On September 26, 2025, the Ministry of Industry and Information Technology (MIIT), together with six other departments of the People’s Republic of China, officially issued the Work Plan for Stabilizing Growth in the Petrochemical and Chemical Industry (2025–2026).
The plan sets ambitious goals: by 2026, the petrochemical and chemical industry in China should maintain an average annual growth rate of over 5%, achieve a rebound in economic benefits, and significantly enhance technological innovation capacity. At the same time, the industry will accelerate digital transformation, green development, pollution and carbon reduction, and safety standards, while promoting the high-quality development of chemical industrial parks.
Why the Work Plan Matters
The petrochemical and chemical industry is one of the most critical pillars of China’s economy. With its massive industrial scale, strong upstream and downstream linkages, and global competitiveness, it plays a decisive role in industrial growth, energy security, and supply chain stability.
In 2024, the sector contributed 14.9% of China’s total industrial added value, with a growth rate of 6.6%, outpacing the overall industrial average. China currently leads the world in production capacity for more than 20 major chemical products, including refining, ethylene, and synthetic resins.
However, the sector faces challenges such as:
-
Intensifying global competition in basic organic raw materials
-
Shortages of high-end fine chemicals
-
Slowing domestic demand growth
-
Rising geopolitical and market uncertainties
The Work Plan (2025–2026) aims to address these issues through capacity optimization, innovation-driven development, and sustainable transformation.
Core Objectives of the 2025–2026 Petrochemical Industry Plan
-
Industry Growth: Maintain an average annual growth rate above 5%.
-
Innovation: Enhance R&D in advanced materials, electronic chemicals, and high-end polyolefins.
-
Green Development: Promote carbon reduction, pollution control, and energy efficiency.
-
Digital Transformation: Accelerate AI + Petrochemicals, big data, and smart plant initiatives.
-
Industrial Parks Upgrade: Transition from standardized construction to high-quality clusters with smart management.
Key Policy Directions
1. Strict Control of New Refining Capacity
-
Implement capacity replacement policies for new refining projects.
-
Regulate the pace of new ethylene and paraxylene capacity additions.
-
Prevent risks of overcapacity in coal-to-methanol production.
2. Upgrade of Existing Facilities
-
Launch the Action Plan for Aging Facility Upgrades.
-
Support “oil-to-chemicals” transformation projects.
-
Accelerate industrialization of emerging technologies.
3. Green and Low-Carbon Transition
-
Promote CO₂ capture, utilization, and storage (CCUS).
-
Support bio-based materials and green ammonia/methanol fuels.
-
Develop projects such as helium extraction from natural gas and potassium extraction from seawater.
4. Expanding Market Demand
-
Boost demand in traditional industries like construction, automotive, shipbuilding.
-
Create new growth areas in new energy, robotics, and low-altitude economy.
-
Enhance green product certification and promote domestic + international trade integration.
5. International Cooperation
-
Strengthen foreign trade policies and overseas investment support.
-
Align Chinese chemical industry standards with international norms.
-
Expand cooperation in fine chemicals, AI applications, and green technologies.
Implementation Safeguards
To ensure the Work Plan’s success, China will:
-
Mobilize local governments and leading enterprises to support coordinated development.
-
Provide policy support through treasury bonds, financing, and differentiated credit policies.
-
Enhance talent development and accelerate project approvals.
-
Establish a petrochemical industry prosperity index and early warning system to manage capacity risks.
0 comments