UTC+8 ( BJT)

Beijing widens the reach of its winter production curbs

ABSTRACT

This year China’s central government intends to include more of the country’s northern, eastern, and central regions in its annual campaign to reduce air pollution during autumn and winter by requiring industrial enterprises responsible for serious atmospheric pollution to further rein-in their production, according to a draft plan released by the Ministry of Ecology and Environment (MEE) on September 16.

Beijing has rolled out such a campaign every winter since 2017 as air pollution tends to be serious in the colder, northern parts of China over the period when coal-fired central heating services to residential households are activated. The winter ‘heating’ season generally runs from October 1 to the following March 31.

 

For the 2021-2022 winter, the government’s emphasis remains focused on lowering the particulate matter concentration of toxic air pollution (PM2.5) and reducing the number of days that the central government officially categorizes as a “heavy pollution day”, according to the draft plan.

 

But this winter, the production curbs will be applied to steelmakers, cement producers, coking plants and similar smoke-stack enterprises in a much larger total of 64 cities/districts, Mysteel Global learns. This is because the MEE has added the northern parts of Hebei and Shanxi provinces (both in North China), the southern and eastern part of Shandong province (East China) and southern regions of Henan (Central China) to those parts of the country included in previous winter heating plans.

 

Broadening the campaign’s reach is not unusual. During the most recent winter spanning 2020-2021, MEE added 11 cities in the Fenwei Plain area to those grouped in the “2+26” city arrangement in North China’s Beijing-Tianjin-Hebei area and nearby regions, Mysteel Global noted.

 

Production curtailment on steel mills remains a key part of this winter’s plan to fight air pollution, but a major difference this year is that this winter’s curbs will be more severe that from last year’s, market sources suggested after reading the draft. Just how much harsher the restrictions might be remains unclear – the draft is still be finalised – but they noted the winter ‘heating season’ campaign is being mounted in the context of Beijing’s existing goal for 2021 of keeping total crude steel output under last year’s level.

 

The MEE plan states that integrated steel mills categorized as “A” - indicating outstanding performance in environmental protection - and electric arc furnace-based mills using 100% steel scrap as raw materials, will be permitted to scale down production at their own discretion to contribute to pollution reduction. However, they will need to ensure that their steel production over the October-March period is not higher on year, according to the draft.

 

As for other steel producers, the severity of the output curbs imposed on them will be determined by their ranking of environmental performance. “The lower the rank is, the higher the curbing ratio will be,” MEE stated in the draft.

 

“Mills (in the areas included in the draft) will definitely need to brace for harsher production curbs this winter, because even the good performers will have to slash output (in order to comply with Beijing’s crude steel output directive),” a steel analyst based in Tangshan commented.

 

The analyst cautioned that usually during the ‘heating season’, some local governments announce additional “emergency” production restrictions on days when weather forecasts suggest smog levels will jump, hitting steel production further. Moreover, the overall impact of this year’s winter curbs on steel production can’t be estimated until local governments finalize this year’s environmental performance rankings for enterprises under their jurisdiction. The rankings should be announced by the end of this month.

 

For last winter, only the Qian’an steel works of Shougang Group in Hebei’s Tangshan city was awarded the top “A” ranking. All other major steelmakers were ranked “B”, “B-”, “C”, and “D”.

 

MEE also stated in the draft plan that local governments will be urged to pay close attention to the means of transport employed for hauling bulk commodities including steel, petrochemical products, coal and non-ferrous metals, to encourage enterprises to move to cleaner modes of transportation, switching from using trucks to rail, for example. Under the slogan of “one plan for one plant”, the ministry advocated specific programs be adopted to meet the circumstances of each factory and works.  

 

The ministry is collecting feedback for its plan from all related departments until September 22.

 

Written by Olivia Zhang, zhangwd@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com