In-Depth Analysis of the Impact of Environmental Policies on the Sulfur Chemical Industry

As an important component of the chemical industry, the sulfur chemical industry involves the emission of air pollutants such as sulfur dioxide and sulfuric acid mist during production, and is significantly affected by environmental policies. The following is a systematic analysis from the aspects of policy framework, industry status quo, policy impacts, corporate responses, and future prospects.

According to The Draft Code of Ecological Environment of the People’s Republic of China, the state has established a strict industrial air pollution prevention and control system. The code clearly stipulates that enterprises in industries such as iron and steel, building materials, non-ferrous metals, petroleum, and chemical industries that emit dust, sulfides, and nitrogen oxides during production shall adopt clean production processes, support the construction of dust removal, desulfurization, denitrification, and other devices, or take other measures such as technological transformation to control air pollutant emissions[1]. The state encourages coal-fired units to adopt advanced technologies and devices for the synergistic control of air pollutants such as dust removal, desulfurization, denitrification, and mercury removal to reduce air pollutant emissions[1].

In terms of sulfuric acid mist monitoring, the Ministry of Ecology and Environment has issued national ecological environment standards such as Stationary Source Waste Gas - Determination of Sulfuric Acid Mist - Ion Chromatography Method[2], providing unified technical specifications for waste gas emission monitoring of sulfuric acid chemical enterprises.

The state encourages and supports key industries such as iron and steel, cement, and coking, as well as coal-fired boilers, to adopt technologies such as ultra-low emissions[1]. According to Technical Specification for Ultra-Low Emission Treatment Project of Sintering Waste Gas in Iron and Steel Industry, key equipment of desulfurization systems should consider setting up corresponding backup and emergency measures to meet the needs of fault switching and maintenance[3]. This specification puts forward specific requirements for desulfurization process design, including desulfurization efficiency, equipment selection, secondary pollution control, and other aspects.

The executive meeting of the State Council held on December 19, 2025, deployed the launch of a comprehensive solid waste management action, marking that China’s solid waste management has entered a new stage[4]. Comprehensive solid waste management has been elevated to a national strategy. As the main producer and provider of industrial bulk solid waste, the mining industry generates solid waste accounting for about 30% of the total solid waste each year[4]. This policy trend puts forward higher requirements for solid waste treatment in the sulfur chemical industry.

The production capacity of China’s sulfuric acid industry mainly comes from three sectors: oil refining, phosphate fertilizer, and mineral acid. From 2024 to 2025, sulfuric acid output and operating rates have shown fluctuations, with environmental production restriction measures significantly impacting the industry’s capacity utilization rate[5]. The revenue from by-product sulfuric acid has continued to rise. As of October 2025, spot smelting of copper concentrate at smelters is in deep loss, while sulfuric acid has become the main profit source for smelters[6].

Downstream demand for sulfuric acid is mainly concentrated in sectors such as chemical fertilizers (53%), titanium dioxide (12%), and hydrofluoric acid (7%)[6]. Recently, sulfuric acid prices have remained at a high level, which has an important impact on the profitability of related enterprises.

Research shows that central environmental inspections are generally conducive to the management of overcapacity in manufacturing enterprises, and can improve the capacity utilization of manufacturing enterprises by promoting regional specialized agglomeration[7]. This system has a significant effect on improving overcapacity in manufacturing enterprises in regions with a high degree of marketization, as well as in heavily and moderately polluting industries. It also has a significant governance effect on overcapacity in large-scale, state-owned, and private manufacturing enterprises[7].

Taking copper smelting as an example, in December 2025, 4 smelters underwent maintenance, involving 750,000 tons of rough smelting capacity and 750,000 tons of refining capacity[6]. A smelter that originally planned to reduce production in November delayed maintenance again due to high sulfuric acid revenue and export demand, reflecting the complex game between environmental policies and market benefits[6].

From the rectification situation of the third round of central ecological and environmental protection inspections in Gansu Province, chemical parks are facing comprehensive pressure for environmental upgrading[8]. Gansu Province conducted a comprehensive inspection of the online monitoring networking of waste gas from 74 enterprises, and urged 48 enterprises to upgrade and transform their waste gas treatment facilities[8]. In terms of volatile organic compounds (VOCs) supervision, 49 enterprises in chemical parks have been connected to the national control platform as required, reflecting the strict trend of environmental supervision[8].

In the rectification of feedback issues from the third round of central environmental inspections, Hubei Province imposed penalties and required rectifications on multiple chemical enterprises[9]. For example, Huanggang City urged Wuxue Yunhua’an Company to suspend production for rectification; the company paid a fine of RMB 1.27 million and suspended production for rectification in September 2024[9]. These cases show that environmental inspections have a substantial impact on the production and operation of sulfur chemical enterprises.

The impact of stricter environmental policies on sulfur chemical enterprises is first reflected in costs. According to analysis, sulfur chemical enterprises need to invest a large amount of capital in the upgrading and transformation of environmental protection facilities, including the construction and operation of dust removal, desulfurization, denitrification, and other devices[1]. The focus of air pollution control has shifted from “ultra-low emissions” to “low-carbon transformation”. It is estimated that investment in areas such as CCUS, desulfurization, denitrification, and dust removal will exceed RMB 500 billion in the next five years[10].

Environmental policies have accelerated capacity consolidation in the sulfur chemical industry. Research shows that central environmental inspections have a significant negative impact on overcapacity in large manufacturing enterprises, objectively promoting the elimination of backward production capacity[7]. For the sulfur chemical industry, this means that small-scale enterprises with inadequate environmental protection facilities face greater survival pressure, while large-scale compliant enterprises are expected to gain a larger market share.

Against the background of environmental policies, the value of sulfuric acid as a by-product of non-ferrous metal smelting has become increasingly prominent. 1 ton of copper produces 3.5 tons of sulfuric acid as a by-product, and the high price of sulfuric acid has improved the comprehensive revenue of smelters[6]. Some smelters have delayed maintenance due to high sulfuric acid revenue, indicating that by-product revenue has become an important factor affecting enterprise production decisions[6].

The construction of the national carbon market has brought a new policy environment for the sulfur chemical industry. In 2025, the number of enterprises included in the quota management of the national carbon market increased from about 2,200 to 3,700, and the annual covered emissions increased from 5.1 billion tons to more than 8 billion tons, accounting for about 60% of the country’s total carbon emissions[11]. Although the sulfur chemical industry is not yet included in the coverage of the carbon market, with the gradual expansion of the carbon market, industry enterprises need to prepare in advance for carbon emission management and carbon asset planning.

The environmental protection technology upgrading of sulfur chemical enterprises mainly includes the following directions:

• Source Emission Reduction
  : Adopt clean production processes to reduce pollutant generation
• Process Control
  : Optimize production processes to improve resource utilization efficiency
• End-of-Pipe Treatment
  : Construct high-efficiency environmental protection facilities such as dust removal, desulfurization, and denitrification systems
• Circular Utilization
  : Strengthen resource utilization of solid waste to reduce emissions

The Action Plan for Comprehensive Solid Waste Management proposes to build a “full-chain, closed-loop” solid waste environmental management system, requiring enterprises to establish industrial solid waste management accounts to achieve traceability and queryability of solid waste[12]. Sulfur chemical enterprises need to establish a sound environmental management system covering raw material procurement, production processing, waste disposal, and other entire processes.

Against the background of the “dual-carbon” goals, the green low-carbon transformation of the sulfur chemical industry is imperative. Enterprises need to:

• Optimize energy structure and improve energy utilization efficiency
• Explore the application of carbon capture, utilization, and storage (CCUS) technology
• Develop circular economy to realize comprehensive resource utilization
• Participate in the carbon trading market and manage carbon emission costs

With the tightening of environmental supervision, enterprises need to establish a sound compliance management system, including:

• Improve environmental protection procedures to ensure compliance of all approvals
• Strengthen the operation and maintenance of environmental protection facilities to ensure stable emission compliance
• Establish an environmental monitoring system to achieve real-time monitoring
• Develop emergency plans to respond to sudden environmental incidents

From the policy trend, environmental protection requirements will continue to tighten. The formulation and implementation of the Code of Ecological Environment will provide a stricter legal framework for the sulfur chemical industry[1]. It is expected that more emission standards and control measures for characteristic pollutants such as sulfuric acid mist and heavy metals will be introduced in the future.

The implementation of environmental policies will accelerate the integration of the sulfur chemical industry. Small-scale enterprises with inadequate environmental protection facilities will gradually exit the market, while large-scale compliant enterprises will expand their market share through mergers and acquisitions. The increase in industry concentration will help improve the overall environmental protection level and resource allocation efficiency.

Environmental protection demands will drive technological innovation in the sulfur chemical industry. On one hand, traditional environmental protection technologies will continue to be upgraded to improve treatment efficiency and reduce costs; on the other hand, new environmental protection technologies such as CCUS and intelligent environmental monitoring will be more widely applied in the industry.

The sulfur chemical industry will strengthen collaborative development with upstream and downstream industries. Collaboration with industries such as non-ferrous metal smelting and phosphate fertilizer production will become an important development direction, achieving resource sharing and centralized pollution control through industrial chain integration.

[1] The Draft Code of Ecological Environment of the People’s Republic of China. https://npcobserver.com/wp-content/uploads/2025/12/Ecological-and-Environmental-Code-3rd-Draft.pdf

[2] Policy Documents of the Ministry of Ecology and Environment. https://www.mee.gov.cn/zcwj/

[3] Technical Specification for Ultra-Low Emission Treatment Project of Sintering Waste Gas in Iron and Steel Industry. https://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/dqhjbh/dqgdwrywrwpfbz/202503/W020250311568405304580.pdf

[4] Elevated to National Strategy! Comprehensive Solid Waste Management Faces a “Big Test”. https://m.thepaper.cn/newsDetail_forward_32326876

[5] Trend Chart of Sulfuric Acid Industry Capacity and Output. https://mmbiz.qpic.cn/mmbiz_png/nzQb6GpDHHUx39SvFwv2DUnlwrxiaibiboJFDyReQBic9UggKS45FvwS417QUsneibZ88YqpiczAMkvXKiaBJJHnfpZLw/640

[6] Non-Ferrous Metals Weekly, December 19, 2025. https://www.ccbfutures.com/upload/20251219/20251219173214641.pdf

[7] The Impact of Central Environmental Inspections on Overcapacity in Manufacturing Enterprises. http://journal.bit.edu.cn/sk/cn/article/pdf/preview/10.15918/j.jbitss1009-3370.2021.4660.pdf

[8] Rectification Situation of the Third Round of Central Ecological and Environmental Protection Inspections in Gansu Province. http://www.gansu.gov.cn/gsszf/c100002/c100010/202601/174268694.shtml

[9] Rectification Situation of Feedback Issues from the Third Round of Central Environmental Inspections by the Provincial Development and Reform Commission. https://fgw.hubei.gov.cn/fbjd/zc/zcwj/gs/202512/t20251225_5842001.shtml

[10] How the Environmental Protection Equipment Manufacturing Industry Solves the 24-Character Dilemma in the 15th Five-Year Plan Period. https://finance.sina.com.cn/wm/2026-01-14/doc-inhhfmkz8580656.shtml

[11] A Guide to Understanding the Global Carbon Market. http://www.sinopecnews.com.cn/xnews/content/2025-12/25/content_7139743.html

[12] New Solid Waste Regulations Issued: How Should the Petrochemical Industry Respond? https://finance.sina.com.cn/jjxw/2026-01-09/doc-inhfsniv5999177.shtml