context: This policy comes on the heels of rising steel supply and reports of illegal capacity expansion. Coal supply also increased in 2018. No specific de-capacity targets are included.
NDRC, MIIT and NEA jointly issued 2019 de-capacity priorities for steel, coal and coal-fired power plants, covering
- de-capacity
- implementing 'taking another look' measures on de-capacity work from 2016-18
- prohibiting production of substandard steel
- strengthening enforcement against illegal coal-fired power plants
- continuing elimination of substandard coal-fired power plants
- implementing inspections for capacity replacements
- reducing crude steel capacity by end 2019
- meeting coal de-capacity targets by end 2020
- optimising steel industry structure
- improving coal supply quality
- upgrading of coal-fired power plants
- shutting down or restructuring zombie enterprises in steel and coal sectors by end 2020
- strengthening law enforcement against illegal conduct in construction and production
- controlling new capacity in steel and coal
- strengthening de-capacity management mechanisms
- ensuring stable supply and preventing 'unreasonable' market fluctuation
- improving employee resettlement
- resolving asset and debt problems
- making better use of special structural adjustment funds
- promoting M&As and vertical integration in steel, coal and coal-fired power
- improving long-term mechanism for industry development
Attached to the Notice were three implementation plans for steel, coal and coal-fired power de-capacity in 2019. In summary
- for steel, the implementation plan mandates authorities
- meet crude steel de-capacity targets by end 2019 in regions that have yet to hit previous targets
- shutdown specified zombie enterprises
- strictly eliminate backward capacity
- prevent re-emergence of substandard steel and re-use of eliminated capacity
- strictly prohibit new capacity
- conduct special inspections of de-capacity results
- improve illegal capacity and substandard steel production reporting system
- promote use of satellite remote sensing technology to monitor de-capacity work and steel enterprise electricity consumption
- strictly control total capacity targets in key areas, including Yangtze River Delta and Fenwei Plain
- promote enterprise M&A
- facilitate smooth performance of steel products and iron ore industries
- promote cooperation between steel enterprises and upstream and downstream industries
- accelerate industry green development and technological advancement
- promote electric furnace steelmaking technology
- promote international cooperation in steel
- for coal, the implementation plan mandates authorities
- consolidate de-capacity results achieved in 2016-18
- accelerate shutdown of zombie enterprises
- accelerate elimination of backward and unsafe coal mines
- coal mines to be eliminated
- below 300,000 tonnes/year in Shanxi, Shaanxi, Inner Mongolia, and Ningxia
- below 150,000 tonnes/year in Hebei, Liaoning, Jilin, Heilongjiang, Jiangsu, Anhui, Shandong, Henan, Gansu, Qinghai and Xinjiang
- below 90,000 tonnes/year in other regions
- below 300,000 tonnes/year for zombie enterprises
- below 300,000 tonnes/year coal mines that are rockburst/coal and gas outburst-prone
- coal mines to be eliminated
- eliminate coal mines not meeting environmental protection and quality standards
- strictly prevent newly-built and expanded coal mines
- prohibit approval of specified coal mines
- promote
- construction of high-quality coal mines
- clean development, production and transportation
- M&A
- improve medium and long-term contract system
- improve capacity replacement and inventory mechanisms
- for coal-fired power, the implementation plan mandates authorities
- promote ultra-low emission renovations
- eliminate backward coal-fired power plants by end Dec 2019
- rectify illegal coal-fired power projects
- implement 'Coal-fired power station construction warning mechanism and warning mechanisms results for 2022'
- strictly control new coal-fired power capacity
- strengthen emergency backup power sources