China's State Council has issued an action plan for sustained improvement of air quality, with green transition efforts in industry, energy and transport, to achieve a triple win of environmental, economic and social benefits.

 

Industrial transformation

The plan highlighted the need to ban construction of new energy-intensive, high-emission, and low-efficiency projects. Particularly, it explicitly said new steel production capacity will no longer be approved. This means any new steel capacity can be launched only by exiting old capacity.

 

Meanwhile, the plan will promote integrated layout for steel, coking, and sintering processes, which involves a substantial reduction in independent coking, sintering, pelletizing, and hot-rolling enterprises, phasing out obsolete coal washing capacity.

 

The plan will also guide the transition from blast furnace–converter long-process steelmaking to electric furnace short-process steelmaking, targeting a 15% share in short-process steel production by 2025.

 

Key regions, including the Beijing-Tianjin-Hebei, will continue the "steel determines coke" approach, with a control ratio of around 0.4 for coke capacity versus long-process steel capacity.

 

Phased withdrawal of outdated capacities

The plan aims to accelerate the exit of backward capacities in key industries, raising standards for energy consumption, environmental protection, quality, safety, and technology. It calls for the gradual elimination of restricted gas-related industrial processes and equipment. Steel, coking, and aluminum smelting sectors in key regions will undergo systematic adjustments and optimizations.

 

Energy transition

To expedite the development of clean, low-carbon, and efficient energy, China will vigorously promote new and clean energy sources. By 2025, the share of non-fossil energy consumption is expected to reach around 20%, with electricity accounting for about 30% of final energy consumption. The plan emphasizes the continuous increase in natural gas production and supply, prioritizing natural gas supply for residential heating.

 

Coal consumption control

While ensuring energy supply, the plan strictly caps total coal consumption in key regions. By 2025, coal consumption in the Beijing-Tianjin-Hebei and surrounding areas and the Yangtze River Delta region is projected to decrease by around 10% and 5%, respectively, compared to 2020 levels.

 

The Fenwei Plain aims to achieve negative growth in coal consumption, focusing on reducing non-power coal consumption. Proposed coal projects in key regions must be built through replacement of equivalent or augmented existing capacity, with a prohibition on using high-pollution fuels like petroleum coke, pitch coke, and semi coke as coal reduction alternatives.

 

The plan also discourages building new captive coal-fired units, and encourages industrial companies to replace existing coal-fired projects with clean energy. However, it remained supportive for on-grid coal projects that are clean emission-upgraded and responsible for energy security.

 

Clean heating and boiler shutdown

The plan advocates the proactive closure and integration of coal-fired boilers, with projects for replacing coal-fired heating boilers included in urban heating plans. It discourages the construction of new coal-fired boilers below 35 t/h and bans the new construction of coal-fired boilers in key regions unless they are used for centralized heating supply.

 

Efforts will be accelerated to build heating networks, demonstrative long-distance heat supply through power plants and large industrial enterprises, phasing out coal-fired boilers and scattered coal usage within network coverage.

 

By 2025, cities with PM2.5 levels exceeding standards will essentially eliminate coal-fired boilers below 10 t/h. Key regions will essentially phase out coal-fired boilers below 35 t/h, including tea boilers, commercial stoves, grain drying equipment, and coal-fired facilities in agricultural processing, maximizing the heating capacity of power plants over 300 MW. For coal-fired heating units (incl. captive units) of heating distance within a 30-kilometer radius, local governments should merge or phase them out.

 

Clean transportation boost

In transportation, China is committed to developing a robust green transportation system. The focus is on continually optimizing cargo transportation structures, exploring the integration of clean transportation as a pivotal factor in the approval and supervision of new, expanded, or modified projects in coal, steel, thermal power, non-ferrous, coking, and coal chemical industries. Major cities and provincial capitals within key regions will adopt logistics approaches such as road-rail combined transportation.

 

By 2025, railway and waterway freight volumes are projected to increase by approximately 10% and 12%, respectively, compared to 2020 levels. Efforts will be concentrated on increasing the proportion of coal and coke transportation by rail to 90% in the major coal-producing areas of Shanxi, Shaanxi, Inner Mongolia and Xinjiang, for distances exceeding 500 kilometers. Coastal major ports in key regions and the Guangdong-Hong Kong-Macao Greater Bay Area are aiming for an 80% proportion of clean transportation, including new energy vehicles, for iron ore and coke.

 

Railway infrastructure and connectivity enhancement

To support these initiatives, the plan underscores the importance of strengthening railway connection facilities. It encourages optimizing existing lines and synchronously planning and constructing railways when establishing new container and bulk cargo handling areas in important harbor regions.

 

Key regions are urged to undertake appropriate transformations for urban railway stations, and new or relocated logistics parks, industrial enterprises, and coal storage bases with an annual throughput of over 1.5 million tonnes should connect to dedicated railway lines or pipelines.

 

Comprehensive assurance of refined petroleum quality

The plan emphasizes the need for stringent oversight across the entire process of oil product importation, production, warehousing, sales, transportation, and usage. Measures are introduced to comprehensively clean and rectify self-built oil tanks, mobile refueling vehicles (ships), and illicit refueling stations, with a firm stance against the use of substandard oil products as engine fuels. The plan calls for increased sampling frequency for diesel in truck, non-road mobile machinery, and ship tanks, tracing discovered leads, and holding relevant producers, sellers, and transporters accountable.

 

Pollution control in key industries

China is unwavering in its commitment to deepening pollution control in key industries. The plan prioritizes the high-quality advancement of ultra-low emission transformations in key industries such as steel, cement, and coking. By 2025, over 80% of the nation's steel production capacity is expected to complete the ultra-low emission transformation, with key regions achieving ultra-low emissions in the steel industry and substantially completing the ultra-low emission transformation for coal-fired boilers.