China to close steel mills failing environment limits
Bloomberg reported that China, the world
largest emitter of greenhouse gases, set new environmental and power
standards for steelmakers and threatened closures to curb pollution and
overcapacity.
According to draft regulations, the industry ministry plants should cap
effluent discharge at 2 cubic meters and sulfur dioxide emission at 1.8
kilograms for every tonne of steel made.
It said last month China the world largest steelmaking nation has
rejected almost USD 29 billion of industrial projects this year and is
planning measures to close plants to curb pollution. A steel oversupply
is overwhelming demand created by the government stimulus, and
depressing profits for larger mills including Baoshan Iron & Steel
Co.
Mr Hu Yanping analyst at industry publication Umetal said “These
environmental and power standards are all necessary for the long term
development of China steel industry. But the key is how to implement the
policies. After all there are various parties involved with different
profit interests.”
The Ministry of Industry and Information Technology said in the proposal
that “Steel mills must exit the industry if they can’t meet the
requirements. Government departments shouldn’t approve construction and
upgrading if the mills can’t meet the requirements and shouldn’t issue
effluent discharge and land permits.”
The Chinese ministry said Banks shouldn’t give credit support and
government departments must not issue iron ore import permits and supply
the steelmaking ingredient to mills failing to meet the new
requirements. The statement said Steel plants should cap energy
consumption of blast furnaces at 411 kilograms coal equivalent and fresh
water use at 6 tons for each ton they produce.
The ministry also proposed that carbon steel mills should have a minimum
production capacity of 1 million tonnes and specialized makers of at
least 500,000 tonnes. It didn’t suggest penalties for those failing to
meet output limits.
Mr Xu Xiangchun chief analyst at researcher Mysteel Research Institute
said “The draft has more details on power and environmental standards
compared with the industry policy announced in 2005. China has between
300 to 400 carbon steel mills with individual capacity of less than 1
million tons.”
The government last month also issued environmental standards for lead
smelting, capping sulfur dioxide emissions at a maximum of 8 kilograms
for each ton of lead produced.
(Sourced from Bloomberg)
