The government has announced it will stop licensing steel projects using outdated technology, following complaints of inordinate power consumption by local steel producers.
Some provinces have approved steel projects that use energy inefficient and environmentally harmful technologies, and this is one of the reasons behind the country's high power consumption, the government said in a statement on its website Tuesday, citing Industry and Trade Minister Vu Huy Hoang.
Hoang said such projects as well as others outside the government's plan for the industry are banned with immediate effect.
According to the development plan set for the industry, it was to have an output of 15-18 million tons of steel products by 2020. However, with aggressive and haphazard licensing, the combined capacity of existing projects has already reached 60 million tons per year.
National power utility Electricity of Vietnam (EVN) last week said part of the responsibility for power shortages in the country lay with steel producers, many of whom were using outdated technology that consumes a large amount of power.
EVN requested the government to tighten controls over the production technology used at steel plants. Large steel producers should be compelled to build their own power plants, it said.