The policy was announced this week by the National Development and Reform Commission.

More information will be available prior to implementation on January 1 next year but ANZ Research says the omens are not good.

While the general restrictions limiting ash content to 40% and sulphur content to 3% (30% and 1.5% for lignite) are unlikely to impact Australian and Indonesian coal, ANZ said more stringent restrictions applied to key population centres could affect as much as 30 million tonnes of Australian coal exports.

ANZ said the restrictions, part of China’s continued crackdown on pollution, limited the use of both domestically produced and imported coal with high impurity levels, so low-quality Chinese coal was arguably the most impacted, falling well below the impurity thresholds.

On face value, Australian exports are unlikely to be impacted by the rule, which says coal that travels beyond 600km across the mainland will need to meet more stringent conditions – ash content can be no greater than 20% and sulphur no more than 1%.

“Typical 5500 kilocalorie net-as-received Australian material contains ash content between 23% and 25% and sulphur between 0.8% and 1%,” ANZ said.

“Equally, Indonesian lignite is renowned for low impurity and would likely fall under the lignite ash and sulphur specifications.

“However, tighter restrictions for coal consumed in key population centres including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang and Guangdong may indeed impact seaborne material.

“Coal consumed in these regions will need to have ash content below 16% and sulphur below 1%, which means most imports into these regions will need to be washed/blended.

“These regions account for roughly half of China’s annual thermal imports, or 100 million tonnes.

“Australia supplies the whole of China with close to 60 million tonnes per annum – half of which could potentially be affected.”

Chinese domestic material – particularly high impurity coal produced in the northern part of the country, which carries ash content up to 40% and sulphur up to 4% – would be even more affected, as this material would not meet the general restriction or the more stringent major city restriction.

“Ultimately the devil will be in the detail,” ANZ said.

“The brief announcement from the NRDC sets out only high level points, no doubt expecting a level of renegotiation from domestic producers and importers alike.

“We expect more information to be available prior to implementation on 1 January 2015.”