU position on chemicals under...
Toward a Toxic Partnership - A critique of the EU position on chemicals under...
 
Statutory Regulations Related to Hazardous Chemical Transportation - India
Statutory Regulations Related to Hazardous Chemical Transportation - IndiaStatutory Regulations Related to Hazardous Chemical Transportation - India
Statutory Regulations Related to Hazardous Chemical Transportation - India
 
Helsinki Chemicals Forum 2017 Final report
Helsinki Chemicals Forum 2017 Final reportHelsinki Chemicals Forum 2017 Final report
Helsinki Chemicals Forum 2017 Final report
 
Zws Seminar 20 Minutes
Zws Seminar 20 MinutesZws Seminar 20 Minutes
Zws Seminar 20 Minutes
 
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025
VIETNAM’S TESTING INFRASTRUCTURE IN THE PERIOD OF 2021-2025
 
Green House Gas Emission – Reporting Standards
Green House Gas Emission – Reporting StandardsGreen House Gas Emission – Reporting Standards
Green House Gas Emission – Reporting Standards
 

Petrochemicals Chemicals andRefining (PCR) CN_07242015_0729(2)

  • 1. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 230 Petrochemicals, Chemicals and Refining (PCR) Working Group Key Recommendations 1. Standardise Penalties Imposed on Pollutants in the Chemical Industry • Provide guidance on how to adjust operations in order to adhere to local emission standards, and recommend third-party agents to advise on local compliance issues. • Set up a corresponding punishment mechanism for each specific market, and regulate the environmental services market. • Examine the Articles 21, 22 and 23 of the Environmental Protection Law (EPL) in terms of its operability, rather than focusing on the macroscopic description.1 2. Optimise the Allocation Methodology in China’s Emissions Trading System (ETS) to Encourage Advanced Technologies in the Chemical Industry • Involve industry experts in the detailed definition of China’s ETS related to the chemical industry. • Establish a fair and consistent process—from one region to another, from expansion to new projects—for initial free allocation, reflecting the nature of industries, the energy intensity of installations and technological levels. • Invite industry experts to work out fuel-specific emissions benchmarks per unit product for the chemical industry so that grandfathering or tons of CO2 per gross domestic product (GDP) (tCO2/ CNY 10,000) output can be substituted for free allowances allocation. 3. Reduce Data Requirements on New Chemical Notification for Intermediates in China • Recognise that intermediates present a lower risk than other regular substances. • Revise current data requirements on intermediates to treat isolated-intermediates as a special group of substances, and lower their notification requirements. 4. Promote Legislation to Optimise Administration on Hazardous Chemicals (HCs) • Clarify the administration scope of relevant licence/permit/registration applications—especially for distribution, storage, production and transportation¬—and publish the corresponding guidelines to ensure regulatory compliance of all industry players. • Complete supporting documents related to identification of hazardous physical property, and publicise the “Inventory exempted from identification”. • Adopt international, advanced practices on chemical identification and classification, for example (EC) No. 1272/2008 on Classification, Labelling and Packaging (CLP). • Accept classification results from companies for pure substances and mixtures based on reliable resources such as Good Laboratory Practice (GLP) laboratories, worldwide authoritative databases and the technical United Nations (UN) calculation principle for the Globally Harmonised System (GHS) of classification. • Accept compliant material safety data sheets (MSDS) based on the Safety Data Sheet for Chemical Products (GB/T 16483-2008), and continue implementing the transition period for the 2013 1 Environmental Protection Law of the People’s Republic of China, Ministry of Environmental Protection, 25th April, 2014, viewed 29th April, 2015, <http://www.gov.cn/ xinwen/2014-04/25/content_2666328.htm>
  • 2. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 231 European Business in China Position Paper 欧盟企业在中国建议书 2015/2016 Guidance on Compilation of Safety Data Sheet for Chemical Products (GB 17519-2013). • Award appropriate exemptions for the import of low volume hazardous chemicals (HCs) for laboratory and research and development (R&D) usage. 5. Take Prudent Steps in Consumption Tax Reform • Publicise the selection criteria and list of potential categories that may be subject to consumption tax for public opinion. • Involve experts to discuss the standards and measurement of particular matters (e.g. consumption tax rate, tax production stage or retail stage) according to the current development of chemical industry in China. • Involve industry experts to analyse the impact of the draft consumption tax reform on related enterprises and end customers. Introduction to the Working Group The Petrochemicals, Chemicals and Refining (PCR) Working Group represents the leading European companies in the petroleum and chemical industry in China, many of which are global Fortune 500 companies. The aim of the working group is to help our members adapt to the China market by facilitating communication between the member companies, and the government as well as Chinese industrial associations, providing up-to- date information and presenting common challenges and making recommendations on regulatory issues. Recent Developments The working group has a continued strategic dialogue with the Chinese Government and relevant institutions, including high-level meetings with Chinese and European authorities, such as: the Ministry of Environmental Protection (MEP); the Ministry of Commerce (MOFCOM); the State Administration of Taxation (SAT); the State Food and Drug Administration (SFDA); the China Petroleum and Chemical Industry Federation (CPCIF); the State Administration of Quality Supervision, Inspection and Quarantine (AQSIQ); and senior European Commission (EC) officials. The working group greatly appreciates both the constructive dialogue between European industry and Chinese officials, and the market-driven orientation of much of the new domestic legislation regulating the PCR industry. The Petrochemicals, Chemicals and Refining Working Group is keen to continue constructive dialogues with all relevant Chinese ministries and institutions and to bring in relevant expertise in terms of the latest technologies, as well as best available techniques, for both industrial practises and regulatory approaches. Key Recommendations 1. Standardise Penalties Imposed on Pollutants in the Chemical Industry Concern Local governments are setting stringent local pollutant discharge standards for pollutants not specified in the national pollutant discharge standards, which has created a complex series of emissions standards across different provinces and municipalities. Assessment According to Article 16 of Environmental Protection Law of the People’s Republic of China, the people’s governments of provinces, autonomous regions, and municipalities directly under the central government may establish their local standards for the pollutant discharge of items not specified in the national pollutant discharge standards and may set local pollutant discharge standards that are more stringent than the national ones. In light of this clause and their own environmental capacities, provinces and municipalities can create their own legislation for a series of emissions standards of pollutants. For instance, the Shanghai Municipal Environmental Protection Bureau and the Shanghai
  • 3. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 232 Third Plenum Reality Check What did the Third Plenum’s Decision2 say? What is the reality? We will persist in equality of rights, opportunities and rules, abolish all forms of irrational regulations for the non-public economy, remove all hidden barriers, and adopt specific measures for non-public enterprises to enter franchising fields. Over the past two years, with the streamlining of government approvals, the scope of projects requiring government approvals has narrowed, and more project approval power is now controlled by local governments. Working group members hope that this will help to shorten the project approval time for their investments, and that the central government will strengthen “overall balancing” to minimise the risk of overcapacity. The National Layout Plan for seven major petrochemical parks was adopted by the State Council in June 2014. Private firms have been granted more access to invest in refinery, cracker and downstream products in these parks. Working group members hope that the Chinese Government will publicise more details of this plan. In the revised Foreign Investment Industrial Guidance Catalogue promulgated in March 2015, caps on equity ratios for foreign direct investment (FDI) have been removed for sectors like cracker and refinery. Working group members see more opportunities in cracker downstream investments. Any price that can be determined by the market must be left to the market, and the government is not to carry out improper interventions. We will push ahead with pricing reforms of water, oil, natural gas, electricity, transportation, telecommunications and some other sectors while relaxing price control in competitive areas. The price of natural gas increased unexpectedly in 2014. This placed a severe burden on the operations of Petrochemicals, Chemicals and Refining Working Group members’ facilities that use natural gas a raw material. On top of that, more factors such as the increased consumption tax on naphtha and other petrochemical feedstocks, increasing costs for hazardous waste treatment, adoption of consumption tax on chemicals like coatings, the introduction of the national emissions trading scheme (ETS) (to be launched in 2016), environmental and carbon taxes, all combine to create additional cost burdens for working group members’ investments in China.   We will encourage non-public enterprises to participate in SOE reform, foster mixed enterprises with non-public capital as the controlling shareholder, and encourage qualified private enterprises to establish the modern corporate system. Working group members noted positive developments in the reform of ‘mixed ownership’ in central SOEs, and the promotion of the public-private partnerships (PPP) model in sectors like infrastructure and environmental protection. We will have the same laws and regulations on Chinese and foreign investment, and keep foreign investment policies stable, transparent and predictable. Working group members noted China’s progress in adopting negative lists in pilots FTZs and the drafting of Foreign Investment Law.   2 The Third Plenum of the 18th National Congress of the Communist Party of China Central Committee was held in November 2013, and concluded with a decision laying out new economic and policy initiatives – the Decision.
  • 4. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 233 European Business in China Position Paper 欧盟企业在中国建议书 2015/2016 Bureau of Quality and Technical Supervision released the Air Pollutant Emissions Standards in the Printing Industry (DB 31/872-2015) in the first quarter of this year. They proposed the limitation of the maximum allowable emissions concentration and maximum allowable emissions rate on five types of substances related to the printing industry: benzene, toluene, xylene, non-methane hydrocarbon and particulate matter. These standards are mandatory for any new formulation. Enterprises guilty of discharging pollutants exceeding the standards will incur a penalty of Chinese Yuan (CNY) 8,000 per ton for every day they continue to pollute. Enterprises are at risk of involuntarily violating local emissions standards due to this complex regional legislation. Also, it can be difficult and costly to adjust operations to local standards whilst trying to supply the entire market. Access to clear and coherent guidance on local emissions standards is not easily accessible making compliance unnecessarily difficult and potentially costly. Recommendation • Provide guidance on how to adjust operations in order to adhere to local emission standards, and recommend third-party agents to advise on local compliance issues. • Set up a corresponding punishment mechanism for each specific market, and regulate the environmental services market. • Examine the Articles 21, 22 and 23 of the EPL in terms of its operability, rather than focusing on the macroscopic description. 2. Optimise the Allocation methodology in China’s Emissions Trading System (ETS) to Encourage Advanced Technologies in the Chemical Industry. Concern The Chinese ETS is underdeveloped in comparison to international equivalents: without properly taking into account the chemical sector’s specificities and its sub-sectors’ heterogeneity, ETS rules can (i) introduce undue biases among similar activities, (ii) lead to counter-effective outcomes and (iii) favour more emitting technologies over efficient ones. Assessment Under the current rules of China’s ETS, allocation of free allowances is mostly based on historical emissions levels for petrochemical and chemical sectors. Whereas petro-chemical multinational corporations (MNCs) have invested in the most efficient plants with best available technologies (BAT), under current ETS policies based on historical emission levels those players are put at a disadvantage compared to their peers who would have invested in low-cost, less-efficient technologies. This allows historically high polluting companies to become more competitive while only slightly improving their operations and still emitting more CO2 than those with a BAT. In other words the Grandfathering scheme is not fair. Moreover, under the current rules, capacity expansions or debottlenecking on existing installations are treated differently (grandfathering) to new projects (benchmarking). This may have a counter-effective impact as it would discourage investment in expansion plans that could improve efficiency. The working group welcomes the decision to have the Chinese ETS evolve into a ‘benchmark’ for future allocation methodology. The European Chamber regrets that the current proposed outcome of the benchmarking process (a general output ratio expressed in tCO2/ RMB) does not accurately reflect the energy efficiency of the production processes within the petrochemical and chemical industry. Due to the diversity of its industry, the working group is advocating for a benchmark methodology similar to what has been applied in other regions, such as in Europe. Such a benchmark would be done by category of products, thereby differentiating the most energy- intensive sub-sectors (ammonia, ethylene oxide, industrial gases, nitric acid) from the less energy intensive ones, based on BAT for the available fuel/ feedstock (e.g. coal, natural gas). This measure would improve extraction efficiency and create added value from resources. Petrochemicals and chemicals are by nature energy and carbon intensive, but indispensable as a pillar of the economy. Without a fuel-specific benchmark by product, the ETS will not encourage the deployment of energy-efficient and low-emitting technologies, and will limit the development of the necessary industrial infrastructure in China.
  • 5. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 234 The Chinese ETS is in a crucial phase of design and testing. Fair treatment for initial free emissions allowances allocation is fundamental to the long-term success of the scheme. It is also essential that the scheme be applied consistently throughout the country under a clear allocation policy that will guide the implementation within the different regions. Petrochemical, Chemical and Refining Working Group members have rich experience in a wide variety of issues in these fields, both in the EU and globally, and can assist the Chinese Government in this regard. Recommendation • Involve industry experts in the detailed definition of China’s ETS related to the chemical industry. • Establish a fair and consistent process—from one region to another, from expansion to new projects—for initial free allocation, reflecting the nature of industries, the energy intensity of installations and technological levels. • Invite industry experts to work out fuel-specific emissions benchmarks per unit product for the chemical industry so that grandfathering or tons of CO2 per gross domestic product (GDP) (tCO2/Chinese Yuan (CNY)3 10,000) output can be substituted for free allowances allocation. 3. Reduce Data Requirements on New Chemical Notification for Intermediates in China Concern The data requirements for notifying a new intermediate in China are the most stringent in the world and the time taken for notification is the longest, which puts Chinese intermediate manufacturers at a big disadvantage. Assessment Chemical intermediates are a common necessity during the synthesis of many products such as pesticides, pharmaceuticals, cosmetics and dyes. Industrial applications usually require intermediates to be produced in high volumes. An intermediate is a chemical substance that is only produced in order to be consumed in a subsequent chemical reaction. As such, an intermediate is only handled in the industrial setting and will—due to its consumption in the reaction—not be used as a direct ingredient in formulations, and the exposure will be very low. For some intermediates there are even dedicated 3 In China, for the measurement tons of CO2 per GDP (tCO2/GDP), GDP equates to CNY 10,000. technical and organisational measures in place to keep the substance contained and controlled. To reduce the data requirements for the registration of intermediates is therefore a process that follows the scientific principle that risk is a function of hazard and exposure. Low exposure lowers the resulting risk. Good regulatory practice benefits from such principles by balancing the regulatory burden through effective provisions in order to protect human health and the environment. That was the reason why reduced registration requirements were introduced into almost all chemical regulations in the world. The current guidance for New Chemical Notification does not differentiate an intermediate (manufactured or imported in annual quantities greater than one ton (>1t/y)) from a regular substance in terms of notification data requirements, which is unusual when compared to international chemical regulations. The European Chamber hopes the Ministry of Environmental Protection (MEP) can consider the special situation of lower exposure risk of intermediates which will be consumed in further reactions, and difficulties faced by the industries in treating isolated-intermediates as a special group of substances, and therefore lower their notification requirements for the companies with proper exposure management measures. Differentiating intermediates from general substances and lowering registration requirements for intermediates will align with the MEP's chemical risk management guidelines, making it more refined and scientific. Enterprises who wish to benefit from reduced registration requirements must provide strict risk management measures to reduce exposure and commit to implementing them, thereby reduced registration requirements can result from the scientific basis that a substance poses a lower risk if the exposure is lower. Enhanced supervision on the annual reporting of intermediates and downstream manufacturers’ clarification can be initiated by the relevant authority to ensure that the reduced registration requirements are not claimed incorrectly. Intermediates are distinguished from other substances and different provisions on reduced requirements for intermediates exist in other major industrial countries and regions including the United States (US), the European Union (EU), Switzerland, Canada and Japan. For example, the provisions below are implemented in the European Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH):
  • 6. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 235 European Business in China Position Paper 欧盟企业在中国建议书 2015/2016 Type of Intermediates Registration Requirement Notes Non-isolated intermediates Exempt   On-site isolated intermediates manufactured or used under strictly-controlled conditions  <1 ton: exempt from registration. 1-1,000 tons: only existing data is required. >1,000 ton: only need to follow the 1-10t/y standard registration requirement. Reduced data requirements; if the intermediates are sold, the manufacturer or importer needs confirmation from the customer that they observed that the conditions were strictly controlled. Transported isolated intermediates manufactured or used under strictly- controlled conditions Isolated intermediates that are not manufactured or used under strictly- controlled conditions Standard registration requirement according to 4 tonnage levels. Data requirements on standards registration is less than those stipulated in the Environmental Management Measures on New Chemical Substances (2010 revision) Order No. 7 of the Ministry of Environmental Protection. Recommendations • Recognise that intermediates present a lower risk than other regular substances. • Revise current data requirements on intermediates to treat isolated-intermediates as a special group of substances, and lower their notification requirements. 4. Promote Legislation to Optimise Administration on Hazardous Chemicals (HCs) Concern The Catalogue of Hazardous Chemicals (2015 Version) implemented on 1st May, 2015, introduces Globally Harmonised System (GHS) classification and the building block principle in addition to 2,828 listed items, which greatly exceeds the scope and compliance requirements of previous versions. Assessment Under State Council decree 591 (Regulations on Safe Management of Hazardous Chemicals), hazardous chemicals in the Catalogue of Hazardous Chemicals must meet the safety management requirements for HC production, storage, use, operation and transportation. This regulation implements a licensing system for producers/operators/users of hazardous chemicals in Catalogue. The scope of the Catalogue of Hazardous Chemicals will directly influence the controlled scope of relevant licensing and registration applications, e.g. the safety production licence, the trading licence, hazardous chemical registration, etc. Though the 2015 version appears smaller in size compared with its 2002 predecessor (total items have been reduced from 2,936 to 2,828),4 the actual scope has expanded with the introduction of the ‘building brick’ principle. The application scope of each relevant permit/ licence/registration is ambiguous and will impede HC compliance procedures in China. So far the corresponding guideline of the 2015 catalogue includes GHS classification information, but the United Nations (UN) number has not been released. Meanwhile, the “Inventory exempted from identification” mentioned in Method No. 66 for hazardous chemicals has been delayed several times, which has led to unnecessary workload for companies who now have to identify the hazardous chemicals within officially-known hazard classifications. Material safety data sheets (MSDS) play a significant 4 The new catalogue of hazardous chemicals will come into effect on May 1, China Quality News, 30th March, viewed 30th April, 2015, <http://www.cqn.com.cn/news/ zggmsb/diliu/1021450.html>
  • 7. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 236 role in HCs registration. The Safety Data Sheet for Chemical Products Content and Order of Sections (GB 16483-2008)5 was set up to define the structure, content and generic forms of the Safety Data Sheet (SDS). In September 2013, GB 17519-20136 was issued and serves as the supporting document to GB 16483- 2008, which introduced more stringent rules to cover MSDS format and content. It appears vastly changed compared with the previous version. Even though GB 17519 is a recommended standard, it is still taken as a mandatory requirement in some inspection processes. Since the MSDS maintenance and management of most multinational chemical companies relies on a complex and comprehensive SAP Enterprise Resource Planning (ERP) software system, even a minor change of the MSDS results in high costs in system adjustment. Multi-level administration of HCs registration for large- scale industry use and for research and development (R&D) use should be applied in a way that is consistent with similar international and domestic regulations (e.g. REACH, the MEP’s Environmental Management Measures on New Chemical Substances (2010 revision) Order No. 7). Current requirements for registration procedures for regular chemicals, such as waiving registration for HCs for quantities less than 1t/y, should be revised for R&D use for the purpose of cost savings, workload reduction and to control supply chain shortage risks. Recommendations • Clarify the administration scope of relevant licence/ permit/registration applications—especially for distribution, storage, production and transportation¬— and publish the corresponding guidelines to ensure regulatory compliance of all industry players. • Complete supporting documents related to identification of hazardous physical property, and publicise the “Inventory exempted from identification”. • Adopt international, advanced practices on chemical identification and classification, for example (EC) No 1272/2008 on Classification, Labelling and Packing 5 Safety data sheet for chemical products-Content and order of sections, 18th June, 2008, Ministry of Industry and Information Technology, viewed 30th April, 2015, <http://www.miit.gov.cn/n11293472/n11293877/n14505342/n14506895/ n14514379/14514476.html> 6 Guidance on the compilation of safety data sheet for chemical products, Standardisation Administration of the People's Republic of China, 6th September, 2015, viewed 30th April, 2015, <http://www.sac.gov.cn/SACSearch/search ?channelid=160591&templet=gjcxjg_detail.jsp&searchword=STANDARD_ CODE=%27GB/T 17519-2013%27> (CLP). • Accept classification results from companies for pure substances and mixtures based on reliable resources such as GLP laboratories, worldwide authoritative databases and the technical United Nations (UN) calculation principle for the GHS of classification. • Accept compliant MSDS based on the Safety Data Sheet for Chemical Products (GB/T 16483-2008), and continue implementing the transition period for the 2013 Guidance on Compilation of Safety Data Sheet for Chemical Products (GB 17519-2013). • Award appropriate exemptions for the import of low volume HCs for laboratory and R&D usage. 5. Take Prudent Steps in Consumption Tax Reform Concern The reform of consumption tax and the introduction of environment taxes, as proposed by the Third Plenum in 2013, needs a solid impact assessment in order to incentivise the industry to develop energy-saving and environmental procedures and minimise the impact on consumers.7 Assessment A consumption tax was firstly imposed in 1994 on consumer goods that have a high energy cost to produce and are highly polluting, in order to guide production and consumption toward being environmentally-friendly and to promote a sustainable economic growth model.8 Tax adjustment of petroleum products is a global trend and underlines the urgent need to promote a green economy worldwide. Recently, China announced that it will impose consumption tax on some chemical-related products, such as certain types of batteries and paint, which are currently not subject to consumption tax in China, and raise consumption tax rate on some products to encourage environmental protection and sustainable development.9 While this is a welcome step towards a more sustainable and environmentally- 7 Notice on the 12th Five-year Plan about the State Environmental Protection, State Council, 2011, viewed 14th April, 2015, <http://www.gov.cn/zwgk/2011- 12/20/content_2024895.htm> (Alternatively: Expert: Green taxes meet a difficult in the choosing time and the early effect is not too big, China Environment, 6th December, 2010, viewed 14th April, 2015 <http://www.chinaenvironment.com/ view/viewnews.aspx?k=20101206171437500>) 8 The Interim Regulations on Consumption Tax of the People's Republic of China, SAT, 1993, implemented 1st January, 1994, viewed 14th April, 2015, <http:// hd.chinatax.gov.cn/guoshui/action/GetArticleView1.do?id=547&flag=1> 9 Notice on New Consumption Tax of Battery Coating, SAT & MOF, 2015, viewed 14th April, 2015, <http://www.chinatax.gov.cn/n810341/n810755/c1489741/ content.html>
  • 8. Petrochemicals, Chemicals & Refining (PCR) Working Group SectionThree:TradeinGoods 237 European Business in China Position Paper 欧盟企业在中国建议书 2015/2016 friendly development model, there are concerns about efficiency and equality in the application of the revised consumption tax. In November 2014, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) announced that it will impose consumption tax on crude oil products to help cut emissions and boost the green economy.10 The tax involves other petroleum products including naphtha, lubricating oil and jet fuel, while small- displacement motorcycles, tyres and ethyl alcohol were exempted in order to reduce burdens on the low and middle-income group. It is counterproductive to impose a blanket consumption tax on chemical enterprises without taking into account the individual company’s environmental record in terms of energy use and pollutant emissions. It is in the interests of the industry to promote a tax system that incentivises environmentally-friendly business practices. In light of the adjustment on petrochemical-related products, boosting consumption tax may not satisfy the goal of more efficient social income redistribution. Most enterprises in the chemical industry are aware of their social responsibilities in terms of environmental impact. Therefore, it is counterintuitive not to align environmental best practices with profit, i.e. lower consumption tax for lower emissions. Otherwise, an increased tax liability for enterprises will ultimately be passed onto customers in the form of higher prices. Recommendations • Publicise the selection criteria and list of potential categories that may be subject to consumption tax for public opinion. • Involve experts to discuss the standards and measurement of particular matters (e.g. consumption tax rate, tax production stage or retail stage) according to the current development of chemical industry in China. • Involve industry experts to analyse the impact of the draft consumption tax reform on related enterprises and end customers. 10 Notice on the Further Increase on Consumption Tax of Oil Products, SAT & MOF, 2015, viewed 14th April, 2015, <http://www.gov.cn/xinwen/2015-01/12/ content_2803343.htm> Abbreviations CNY Chinese Yuan CLP Classification, Labelling and Packaging ERP Enterprise Resource Planning ETS Emissions Trading System EPL Environmental Protection Law EC European Commission EU European Union FTZs Free Trade Zones GHS Globally Harmonised System GLP Good Laboratory Practice GDP Gross Domestic Product HCs Hazardous Chemicals MSDS Material Safety Data Sheets MOFCOM Ministry of Commerce MEP Ministry of Environmental Protection MOF Ministry of Finance MNCs Multinational Corporations PCR Petrochemicals, Chemicals and Refining PPP Public-Private Partnerships REACH Registration, Evaluation, Authorisation and Restriction of Chemicals R&D Research and Development SDS Safety Data Sheet SAP Standard Assessment Procedure AQSIQ StateAdministration of Quality Supervision, Inspection and Quarantine SAT State Administration of Taxation SFDA State Food and Drug Administration UN United Nations US United States