China Signals Coal-Capacity Cut Equal to 7.5% of Output in 2015


China says it’s reining in coal production as the country tries to curb the pollution choking the nation’s cities and eliminate so-called “zombie” companies in the struggling industry.

Coal output capacity will fall by 280 million tons this year, National Development and Reform Commission Chairman Xu Shaoshi said at the World Economic Forum in Tianjin on Sunday. That’s equal to about 7.5 percent of the 3.75 billion tons that BP Plc says the country produced in 2015.

China also plans to shed 45 million tons of steel capacity this year, Xu said.

The coal reduction is part of the country’s plans to eliminate as much as 500 million tons of output by 2020 and to consolidate a further 500 million tons among fewer miners.

Besides tackling pollution, the Chinese government says it wants to eliminate companies that aren’t viable in struggling industries such as coal and steel as part of efforts to restructure the economy for greater efficiency.

The world’s largest energy consumer is trying to raise the share of less-polluting natural gas to 10 percent of its energy mix by 2020 from 6 percent last year.

Source: Bloomberg

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