NDRC releases new guidelines for China’s oil refining industry

The National Development and Reform Commission (NDRC), China’s top administrative agency responsible for economic and social development planning, released new guidelines for China’s oil refining industry on October 25, 2023. The guidelines aim to promote green development and reduce pollution in China’s petroleum refining sector.

The new guidelines include the following:

• China will cap its crude oil refining capacity at 1 billion metric tons by 2025 to streamline its vast oil processing sector and cap carbon emissions.
• Refineries with an annual capacity of 10 million metric tons or more will account for 55% of processing facilities by 2025, while any new refineries will have to have capacities of at least 10 million tons a year.
• China will also promote energy efficiency and better carbon emission management in the oil refining industry.
• Refiners will have to shut down old, inefficient operations as authorities set a cap on domestic crude processing capacity under new guidelines promoting green development of the sector.

The cap of 1 billion tons a year starting in 2025 will force a reduction from this year’s 1.008 billion tons, based on a projection by commodities consultancy Sublime China Information. The industry is expected to add 27.5 million tons of capacity this year, Sublime projected, on top of 980 million tons last year, according to data compiled by Everbright Securities.