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Fertilizer costs are going up again! These fertilizer projects must be cleared up by the end of this year! Author/Source: Nongcai Net’s Agrochemical Handbook; Date: 11-11-2016; Clicks: 63. Recently, the Ministry of Environmental Protection issued a notice titled “On Strengthening Environmental Impact Assessment Management with an Emphasis on Improving Environmental Quality,” in which it called on provincial environmental protection departments to step up efforts to address projects that were constructed without prior approval, to conduct regular inspections, and to ensure that all such projects are resolved by December 31, 2016. The Notice states that for regions that fail to meet the requirements set for environmental quality assessments, except for projects related to people’s livelihoods and energy conservation and emission reduction, the approval process for environmental impact assessment documents for new projects that would generate such key pollutants in those regions shall be suspended in accordance with the law. New projects in the fields of non-ferrous metal smelting, petroleum processing, chemicals, coking, electroplating, and leather manufacturing are strictly restricted from being established in areas where arable land designated for priority protection is concentrated; fertilizer production projects fall under this restriction as well. Furthermore, in recent times, 12 **environmental inspection teams have taken strict action to address chemical enterprises that cause air pollution through illegal emissions. Influenced by various environmental initiatives and the emphasis placed on environmental protection, eliminating outdated production capacities and ensuring proper emission control have also become key priorities in manufacturing. With the recent introduction of **environmental protection policies, various regions have responded actively; major fertilizer-producing provinces such as Shandong have begun to implement the strictest regulations on air pollution control. As a result, the operating rate of fertilizer plants has declined, and the reduced production capacity has contributed to the recent rise in fertilizer prices. Since 2017, fines have been imposed on illegal construction projects on a daily basis. The Ministry of Environmental Protection has required provincial environmental protection departments to step up efforts to eliminate and shut down such projects, to rectify and standardize others, and to improve the registration process for remaining projects, with the goal of completing all these tasks by December 31, 2016. Starting from January 1, 2017, projects that were constructed without approval and violated environmental protection regulations must be subject to strict penalties in accordance with the law. For projects that have been delayed for too long without any action taken, measures should be developed to address them; those that cause severe environmental pollution or ecological damage must be investigated and dealt with in accordance with the law ； Those who refuse to comply shall be subject to \"daily fines\" in accordance with the law. The Notice clearly states that it is necessary to effectively safeguard the environmental rights and interests of the public. The Ministry of Environmental Protection requires enhanced supervision over ongoing and completed key projects, both during and after their implementation, and strict enforcement of the law to address and correct any illegal or non-compliant activities in construction projects ； Information on environmental protection supervision and management as well as penalties related to construction projects should be made publicly available in a timely manner. The enforcement mechanisms against enterprises that seriously violate environmental protection regulations should be strengthened, and systems for maintaining records of construction entities’ environmental compliance and a blacklist system should be established. Industry insiders reveal that in energy-intensive sectors such as oil processing and fertilizer production, a considerable proportion of projects are built without prior approval; there are many such projects, making it very difficult to rectify the situation. Following the issuance of the Notice, various regions responded actively. The Shandong Province Air Pollution Prevention and Control Regulations, which came into effect on November 1 and are regarded as the strictest environmental protection regulations in history, impose stricter restrictions on emissions from chemical enterprises. Based on the authority granted by the Environmental Protection Law, these regulations introduce the possibility of imposing continuous daily penalties for activities such as starting construction without prior approval or dumping construction waste from heights ； Provisions have been made to establish a connection between civil liability for compensation and criminal liability for such illegal acts. Environmental inspection teams take action to strictly audit outdated production facilities in enterprises. Recently, the Ministry of Environmental Protection dispatched 12 inspection teams to key regions such as Tianjin, Hebei Province, Heilongjiang Province, Jilin Province, Liaoning Province, and Shandong Province to conduct emergency inspections in response to severe air pollution. The inspection results showed that during this period of severe pollution, multiple cities experienced serious contamination; however, the emergency response was delayed and the countermeasures taken were inadequate. 39 enterprises had abnormal levels of air pollution emissions, suggesting that they exceeded the allowed limits. Upon inspection, in addition to emissions from vehicle exhausts, the environmentally unsound production practices of chemical enterprises are exacerbating air pollution. Enterprise emissions are a significant issue, including the lack of installation of denitration and desulfurization facilities, as well as the presence of a large number of small coal-fired boilers. To date, the Ministry of Environmental Protection has taken three main measures in the Beijing-Tianjin-Hebei region: ensuring that all enterprises with high pollution levels achieve ultra-low emission levels, arranging for heavy-polluting industrial enterprises to operate at staggered times, and continuing to adjust the energy structure – in particular by replacing coal with electricity and natural gas on a large scale – in order to prevent extreme levels of pollution from occurring. A responsible official from the Ministry of Environmental Protection said that the ministry will instruct the provincial environmental protection agencies in the locations where these enterprises are situated to conduct on-site inspections, impose severe penalties on those enterprises that discharge pollutants in excess of allowed levels, and make public the details of those penalties. Those discharge entities that engage in fraudulent practices such as altering or fabricating monitoring data will be referred to the public security authorities for handling in accordance with the law. Based on the level of environmental pollution, the Ministry of Environmental Protection will also conduct environmental risk assessments of enterprises that need to be shut down or relocated; those with particularly severe pollution levels will be ordered to cease operations. In addition, the \"Regulations on the Prevention and Control of Air Pollution in Shandong Province\", issued by Shandong, a major province for fertilizer production, stipulate 12 supervision and management measures, including staggered production schedules, the establishment of joint prevention and control mechanisms, control at the source of pollution, overall control of air pollutants, emergency warnings for severe pollution conditions, interviews and suspension of approval processes, as well as targeted oversight of major cases and significant issues. The core objective of these regulations is to improve the quality of the air environment throughout the entire regulatory framework. All institutional designs, all management standards, all assessment and supervision mechanisms, all information disclosures, and all sanctions are all aimed at improving the quality of the atmospheric environment as their core objective. Reports suggest that in response to environmental regulations, some fertilizer manufacturers in Shandong plan to adjust their production schedules. Coupled with the poor demand during the recent winter storage period, some companies have already suspended production and shut down their manufacturing equipment to avoid facing environmental penalties. It drives the upgrade of fertilizer production equipment. Green and environmentally friendly agriculture is eligible for subsidies. Recently, with rising costs of road and rail transportation, as well as higher costs for raw materials such as coal and natural gas, the production costs of fertilizers have increased. Coupled with environmental regulations and the expenses associated with upgrading production equipment, these factors inevitably raise the costs of fertilizer production. But at the same time, there will also be more motivation to carry out technological upgrades in order to achieve a better model of development. Especially for some large enterprises, from a strategic perspective, it is more appropriate to introduce technological innovations for pollution control. Recently, the Central Deep Reforms Committee approved the \"Plan for Reforming the Agricultural Subsidy System with a Green and Ecological Focus.\" To establish such a subsidy system, it is necessary to proceed cautiously and make gradual adjustments, while ensuring **food security and steady increases in farmers’ incomes**. Starting with the reform and improvement of existing subsidy policies, and focusing on the key areas and critical links that hinder the sustainable development of agriculture, an emphasis will be placed on a green and ecological approach. Efforts will be accelerated to implement reforms in relevant agricultural subsidy policies, with a focus on strengthening subsidies for major ecosystems such as arable land, grasslands, forestry, and wetlands. Effective support policies will be explored for addressing heavy metal contamination in arable land, agricultural non-point source pollution, and efficient water use in agriculture. The policy goals will shift from emphasizing quantity growth to giving equal importance to quantity, quality, and ecology. Industry experts point out that a series of recent environmental protection measures and subsidies for green practices can drive industrial upgrading by encouraging the development of new types of efficient, green, and environmentally friendly fertilizers and pesticides. Combining organic, inorganic, and biological methods is essential to meet the demands for long-term effectiveness, high efficiency, low consumption, and no pollution – trends that are characteristic of modern agricultural development. It is also a practical necessity for ensuring agricultural ecological safety and the quality and safety of agricultural products. In addition, chemical manufacturing enterprises that produce fertilizers, pesticides, and other such products will undertake a new round of upgrades to their production equipment, phasing out outdated facilities in order to improve energy conversion efficiency. This will also facilitate the adoption and use of new energy sources, thereby reducing environmental pollution. (Huang Haiyang)