The Chinese government has released a guideline promoting a compulsory insurance pilot program in heavy industries and other enterprises posing high environmental risks.
According to the guideline jointly released by the Ministry of Environmental Protection and the China Insurance Regulatory Commission, the insurance scheme aims to help heavy industries better prevent pollution and provide compensation for damage caused by polluting accidents.
The pilot insurance program currently covers more than 2,000 enterprises that pose serious environmental risks, with some 20 billion yuan (3.2 billion U.S. dollars) underwritten, according to the ministry.
The guideline has specified the category of enterprises that must participate in the insurance policy, which include mining and smelting industries, lead storage battery manufacturers, leather goods companies and chemical factories.
Meanwhile, petrochemical companies and those involved in businesses related to hazardous chemical products and hazardous waste are encouraged to be insured.
According to the guideline, special environmental protection funds will be allocated in favor of participating companies, which will also enjoy priority in bank lending.
Those failing to apply for insurance may face negative environmental impact assessments and credit downgrading, which would hamper the future development of those companies, the ministry said.
China has faced intensifying pollution pressure recently. In January, a chemical spill from a coal chemical company in north China's Shanxi Province polluted nearby Hebei and Henan provinces, leaving thousands of people without tap water for days.
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