Chinese environment minister visited the heart of the country’s steel industry with pollution at a very unhealthy level in Beijing. “The 4 steel mills to dodge emission targets for what he considered faked production records”, said Huang Runqiu, Minister of Ecology and Environment. “Chinese Environment Ministers’ unusual intervention showed their growing power following new carbon-reduction commitments and further efforts to clean up one of their most polluting areas. The battle against stainless steel production, however, also shows how the government’s response to the coronavirus pandemic has damaged its plans to pull its economy away from heavy industries and less carbon-intensive growth sources”, he added.
The production of steel, as in many parts of the Chinese economy was heated as a part of the supply side boom, that helped counter the early crises over the last 12 months. According to data from the International Energy Agency, this has contributed to the country’s carbon emissions increasing as opposed to 2019. “The crisis of the coronavirus made matters clearer and household consumption and services dropped sharply and the Government responded with yet more construction encouragement. This meant an even greater reverse in their efforts to change the structure of the economy”, said Lauri Myllyvirta, Analyst at the Center for Research on Energy and Clean Air.
“In 2020, China’s steel production grew 6% to 1.1 billion tones, the highest ever, while building activity is also springing up. The production also increased in 2019, as more infrastructure expenses were encouraged by the government as growth slowed. In Tangshan, in March the city government ordered most mills to cut their production by 30% until year-end and told seven steel manufacturers to maintain the production capacity by half before July”, said Huang Runqiu. “Rules which require companies to either refurbish or discontinue use of older, more polluting blast furnaces and set a June deadline to show reductions in costs or facing fines. The Environmental Office issued USD293 million in fines in three days for 48 local businesses to emphasis the message”, he added.
“A survival issue for steelmakers who fulfilled the environmental goals. According to state media reports, firms with little in the way of predicting the exact direction of policy will have no way out of this, and everyone has feared further measures. Despite fines and warnings, it can prove difficult to reduce steel capacity, especially if old and idle units are replaced with new technology more efficiently”, said Zhang Gujiang, Tangshan’s party chief.
“Many investments have been made in the sector and certainly, much of this has meant that the large steel producers have increased capacity, and there is still a problem with smaller unregulated actors just outside the capacity control system. In 2020, China’s steel production grew 6% to 1.1 billion tonnes, the highest ever, while building activity is also springing up. The production also increased in 2019, as more infrastructure expenses were encouraged by the government as growth slowed”, said Lauri Myllyvirta.
“In March, the city administration instructed most factories to cut production by 30 percent by year-end and ordered seven steelmakers to keep production at half full capacity by July. It introduced rules this month requiring firms either to renovate or discontinue using older and most polluting blast furnaces, with a June deadline for reductions or fines. The Environment Office has issued USD293 million in fines for 48 local firms in three days to highlight the message”, said Huang Runqiu.
“Companies that don’t correct their environmental problems thoroughly will be without a chance, while few could predict the exact policy direction, all were afraid of additional action, Despite fines and warnings, it can prove difficult to reduce steel capacity, especially if old and idle units are replaced with new technology more efficient”, said Zhang Gujiang.
