Measures for the Quality Management of Commercial Coal Issued

On Sep 15^th, Ministry of Environment Protection, Ministry of Commerce and National Development and Reform Commission, along with 3 other authorities, issued the Interim Measures for the Quality Management of Commercial Coal. The measures will be effective from Jan 1^st, 2015.

The Measures apply to activities such as the production, processing, storage, transport, sale, import, and utilization of commercial coal within the territory of the People's Republic of China.

The Measures stipulate the following requirements:

• Ash content mustn’t exceed 30% in brown coal. In other coal the limit is 40%.

• Sulfur content mustn’t exceed 1.5% in brown coal while in other coal the limit is 3.0%.

• Other concentration requirements are also imposed on mercury, arsenic, phosphorus, chlorine and fluorine.

• Commercial coal that is not in line with the requirements of these measures is not allowed to be imported, sold or transported over long distances.

• Transport enterprises should load and stock commercial coal based on different quality levels. Transportation or storage conditions must not negatively affect the quality of coal.

China is the largest consumer of coal in the world and has been a net importer since 2008. Coal plays a significant role in China’s economy, especially in power supply. Before the issuance of these measures the draft was open for public consultation for over one year. There were rumors that the Measures would be very strict on the quality requirements of imported coal however the pending Measures are much more moderate than expected.

However, there are signs that Chinese government will eventually raise the quality requirements on imported coals. For example, a batch of coal imported from Australia was declined at Qingdao Custom due to minor quality issues. Also in Feb 2014 the National Energy Administration revealed that in future they would develop measures to reduce and replace coal usage. So it’s still believed that the issued Measures won’t be the end of the management of coal quality. Coal importers should be prepared for coming changes.