The Maritime Executive
Summary
On July 3, China’s State Council released the full text of a three-year action plan to curb air pollution by 2020.
Air pollution in China is now affecting 37 percent of China's population, and measures taken so far are falling short of government goals and public expectations. The new plan offers tougher limits and proposes a quicker shift to cleaner fuels such as LNG and electricity, and high grade iron ore, coal and metals.
The challenge is many of these commodities are not produced competitively locally and need to be imported. Additionally, a large portion of existing capacity will now require stricter supervision and environmental compliance. As a result, Prakash Sharma, Head of China Research at Wood Mackenzie, expects domestic costs to rise and production curbs to increase. A proposed ban on trucking to move raw materials from port to plant could also be a game changer, as it creates more competition between domestic supply and imports.
The plan extends its reach to cities in the Fenwei plain in Shanxi, Shaanxi and Henan provinces, where air pollution is worsening. It calls for prioritizing district heating with coal-based combined heat and power plants and more switching from coal to gas or electricity. Henan province has said it will switch a further one million households by October 2018.
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