I. Why is it necessary to revise the Implementation Measures for Capacity Replacement in the Cement and Glass Industries?

First, maintain the continuity of policies. The “Guiding Opinions of the State Council on Resolving the Contradiction of Severe Overcapacity” (Guofa [ 2013 ] 41 Article [Number] clearly stipulates: “No local authorities or departments shall, under any name or in any form, approve or file new capacity projects in industries suffering from severe overcapacity.” For new projects that are indeed necessary, a capacity replacement plan must be formulated in accordance with the principle of maintaining equal or reduced capacity. To standardize the formulation and implementation of capacity replacement plans, 2015 In [year], the Ministry of Industry and Information Technology formulated and issued the “Implementation Measures for Capacity Replacement in Industries with Severe Overcapacity” (MIIT Industry [ 2015 ] 127 No., hereinafter referred to as the Original Measures ) , this measure has already been... 2017 Year 12 Moon 31 The deadline is tomorrow. To ensure policy continuity and provide a clear framework for capacity replacement efforts, it is essential to revise the original measures in light of new developments, emerging challenges, and evolving requirements in the work of resolving excess capacity.  

Second, it is crucial to better resolve the contradiction of severe overcapacity. Currently, the cement and flat glass industries are showing signs of stabilization and recovery, with significant improvements in economic performance and initial success in addressing overcapacity. However, the underlying contradiction of severe overcapacity has yet to be fundamentally alleviated, and the foundation for stable and positive industry development remains fragile—particularly in the cement industry, where daily production... 2500 There are still more than 800 clinker production lines with a capacity of one ton or less, lacking competitive strength, with a total capacity exceeding 500 million tons. To promote the adjustment of industrial structure and optimization of industrial layout, it is imperative to follow the “Guiding Opinions of the General Office of the State Council on Promoting Stable Growth, Structural Adjustment, and Enhanced Efficiency in the Building Materials Industry” (Guobanfa [ 2016 ] 34 No.) Deployment will continue to implement measures such as strictly prohibiting the addition of new capacity, phasing out outdated capacity, promoting joint restructuring, and implementing staggered production schedules, with concerted efforts to comprehensively adopt a range of policies aimed at reducing excess capacity. To effectively control the “strict prohibition of adding new capacity” at the source and guide enterprises—through joint restructuring and capacity replacement—to promptly phase out excess capacity that lacks competitiveness, there is an urgent need to revise and issue the “Implementation Measures for Capacity Replacement in the Cement and Glass Industries” (hereinafter referred to as the “Implementation Measures”), which should be more stringent and feature even greater reduction targets than the original guidelines.  

II. What are the main adjustments made by the newly revised Implementation Measures compared to the original measures?

First, we will intensify efforts to implement reduction-and-replacement measures while paying close attention to tailoring strategies to local conditions and adopting industry-specific approaches. The implementation guidelines stipulate that for cement clinker projects, except in the Tibet region where equal-volume replacement will continue to be applied, all other regions will fully adopt reduction-and-replacement measures. Specifically, for construction projects located within nationally designated environmentally sensitive areas, for each new project constructed... 1 Production capacity exceeding one ton must be shut down and phased out. 1.5 ton capacity; for construction projects located in non-environmentally sensitive areas, per construction... 1 Production capacity exceeding one ton must be shut down and phased out. 1.25 ton of production capacity. For flat glass projects, the replacement ratio will continue to follow the original approach. For construction projects located in environmentally sensitive areas designated by the state, the amount of outdated capacity to be replaced must be no less than that of the construction project itself. 1.25 The amount shall be doubled and approved, while other regions shall implement equivalent substitution.  

Second, the restrictions on capacity to be used for replacement have been tightened. The implementation measures clearly stipulate that the capacity used for replacement must be: 2018 Year 1 Moon 1 After the date specified, capacity that has been shut down and phased out will be announced on the portal website of the provincial-level department in charge of industry and information technology (hereinafter referred to as the provincial-level department). At the same time, it is stipulated that outdated capacity that has already exceeded the nationally mandated phase-out deadline, capacity that has already received subsidies and policy support upon its exit, and cement clinker capacity lacking a production license shall not be used for capacity replacement. Of course, capacity whose project construction procedures do not comply with regulations also cannot be used for replacement. To prevent and eliminate any potential fraudulent activities, the implementation measures not only reiterate that capacity indicators used for replacement may not be reused, but also encourage industry associations, media, and the public to monitor the implementation of capacity replacement plans and the progress of new project construction.  

Third, the verification of capacity indicators used for replacement has been made more stringent. Given the phenomenon of “small-scale approval but large-scale construction” in cement clinker projects, and in order to promote integrity and compliance with laws and regulations, the implementation measures stipulate that the capacity indicators used for replacement shall be determined based on the designed capacity indicated in the project’s filing or approval documents. If the actual capacity is less than the filed or approved capacity, the actual capacity shall prevail. The calculation of actual capacity will continue to follow the tables provided in the original measures; however, to avoid confusion when estimating cement clinker capacity—specifically, the issue of mistakenly confusing the inner and outer diameters of rotary kilns—the implementation measures strictly require that the estimation be based on the outer diameter of the rotary kiln.

Regarding inter-provincial capacity replacement, the implementation guidelines emphasize that such measures should help promote adjustments to industrial structure and optimization of industrial layout. Capacity indicators shall be separately verified and confirmed by the provincial authorities of both the sending and receiving regions, and shall be publicly announced on their respective official websites.  

Fourth, further streamline the review process for capacity replacement plans. To deepen the “delegation, regulation, and service” reform and improve industry management and services, the implementation measures stipulate that the provincial-level competent authority in the project location shall be responsible for verifying and confirming the authenticity and compliance of the capacity replacement plan, and after publicly announcing no objections on its departmental portal website, it shall issue a formal announcement. At the same time, this authority shall also oversee the implementation of the capacity replacement plan and determine the actual production capacity of the project. For capacity indicators involving cross-provincial replacements, the provincial-level competent authority in the project location shall coordinate closely with the provincial-level competent authority in the region from which the capacity indicators are transferred.

III. What new content has been added to the newly revised implementation measures compared to the original measures?

First, energy-saving and emission-reduction technical renovation projects that rely on existing main equipment and do not involve any additional production capacity may be exempted from formulating capacity replacement plans. To encourage enterprises to independently carry out technological innovation and upgrades, the implementation guidelines clearly stipulate that for technical renovation projects—based on existing main equipment such as cement clinker rotary kilns and flat glass melting furnaces—that aim at pollution control, emission reduction, energy conservation, and consumption reduction without adding new production capacity, enterprises need not develop capacity replacement plans. In practice, manufacturing enterprises only need to proactively announce the details of their technical renovation projects, commit to ensuring that they will not expand their actual production capacity for cement clinker or flat glass, and voluntarily submit to oversight.  

Second, the capacity of newly commissioned melting furnaces shall not exceed. 150 ton / Industrial glass projects are not required to formulate capacity replacement plans. To encourage enterprises to develop and produce high-end flat glass for industrial use, the implementation measures clearly stipulate that newly established industrial glass projects shall have a melting furnace capacity not exceeding: 150 ton / By the way, there’s no need to formulate capacity replacement plans. In practice, glass companies only need to accurately register their projects and proactively disclose information about the key equipment involved; they should voluntarily submit to oversight. However, under no circumstances should they use the pretext of developing industrial glass to actually carry out projects that expand flat-glass production capacity.  

Third, the implementation measures allow for the phenomenon of “building first, then dismantling” in capacity replacement schemes. To better balance technological advancement with the reduction of excess capacity and to facilitate the normal production and operation of enterprises, the implementation measures stipulate that any capacity used for replacement in a new project must be shut down before the new project begins production and must be completely dismantled and phased out within one year after the new project starts operating. This effectively permits the “build-first, dismantle-later” approach: after the announcement of the capacity to be replaced and before its actual shutdown and dismantling, the new construction project can commence. In practice, the provincial authorities where the new project is located must rigorously supervise and guide enterprises, ensuring that they honor their commitments and maintain integrity. They must guarantee that the capacity designated for replacement will be shut down and phased out before the new project goes into operation, that the original production lines will be dismantled within one year of the new project’s commissioning, and that announcements regarding shutdowns, commissioning, and dismantling activities will be promptly released, voluntarily accepting oversight.

Fourth, the intensity of punishment and accountability has been stepped up. To prevent dishonest behavior during the capacity replacement process in the cement and glass industries, the implementation measures stipulate that for construction projects failing to implement capacity replacement plans, the provincial-level authorities shall, in coordination with relevant parties, investigate and deal with such cases in accordance with laws and regulations. Enterprises found to have inadequately implemented capacity replacement plans—particularly those engaging in fraudulent practices or "approving small-scale projects while constructing large-scale ones"—will have their dishonest behavior publicly reported, thereby promoting joint punitive measures. Regarding potential negligence, dereliction of duty, or illegal and criminal activities by administrative agencies, the implementation measures require that regions failing to rigorously verify and approve capacity replacement plans or to effectively supervise their implementation be ordered to make rectifications within a specified time limit. In cases of serious violations, such regions will be publicly reported nationwide, and the responsible individuals will be held accountable according to applicable laws and regulations.