BEIJING: China pledged to reduce soaring coal prices as it ramps up production to relieve increasing pressure on the country’s economy — despite promising to reduce fossil fuel emissions.
The world’s number two economy expanded slower than expected in the third quarter as an energy crisis began to bite, official data showed this week, with electricity shortages and production cuts dragging industrial output.
It comes as Beijing — one of the world’s leading polluters — says it will reduce emissions and its reliance on the fossil fuel.
The National Development and Reform Commission (NDRC) said Tuesday it was studying measures to intervene in coal prices, which have risen rapidly and hit record highs.
“The current price increase has completely deviated from the fundamentals of supply and demand,” it said, pledging to have prices return to a “reasonable range”.
It warned authorities would take a “zero tolerance” approach and “severely crack down on” activities like spreading false information or price collusion.
In a separate notice on Tuesday, the NDRC stressed coal mines should aim for more than 12 million tonnes in daily output, with local authorities to ensure production is maximised.
The surging price of coal and supply shortages, both factors behind recent power outages in China, have fanned concerns about global supply chains.
A production snarl in China could hit global exports and bump up prices at a time when factory price inflation is already high.
Meanwhile, the country’s thermal coal futures fell in overnight trading.
Nearly 60 percent of China’s energy-hungry economy is fuelled by coal, and it has pledged to become carbon neutral by 2060.
In recent months China has been hit by widespread power cuts, forcing factories to delay production as businesses are ordered to minimise energy usage.
Officials have been looking for ways to combat the price rally as the winter months approach.
Mines have been ordered to expand coal production, while top state-owned energy firms must ensure adequate fuel supplies at all costs.
Local governments have also been taking action, with coal port Qinhuangdao reaching an agreement with miners, power plants and railway operators to cap some supplies costs, according to the state-run Economic Daily.
China’s coal inventories stand at 88 million tonnes, enough to last 16 days, according to the NDRC.
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