The dual control policy is a watershed in China’s chemical industry

On August 17, the National Development and Reform Commission issued the “Barometer of Regional Energy Consumption Intensity and Total Volume for the First Half of 2021″-also known as “Dual Control”. The dual control policy provides a clear alert level for reducing energy consumption intensity and consumption. According to China’s Paris Agreement’s commitments, this policy is a crucial step towards China’s goal of carbon neutrality.
Under the dual control policy, power supply is strictly controlled. With the temporary suspension of production, Chinese agrochemical companies are also facing shortages of raw materials and power supplies. It also brings great risks to safe production during operation.
Energy consumption intensity is the most important indicator, followed by total energy consumption. The dual control policy is mainly aimed at improving the industrial structure and the utilization of renewable energy.
Policy management is regional, and local governments shoulder the responsibility of implementing policies. The central government allocates credits for total energy consumption to each region, taking into account the development of regional energy consumption efficiency and energy utilization.
For example, due to the large demand for electricity in the mining industry, energy-intensive industries such as yellow phosphorus mining are strictly controlled. The intensity of use in Yunnan is particularly high. One ton of yellow phosphorus consumes approximately 15,000 kilowatts/hour of hydroelectric power generation. Moreover, the drought in the southwest has led to a shortage of hydropower supply in 2021, and Yunnan’s total energy consumption for the whole year is also untrustworthy. All these factors pushed the price of glyphosate to the moon in just one week.
In April, the central government sent environmental audits to eight provinces: Shanxi, Liaoning, Anhui, Jiangxi, Henan, Hunan, Guangxi, and Yunnan. The future impact will be “dual control” and “environmental protection”.
The same situation happened before the 2008 Beijing Olympics. But in 2021, the basis of the situation is completely different from that in 2008. In 2008, the price of glyphosate rose sharply, and the market stocks were sufficient. Currently, the inventory is very low. Therefore, due to the uncertainty of future production and shortage of inventory, there will be more contracts that cannot be fulfilled in the coming months.
The dual control policy shows that there is no excuse for postponing the 30/60 target. From the perspective of such policies, China has decided to transform to sustainable development through industrial upgrading. The maximum energy consumption of new projects in the future is 50,000 tons of standard coal, and projects with high energy consumption and high waste emissions will be strictly controlled.
In order to achieve systemic goals, China assessed a simple parameter, namely carbon consumption. The market and enterprises will correspondingly support the future industrial revolution. We can call it “from scratch”.
David Li is the business manager of Beijing SPM Biosciences Inc. He is an editorial consultant and regular columnist of AgriBusiness Global, and an innovator of drone application technology and professional formulations. View all author stories here.

Post time: Oct-16-2021