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The nitrogen fertilizer industry in Henan strongly calls for adjustments to industrial policies. Author/Source: Sinochem News Network. Date: August 20, 2020. Clicks: 13. Approximately 1.35 million tons of production capacity will be phased out, affecting nearly 10,000 workers in this industry. Recently, the issuance of the \"Notice on Setting Targets for Phasing Out Backward Production Capacity in the Industrial Sector for 2020\" by the Office of the Leading Group for Phasing Out Backward Production Capacity in Henan Province caused a significant stir within the province’s nitrogen fertilizer industry. Over the past few days, the Henan Province Petroleum and Chemical Industry Association sowie several key nitrogen fertilizer manufacturers have submitted petitions to the relevant departments in Henan Province and to provincial leaders, urging that, given the uncertainty surrounding the pandemic, the deadline for phasing out intermittent fixed-bed gasifiers and the policy requiring that synthetic ammonia production capacity of less than 300,000 tons per year be eliminated be postponed until the end of 2022, so as to provide nitrogen fertilizer manufacturers with a path to survival. The Notice specifies that it is necessary to eliminate a certain number of \"underperforming production capacities\" by the end of December, involving 72 enterprises in industries such as coking, chemicals, and building materials. Among them, there are 6 enterprises in the province that are key players in the nitrogen fertilizer industry: Henan Xinlianxin Chemical Group Co., Ltd., Xinxiang Yubei Chemical Co., Ltd., Henan Jinshan Chemical Group, Anyang Chemical Industry Group, and Hebi Bama Fertilizer Factory. These enterprises have a total of 7 production units that are operating steadily, with an overall production capacity of around 1.35 million tons per year; they employ nearly 10,000 workers. In accordance with the requirements of the Notice, the industry and information technology departments in cities such as Xinxiang, Hebi, and Anyang in Henan have issued orders requiring local manufacturing enterprises to shut down the relevant production lines within a specified time frame. In response to this situation, the Henan Provincial Petrochemical Association and some key nitrogen fertilizer manufacturers raised requests through various channels to adjust the policies aimed at phasing out outdated production capacities in traditional industries, but with little success. “Traditional industries do not necessarily mean enterprises with outdated production capabilities, as well as those that are high in energy consumption and pollution. ”Su Dong, executive vice president of the Henan Petrochemical Association, said. In recent years, key nitrogen fertilizer manufacturers in Henan Province have managed to ensure that their emissions of waste gases, wastewater, and solid waste meet regulatory standards through technological upgrades. Companies such as Xinlianxin Group and Jinshan Group have won the title of \"Industry Energy Efficiency Leaders\" awarded by the Ministry of Industry and Information Technology for several consecutive years, maintaining a leading position in their respective sectors in China. “If the aforementioned facilities are shut down by the end of 2020 as required by the Notice, it will result in the waste of assets worth hundreds of billions of yuan, as well as a reduction in fertilizer production by several million tons. This will lead to a severe shortage of fertilizers in Henan Province, directly affecting the economy related to agriculture, rural areas, and farmers, and hindering the implementation of the strategies aimed at benefiting and enriching the people. ”Su Dong said. Responsible officials from companies such as Henan Xinlianxin, Henan Jinshan, and Yubei Chemical said that product upgrades or the launch of new projects require time, and due to the impact of the pandemic this year, it is difficult for these companies to complete the phasing-out tasks by the end of 2020. Forcing such closures would have a severe impact on the operations of these enterprises, and could lead to issues such as shortages of raw materials, debt risks, employee unemployment, and problems related to social stability. It is recommended that the existing policies be adjusted accordingly, so that policies aimed at phasing out outdated production capacities that exceed the **standard are no longer implemented or are implemented on a delayed basis. “The procedures for formulating and issuing the «Notice» were flawed; it lacked policy and legal foundations, as well as safeguards such as arrangements for the affected employees and capital compensation. ”Yang Qishen, secretary-general of the Henan Provincial Petrochemical Association, believes that it is inappropriate to formulate a list of outdated production capacities for elimination, to expand the scope of such eliminations and shutdowns, and to change the schedule for them, without seeking the opinions of industry associations or holding expert hearings. When reporting to the relevant ministries and commissions on the situation regarding fixed-bed batch gasification furnaces in the fertilizer industry, the China Nitrogen Fertilizer Industry Association expressed opposition to a one-size-fits-all policy applied to ammonia production facilities using fixed-bed batch gasification in the “2+26” regions. It is believed that technological upgrades aimed at improving environmental performance are key to the sustainable development of enterprises engaged in batch gasification for ammonia production using fixed-bed reactors. Such upgrades can provide valuable lessons for the industry, helping to ensure the continued operation of those enterprises that possess comparative advantages in this field. Some business leaders also said that over the years their companies have invested substantial funds in upgrading the batch-type fixed-bed gasification furnaces; if these furnaces are shut down without consideration for the circumstances, it will pose various challenges for the companies in terms of personnel, land, assets, and debts. They hope that **supporting policies such as measures for employee placement, special funding, and economic compensation will be introduced. “It is recommended that **the relevant departments strengthen coordination, sort out the issues raised by enterprises, explore effective measures to reduce the burden on these enterprises, and assist them in transforming and upgrading. At the same time, by drawing on the practices of neighboring provinces, relevant policies are adjusted and improved to scientifically and reasonably determine the scope and timeline for phasing out outdated production capacity in Henan Province’s nitrogen fertilizer industry. A tailored approach is adopted for each enterprise, in order to avoid sharp fluctuations in the industry and ensure its healthy development as well as social stability and food security. ”Su Dong said.