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In order to achieve energy-saving and emission-reduction goals, the government has introduced a series of policies aimed at promoting sustainability within the chemical industry. These measures include reducing export tax rebates, increasing resource taxes, gradually liberalizing energy prices, implementing green credit policies, and offering financial support for environmentally friendly initiatives. The effects of these policies are clearly reflected in the quarterly reports of listed chemical companies, with several key impacts observed:
Firstly, the reduction in export tax rebates has significantly affected high-energy-consuming and polluting chemical firms. Products such as barium carbonate, phosphorus chemicals, soda ash, Titanium dioxide, and dyes have seen their tax rebates lowered, particularly those in the pharmaceutical and chemical raw material sectors, which now face a 5% rebate rate. This policy has intensified domestic competition, leading to the elimination of smaller, less efficient companies and pushing firms toward innovation and efficiency improvements. Larger enterprises with cost and scale advantages are likely to benefit from this restructuring.
Secondly, the increase in resource taxes is part of a broader strategy to curb overcapacity in energy-intensive industries. With rapid growth in sectors like nitrogen fertilizers, caustic soda, and calcium carbide, the government aims to balance supply and demand through taxation. Additional environmental and fuel taxes are expected to further strengthen this regulatory framework, encouraging chemical companies to focus on technological upgrades and resource efficiency. This shift will favor large firms with advanced technologies and sustainable practices.
Thirdly, the gradual marketization of energy product prices, such as crude oil, has led to higher costs for basic raw materials like ethylene. This, in turn, increases production costs for downstream chemical companies, affecting the petrochemical sector. As a result, the development of high-pollution and high-energy products is being curbed, while environmental compliance costs rise. Companies producing basic materials like chlor-alkali and viscose may see benefits from rising raw material prices, but overall performance in midstream and downstream sectors is slowing.
Fourthly, the green credit policy, issued by the State Environmental Protection Administration, the People's Bank of China, and the China Banking Regulatory Commission, requires stricter lending controls for non-compliant enterprises. This policy is expected to limit the expansion of high-pollution projects, putting pressure on small and medium-sized chemical companies that lack environmental safeguards.
Lastly, the government has allocated 21.3 billion yuan to support energy-saving and emission-reduction efforts. Policies promoting a circular economy are expected to provide long-term support for leading chemical companies. Firms like Sinopec and Yantai Wanhua, which have strong environmental standards, are likely to receive preferential treatment and funding.
Overall, the implementation of these policies is driving industrial and regional adjustments within the chemical sector. As environmental and cost pressures grow, outdated production capacities will be phased out, and companies with technological and scale advantages will gain a stronger competitive edge. Leading firms with robust pollution control capabilities and advanced technology will have greater opportunities for growth. Companies like Zhejiang Longsheng, Shandong Hailong, and Xinjiang Tianye are well-positioned for future success. Additionally, the rapid development of the domestic capital market is accelerating internal M&A activities in the chemical industry, paving the way for consolidation and stronger group structures. Companies such as Xingxin Materials, Yuntianhua, and Hubei Yihua are expected to grow even further through strategic alliances and increased group strength.