Jing-Jin-Ji's Strides to Curb Steel Industry Emissions Go Beyond Production Cuts

By Edoardo Donati Fogliazza and Grigor Grigorian, June 5, 2019

While the air in Beijing and Tianjin has become noticeably more breathable within the past couple years, the improvement is in no way a mystery. The Chinese government has been putting an enormous amount of effort into cleaning up the air in the so-called Jing-Jin-Ji area, which includes the capital, the surrounding Hebei province and the municipality of Tianjin. As it turns out, steel is at the center of this large-scale war on pollution.

Steel production is most responsible for the emissions which routinely clog the air around the northeast of China, making cities in Hebei province some of the most polluted in China – and the world. In fact, China is a steel production powerhouse and until not so long ago, Hebei province was its main factory. In 2017, China was producing 49.2% of the world’s crude steel, at 832 million tons a year, and Hebei alone was responsible for 11% of China’s output, according to data from the Worldsteel Association. Hebei produced more steel per year than the entirety of Japan (the world’s second largest producer) – and the whole European Union. With the territory of Beijing and Tianjin added to the mix, we have 25% of China’s steel produced in the Jing-Jin-Ji area.

Now, however, the region is ready to cut down on steel in order to achieve the double goal of controlling emissions and raising the profits of an industry heavily damaged by over-production. In April, news came that crude steel production capacity in Hebei and Tianjin will be capped at 200 million metric tons and 15 million tons by 2020 in an effort to “optimize the iron and steel industry,” as reported by Xinhua.

In fact, the industry is producing way more than China needs. In 2015, only 70% of local steel output would end up utilized. Now, several steps have been taken to decrease overcapacity and optimize the industry.

Steel sheets at a deep-processing steel enterprise in Qian'an, Hebei. Image via Xinhua/Beijing Review

The measures are a local effort to implement the three-year policy that was first announced in 2018 after the first efforts to reduce overcapacity that year resulted in higher profits, which in turn motivated more illegal steel production in the region, Xinhua reported.

“Controlling emissions and making factories more sustainable is one of the most important moves to take to solve the Jing-Jin-Ji area air pollution problem,” a representative from the Environment Defense Fund (EDF), a US-based environmental non-profit which routinely collaborates with the Chinese government, told That’s.

But while the region has achieved some results in reducing capacity and emissions, it is still struggling to make the remaining factories more environmentally friendly.

“At the moment, Hebei province has a set of standards for the reduction of emissions by steel factories, and it is supposed to complete a transformation of steel factories towards ultra-low emissions, according to the Ministry’s work plan released earlier this year. But as of today, the province has still to effectively implement the plan and has yet to release its own benchmarks,” the EDF representative confirmed.

This does not mean the province has sat idle during the first months of the year. Large-scale interventions have been reported to be underway in the region throughout the winter, with local government officials shutting down plants not complying with regulations and the so-called ‘zombie mills,’ the already partially or completely inactive plants which succumbed to falling prices. South China Morning Post publicized the struggles of Jing-Jin-Ji smallscale steel producers to make ends meet in a recent piece, describing inconsistent blanket measures imposed by local officials over the factories.

While the government designs large-scale policies and controls the markets, the practical implementation falls on the shoulders of local bureaucracies, in an extremely fragmented regulatory system. Beijing and Tianjin, as municipalities with special administrations, and Hebei province and its cities, all have different offices overseeing the implementation of policies, making a concerted effort complex.

“Controlling emissions and making factories more sustainable is one of the most important moves to take to solve the Jing-Jin-Ji area air pollution problem.”

“In order to limit emissions from the iron industry, the Chinese government has decided to introduce very strict benchmarks, which are considered as very strict even for global standards,” the EDF representative tells That’s. “Every business has to strive to implement environmentally friendly and energy-saving technology to realize the ultra-low emission rehauling of the industry, and this is a big challenge for any business, even more so for smaller ones, and that these producers would feel the pressure is entirely understandable.”

Yet at the other end, increasing industry revenues prompt a bump in illegal activity, tempting factory owners to unlawfully increase production capacity to get a bigger chunk of the money. The Chinese government has promised further action to take care of these murky business practices, and measures like inspecting factories randomly through satellite remote sensing, evaluating electricity consumption and opening illegal activity reporting platforms are all included in the latest Xinhua report.

And yet, the whole struggle to control iron production might not be enough to reach the final goal of improving the quality of air over Jing-Jin-Ji. Greenpeace senior campaigner Liu Qian, interviewed by That’s, praised the Chinese government for its efforts in optimizing the iron industry, which “will play a key role in both air pollution control and industry capacity control,” but mentioned a rebound of regional air pollution has been registered in the first quarter of 2019, in a period of unfavorable weather conditions.

Before winter, the improvement in air quality in the Jing-Jin-Ji area was praised worldwide. According to statistics from the California-based climate analysis non-profit Berkley Earth, the air in Beijing has indeed cleared significantly since 2017. The AQI average for last year stands at about 110, classified as moderate. This was also the case in Tianjin and Hebei, still housing a plethora of heavy industry players of all shapes and sizes. The Asian Development Bank, which loaned China USD300 million to clean up the air in the region, also praised the government’s efforts, which managed to cut down its CO2 output by 4% for every RMB10,000 worth of GDP in 2018, with global carbon emissions steadily growing in the same period.

“Every business has to strive to implement environmentally friendly and energy-saving technology to realize the ultra-low emission rehauling of the industry.”

Now, though, a less-than-optimal performance is caused by the increase in production of other major heavy industries, according to Liu. The sectors of cement and iron all grew in January and February 2019, according to China Commodity Data Group. “Even though emissions of SO2 and PM2.5 from the steel industry have been decreased by 60% in the last decade, the industry is still one of the major polluters in the region,” Liu says. “The Beijing, Tianjin and Hebei area needs to accelerate the systematic process of avoiding industrial capacity shocks brought about by short-term demand growth, while also making sure of the results achieved before.”

This is not an easy task. Though the government seems to be spending time and effort designing solutions which balance the impact of the new regulations on the industry. In February of last year, scholars from the Center for Resource and Environmental Policy Research of Beijing’s China University of Mining and Technology drafted plans to supply market value and job creation with investment in renewable energy, which has been underway since the large-scale crackdown on carbon emissions in the winter of 2017. In the same year, Beijing Review reported on the struggles of employing workers of the since-closed mills into new production plants in the area. According to their report, Yinlong Group’s Wu’an New Energy Industrial Park in Handan, Hebei, was already home to more than 2,500 laid-off workers from nearby closed steel mills.

The struggle to clean up the air in what is expected to become the world’s largest megacity is still underway, and while we can already benefit from better skies, more needs to be done. And the task is more complex than ever before.

[Cover image via Pixabay.com]