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BEIJING -- China will soon issue an environment friendly loan policy, or "green credit policy", as one way of tackling environmental pollution, Xinhua learnt from the State Environmental Protection Administration here Thursday.

"Under the new policy, companies who fail to pass environmental assessment or fail to implement China's environmental protection regulations are disqualified from getting loans from any bank or financial institution," SEPA vice-director Pan Yue said.

Companies that have already got loans but are later discovered to have violated China's environmental protection regulations will have to return their loans, Pan added.

China's deteriorating environmental situation has spurred the Chinese government to find solutions.

Pan said other economic policies including insurance and security policies targeting environmental protection will be released as soon as possible.

He said another economic policy is to increase sewage treatment fees to tackle water pollution.

He said current sewage treatment fees collected from both individuals and companies are too low to tackle water pollution.

He said, "Sewage treatment fees collected both from individuals and companies will be raised so as to have enough funds to cover the cost of sewage treatment."

"Higher sewage treatment fees will be imposed on energy-consuming and polluting companies," he stressed.

At a press conference on Tuesday, Pan blacklisted 32 polluting factories and six sewage works that SEPA had found to be in violation of environmental regulations.

He admitted that "traditional ways of development have caused the near breakdown of China's resources and environment and people's lives are in great danger."

Since May, blue-green algae outbreaks have been reported in eastern Taihu Lake, Chaohu Lake and southwestern Dianchi Lake, endangering local tap water supply.