Draft National Chemical Policy (2012) proposed by the Ministry of Chemicals & Fertilizers

The Department of Chemicals & Petrochemicals, Ministry of Chemicals and Fertilizers released the draft of the National Chemical Policy in March 2012. The chemical sector is the mainstay of a large number of industries and in view of that, the policy has been framed to facilitate the growth and development of chemical sector in India taking a futuristic view. 

The policy comprehensively discusses the various issues involved in a holistic manner, and accords high importance to R&D, technology up-gradation, safety & sustainability, pollution & environmental aspects, effluent/waste disposal & treatment, and green chemicals.

Concerns about environmental pollution due to chemical industries are gaining attention, especially in public perception. Current efforts in these areas need to be stepped up with appropriate arrangements for co-ordination across multiple agencies involved, and make them effective in meeting new and emerging challenges. Department of Chemicals & Petrochemicals, and Department of Environment & Forest would need to play a key role in this endeavour, the Policy says.

The aims and objectives of the policy are –

  1. Increase investments in the sector through facilitating capacity additions and ensuring availability of necessary feedstock and quality infrastructure;
  2. Increase the domestic demand & per capita consumption of chemicals;
  3. Adoption of cluster approach and encourage development of ancillary industries around them;
  4. Facilitate access to the latest technologies, assistance in up-gradation of the existing technologies and substitution of the outdated technologies;
  5. Promote research and development with focus on sustainability and green technologies;
  6. Promote human resource development to ensure the availability of critical human resources, required for achieving the desired growth, and to meet the future challenges;                                                                     
  7. Establish a Chemical Standard Development Organisation (CSDO) to enable the growth and development of a globally competitive, high quality chemical sector in India and also to meet the international standard/ norms, and their enforcement;
  8. Set up a National Chemical Centre for promoting an integrated and holistic growth & development of the sector in an environmental friendly manner;
  9. Put in place a robust frame-work for striving towards a disaster resistant and resilient chemical sector in India;

The policy it is said has declared the need to create legislations like Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), a European legislation for safer use of chemicals, for the protection of human health and the environment, and in order to reduce the current number of chemical-related laws. REACH is a pioneer initiative in the world and has replaced around 40 different environment-related legislations. It entered into effect in June, 2007 in the European Union.

The document includes a wide range of objectives and proposals such as the need to consolidate the “multiple legislations in India governing the chemicals industry that fall under the purview of different ministries”.

According to the draft, India lacks legislation that addresses the registration of substances, preparation of a national inventory, restrictions on hazardous substances, banning of certain substances, detailed classification and labelling criteria and transport classification.

The draft policy also calls for the creation of a “National Chemical Centre” (NCC) by the Department to draft legislation and monitor its implementation, to monitor international trade practices and identify opportunities for innovation and technology. It would have a role in disseminating information about hazardous chemicals and create and maintain a chemicals inventory, which would include data on production, consumption and toxicological properties.

A second new body which the document states should also be set up under the guidance of the department is a “Chemical Standard Development Organisation”, or CSDO, to “drive consensus regarding national requirements, including safety norms”.

Rajeev Betne, Toxics Link welcomed the document's references to REACH-like legislation and said his organisation and many other environmental groups in India feel that the legislation governing chemicals management is scattered and needs to be consolidated. The NCC, he said, would also act as a body similar to the European Chemicals Agency (ECHA) that would coordinate implementation activities. [Source: www.sustainlabour.org]

This would also facilitate the creation of a chemicals inventory similar to the European chemical Substances Information System (ESIS).

The draft national chemical policy suggests that government could initiate duty structure rationalization to correct the situation. Fiscal incentives, duties, and taxes rationalization could also be used to stimulate and support the growth and productivity of renewable resources, e.g., bio-mass feedstocks and ethanol, to support green chemistry.

Specialty chemicals, known for their end-use applications or performance-enhancing properties, need to be declared as a focus area according to DCPC. Specialty chemicals include construction chemicals, paint driers, food additives, antioxidants, retarders, and water treatment chemicals. DCPC states that, since infrastructure projects are being developed 'on a massive scale, the demand of these chemicals will grow by leaps and bounds.'
As per the draft policy, the various measures that could be considered by the government for securing key feedstocks are as follows:

  1. To set up world class capacity plants, Government could undertake strengthening and improving capacities of state owned chemical companies for the manufacture of base chemicals such as phenol, methanol, nitro benzene, ammonia & etc.
  2. A strategic plan to secure its feedstock from feedstock rich countries with competitive supplies needs to be developed.
  3. Government will, in consultation with industry, develop a policy for allocation of feedstocks to best suited products (gas for fertilizers, coal for power, naphtha for petrochemicals).
  4. Government will boost domestic feedstock supply by ensuring adoption of the “consortium cracker” approach.
  5. Government would set up support funds or provide incentives for adoption of certain capital intensive technologies, such as coal gasification (simultaneously production of power and fertilizer based on coal gasification) and coal to methanol/ olefins/ acetic acid.
  6. A three pronged strategy is envisaged to be adopted for chemical industry as given below -
  • Government will provide incentives for using bio-based raw materials as a way to reduce dependence on crude oil based products.
  • Encouraging the setting up of chemical plants abroad, with special focus on African & Latin American countries,  where the required raw materials are available and their products have demand in India;
  • Setting up of chemical clusters in India along the lines of PCPIR. Further, the Government would negotiate with other countries to facilitate the availability of funds/ loans on preferential basis to such chemical plants in other countries.

To remain globally competitive and comply with requirements like REACH, the Indian chemical industry must upgrade its technology to meet world standards and show improved performance in global trade. The government would establish a 'Technology Up-gradation & Innovation Fund' (TUIF) to address specific technology issues faced by the industry.

The policy suggests introducing incentives for the development of green products and processes (bio-feedstock, bio-degradable products, eco-friendly processes, etc.), including:

  • Putting in place a national policy and action plan to develop the necessary plantation industry, including industrial utility plants such as castor oil, bio-fuels, etc., on waste land;
  • Identifying and inventorizing all agro-wastes (e.g., molasses) and their utility as raw materials and bring in the processes for necessary commercial utilization;
  • Setting up a Center for Green Technologies and regional Centers of Excellence, which would also partner with international technology organizations and institutes, to conduct R & D as well as to develop and upgrade processes and products;
  • Treating renewable resources/agro-waste based chemical industry of strategic national importance; and
  • For efficient and effective disposal of chemical wastes generated by chemical plants, putting in place suitable waste disposal mechanisms through means like incinerator, etc.