The environmental protection industry upgrade: three major areas will enter a new stage.
Release time:
2020-05-14
The main sources of dust and nitrogen oxides emissions in our country are industrial production, accounting for 83% and 71% respectively. If we further subdivide the industrial sector, the power industry (especially thermal power), steel, and building materials are the main industries emitting smoke, dust, and nitrogen oxides. These three industries account for more than 70% of the emissions of these two pollutants from all industries.
In order to achieve the goal of emission reduction, our country implemented a production restriction action in 2010, using power cuts as a mandatory means. After 2015, environmental protection requirements continued to increase, and production restrictions became more logical under the name of environmental protection, with significantly stronger enforcement. During the three years from 2015 to 2017, environmental protection production restrictions had seemingly become the norm in regions such as Beijing-Tianjin-Hebei.
However, a significant limitation of large-scale production restrictions and emission reductions is that they can only be implemented when the restricted industries are in a state of obvious overcapacity, where supply exceeds demand, leading to low product prices and weak industry profitability. At this time, production restrictions help achieve the goal of improving air quality, while also aiding in the improvement of supply-demand relationships in these industries, allowing profit margins to return to normal levels.
Once the supply-demand relationships in these industries improve, continuing production restrictions, although still beneficial for air quality control, will lead to a reverse imbalance in supply and demand, causing a significant increase in product prices, thereby raising costs for downstream industries and causing unnecessary harm to the national economy.
Since 2016, the significant rebound in steel and cement prices has constrained the space for production restrictions in these industries. In particular, in 2017, the price and profit margin levels of these industries reached new highs since 2012, making it difficult to continue large-scale production restrictions in 2018. This is evident from the environmental protection requirements issued by the Ministry of Ecology and Environment for the Beijing-Tianjin-Hebei region in 2018-2019, where the previous year's requirement was that PM2.5 and PM10 must decrease by more than 15%, while this year's target has been adjusted to 5%.
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