With pollution hovering around a “very unhealthy” level in Beijing, China’s environment minister made a surprise visit to the heart of the country’s steel industry.
When Huang Runqiu arrived at the industrial city of Tangshan, about 150km east of the Chinese capital, he scolded four steel mills for what he deemed to be “faked” production records to dodge emissions targets.
The unusual intervention last month signalled the rising power of China’s environment ministry following new commitments to reduce carbon emissions, and greater efforts to rein in one of its most polluting sectors.
But the battle to control steel production also reflects how the government’s response to the coronavirus pandemic has undermined its plans to wean its economy away from heavy industry and towards less-carbon intensive sources of growth.
Like many parts of the Chinese economy, steel production has been running hot as part of a supply-side boom that over the past 12 months has helped counter the early hit from the crisis. That has contributed to the country’s carbon emissions rising compared with 2019, in contrast to other big economies, according to data from the International Energy Agency.
“The coronavirus crisis just made things more pronounced,” said Lauri Myllyvirta, an analyst at the Center for Research on Energy and Clean Air.
“You had a sharp fall in household consumption and services . . . and the government responded to that with even more construction stimulus. That really meant an even bigger setback to their efforts to change the economic structure.”
In 2020, steel production in China rose 6 per cent to hit 1.1bn tonnes, its highest level of all time, while construction activity also leapt. Production had also increased in 2019, when the government encouraged more infrastructure spending as growth slowed.
In Tangshan, the city government in March instructed most mills to cut production by 30 per cent until the end of the year and told seven steelmakers to keep output at half of full capacity until July.
This month, it introduced rules requiring companies to either renovate or stop using older and more polluting blast furnaces, and set a deadline of June to demonstrate reduced reductions or face fines. To underscore the message, the environmental bureau handed out Rmb1.92bn ($293m) in fines to 48 local companies in three days.
Zhang Gujiang, Tangshan’s party chief, told steelmakers that meeting environmental targets was a matter of survival. “There will be no way out for companies that do not thoroughly rectify their environmental issues,” he said, according to state media reports.
One person working in the industry said while few…
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