Purpose: This chapter explores the policy formation process for chemical pollution in the An-Shun Plant case. Two major policies including the closing policy and the 1.3 billion NT dollars' compensation were studied. Design/methodology/approach: This chapter first analyzes the background of the An-Shun Plant case, the closing policy, and the compensation policy. Analytically, a comparison of the closing policy and compensation policy are offered using Kingdon's (1984) theories of policy formation. Findings: It was found that both inside and outside government factors were important from the analysis of the two formed policies. For the closing policy, inside government factors were more important than outside government factors. On the contrary, outside government factors were more important for the compensation policy. Originality/value of the chapter: Environmental policies, especially compensation policy processes, were often ignored. This chapter signifies the importance of environmental policy formation.