China Closes 2,000 Manufacturing Operations to Help Meet Energy Reduction Targets

Aug 25th, 2010 | By | Category: Analysis, News and Notes

China, the world’s largest energy user, ordered 2,000 industrial facilities producing steel, coal, cement, aluminum, glass and other materials to close their old and obsolete plants by the end of September. Facilities that fail to meet the regulatory deadline risk losing their pollution emission certifications, having their bank loans frozen, and having their power cut off.

According to BusinessWeek, affected facilities include 762 cement factories, 279 paper mills, 175 steel mills, 192 coking plants and an unspecified number of aluminum mills. The shut down order applies to full or partial facilities (i.e., production lines) that are considered to be employing inefficient and “backwards” production techniques. Provinces with the biggest numbers of affected facilities are Henan in central China and Shaanxi in the north, both traditional centers for heavy industry, with more than 200 facilities each.

Yahoo News reported that only about a dozen factories will be closed entirely; the rest will be ordered to shut down specific production capacity. Tianjin Tiangang Union Iron and Steel Co in northern China, for example, has been told to close two furnaces, while Chaofeng Construction Materials Co, also based in northern China, will need to close two production lines.

China’s Energy Reduction and Climate Change Targets

China has pledged to reduce its energy intensity (the energy consumed per unit of economic output) by 20 percent by the end of 2010. The government said in March it had cut energy intensity 14.4 percent by the end of 2009 but reported in August that energy intensity increased by 0.09 percent in the first half of this year because of strong construction and manufacturing demand.

Ahead of recent global climate talks in Copenhagen, China pledged to reduce its carbon intensity — the measure of greenhouse gas emitted per unit of economic activity — by 40 to 45 percent by 2020 based on 2005 levels.

China has also committed to generating 15 percent of its energy from renewable sources, mainly wind and water, by 2020.

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About the Author

Michael Bittner is an associate partner in the Boston, U.S.A. office of Environmental Resources Management (ERM) and editor of the EHS Journal. He has more than 20 years of experience in the EHS field, including 17 years of EHS consulting experience and four years as the corporate environmental manager for a U.S. Department of Defense contractor. Mr. Bittner specializes in global EHS solutions including

  • Compliance and management systems auditing.
  • EHS management systems implementation and design.
  • Sustainability solutions.
  • Strategic planning.
  • Mergers and acquisitions support.

Image: Currant by Olexandr Martinyuk, Luck, Volyn, Ukraine. 

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