China continues coal crackdown

China’s ongoing five year plan to cut coal and steel production and address pollution will see it punish regional governments for failing to close coal mines and steel mills.

Earlier this year China announced its intention to institute a reduction in thermal coal consumption within the next five years in order to cut pollution levels, with the National People’s Congress (NPC) outlining plans to reduce thermal coal consumption by 160 million tonne.

China’s ongoing pollution and smog issues were the main focus of the NPC, with Chinese president Xi Jinping stating that the government will be increasing focus on the nation’s environmental standards and regulations.

“We are going to punish, with an iron hand, any violators who destroy ecology or the environment,” Xi stated at the time.

As part of this plan the country also announced it would lay-off close to two million workers in its coal and steel industry to help cut market oversupply.

An official at China’s human resources and social security ministry said the nation’s industries expect to cut around 1.8 million workers as it seeks to reduce capacity, and address the growing stockpiles in the country.

Provincial governments have been ordered to set capacity reduction targets this week, and submit phase-out plans by the end of this month, chair of the National Development and Reform Commission Xu Shaoshi said, according to Bloomberg.

Those that miss their targets will be “seriously punished,” Xu said.

The country is also predicted to ban new coal fired power stations, according to the AFR.

In its upcoming 13th Five Year Plan for the resources sector, China is forecast to ‘suspend’ construction of any new thermal coal power plants until 2018, after which the suspension will be reviewed, however it is unlikely to be lifted.

However the growing power demand is unlikely to be filled by renewable resources, with the Economic Information Daily stating there will a slowdown in wind and photovoltaic solar power support; instead the country will focus on hydropower and nuclear energy, stating their will be a moderate increase in the scale of operations.

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