By Zhou Jianqi & Chen Xiaohong, Enterprise Research Institute, DRC

Research report No.64 2017 (Total 5139) 2017-06-07

Abstract: The current steel overcapacity reduction drive includes multiple targets, but these targets are not coordinated, and have adversely influenced the overall effect of overcapacity reduction. Therefore, efforts need to be focused on giving priority to emission reduction and control through regulating the emission reduction standards which will help reduce emission from the steel industry in the new era. Relevant studies have been made to compare the emission standards of some countries with first-class steel enterprise parks featured by a high concentration of large-sized steel enterprises and that of the emission reduction capability of China’s advanced steel enterprises. According to the analysis, it’s necessary for China to establish more strict state benchmarks in order to regulate emission reduction standards. This paper puts forward the following policy options. 1. The government needs to raise state pollutant emission standards across the board, especially the standards in those parks with a high concentration of steel industries. 2. The government needs to tighten up the pollutant emission regulation of the steel industry, and implement differentiated emission limits in industrial parks in light of the actual production performance. 3. The government needs to leverage an incentive mechanism and do not impose any overcapacity reduction quotas on those enterprises that have realized ultra-low emission targets. 4. The government needs to be fully aware of the fact that overcapacity reduction is a long-term and complicated job.

Key words: overcapacity reduction, steel, emission reduction standards, regulation policies, policy options