Fu Chengyu claims local authorities have more say in emissions controls than nationwide operators
Sinopec Chairman Fu Chengyu Image: Sinopec |
In a recent interview with the Beijing Times, the chairman of Sinopec, Asia’s largest refiner, claimed that although National IV and National V standards are being fast tracked at a national level, provincial governments are responsible for setting local standards.
Often under pressure from local industries to cut prices, provincial authorities set standards lower for cheaper, more polluting products, according to Fu. In the case of the trucking sector, those alternatives can sometimes be hard to find.
He also asserted that coal accounts for about 66% of total resources used in China today, while oil products make up only 18%. Moreover, the lack of clean coal projects contributed significantly to the rise in pollution.
This creates another problem for Sinopec. Under pressure to invest in cleaner fuels and lubes, state-owned enterprises pour more capital into projects where there is less demand than anticipated. If regional sales fall short, the company is then put under dual pressure to improve margins without reducing employment.
Despite this, the energy sector is seeing capital from both the public and private sector, and the state owned giant had received investments of over 105bn yuan ($17bn) from 25 investors, meaning big changes to the company’s focus on researching higher quality fuels.
Sinopec and CNPC have been the subject of merger speculation as part of a wider set of reforms to state owned enterprises. If the merger was approved it would create by far the world’s largest company by revenue with a combined income of close to $800bn per annum.