Sixteen firms in Guangdong have been warned they may be denied further access to loans by local banks after receiving their second red card in the environmental protection credit ratings.
The companies were among 28 given the worst rating in 2006 by the provincial environmental protection bureau and were found to have made little progress before the deadline for improvements last year, said the watchdog on its website.
In total, 269 businesses were given environmental protection ratings three years ago; 210 were shown green cards, 31 yellow and 28 red, the latter comprising heavy industrial polluters, thermal power stations with a capacity of over 6,000 kilowatts and wastewater disposal plants with a daily capacity of more than 10,000 tons, said bureau engineer Du Huaming.
"They churn out about half of the province's chemical oxygen and sulfur dioxide. So how well we get such enterprises under control decides heavily on how successful the pollution control is," he said.
"The watchdog has been working with local branches of the People's Bank of China and China Banking Regulatory Commission since 2007 to share the pollution information of the enterprises. Local banking institutions will adjust the credit scale for polluting enterprises accordingly."
Those shown green cards in the environmental protection credit ratings are eco-friendly firms and will enjoy favorable policies in terms of environmental management and special funds, while those that receive yellow cards will be kept under close supervision this year.
Companies that get red cards are blocked from floating shares on the stock market or financing, and run the risk of being closed down if they do not make the necessary changes.
"Environmental ratings will force companies to hone their awareness of protection as it will arouse the attention of both the government and the public," added Peng Peng, a researcher with Guangzhou Academy of Social Sciences.