The Chinese refining sector has recently been under pressure, not so much from the extreme demand pressures of the past 18 months, but more driven by changes in domestic government policy. Independent refineries (often called Teapots) have become a major force in the sector; however, their presence has often attracted the attention of the central government. Recent policy decisions now put their future under threat.
As part of China’s goal to peak CO2 emissions by 2030, the independent sector has become a target with the government seeking to reduce excess capacity in order to lower emissions. Several new measures to reduce the output of independent refiners have recently been introduced, such as the imposition of taxes on key products used by the Teapots for blending or as a feedstock including LCO, mixed aromatics, and bitumen mixture
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Source: Gibson
