China leaves size, timing of coal output restrictions to local authorities

China’s has decided to eliminate recently set restrictions on coal production from local miners, which decreased global supplies and helped prices last year, and has instead vowed to adopt more market-friendly measures in the sector and other oversupplied industries.

The announcement doesn’t mean the country’s top planning agency has abandoned its intention to cut 150 million tonnes of coal mining capacity this year. But the National Development and Reform Commission (NDRC) would leave the size and timing of such cuts to local governments as long as prices remained stable, FT.com reports (subs. required).

But Beijing is not giving up on its long-term plans of reducing the share of coal in the country's overall energy mix and consequent smog and greenhouse gas emissions.

NDRC's statement comes in response to market speculation related to whether the agency would revert back to 276 work day policy later this month after it temporarily relaxed such rules last November in an effort to curb increasing thermal and coking coal prices.

China, the world’s largest coal consumer and producer, clarified in January that it would continue working towards its long-term plans of reducing the share of coal in its overall energy mix and consequent smog and greenhouse gas emissions.

Other than shutting down mines and forcing production cutbacks Beijing has also halted the approval of new coal mines until at least 2019, eliminated about 560 million tonnes of coal production capacity and closed 7,250 coal mines in the last five years.

The government has also made public its intention of modernizing its coal-fired power plants by 2020 in an effort to cut “polluting” emissions by 60%. It also aims to add over 20 million kilowatts of installed wind power and more than 15 million kilowatts of installed photovoltaic power by the end of the decade.