Chinese refineries reject call to halt summer maintenance programme to help curb pollution
- Just one of 10 oil and petrochemical firms in Shandong agrees to comply with appeal from provincial government
- Making last-minute changes to maintenance works would raise refiners’ costs and may disrupt cash flow for upcoming tax payments, consultancy says
The coastal province, a hub for private factories with an economy the size of Indonesia’s, issued a notice urging local industry, and especially oil and petrochemical firms, not to carry out plant maintenance between April 15 and October 15 in an effort to reduce the area’s awful summer smog. Yet only one of about 10 independent refineries set to do maintenance has agreed.
The refineries, known as “teapots” because of the shape of early plants, are usually cleaned and renovated during that period in preparation for an annual hike in prices and demand for diesel and petrol in the second half of the year. The cleaning process tends to release large quantities of volatile organic compounds that are a major contributor to local air pollution.
It is no small contribution. Shandong’s oil refineries account for a quarter of China’s total processing capacity. Making last-minute changes to maintenance works would raise their costs and may disrupt cash flow for upcoming tax payments in March, industry consultancy FGE said in a note.
The conflict illustrates the tightrope the government has to walk in balancing the need to reduce emissions with maintaining economic growth as it strives to meet the 2060 carbon neutrality target set by President Xi Jinping.
China is the world’s largest crude oil importer and its refining capacity is expected to keep growing this decade even as its overall consumption of fossil energy is set to decline.
