China Continues War Against Coal

It may not be the first place you’d think to look for regular efforts to improve emissions quality, but China has spent the past several months targeting its coal emissions in a series of regulatory measures aimed at reducing its emissions and well-known smog issues.

According to a regulation posted on the website of the country’s National Development and Reform Commission Monday, China is set to ban sales and imports of coal containing high quantities of ash and sulfur in a move that is aimed at promoting cleaner types of coal and improving the nation’s comically dangerous air quality.

The move comes on the heels of several similar moves made by the Chinese and Beijing governments respectively. Early in August the Chinese state news agency Xinhua reported that the capital of Beijing was set to ban coal use entirely in six inner-districts by 2020, in an effort to “cut air pollution”.

The move was immediately backed up by news that the country had cut coal use by 7% over the first six months of 2014, following news earlier in the year that China had “declared war” against pollution, adopting revisions to the country’s Environmental Protection Law.

The regulation (PDF in Chinese) bans coal with ash content of more than 40% and sulphur content more than 3% from sales and imports. Lignite, often referred to as brown coal, containing more than 30% of ash and more than 1.5% of sulfur is also banned under the new revisions.

“The regulation is mainly to promote use of cleaner coal and will affect low-quality coal’s flow into China, especially low-heating value coal from Indonesia and coal with arsenic content from Australia,” Winston Han, a Beijing-based analyst with the China Coal Transport and Distribution Association, said by phone with Bloomberg Tuesday.

Han predicts that China’s coal imports will fall by as much as 15% to less than 300 million metric tonnes this year.

According to Wood Mackenzie’s China consulting manager Rohan Kendall, none of Australia’s thermal coal exports to China will meet the new restrictions, hitting Australian coal producers hard and forcing costs higher to make up for the discrepancy. Kendall explains further that to meet China’s new restrictions it would not be hard for Australia to simply wash the coal, but this would increase the cost of production. As a result, its possible China may simply redirect their efforts to importing cheaper Indonesian coal, further cutting Australian exporters out of the deal.