# Ethylene: Regulation

Vapour clouds and the Strait of Hormuz

Source page: https://www.materialinsights.org/chemicals/ethylene/regulation/

What this tab covers How it is regulated and what could disrupt supply: hazard classification, rules in the EU, US and India, anti-dumping duties and other trade measures, and supply-risk notes.

#### Hazards

| Classification | UN number | Key risks |
|---|---|---|
| Flammable gas cat 1; gas under pressure; STOT SE 3 (drowsiness) | UN1962 / UN1038 | Extremely flammable and can decompose explosively at high pressure; leaks form vapour clouds, as in several cracker fires. |

#### Main rules

| Where | Rule | Effect |
|---|---|---|
| **EU** | EU ETS with a steam cracking product benchmark; REACH; Seveso III | Free allocation benchmark could fall 20-27% from 2026 (Argus 2026), raising carbon cost for naphtha crackers. |
| **US** | EPA Clean Air Act (HON and ethylene production MACT); OSHA PSM | Flaring and fenceline monitoring rules tightened 2024. |
| **China** | NDRC capacity approvals; plan to phase out small crackers | Limits new sub-scale units; supports consolidation. |
| **International** | IGC Code for gas carriers | Sets ship design for refrigerated ethylene. |

#### India

| Rule | Effect |
|---|---|
| **Manufacture, Storage and Import of Hazardous Chemical (MSIHC) Rules 1989** | Ethylene listed; major accident hazard sites need on-site emergency plans and safety reports. |
| **PESO: Static and Mobile Pressure Vessels (Unfired) Rules 2016** | Licensing for storage and transport of liquefied gases. |
| **BIS Quality Control Order on polyethylene (Jan 2024, rescinded Nov 2025)** | Removed a non-tariff barrier on PE imports (CareEdge 2025). |

#### Trade measures

- China 10% additional tariff on most US goods (2025) affects US ethane and ethylene flows
- EU CBAM does not cover organic chemicals as of 2026
- 2026 Iran war: Hormuz oil flows fell below 1 mb/d in April and were about 82% of pre-war in October (Reuters/Kpler), a de facto restriction on Gulf exports

#### Supply risk

Supply is diversified across many crackers, but cheap export supply is concentrated in the US and Gulf, and Gulf flows depend on the Strait of Hormuz. Ethylene is not on critical raw material lists.

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/ethylene/index.md)
- [Overview](https://www.materialinsights.org/chemicals/ethylene/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/ethylene/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/ethylene/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/ethylene/production/index.md)
- [Feedstocks](https://www.materialinsights.org/chemicals/ethylene/feedstocks/index.md)
- [Cycles](https://www.materialinsights.org/chemicals/ethylene/cycles/index.md)
- [Trading](https://www.materialinsights.org/chemicals/ethylene/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/ethylene/movement/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/ethylene/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/ethylene/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/ethylene/links/index.md)