The pharmaceutical industry in China is among the six most polluting sectors, and recent developments indicate a major shift in environmental regulations. The China Chemical Pharmaceutical Industry Association recently announced that the new "Drug Industry Pollutant Emission Standard (Draft)" has been finalized and is expected to be officially implemented next year. This move marks a significant step forward in addressing environmental concerns within the sector, forcing companies to face stricter compliance requirements.
Previously, pollution control standards for the pharmaceutical industry were limited to setting limits on raw material indices, with other wastewater treatment practices following general chemical industry guidelines. However, these outdated rules are no longer sufficient as the industry grows and environmental demands become more stringent. The new standard will introduce specific pollutant discharge limits for APIs (Active Pharmaceutical Ingredients), chemical drugs, and biopharmaceuticals, with tighter emission criteria for certain products.
For instance, the COD pre-discharge limit for chemical raw materials has been reduced from 1000 mg/L to 500 mg/L, while the final emission standard has dropped from 300 mg/L to 150 mg/L. A three-year transition period is provided for companies to adapt. According to the State Environmental Protection Administration, the reason for these strict measures is that many pharmaceutical firms have caused severe environmental damage over the years.
As a result, stricter environmental standards are expected to significantly increase operational costs for chemical and pharmaceutical companies. Several large enterprises have already begun investing heavily in environmental upgrades. North China Pharmaceutical Co., Ltd. has spent 200 million yuan to meet the new requirements, while Shijiazhuang Pharmaceutical Group invested 350 million yuan in rectification. Haizheng Pharmaceutical spent 130 million yuan, and Guangji Pharmaceutical, which was previously exposed by CCTV for excessive pollution, now needs to invest an additional 31 million yuan in its sewage treatment facilities, bringing the total to 43 million yuan. Annual sewage treatment costs are also expected to rise by about 20 million yuan once the new systems are operational.
While big companies can absorb these costs, smaller firms with weak environmental controls may struggle. The new standard mandates that new enterprises must comply from the start, and existing ones have a three-year window to upgrade. Many small-scale or outdated companies may be forced to shut down due to non-compliance. At the same time, the higher entry barriers could help regulate the industry and promote healthier competition.
Industry insiders believe that while the new standards present challenges, they also offer opportunities. Currently, 20% to 30% of Chinese pharmaceutical companies already meet the new requirements, and others can do so with targeted improvements. Biopharmaceutical companies, which generally produce less pollution, are likely to be less affected. According to officials from the State Environmental Protection Administration, some small firms lack proper infrastructure and pose serious environmental risks. Raising the bar helps eliminate substandard players and encourages sustainable development.
The China Chemical Pharmaceutical Industry Association estimates that this year’s environmental spending by pharmaceutical companies will reach several billion yuan. Though costly, these investments are necessary to improve the industry's public image. With effective implementation, the new standards are expected to drive the survival of the fittest and support long-term, sustainable growth in the sector.
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