Oil giants fail environmental tests

The evaluation, released on Thursday, was based on four indicators: chemical oxygen demand, which shows the concentration of organic matter in the water; ammonia nitrogen, a major cause of excessive nutrients in water; and the airborne pollutants sulfur dioxide and nitrogen oxide.

The indicator for chemical oxygen demand for China National Petroleum Corp, or CNPC, Asia's largest oil and gas producer, was reduced 0.08 percent in 2012, far below the target reduction of 0.6 percent.

Nitrogen oxide emissions by China Petroleum and Chemical Corp, or Sinopec, in 2012 were originally set at zero growth, but the company increased emissions by 1.28 percent.

Local governments of 31 provinces, municipalities and autonomous regions, and eight State-owned companies were subject to the evaluation.

The two petrochemical giants were the only two that failed, the second consecutive year they failed to reach the bar.

The evaluation found that China succeeded in bringing down overall emissions' chemical oxygen demand in 2012 by 3.05 percent, ammonia nitrogen by 2.62 percent, sulfur dioxide by 4.52 percent and nitrogen oxide by 2.77 percent.

Though a detailed assessment method was not used in 2011, officials from the ministry warned CNPC and Sinopec to take more effective action to curb emissions.

This year, the ministry withheld approval of environmental impact assessment reports for all new modification and expansion projects by the two companies, except for those upgrading oil quality and energy saving.

"When the approval limits will come to an end is still pending," said Huang Xiaozeng, deputy head of the Environmental Protection Ministry's pollution emission control department.

"The time will be based on the two companies' emission reduction evaluations for the first half of 2013," said Huang.

He said the punishment will not affect China's current oil provisions or refining capacity of almost 600 million metric tons per year, not to mention projects outside the refining industry.