China's cement industry to face tougher emission rules

China is mulling a tougher national standard on nitrogen oxide (NOx) emissions from cement factories amid public calls to clear up both air pollution and the sector's excess production capacity.

The new standard drafted by the Ministry of Environmental Protection is expected to be issued on July 1, the China Securities Journal reported Friday.

The cement industry produces about 11.6 percent of all NOx emissions across China's industrial sectors, and therefore, it has been targeted in the country's move to address air pollution, particularly after hazardous smog repeatedly blanketed skies in the country since the beginning of this year.

The drafted new standard will sharply cut the amount of NOx emitted by an existing cement factory to below 450 mg for every normal cubic meter of cement produced from an average emission of 880 mg among cement makers now, the report said.

For those newly built cement production lines, the emission standard would be capped below 320 mg, it added.

The drafted requirement is stricter than market expectations for the cap to be set at 500 mg, according to the report, which noted that the new standard is set at a level equivalent to that of advanced countries.

Analysts said the installation of denitrification equipment will increase the production costs of cement plants and weigh on their earnings.

China's cement industry has already struggled with weak demand amid faltering economic recovery. The industry's profits plunged 29 percent year on year in the first quarter, according to data from the China Cement Association (CCA).

Moreover, the National Development and Reform Commission has listed the cement sector, along with the steel, electrolytic aluminum, sheet glass and hard coke sectors, as having especially serious overcapacity problems.

Experts believe that in setting a higher industry standard, the new policy will weed out unsustainable capacity.

Amid deliberations over the new standards, China's local governments have been pressuring cement factories to install denitrification facilities.

In 2011, the Sichuan provincial government said power would be cut for cement plants that fail to achieve the NOx emissions target set by the provincial government for the 2011-2015 period.