China's largest oil and gas producer, PetroChina, has been barred from expanding its refining and chemical production capacity.
The Ministry of Environmental Protection said yesterday the energy giant had failed to meet its target for cutting chemical oxygen demand (COD) - a measure of organic pollutants from waste water in rivers and lakes.
The fresh blow came after it emerged this week that three of its senior officials were being investigated by Beijing authorities for alleged discipline violations.
Another state energy giant, China Petroleum & Chemical (Sinopec), missed its target for reducing nitrogen oxide emissions.
The ministry said it had halted all environmental impact approvals for construction of refineries and chemical plants by the two companies as well as overhaul and expansion projects, apart from those that would upgrade fuel quality, conserve energy and cut pollution.
Xinhua, citing data from the ministry, reported that PetroChina's COD emissions fell 0.08 per cent last year, short of its target of a cut of 0.6 per cent, while Sinopec's nitrogen oxide discharges grew by 1.28 per cent, against its goal of zero growth.
In a comment piece, the Communist Party mouthpiece People's Daily said some of PetroChina and Sinopec's operating units were still implementing emission standards from 17 years ago, and that some had faked pollution data.
Sinopec and PetroChina said they would strive to meet pollution control requirements and that the ban would not affect their operations in the short term. A PetroChina spokesman said projects already approved would be enough to meet demand for the next few years.
Yesterday's release by the ministry of last year's pollution control records for 31 provinces and administrative regions and eight energy giants directly under the control of Beijing came at a sensitive time for PetroChina.
PetroChina said on Wednesday that three of its senior officials were being probed for alleged violations of discipline, while another top-level manager at parent company China National Petroleum Corp was reported by Xinhua on Tuesday to be under investigation for "gross violation of party discipline".
Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University, said major state-owned power generators had faced similar bans before.
In 2007, Datang International Power Generation, China Guodian Group, China Huadian Group and China Huaneng Group were banned from work on new projects after failing to close old plants and install pollution control gear.
Li Bo, a senior consultant to environmental advocacy group Friends of Nature, said past experience showed that the ministry's bans on new industrial projects were sometimes ineffective, with the penalties fizzling out and failing to truly deter polluters.
Li cited a ban imposed by the ministry in August 2011, following a heavy-metal-pollution scandal, in Qujing , Yunnan province, which was lifted eight months later amid questions by local environmental groups about how the waste was treated.