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The city of Beijing has just announced that it will ban the construction of any new oil refining, steel, cement, and thermal power plants as well as preventing the expansion of any existing plants, in order to try and clean up the city's air and reduce pollution.

China is the largest polluter on the planet and the problem of smog in some of its major cities has been well documented over the past year or so. In January 2013 smog was so bad in Beijing that visibility was reduced to less than 200 metres, grounding flights in and out of the city, closing highways, and forcing many people to stay indoors.

Public dissent over the environmental cost of the country's economic development threatened to blow and in an attempt to appease any anger the central government drew up a pollution master-plan in September, which aimed to reduce the energy sectors dependence on coal and close any outdated and highly polluting industrial plants.

This new document, published on the Beijing government's website last week, is part of the nation's master-plan and will be put into motion starting in March.

The document was approved by local lawmakers last week and commits the city to reduce its total emissions of PM 2.5 (any airborne particles less than 2.5 micrometresin diameter), a key component of air pollution, by 5% before the end of the year.

As part of the new clean air laws Beijing must also work hard to reduce the number of vehicles on its roads and establish zones in which high carbon fuels such as coal will be completely banned.

According to Reuters any company working in Beijing that fails to install low-emission technology, or doesn't meet pollution standards, could face a maximum penalty of 500,000 yuan ($82,600), and then have their permit for emission allocation cut for the next year, requiring them to work even harder to reduce emissions.

Zhou Shengxian, the Minister of Environmental Protection, stated earlier in the month that the Chinese government was working on a nationwide pollution permit trading system that would work to use market mechanisms to try and reduce levels of pollution.

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Written by Joao Peixe at Oilprice.com.