China’s cement industry could crack as tougher environmental laws bite

Chinese banks should rethink lending to the hugely-polluting cement sector as new environmental laws come into force, says new report

China’s cement industry would be liable for a huge bill if it had to pay the external costs of pollution, a finding that lenders to the sector should bear in mind as central government enforces new environmental laws and aims for greener growth.

Cement producers are major users of heat and electricity generated from coal, and emits large amounts of toxic compounds, making the sector one of the main contributors to the thick smog that often shrouds Chinese cities.

That means scrutiny of the cement’s sector’s dire environmental record is increasing, said Chaoni Huang, head of business development in Asia with UK-based financial analysts Trucost, one of the co-authors of the report.

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