China’s New Measures to Combat Air Pollution Toughest to Date
Oct. 10 – China’s State Council released the “Action Plan for Air Pollution Prevention and Control (guofa  No. 37, hereinafter referred to as the ‘Action Plan’)” on September 12, which puts forward the toughest-ever measures to combat air pollution in the country. Detailed information can be found below.
According to the Action Plan, the country’s air pollution situation is “severe,” is harming people’s health, and is “affecting social harmony and stability.” Therefore, the country’s air quality shall be improved in general over the forthcoming five years, with heavily-polluted weather being significantly reduced. Moreover, air quality shall be greatly improved in regions such as Beijing-Tianjin-Hebei (BTH), the Yangtze River Delta (YRD), and the Pearl River Delta (PRD). More specifically:
- The density of particulate matter (PM) of the cities at or above the prefecture level nationwide shall be decreased by more than 10 percent by 2017;
- The PM density in the BTH, YRD and PRD regions shall be decreased by 25 percent, 20 percent and 5 percent respectively by 2017; and
- The average annual PM density in Beijing shall be controlled at about 60 micro grams per cubic meter by 2017.
Goals on Coal Consumption and Vehicle Emission
The Action Plan also sets up the following coal consumption and vehicle emission goals for the country in the coming five years:
- By 2017, the share of coal in total energy consumption will be reduced to 65 percent, and the setting-up of new coal fired power plants in the BTH, YRD and PRD regions will be banned.
- By 2017, the installed capacity for nuclear power plants will reach 50 million kilowatts, increasing the share of non-fossil energy consumption to 13 percent.
- By 2015, all “yellow label” vehicles registered before the end of 2005 shall be phased out in the BTH, YRD and PRD regions. Such vehicles will be eliminated nationwide in 2017.
The Action Plan puts forward the following 10 measures to realize the above-mentioned goals:
- Strengthening the comprehensive treatment efforts to reduce multi-pollutant emissions;
- Adjusting and optimizing the industrial structure to promote industrial restructuring and upgrading;
- Accelerating the technological transformation of enterprises to improve the technological innovation capacity;
- Accelerating the adjustment of energy structures to increase clean energy supply;
- Imposing strict entry requirements for the energy-saving environmental protection industry to optimize the industrial layout;
- Introducing market mechanisms to improve environmental and economic policies;
- Improving the legal system to conduct stricter supervision and management;
- Establishing a regional coordination mechanism to coordinate regional environmental governance;
- Establishing a warning system to properly deal with heavily-polluted weather; and
- Specifying the responsibility of government and enterprises.
Moreover, with the view to motivate cities to meet their targets for air protection and to promote more environmentally-friendly economic growth, the central government will disclose the 10 best and 10 worst performing cities in terms of air quality each month.
In response to the Action Plan, the country’s Environmental Protection Ministry released a more detailed plan which sets targets for the following six municipalities, provinces and autonomous regions in the BTH region:
- Hebei Province;
- Shandong Province;
- Shanxi Province; and
- Inner Mongolia Autonomous Regions.
The plan requires Beijing, Tianjin, Hebei and Shandong to cut their annual coal consumption by a total of 83 million tons by 2017. Moreover, Shanxi and Shandong must lower their PM2.5 density by 20 percent compared with the 2012 level.
The plan also puts forward the following backward productivity elimination goals for the six regions:
- Beijing shall close down 1,200 heavily-polluting enterprises by 2017;
- Tianjin shall keep its steel, cement and coal production capacity within 20 million tons, 5 million tons, and 14 million tons, respectively, by 2017;
- Shanxi Province shall cut its steel production capacity by 6.7 million tons;
- Hebei Province shall reduce its steel production capacity by at least 60 million tons by 2017;
- Inner Mongolia shall cut its cement production capacity by 4.59 million tons; and
- Shandong Province shall cut its steel production capacity by 10 million tons by 2015.
In addition, the country will build a nation-wide network within three to five years to monitor the impact of air pollution on human health, with a total of 43 monitoring spots setting up in 16 provinces and municipalities.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
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