Industry News

On October 8, the National Development and Reform Commission (NDRC) released the “The Negative List System for Market Access (2021 Version)” (Draft for Public Comments) [hereinafter referred to as the List (2021 Version)] for public comment. This is the fourth version released since China officially implemented the negative list system in 2018.

“The Negative List System for Market Access” includes two categories: Prohibited Access Category and Permitted Access Category. For those industries, segments and businesses outside the list, all types of entities can enter the market equally according to the law.

The List (2021 Version) contains 6 prohibited access items and 111 permitted access items, with a total of 117 items, reducing 6 items compared with the 2020 version.

It is worth knowing that a number of “Permitted Access” items related to chemical industry have changed. For example, in the “Without permission, it is prohibited to engage in the operation and construction of specific chemical projects”, items adjusted include

• “Approval of the second, third and fourth categories of phosphorus sulfur fluoride containing monitoring chemical facilities”
• “Approval of the first, second and third categories of monitoring chemicals and their production technology, import and export companies of special equipment”
• “License of operation, use and change of the using purpose for the second category of monitoring chemicals”
• “Safety production license of the dangerous chemicals (except as otherwise provided)”
• “Road transportation permit for highly toxic chemicals”

Source: China Chemical Information Weekly

The Development and Reform Commission recently issued the Dual Control Program to Improve the Intensity and Total Use of Energy Consumption, and the supporting green power trading pilot has been officially launched. In the chemical industry, Wanhua Chemical, Jinneng Science & Technology, and other companies announced investment in PV, wind power, nuclear power, and other green energy.

The Dual Control Program further implements the future development requirements with energy consumption as the overall constraint, and it proposes a way to allocate quotas based on energy output efficiency as an important basis as well as a mechanism to promote market-based trading of quotas. This will have a far-reaching impact on the future development of the manufacturing industry. It puts forward different requirements for chemical enterprises than before, and whether a company can survive or even thrive under these new conditions will become a very important influencing factor for its future development.

The main impact of carbon neutrality on the supply side of the manufacturing industry is the addition of carbon emissions as a new constraint. Thus, it requires companies to find new models to achieve development without increasing carbon emissions or even reducing them. Some manufacturing companies have recently disclosed their plans to invest in new energy projects. Wanhua and Huaneng announced joint investment in a wind power project, the establishment of Shandong Nuclear Energy Company with China Nuclear Power, and plans to invest in a PV project. Jinneng announced an investment in a PV power generation project in Qingdao. The information disclosed regarding these projects mention the volume of CO2 emission reduction and coal replacement after they are commissioned.

Now companies are investing in new energy projects mainly to cope with their future demand for energy consumption. If they do not prepare new energy projects in time, there is a risk of losing the initiative in future development, resulting in loss of market share.

Current investment in new energy projects is for the sake of the long-term development of chemical companies, but the price of acquiring this development space is not low. The current investment intensity of domestic PV and wind power is about RMB 4-5/W, which is obviously no longer something that can be achieved by SMEs. Further, energy and emission quotas will be core factors in the future development of manufacturing enterprises, and there are obvious investment barriers due to the Dual Control policy which will further the divide between leading enterprises from SMEs.

The recently started green power trading pilot provides another option for a wide range of companies. The green power market does not trade electricity, but green certificates. The sellers are mainly PV and wind power generation enterprises, while the buyers can be anyone. For every MWh of green power generated by wind and solar power companies, they will receive one green certificate, and buyers will purchase green certificates to fulfill the requirements of sustainable development and carbon emission reduction. The national government set a price ceiling for green certificates—each green certificate price cannot exceed 1,000 times the difference between the local wind power or PV benchmark price and the desulfurization coal-fired benchmark price. The benchmark price is generally the feed-in tariff. Despite declining somewhat, the benchmark prices for wind and solar energy have been higher than the benchmark price of coal-fired energy for a long time. The difference is actually a subsidy to support the development of wind and solar energy.

After the establishment of the green power trading platform, power generation enterprises can choose to bring their electricity online at the benchmark price of wind and solar, but they will not receive a green certificate. They can also bring their electricity online at the coal-fired price and receive a green certificate to sell. This is actually a transfer of national subsidies for new energy generation to enterprises that now need to reduce emissions, so as to continue to promote the development of new energy. In the past, buyer companies only needed to buy electricity according to the feed-in tariff. In the future, if a company must meet the emission reduction requirements and it does not have the ability to build its own new energy project, it must achieve compliance via the purchase of green certificates.

The current green certificate transaction price for wind power is on average RMB 90.6, and for PV it is on average RMB 57.1, which means that buyers need to pay an additional premium of more than RMB 0.05/kWh in order to obtain green power certification. Further, according to statistics, in 2015-2018 China’s chemical raw materials and chemicals industry’s gross profit was only about RMB 1/kWh, while net profit was estimated to be about RMB 0.8/kWh. If only green power is used, net profit will be affected by about 6%. After the domestic supply-side reform that began in 2016, the profitability of leading and non-leading chemical companies has been more obviously differentiated. Thus, the impact of green power on profits will be more significant for SMEs, and it will gradually intensify industry concentration.

The change of power cost is relatively consistent for manufacturing companies and will not create drastic differences. However, the green hydrogen generated from green electricity may lead to very obvious differentiation between different enterprises and different production routes.

The cost of green hydrogen is much higher than that of traditional hydrogen production from coal or natural gas. According to the electricity price from power coal, natural gas and green electricity in Shanghai, the cost of green hydrogen production is 140% higher than that of coal to hydrogen production. Even considering the further reduction of the cost of green hydrogen and water electrolysis in the future, the production cost of green hydrogen will still be much higher than that of traditional route. However, traditional hydrogen production methods will produce a large amount of CO2 emissions. It is imperative to be replaced by low emission hydrogen production methods in the future.

Therefore, low-cost and low emission blue hydrogen (from light hydrocarbon chemical PDH) will become a high-quality hydrogen source in the future. At present, there are few examples of domestic light hydrocarbon chemical industry combined with downstream hydrogenation process, and the most successful is Yantai Wanhua Chemical. Wanhua has built a complete industrial chain in Yantai to produce MDI from the most basic raw materials. The production process of MDI involves multi-step hydrogenation reaction, which consumes a lot of hydrogen, including methanol synthesis, nitric acid production and nitrobenzene hydrogenation. For each ton of MDI produced, 0.11 tons of hydrogen is required. If the MDI production units in Shanghai Chemical Industry Park need to use green hydrogen in the future, the MDI cost of these units will increase by more than RMB 1,500/ton.

Source: Oriental View Chemical Industry

The Ministry of Industry and Information Technology stated it revised the Guidance Directory for the Application Demonstration of the First Batch of Key New Materials (2021 Version) (Draft for Public Comment) in accordance with the pilot work arrangements for the first batch to apply an insurance compensation mechanism, and it is now open for comments from all sectors of society.

The directory has been modified compared to the 2019 edition, removing some new chemical materials, while adding others.

1. Advanced chemical materials

Products deleted in this category mainly include halobutyl rubber, polyolefin elastomer materials, high fluidity nylon, PEEK engineering plastics, polyphenylene sulfide (PPS) special new material products, semi-aromatic nylon (PPA), high-performance graphene heat dissipation composite film, LCD with positive photoresist, and thermoplastic liquid crystal polymer materials.

Products added in this category mainly include super-polymerized natural rubber, styrene-based elastomer, biodegradable polyester rubber, hydrogenated nitrile rubber (HNBR), optical grade fluorine resin, optical grade polymethyl methacrylate (PMMA) and its plastic optical fiber, nuclear grade zirconium phosphate resin, cyclic olefin copolymer (COC), flame retardant anti-melt drip polyester chips, phenolphthalein-based amorphous polyaryl ether ketone resin, high temperature resistance nylon (PPA) materials, long carbon chain nylon (LCPA) materials, BPF, etc.

2. High Performance Fibers and Composites

Products deleted in this category mainly include carbon fiber composites for automobiles, continuous basalt fibers, PBO high-performance fibers, carbon fiber composites for wind turbine blades, ultra-high molecular weight polyethylene fibers, boron-free high-performance glass fibers, etc.

Products added in this category mainly include carbon fiber composites for airplane interiors, carbon fiber/epoxy resin composites, carbon fiber composites for hydrogen storage cylinders, large filament bundle carbon fibers and their thermoplastic composites, high-modulus glass fibers, continuous silicon carbide fibers, etc.

3. Cutting-edge New Materials

The main products deleted from this category are graphene-modified lubricating materials, graphene-modified batteries, water-sensitive materials, aerogel materials, amorphous alloys, etc.

Products added in this category mainly include aerogel insulation mats, transparent UV-resistant encapsulation film, amorphous boron powder, copper-based micro and nano powder materials, titanium alloy powder for injection molding, etc.

Source: Advanced Chemical Materials Industry

To accelerate the elimination of industrial solid waste generated by serious environmental pollution due to outdated production processes and equipment as well as to continue to improve the level of industrial green development, the Ministry of Industry and Information Technology recently announced the Deadline for the Elimination of Industrial Solid Waste Generated by Serious Pollution of Outdated Production Process Equipment, which goes into effect on January 1, 2022

The six kinds of petrochemical chemical process equipment that are to be phased out are:

• Illegal small-scale oil refining from waste rubber and plastic
• Intermittent coke method carbon disulfide process
• High-mercury catalyst production units (mercury chloride content above 6.5%)
• Acetylene method polyvinyl chloride production equipment using high mercury catalysts
• Production units with calcium roasted chromium compounds
• Production equipment that uses mercury or mercury compounds to produce sodium methanol, potassium methanol, sodium ethanol, potassium ethanol, polyurethane, acetaldehyde, caustic soda, and pesticide

Compared with the draft for opinions, the following three petrochemical processes were deleted: (a) acid-clay process used mineral oil recycling, (b) used mineral oil kettle distillation clay refining process, and (c) chromium salt production in the sulfuric acid method of sodium dichromate and chromic anhydride production.

In addition, the document also includes illegal small-scale coking in the iron and steel industry (including improved coke ovens), light fatty acid process for producing tertiary amines in light industry, fuming sulfuric acid sulfonation process, etc.

Source: China Chemical Industry News

Known as the “price king” of the chemical industry this year, on the first day after the weeklong National Day holiday, the price quote of DMC reached a high of RMB 64,200/MT. Then in just half a month, due to easing of power restrictions and sluggish downstream demand, the silicone market began a downward trend. The current DMC market price is RMB 52,000/MT, down RMB 12,200/MT in just half a month—a decrease of 20%.

Crystalline silicon appeared in the top ten list of declining products for many days, with a decrease of more than 20%. As of now, chemical grade 421 crystalline silicon at Huangpu port was quoted at RMB 60,500~67,500/MT, down RMB 2,500~3,000/MT from the beginning of October.

In the previous period, influenced by the Dual Control policy for energy consumption, crystalline silicon production capacity was limited, and the price rose sharply, especially chemical grade 421 crystalline silicon, which reached RMB 86,400/MT.

Also due to recent electricity production restrictions, production cuts in downstream segments such as aluminum alloys and polysilicon have been heavy as well, reducing demand for silicon. Recent metallurgical grade crystalline silicon prices have plummeted precipitously. Metallurgical grade 553 prices have dropped from a peak of RMB 55,000/MT to RMB 28,000/MT, a decrease of 50%. As the various grades of crystalline silicon are produced using swing capacity, chemical grade crystalline silicon prices are high, and there is an increase in the number of manufacturers switching to chemical grade 421 crystalline silicon recently, which has alleviated the tight supply.

In the face of the growing shortage of coal and electricity, the relevant national government departments proposed to promote increased production of coal mines as soon as possible. From the current situation, it is clear that the increase in coal production has achieved obvious results. In mid-October, national coal production exceeded 11.5 million MT/day, an increase of more than 1.2 million MT/day from mid-September. Along with the easing of power restrictions and production cuts, silicone production began to increase.

With the restoration of power supply, downstream demand will improve to some extent, but the overall growth rate may gradually decrease.

In the short term, the silicone market is expected to remain at a high level.

Source: China Chemical Industry News

In early October, Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange jointly released the “Statistical Bulletin on China’s Outbound Direct Investment (ODI) in 2020” (hereinafter referred to as “the Bulletin”), which announced that China’s outbound investment had jumped to the first place in the world for the first time.

According to the Bulletin, in 2020, the world’s economy suffered the first negative growth since 2009 by decreasing 3.3% due to the severe impact caused by the COVID-19. The global goods trade decreased by 5.3%, and the outbound direct investment decreased by nearly 40% compared to that of the previous year. China, the only country achieved the positive economic growth, had a ODI flow of $153.71 billion in 2020, increasing at a CAGR of 12.3%, accounting for 20.2% of the global share, ranking the first in the world for the very first time.

In the same period, the scale of global outbound investment shrank significantly. UNCTAD’s World Investment Report shows that the global ODI flow totaled USD 740 billion in 2020, shrinking by nearly 40% than a year earlier. In 2020, China’s ODI accounted for 20.2% and 6.6% of the global flow and stock of the year, respectively, becoming the top 1 and 3 in the global ranking, respectively.

Luxembourg, Japan, Hong Kong and the United States ranked second to fifth by global outbound investment. Among them, the outbound investment by US totaled $92.8 billion in 2020, showing dramatic fluctuations and dropping to the fifth place. Traditional ODI countries (i.e. Japan, UK, Netherlands and Germany) also drew back their ODI efforts in 2020.

In 2020, China’s ODI covered 18 industrial categories, among which, the investments on leasing and business services, manufacturing, wholesale, retail, and finance exceeded $10 billion. The leasing and business services ranked at the first place, and the manufacturing ranked at the second.

The net ODI investment flowing to the manufacturing industry totaled US$25.84 billion at a CAGR of 27.7%, accounting for 16.8% of total ODI. The key segments are automobile, pharmaceutical, computer/communications and other electronic equipment, special equipment, non-ferrous metal smelting and rolling processing, rubber and plastic products, chemical materials and chemical products, general equipment, electrical machinery and equipment, textiles, paper and paper products, non-metallic mineral products, food, ferrous metal smelting and rolling processing, textile and garment/apparel, etc. Among them, the investment on chemical raw materials and chemical products was $1.36 billion, accounting for 5.3% of the total investment in the manufacturing industry.

By the end of 2020, the number of China’s foreign direct investors (hereinafter referred to as domestic investors) reached 28,000. Among the domestic investors, there are 181 central government enterprises, accounting for only 0.6%. Local province-level and municipal-level investors account for 99.4%. The top 10 provinces by number of domestic investors are: Guangdong, Zhejiang, Shanghai, Jiangsu, Beijing, Shandong, Fujian, Liaoning, Tianjin and Sichuan, accounting for 81.4% of the total number of domestic investors. Guangdong is the province with largest number of domestic investors at more than 6,800, accounting for 24.5%, followed by Zhejiang with the number of investors of more than 3,200, accounting for 11.5%. Shanghai ranked third with more than 3,000 investors, accounting for 11%.

China’s outbound investment has been maintaining the rapid growth for the last 20 years. In 2002, the investment was only $2.7 billion. After breaking $10 billion for the first time in 2005 at $12.26 billion, China’s outbound investment surged all the way to $100 billion in 2013, reaching $107.84 billion. In 2016, China’s outbound investment reached a historical peak of $196.15 billion. After that, China issued the policies to regulate and optimize the structure of overseas investment, and China’s ODI gradually declined. In recent years, it has been maintained at around $150 billion.

During this period, China’s outbound investment in the global market ranked from 26th in 2002 to 5th in 2009, remaining at the world’s No. 2 for four of the five years until 2020. In 2020, China ranked as the top one for the first time instead of the USA.

Chinese outbound investment can grow against the trend in 2020, except for the investment flow to Oceania (mainly Australia), which decreased by 30%, the investment to other regions has all showed considerable growth.

• The investment flow to Asia was $112.34 billion, increasing at a CAGR of 1.4%.
• The investment flow to South America was $16.66 billion, increasing at a CAGR of 160.7%.
• The Investment flow to Europe was $12.69 billion, increasing at a CAGR of 20.6%.
• The investment flow to North America was $6.34 billion, increasing at a CAGR of 45.1%.
• The Investment flow to Africa was $4.23 billion, increasing at a CAGR of 56.1%.
• The investment flow to Oceania was $1.45 billion, decreasing at a CAGR of 30.3%.

The Chinese direct investment in the United States significantly increased by 58%, reaching $6.02 billion in 2020. However, the investments in Canada and Australia sharply declined. (The investment in Canada declined by 55.3% and the investment in Australia declined by 42.6 %)。

By the end of 2020, about 28,000 Chinese investors had set up a total of 45,000 OFDI enterprises in 189 countries (regions) around the world, with the total assets of US$7.9 trillion and the net OFDI of $258.06 billion.

Source: Ministry of Commerce

On October 9, Hualu Hengsheng issued an announcement on the commissioning of caprolactam (CPL), amide and PA project. Its 300,000 MT/year caprolactam new facility is able to produce qualified products and entered the trial production stage. Its 200,000 MT/year PA6 resin production units are currently under construction and are expected to be put into operation in the first half of 2022.

The project relies on the existing gasification platform of the company, takes benzene and hydrogen as raw materials, makes full use of syngas resources, takes carbonylation route and conversion of hydrogen production gas as the direction, and combines the existing advantages of methanol, ammonia, steam, electricity and so on. The main construction includes cyclohexanol, cyclohexanone, caprolactam units, hydrogen peroxide and sulfuric acid units. After the project is completed, it can produce 300,000 MT/year of CPL (200,000 MT for captive consumption), 200,000 MT of formic acid, 200,000 MT/year of nPA6 resin, 480,000 MT of ammonium sulfate, etc.

CPL production units in China are mainly distributed in Fujian, Shandong, Zhejiang, Jiangsu and Shanxi provinces. HAO process and HPO process are the mainstream processes used. HPO process is a production process introduced from DSM, and it is also the process adopted by most domestic enterprises. It is a technology with independent IPR jointly developed by Sinopec Baling Petrochemical and Petrochemical Research Institute on the basis of foreign technology. The 200,000 MT/year unit put into operation by Fujian Yongrong Technology in 2019 is the fourth generation of hydration and HAO technology, which has been improved compared with the traditional technology.

The CPL producers and their capacities in 2020 is shown in the table below.

In 2021, the capacity of CPL continues to expand, and it is expected that 1.08 million MT/year of new capacity will be put into operation.

• On March 12, Fujian Shenyuan Phase II 200,000 MT/year CPL project was officially put into operation. The total CPL capacity of the company has exceeded 700,000 MT/year
• On June 25, Inner Mongolia Qinghua 200,000 MT/year CPL project was put into operation
• In mid-August, the 300,000 MT/year CPL project of Lunan Chemical was handed over
• In September, Hualu Hengsheng’s 300,000 MT/year CPL capacity was put into operation
• The Phase I technical upgrade project of Pingmei Shenma Group will start the trial production in October, and the CPL production capacity will increase from 100,000 MT/year to 180,000 MT/year

There are also several companies planning to build CPL projects in China

With the release of new CPL capacity, the overcapacity will be further intensified and the market competition will increase.

Source: Guoxin Research, China chemical Information, etc.

Energy price has been significantly increasing in the international market since 2021. In domestic market, the coal and electricity have always been in short supply, resulting in the recent power rationing in some regions.

Under the influence of the “Dual-Control” policy, some fluorine chemical companies have restricted or shut down the production, resulting in tight supply of the product. Thus, the price of fluorine raw materials, refrigerants and fluorine polymers increased significantly as well.

Market situation of fluorine raw materials

1. Fluorspar

Due to power shortage and upcoming cold weather, the fluorspar price significantly increased in the northern market, ranging from RMB 50-150/MT.

2. Anhydrous hydrofluoric acid

On the eve of the National Day (October 1), due to the “Dual-Control” policy, many refrigerant companies planned to carry out the maintenance, and the price in October is not as high as expected by anhydrous hydrofluoric acid producers. After the holidays, the price of raw material fluorspar increased.

Situations of the downstream market

1. Aluminum fluoride

As the winter season is coming, some aluminum companies have begun increasing the inventory. Thus, it is estimated the aluminum fluoride price will continue to increase.

2. Refrigerant

Due to the poor logistics, the companies mainly sell the inventory products during the National Day holiday week, and refrigerant price is mainly the same as that of before the holidays.

The power restriction policy continued to heat up, and the production was restricted to different degrees in Jiangsu, Zhejiang, Guangdong and Shandong. Jiangsu and Guangdong are energy consumption warning regions with serious shutdown and overhauling situation, and a large number of companies were shut down in the last two weeks of September. After the holidays, the power was only given to those key facilities to resume the production. For example, Meilan mainly guarantee the production of refrigerant R22, and Sanaifu mainly guarantee the production of refrigerant R142b, etc. As the power restriction policy is persistent, utilization rate of the companies is not optimistic in the short term.

Source: Fluoro chemical

Since the beginning of 2021, the market of new energy vehicles and lithium batteries has been booming, and the price of raw materials of lithium batteries has risen rapidly. Among them, cathode materials are the most critical raw materials, including lithium carbonate, lithium hydroxide, etc. At present, the prices of lithium carbonate, lithium hydroxide and electrolyte have increased significantly. Some raw materials have increased by more than 200% compared with the beginning of this year.

Lithium carbonate and lithium hydroxide have broken through the highest prices in history. It is expected that the prices of these raw materials will remain high in Q4 2021.

At present, the price of battery grade lithium carbonate has been close to RMB 190,000/MT. In the past month, the price has increased by more than 50%, and the increase has been as high as 233% compared with the price of about RMB 57,000/MT at the beginning of the year. Now the price of lithium carbonate is rising by about RMB 3,000/MT every day.

In addition to lithium carbonate, the prices of other key raw materials have also increased significantly. The price of battery grade lithium hydroxide is RMB 174,000/MT, an increase of 41% in the past month, and 235% higher than the price of RMB 52,000/MT at the beginning of the year. The current price of electrolyte is RMB 120,000/MT, an increase of more than 14% in the past month, and 150% higher than the price of RMB 48,000/MT at the beginning of the year.

According to the statistics of China Automobile Industry Association, the cumulative output and sales of new energy vehicles in China from January to August of 2021 reached 1.813 million units and 1.799 million units, respectively, an increase of 1.9 times year-on-year. The booming new energy vehicle market has driven the rapid growth of the lithium battery industry chain. In August, China’s power battery output totaled 19.5 GWH, with a year-on-year increase of 161.7% and a month on month increase of 12.3%.

Due to the development prospect, many power battery enterprises, including CATL, BYD and AVIC, have announced new production expansion plans. The planned new production capacity exceeds 1,000 GWH.

The rapid increase in demand for lithium battery and the expectation of production expansion have also exacerbated the supply shortage of raw materials.

The key spodumene mines in the world are mainly in Australia and South America. Since 2020, affected by the pandemic and other factors, the production and expansion plans of lithium mines have been restrained, and the global lithium resources are relatively tight, which also limits the production capacity of lithium carbonate and lithium hydroxide.

At present, the annual capacity of lithium carbonate and lithium hydroxide in China is about 340,000 MT/year and 230,000 MT/year, respectively, but the actual output is lower than the capacity.

Since 2021, while prices have continued to rise, the orders of many raw material manufacturers have been raised significantly and even scheduled for next year.

Source: Chemical 365

Premier Li Keqiang of China State Council chaired an executive meeting of the State Council on October 8 to further deploy the supply of electricity and coal this winter and next spring to ensure the basic livelihood of the people and the stable operation of the economy.

The meeting pointed out that since the beginning of this year, energy prices in the international market have risen sharply, and the supply and demand of domestic electricity and coal have remained tight. Various factors have led to power cuts in some places recently, which has had an impact on the normal economic operation and residents’ lives. In accordance with the deployment of the CPC Central Committee and the State Council, the relevant parties have taken a series of measures to strengthen the guarantee of energy supply. In view of the still great pressure on the supply and demand of electricity and coal this winter and next spring, the meeting stressed that ensuring energy security and the stability of the supply chain are important contents of the “Six Guarantees”. A full play should be given to the role of the coal, electricity, oil and gas transportation guarantee mechanism, and effectively use market-oriented means and reform measures to ensure the supply of electricity and coal. Major coal producing provinces and key coal enterprises should implement the task of increasing production and supply as required. The central power generation enterprises shall ensure that their thermal power units shall be used up. Power grid enterprises should strengthen power operation dispatching and safety management. Those who fail to implement the responsibility of ensuring energy supply should be seriously held accountable.

Important statements of the meeting:

1. Ensuring energy security and supply chain stability is an important part of the “Six Guarantees”. A full play should be given to the role of coal, electricity, oil and gas transportation guarantee mechanism, and effectively use market-oriented means and reform measures to ensure the supply of electricity and coal.
2. Priority to people’s livelihood should be given and ensure that coal is adequate for power generation and heating, especially in winter in Northeast China.
3. On the premise of ensuring safe production, encourage the coal mines with potential to increase production and release production capacity as soon as possible, accelerate the production starting time of the approved and basically completed open-pit coal mines, and promote the coal mines that stop production for rectification to rectify in accordance with laws and regulations and resume production as soon as possible.
4. In view of the difficulties faced by coal-fired power companies, government will implement phased tax deferment policies, guide and encourage financial institutions to provide reasonable financing for coal purchase.
5. On the premise of maintaining the stability of electricity prices for residents, agriculture and public welfare, the fluctuation range of electricity prices shall be adjusted from no more than 10% and 15% respectively to no more than 20% in principle. For high energy consuming industries, the price can be formed without the restriction of floating up by 20%.
6. Accelerate the construction of large-scale wind power and photovoltaic projects in desert areas and accelerate the construction of emergency standby and peak shaving power supply.
7. Promote new renewable energy consumption to be excluded from the total energy consumption within a certain period of time.
8. Strictly implement the territorial management responsibility and orderly power consumption management. The central state-owned power generation companies should ensure that their thermal power units are in full production, correct the “clean cut” shutdown and production restriction or “Event” carbon reduction actions in some regions.

Source: China Government Network