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China's Shanxi Sees Truck-to-Rail Shift for Coal



June 17, 2020 - China's major coal-producing Shanxi province has pushed for a shift from trucks to rail for coal transportation in a bid to reduce vehicle tailpipe emissions.

Designated railway lines should be built to connect all major coal mines in the province this year, according to a document released recently by the Shanxi ecology and environment bureau.

Rail shipping within the province should account for more than 80pc of coal and coke transportation this year, while the two commodities should only be railed when leaving the province. This would mean a rapid shift given that coal rail haulage currently accounts for only 40-50pc of overall coal transportation within the province, and about 80pc of coal is shipped out of the province by rail, an official at a major Shanxi-based coal producer told Argus.

The shift from trucks to railways for hauling coal could raise costs over short distances but is likely to reduce logistics costs for long-distance transportation.

The province's ecology and environment bureau has asked railway operators to prioritise the shift to rail for the shipping of coal, coke, iron ore and steel. The bureau also wants the shift to rail in order to cut emissions from diesel-fuelled trucks and to reduce the overloading of trucks.

Shanxi aims to raise the haulage of commodities by the railways by 200mn t this year compared with a 2017 baseline, the ecology and environment bureau said without giving a specific haulage figure.

China has gradually banned coal inbound deliveries by trucks to most coal handling ports since 2017 in a bid to combat air pollution problems.

The outbreak of Covid-19 early this year provided a setback to China's efforts to increase the national shipping of coal by rail. Rail haulage of coal was 560mn t in January-March, down by 6pc on the year, according to the national development and reform commission. But this drop is likely to be temporary given the government's goal of reducing the trucking of commodities.