Green Deadline Closes China Factories

China is facing a looming environmental deadline that has prompted the government to order thousands of factories to close high-polluting plants as its leadership vies to retool economic growth.

The Chinese government has pledged to slash energy consumption per unit of gross domestic product by 20 percent between 2006 and 2010. China is the world's biggest greenhouse gas emitter and has bowed to international pressure to reduce pollution and clean up its environment.

While China has made some progress on this front, the world’s most populous nation is likely to miss the year-end deadline, which could embarrass leaders who have touted efforts to curb emissions growth and develop renewable energy.

Chinese government officials this month ordered 2,087 firms producing steel, coal, cement, aluminium, glass and other materials to close old and obsolete plants by end of September – or risk having bank loans frozen and power cut off.

Authorities in the eastern province of Anhui reportedly cut off electricity to more than 500 factories for a month after they failed to meet emission reduction targets.

Only about a dozen factories will be closed completely, with the remainder ordered to shut down specific production capacity, according to the government order.

Tianjin Tiangang Union Iron and Steel Co. in northern China has been told to close two furnaces while Chaofeng Construction Materials Co., also based in northern China, has been told to shutter two production lines.

The move comes after China in July scrapped preferential power rates for energy-intensive industries, which had reduced electricity bills by an estimated CNY15 billion.

Ahead of global climate talks in Copenhagen last year, Chinese officials promised to reduce China's carbon intensity by 40-45 percent by 2020, based on 2005 levels.

China has earmarked US$738 billion to invest in developing clean energy during the next decade as it seeks to meet a target of generating 15 percent of its energy from renewable sources -- mainly wind and water -- by 2020.