Following are key details on China's steps, outlined this week, to rein in a refining industry that recently surpassed the United States to become the world's largest.The overall capacity cap, first unveiled in October 2021 as part of a plan to reach peak carbon emissions by 2030, is aimed at curbing excessive domestic refinery production and supply overhang to reduce greenhouse gas emissions.
The cap will also help curb China's already high reliance on imported crude oil, which stood at 76 per cent last year.Refining capacity in China increased last year to 920 million metric tons per year, or 18.4 million bpd. That growth has resulted in a low refinery utilization rate of 73 per cent in 2022, based on official output data, compared with more than 91 per cent in the U.S., which means China has surplus capacity to allow for large volumes of refined fuel exports.
In recent years, the cap has stood at an annual 243 million tons, or 4.86 million bpd and actual grants have run below that.