Accelerated elimination of calcium carbide coking industry

In the early part of this year, the National Development and Reform Commission (NDRC) released the list of companies to be phased out in the second batch of calcium carbide and coking industries. Notably, Shanxi and Inner Mongolia accounted for approximately 70% of the total eliminated production capacity. The time between the announcement of this list and the first batch was less than three months, signaling a significant acceleration in the national effort to eliminate outdated and inefficient industrial capacities. Calcium carbide and coking are key sectors where energy conservation and emission reduction are critical. These industries often rely on outdated equipment, leading to high energy consumption and severe environmental pollution. As a result, they have become a major focus for government regulation and elimination in recent years. Both Shanxi and Inner Mongolia are major producers of calcium carbide and coke in China, with Shanxi alone producing over 40% of the nation’s calcium carbide and more than 45% of its coke. These provinces are home to numerous small-scale plants, many of which operate at capacities between 20,000 and 50,000 tons per year, and are now being targeted for mandatory closure. A total of 211 enterprises were involved in this round of elimination, including 20 calcium carbide companies and 146 coking firms. A total of 22 and 213 pieces of outdated equipment were removed, respectively, resulting in an annual reduction of 221,400 tons of calcium carbide and 12.23 million tons of coking capacity. Geographically, the calcium carbide phase-out was concentrated in Shanxi, involving 15 companies and 17 units, with an elimination capacity of 107,400 tons/year. In contrast, the coking industry’s outdated production was mainly found in both Shanxi and Inner Mongolia, with Inner Mongolia eliminating 3.9 million tons/year and Shanxi eliminating 4.89 million tons/year. This is not the first time such measures have been taken. On October 12, 2007, the NDRC had already announced the first batch of companies to be phased out, with similar targets and regional impacts. Shanxi and Inner Mongolia have consistently played a central role in these efforts, as these industries are vital to their local economies. Prior to these announcements, both provinces had already initiated large-scale clean-up campaigns targeting inefficient and polluting facilities. Shanxi has imposed strict controls on new calcium carbide projects during the “Eleventh Five-Year Plan” period, limiting future expansion. The province aims to keep its total calcium carbide capacity at 2.65 million tons by 2009, after replacing outdated facilities. By the end of 2007, 58% of Shanxi’s total calcium carbide capacity had already been eliminated. In Inner Mongolia, a quota system has been introduced to control output, with a cap of 5 million tons set for 2007. Companies that fail to meet their quotas face power cuts, further pressuring inefficient operators. China’s calcium carbide industry as a whole suffers from overcapacity, with an average utilization rate below 50%. The backward production not only consumes excessive energy but also undermines the competitiveness of larger, more efficient facilities. However, after the elimination of outdated capacities, remaining plants are expected to increase their operating rates to fill market gaps, with minimal impact on overall supply. The coking industry faces similar challenges. Shanxi, the country's largest coking producer, has taken decisive action to shut down all illegal and outdated coke plants by 2008, eliminating 24.07 million tons of outdated capacity through the closure of 103 projects. Although phasing out outdated production may temporarily affect local GDP, it brings long-term benefits by protecting the environment and ensuring more efficient use of resources. For example, in the first half of 2007, the main business income of large-scale coke enterprises in Shanxi reached 43.117 billion yuan, up 51.4% year-on-year, while profits and taxes increased by 163%. At the same time, the industry saw a "double drop" in energy consumption per 10,000 yuan of added value and per unit of GDP, marking a turning point after years of rising energy use.

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