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Heavy industrial polluters to be refused bank loans

Firms that fail green tests won't have access to credit

Beijing will use economic leverage in its latest attempt to curb widespread pollution and rein in unruly industrial polluters, with 'green loans' and other economic incentives to be introduced soon, state media reported.

The State Environmental Protection Administration and the China Banking Regulatory Commission would unveil a green-credit policy, Sepa deputy director Pan Yue said.

'It will be a start for Sepa to study and introduce other environmentally friendly economic polices on insurance, security and taxation with various government departments,' he told Xinhua.

Companies who failed to pass a mandatory environmental assessment or violated green laws and regulations would not be able to get loans from banks or other financial institutions, he said. Companies that had received loans would be asked to return the money if they were found to be involved in causing pollution.

Xia Guang , director of Sepa's policy research centre for the environment and economy, said the economic policy was aimed at encouraging enterprises, especially those in energy intensive and heavily polluting industries, to realise the price of pollution and improve their conduct.

'Companies discharging pollutants will have to worry about the impact of their activities, such as more difficulty in getting loans, while other law-abiding enterprises will benefit from the policy,' he said.

Mr Xia said six industries that had been blamed the most for polluting the country's air and water were targeted by the policy. These are power generation, steel, construction materials, chemicals, petroleum processing, and non-ferrous metals.

'Companies' environmental track record will be scrutinised by banks and other financial institutions with the help of the database of Sepa and local environmental offices.'

Mr Xia said a blacklist of more than 6,000 industrial polluters published by Sepa early this year, which included some big state-owned enterprises such as China National Offshore Oil Corp and Beijing Shougang, also would be used as a reference for granting loans.

Sepa imposed sanctions on eight city and county governments and 38 industrial polluters along four major rivers this week and admitted it had exhausted almost all of the administrative options available to it to stop pollution.

Zhou Shengxian , the Sepa director, said at a national meeting of environmental officials that water pollution had worsened and heavily polluting industries were continuing to expand this year despite Beijing's determination to cut pollution and energy waste.

He said the environmental campaign on the mainland had reached a low point, highlighted by an unprecedented series of pollution disasters across the country this year, with 65 at last count.

Algal-bloom outbreaks in Tai, Chao and Dian lakes in the past month have choked off supplies of drinking water for millions of people.

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