The energy transition in China includes checks on energy use by coal and steel companies

China knows it has many issues to deal with as it tackles economic development and environmental concerns. And those environmental concerns include both climate change and air pollution. The South China Morning Post provides news on a government order to have energy consumption checks conducted to reduce unnecessary demand.

 

China orders checks on energy use to speed up closure of inefficient coal mines and steel plants: economic watchdog

China has ordered local authorities nationwide to check on energy use by coal and steel companies to speed up the closure of plants and mines that fail to reach certain efficiency standards, the country’s economic watchdog said on Monday.

Local governments need to conduct energy consumption checks on coal and steel producers, and any that do not meet efficiency standards will be given a maximum of nine months in which to improve or be closed, according to two statements on the website of the National Development and Reform Commission (NDRC).

China, the world’s biggest producer and consumer of coal and steel, is prioritising supply-side reform for the two key sectors due to sagging prices as part of efforts to restructure overall industrial overcapacity.

China has vowed to slash steel capacity by 100 million to 150 million tonnes over five years from around 1.1 billion tonnes, and reduce coal production by 500 million tonnes in the next three to five years from its annual output of 3.7 billion tonnes.

However, the efforts have been slowed by an unexpected rally in steel prices that has driven a pick-up in output in the first few months of this year, resulting in strong exports that have escalated trade tensions between China and other steel producing nations such as Japan, India and the United States.

China also plans to allocate a total of 100 billion yuan (US$15 billion) to help local authorities and state-owned firms finance layoffs in the two sectors this year and in 2017.

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