A draft of the environmental protection tax law is to be tabled for discussion in
June 2016, according to the 2016 legislative agenda released by the
Standing Committee of the NPC. This suggests that China will confirm the
introduction of legislation imposing an environmental protection tax (in place
of environmental protection charges). In addition, the coming law is expected
to raise domestic TiO2 enterprises’ production costs, which is then
expected to further accelerate the phasing out of outmoded production capacity.
Source: Bing
The
levying of a tax on environmental pollution is becoming increasingly urgent,
with worsening air, water and soil pollution in China.
A draft of the environmental protection tax law is to be tabled for discussion
in June 2016, according to the 2016 legislative agenda released by the Standing
Committee of the National People's Congress (NPC). The Environmental
Protection Tax Law of the People's Republic of China is expected to have
been passed by the end of the year.
Based on the exposure draft of the law (released on 10 June, 2015), jointly
drawn up by China's Ministry of Finance, State Administration of Taxation (SAT)
and Ministry of Environmental Protection (MEP), CCM expects the law to shake up
China's chemical industry.
According to the draft, environmental protection taxes (currently environmental
charges) will be imposed on enterprises for the emission of pollutants by the
SAT (environmental charges are currently imposed by the MEP).
Notably, enterprises that discharge pollutants illegally will run the risk of
being charged with tax evasion, effectively significantly increasing the
penalty for illegal pollutant emissions.
In addition, the law will grant more regulatory power to local governments than
before. Enterprises who obviously exceed discharge levels for pollutants will
be fined <= three times the regular taxable amount for these pollutants.
Furthermore, according to the draft, taxation for water pollutants will be
USD0.21 (RMB1.40) for each unit per capita loading; that for air pollutants
will be USD0.18 (RMB1.20) for each pollutant equivalent; and that for solid
wastes will be vary from USD0.76/t (RMB5/t) to USD4.55/t (RMB30/t).
According
to CCM, environmental protection costs for sulfate grade TiO2 (currently USD151.77-303.54/t, or RMB1,000-2,000/t, varies greatly between
different enterprises) will be increased by about USD30.35/t (RMB200/t) after
the new law is implemented. Most importantly, small- and medium-sized TiO2 enterprises that currently escape environmental protection charges will not be
exempt from new environmental protection taxes.
It is not difficult to imagine small- and medium-sized enterprises with very
limited profit margins leaving the market in the short term after being faced
with a “newly added” environmental protection cost, which could be as high as
over USD182.12/t (RMB1,200/t). When that happens, large-scale, environmentally
friendly enterprises will be able to seize additional market share.
In China, large scale TiO2 enterprises usually perform better when
it comes to pollution control and prevention and clean production than others.
For instance:
- Sichuan Lomon Titanium Co., Ltd.
Its “TiO2 – sulfuric acid – phosphorus chemicals” circular
production line and clean production technique for sulfate grade TiO2 were listed as models of “circular economy and comprehensive utilization” by
the National Development and Reform Commission.
- Henan Billions Chemicals Co., Ltd.
Through comprehensively utilizing waste and by-products, recycling waste water,
and heat recovery, it can now successfully recycle sulfur, iron, titanium and
scandium resources and has raised its titanium production yield from less than
82% to more than 87%.
*This article comes from Titanium Dioxide China Monthly Report 1606, CCM
About CCM:
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provider for China’s agriculture, chemicals, food & ingredients and life
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solutions, from price and trade data to industry newsletters and customized
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Tag: TiO2