Original Title: Notice from the General Office of the People’s Government of Shandong Province on Strengthening the Management of “High-Energy Consumption and High-Emission” Projects
To the People’s Governments of all cities, the People’s Governments of all counties (cities, districts), relevant departments of the Provincial Government, major enterprises, and institutions of higher education:

　　To thoroughly implement Xi Jinping’s Thought on Ecological Civilization, carry out the central government’s major decisions and plans regarding “carbon peaking and carbon neutrality,” deepen the “Three Reductions, One Cut, and One Supplement” initiative, advance the “Four Reductions and Four Increases,” resolutely curb the blind development of “high-energy-consumption and high-emission” projects, accelerate the optimization of industrial structure and the transition from old to new growth drivers, and promote the green and low-carbon transformation of economic and social development, in accordance with the “Regulations on the Approval and Filing Management of Enterprise Investment Projects” (State Council Order No. 673),the “Notice of the General Office of the People’s Government of Shandong Province on Further Standardizing the Handling of Industrial Investment Projects in Overcapacity and Energy-Intensive Industries and Strengthening In-Process and Post-Approval Supervision” (Lu Zheng Ban Zi [2020] No. 40), and other relevant provisions, and with the approval of the Provincial Party Committee and the Provincial Government, we hereby issue the following notice regarding the strengthening of management over high-energy-consumption and high-emission projects (hereinafter referred to as “high-energy-consumption and high-emission” projects):

　　I. Defining the Scope of “Two Highs” Industries and Projects

　　The “Two Highs” industries referred to in this Notice primarily include the “six major energy-intensive industries” specified in the National Bureau of Statistics’ Statistical Bulletin on National Economic and Social Development, namely: petroleum, coal, and other fuel processing; chemical raw materials and chemical product manufacturing; non-metallic mineral product manufacturing; ferrous metal smelting and rolling; non-ferrous metal smelting and rolling; and electricity, heat production, and supply.“High-energy-consumption and high-emission” projects refer to investment projects in 16 high-energy-consumption and high-emission sectors within the “six major high-energy-consumption industries,” including steel, ferroalloys, electrolytic aluminum, cement, lime, building ceramics, flat glass, coal-fired power generation, refining and petrochemicals, coking, methanol, nitrogen fertilizers, acetic acid, chlor-alkali, calcium carbide, and asphalt waterproofing materials.

　　II. Strictly Enforce National Industrial Policies

　　New “high-energy-consumption and high-emission” projects (including expansion and renovation projects, but excluding technical renovation projects that do not increase production capacity, such as environmental protection and energy-saving upgrades, safety facility improvements, and product quality enhancements; the same applies hereinafter) must strictly comply with the requirements of the national “Catalogue for the Guidance on Industrial Structure Adjustment” and conform to national and provincial industrial planning and layout as well as relevant regulations on industrial park management.Investment in new projects where the products, processes, technologies, or equipment fall under the restricted or phased-out categories is strictly prohibited. Financial institutions shall not issue loans for such projects, and departments including development and reform, industry and information technology, natural resources, ecology and environment, emergency management, market regulation, and administrative approval shall not process related procedures.We will continue to optimize industrial layout, encourage capacity consolidation through measures such as “expanding large-scale operations while phasing out small-scale ones” and “replacement with reduced-capacity alternatives,” and concentrate on building steel production bases, refining and petrochemical bases, and casting and forging centers. This will improve process equipment standards and energy utilization efficiency, and promote the intensive and clustered development of industries. (The Provincial Development and Reform Commission, the Provincial Department of Industry and Information Technology, and other relevant departments shall be responsible in accordance with their respective duties.)

　　III. Resolutely Implement Reduction-for-Substitution

　　For new “high-energy-consumption, high-emission” projects, strictly implement the reduction-through-substitution system for production capacity, coal consumption, energy consumption, carbon emissions, and pollutant emissions. Sources for reduction-through-substitution must be monitorable, quantifiable, and verifiable; otherwise, they shall not be recognized as valid substitution sources. For projects subject to national planning or with separate regulations, such provisions shall prevail.

　　1. Regarding capacity reduction and substitution: The substitution ratio for cement grinding station projects shall be no less than 1:2; for cement clinker, refining and petrochemical, electrolytic aluminum, and coal-fired power (excluding back-pressure combined heat and power) projects, no less than 1:1.5; for steel, coking, calcium carbide, and chlor-alkali projects, no less than 1:1.25; for ferroalloy projects, no less than 1:1.2;for flat glass projects, no less than 1:1.1; and for nitrogen fertilizer projects, no less than 1:1.05. (Led by the Provincial Department of Industry and Information Technology and the Provincial Energy Bureau, respectively, with support from the Provincial Development and Reform Commission, the Provincial Department of Ecology and Environment, the Provincial Department of Emergency Management, and the Provincial Market Regulation Bureau)

　　2. Coal Consumption Reduction and Substitution. The reduction and substitution ratio for all “high-energy-consumption, high-emission” coal-consuming projects shall be no less than 1:1.2; lignite shall not be used as a substitute source. (Responsibility: Provincial Development and Reform Commission)

　　3. Regarding energy consumption reduction and substitution: The reduction and substitution ratio for cement, refining and petrochemical, electrolytic aluminum, and coal-fired power projects shall be no less than 1:1.5; for steel, coking, ferroalloy, calcium carbide, lime, methanol, nitrogen fertilizer, acetic acid, chlor-alkali, building ceramics, flat glass, asphalt waterproofing materials, and back-pressure combined heat and power projects, the ratio shall be no less than 1:1.2.For clean energy power generation in “high-energy-consumption and high-emission” industries—including hydropower, nuclear power, wind power, solar power, biomass energy, geothermal energy, tidal energy, thermal gradient energy, and wave energy—as well as investment projects in grid engineering and district heating networks, energy consumption substitution requirements shall not apply. Energy consumption substitution policies for other industries shall be formulated independently by each city, and it must be ensured that the total energy consumption of “high-energy-consumption and high-emission” industries decreases rather than increases.(The Provincial Development and Reform Commission and municipal people’s governments shall be responsible in accordance with their respective duties)

　　4. Carbon Emission Reduction and Replacement.For cement, refining and petrochemical, electrolytic aluminum, and coal-fired power projects, the reduction-to-replacement ratio shall be no less than 1:1.5; for steel, coking, ferroalloy, calcium carbide, lime, methanol, nitrogen fertilizer, acetic acid, chlor-alkali, architectural ceramics, flat glass, asphalt waterproofing materials, and back-pressure combined heat and power projects, the ratio shall be no less than 1:1.2. (Responsibility lies with the Provincial Department of Ecology and Environment)

　　5. Pollutant Emission Reduction and Substitution. For cities, counties (county-level cities, districts) where the annual average concentration of ambient air quality failed to meet standards in the previous year, or where water quality requirements were not met, the reduction-to-substitution ratio for new “high-energy-consumption, high-emission” projects shall be no less than 1:2(excluding coal-fired power generation units that meet ultra-low emission standards for air pollutants); in cities where the annual average concentration of fine particulate matter (PM2.5) does not meet standards, the four pollutants—sulfur dioxide, nitrogen oxides, smoke and dust, and volatile organic compounds—must all be subject to a reduction-based substitution ratio of no less than 1:2; cities that meet standards shall implement equivalent substitution. (Responsibility: Provincial Department of Ecology and Environment)

　　Cities may formulate stricter reduction-through-replacement measures based on local conditions.

　　IV. Improving and Implementing the Resource Reserve Mechanism

　　The Provincial Development and Reform Commission shall improve the mechanism for the collection, storage, and trading of coal consumption and energy consumption quotas, and explore the implementation of capacity quota collection, storage, and trading, with a focus on supporting landmark projects critical to the province’s major productive capacity layout and socioeconomic development.

　　All cities shall fully tap the potential of production capacity indicators. While ensuring that the total energy consumption of “high-energy-consumption and high-emission” industries decreases rather than increases, they shall plan and implement major and high-quality projects that promote the transition from old to new growth drivers and drive high-quality development.Intensify efforts to phase out outdated and inefficient production capacity. Enterprises failing to meet mandatory standards for safety, environmental protection, energy conservation, and quality must be ordered to rectify issues within a specified timeframe in accordance with laws and regulations; those unable to fully rectify issues shall be shut down and phased out. For enterprises failing to meet advanced industry standards for safety, environmental protection, energy conservation, water consumption, and profitability, differentiated policy measures shall be adopted to compel the exit of inefficient production capacity.We will research and introduce supportive policies, vigorously promote energy-saving technologies and equipment, implement energy-saving technological upgrades, regularly organize specialized energy-saving inspection campaigns, and improve supporting coal consumption and energy consumption metering equipment and technologies. We will actively promote capacity and output controls in key industries such as steel and coking, strengthen monitoring and coordination of raw materials, electricity consumption, and production and sales volumes, and drive key industries to achieve “carbon peaking” as soon as possible.

　　V. Strictly Control Project Approval

　　The Provincial Development and Reform Commission shall strengthen analysis and early warning regarding overcapacity in “high-energy-consumption, high-emission” projects, as well as analysis of existing energy and coal consumption levels in various cities. It shall enhance coordination with industry regulatory authorities and administrative approval departments, provide professional guidance for new “high-energy-consumption, high-emission” projects, and thoroughly evaluate the necessity and feasibility of construction.and thoroughly analyze and evaluate their impact on total energy consumption, carbon emissions, high-quality industrial development, and environmental quality. Where necessary, organize third-party assessments. Projects that have not undergone such guidance or assessment shall not be approved or filed, nor shall they be included in provincial, municipal, or county-level key project lists or relevant industrial plans.

　　When approving or filing “high-energy-consumption and high-emission” projects, approval and filing authorities at all levels must strictly review whether they comply with industrial policies, industrial plans, the “Three Lines and One List,” and requirements for planning environmental impact assessments, and whether capacity replacement has been implemented in accordance with laws and regulations. Projects that do not comply or have not implemented capacity replacement shall not be approved or filed under any circumstances; where the state or province has specific management requirements for project approval, approval and filing authorities at all levels shall not exceed their statutory authority to grant approval or file such projects.New “high-energy-consumption and high-emission” projects shall adopt advanced industry technologies and processes, as well as green and energy-efficient equipment, to improve energy efficiency and reduce carbon and pollutant emissions.

　　Project approval and filing authorities at all levels shall guide project developers to reasonably determine the project’s industry classification in accordance with the National Economic Industry Classification, and to report project information objectively, accurately, and completely, ensuring that it is monitorable, statistically trackable, and verifiable.Project information must include details on production capacity, coal consumption, energy consumption, carbon emissions, pollutant emissions, and reduction and substitution measures, specifically covering the quantities of new construction and substitution, sources of substitution, specifications and quantities of substitute equipment, and substitution ratios; project construction content and scale must clearly specify production scale, product plans, process technologies and procedures, major equipment and its selection, and raw materials.

　　VI. Strengthening Mid-term and Post-project Supervision

　　The Provincial Development and Reform Commission, in collaboration with relevant departments, shall establish a reporting and complaint mechanism and a list management system for “high-energy-consumption and high-emission” projects. It shall regularly publish information on new “high-energy-consumption and high-emission” projects in each city to the public to strengthen social oversight. Each city must promptly report information on new “high-energy-consumption and high-emission” projects to the Provincial Development and Reform Commission. Third-party agencies shall be commissioned to monitor new industrial projects across the province, producing regular monitoring reports to prevent the unauthorized construction of “high-energy-consumption and high-emission” projects. Efforts shall be made to integrate “high-energy-consumption and high-emission” projects into the online energy consumption monitoring system for key energy-consuming units.

　　All cities must, in accordance with the principle of “whoever approves is responsible for supervision, and whoever oversees is responsible for supervision,” consolidate supervisory responsibilities, strengthen work measures, and enhance full-process supervision of “high-energy-consumption and high-emission” projects. Particular emphasis should be placed on supervising capacity, coal consumption, energy consumption, carbon emissions, and the status of pollutant emission substitution. A precise measurement and monitoring mechanism must be established and improved, and the level of information technology development must be enhanced to ensure that projects are constructed in accordance with laws and regulations;Fully leverage the role of the online approval and supervision platform for investment projects, strictly implement the information reporting system, and guide and urge project entities to promptly report information regarding approval, construction, supervision, and penalties.

　　VII. Organizing Project Verification and Cleanup

　　All cities must conduct case-by-case verification and comprehensive cleanup of “high-energy-consumption and high-emission” projects. Any project that does not comply with industrial policies, has not implemented reduction-through-substitution requirements as stipulated, or where the energy efficiency level of the main product of an ongoing project falls below the industry’s energy consumption limit for market access shall be suspended immediately and rectified; construction may not resume until rectification is complete;For projects that have been completed and put into operation, those with potential for energy conservation and emission reduction shall be retrofitted and upgraded, while those classified as outdated production capacity shall be phased out expeditiously; for suspended projects, project units shall be supervised to implement reduction-through-substitution in accordance with the requirements of this notice, except for those that have already implemented coal or production capacity substitution under the original policy and have been reviewed and approved by relevant departments. Each city shall promptly report the status of project cleanup and rectification to the Provincial Development and Reform Commission. The Provincial Development and Reform Commission, in conjunction with relevant industry authorities, will conduct on-site spot checks on the cleanup and rectification efforts of each city.

　　VIII. Strengthening Supervision, Inspection, and Accountability

　　All cities must attach great importance to the political sensitivity of strictly controlling “high-energy-consumption and high-emission” projects. They must resolutely shoulder the political responsibility of guiding the green and low-carbon development of industries, accelerating the transition from old to new growth drivers, and optimizing the industrial energy structure, while effectively enhancing the effectiveness of implementation. Departments and units that fail to implement policies effectively, have numerous issues with investment management, have inadequate information system management, fail to perform regulatory duties in accordance with the law, or have inadequate supervision shall be subject to disciplinary talks and public notifications in accordance with discipline and law, and relevant personnel shall be held strictly accountable.The Provincial Development and Reform Commission, in conjunction with relevant industry authorities, shall conduct supervisory inspections of all cities and promptly report the findings to the Provincial Government. The departments of ecology and environment, audit, and statistics shall strengthen supervision and inspection. Discipline inspection and supervision agencies shall intensify oversight and strictly pursue accountability for violations of regulations.

　　The scope of “high-energy consumption and high-emission” projects shall be dynamically adjusted by the Provincial Development and Reform Commission in conjunction with relevant departments, based on national regulations and the actual conditions of our province; the specific list of such projects shall be separately stipulated by the Provincial Development and Reform Commission in conjunction with relevant departments.

General Office of the People’s Government of Shandong Province

June 19, 2021