Shanxi provides policy benefits for eco-friendly firms, coke makers included

According to an action plan published by Shanxi's Department of Ecology and Environment on September 7, the government has identified 39 industries whose member firms might apply for recognition under the plan for their pollution control and conservation efforts. Among the 39 industries is coke-making and other coal-related segments such as the cement and coal-to-nitrogen fertilizer industries.

Shanxi's move followed a guidance published in January this year by China's Ministry of Ecology and Environment (MEE). In it, the central government encourages provincial governments to introduce supportive policies for industrial companies to undertake factory upgrades to accommodate more environmentally friendly facilities and production technologies. Beijing also called for the development of a more comprehensive grade-based management mechanism on industrial companies' operations.

Environmental protection capacity used to rank industrial companies' operations

Commencing in 2019, MEE has been grading companies in certain industries to indicate the sophistication of their environmental protection facilities and the comprehensiveness of their pollution abatement systems. Initially companies in 31 industries were selected but in 2020, the ministry expanded the mechanism's coverage to the present 39.

The companies' environmental protection performance is graded according to multiple standards including production methods, pollution emission surveillance and control, and usage of clean transport technologies. Based on the grading, during times when, for example, atmospheric pollution over a city is regarded as serious and local governments require industries to reduce operations until the situation improves, a company's grading will determine the extent to which it is required to curtail production, as Mysteel Global has reported.

This year, the MEE continued to optimize its grading system, setting four levels of A, B, C and D (only three levels for some less sophisticated industries), while creating grade "A+" to identify those leading companies whose environmental protection systems and equipment it regards as exemplary.

Under the scheme, companies categorized as "A" – indicating outstanding performance in environmental protection – will be permitted to scale down production at their own discretion when industries are required to help in pollution reduction. For integrated steel producers or coke manufacturers, the severity of the output curbs imposed on them – the number of blast furnaces banked or coke oven chambers to be stopped – will be determined by their ranking of environmental performance.

Shanxi to accelerate company upgrading with supportive policies

Based on the MEE's guidance, Shanxi province aims to have over half of the companies within the 39 industries achieve a ranking of grade B and above, with grade A and A+ companies accounting for at least 20% by 2029, according to the document.

As an incentive, the province will provide tax reductions to companies whose pollutant emissions are below the standards set by the national and local authorities. Specifically, for companies whose emissions are lower by 30% than the standards, their liabilities regarding environmental protection tax will by reduced to 75%, and to 50% for those whose emissions are lower than the standards by 50%.

For programmes ranking grade A, the province promises to prioritise their implementation and seeks to streamline the approval procedures. Special funds will also be provided to projects that meet grade A requirements or help companies upgrade to grade B.

On operations, grade A companies will face fewer restrictions during heavy air-pollution events. Meanwhile, discounts on electricity charges will be available for companies that reach grade A, while other lower-graded firms will be obliged to pay higher premiums.

Written by Adrian Zhou, zhouwenhaoa@mysteel.com

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