The Environmental Protection Ministry issued a guidance on Thursday making it mandatory for enterprises with high environmental risk to join an environmental liability insurance system.

The ministry, together with the China Insurance Regulatory Commission, introduced the insurance system in 2007 in an attempt to use a market-oriented approach to tackle pollution damage and compensate victims for their losses.

The new guideline is to make petrochemical and heavy metal industries join the system, which until now enterprises have joined on a voluntary basis.

The system has already been applied in more than 10 provinces and regions, insuring more than 2,000 enterprises by almost 20 billion yuan ($3.17 billion).

According to the guidance, enterprises that are included in the targeted industries but do not join the insurance system will encounter restrictions and difficulty in the approval of their projects' environmental impact assessments before and after construction, application of environmental protection related funds and their credit ratings in the banking system.

This is the second move by the ministry in as many days to control the environmental risks posed by hazardous chemicals during industrial development.

Fifty-eight types of hazardous chemicals out of a total of more than 3,000 are labeled as key chemicals to prevent and control in the Five-Year-Plan (2011-15) of the Management of Chemicals' Environmental Risks, released by the ministry late on Wednesday.

By 2015, a basic management system will be formed to control the environmental risk of hazardous chemicals.