According to Economic Council of Inner Mongolia Autonomous Region, while implementing the policy of quota production for ferro alloy and calcium carbide industries, Inner Mongolia Autonomous Region plans to expand much more outdated capacities in these industries.

Basing on the rich resources like coal,  silica and iron and so on, Inner Mongolia has become an important production and export base of ferro alloy and calcium carbide and so on since 2000. But these industries have high energy consumption and high pollution, with a ton of calcium carbide consuming 3,000 KWH of electricity, and a ton of ferro alloy consuming several thousand KWH of electricity, while pulls out a lot of waste gas and dusts, having a big effect on the environment.

Therefore, the Inner Mongolia government took measures to limit the output of calcium carbide to 5.00 million tons and that of ferro alloy to 3.00 million tons in 2007. The company who used up the quota will be cut off electricity supply, and no quota to these higher energy consuming and pollution companies. Meanwhile, fifty-seven ferro alloy producers and five calcium carbide producers were forced to stop production in 2007, with the demolished capacities totaled 270,000 tons and 100,000 tons respectively.

To boost the energy saving and emission decreasing, Inner Mongolia Autonomous Region plans to demolish 1.00 million tons of ferro alloy capacity and 2.00 million tons of calcium carbide capacity during the "11th Five" period, up from 600,000 tons and 1.20 million tons. In 2008, local government targets at demolishing capacities of ferro alloy and calcium 600,000 tons and 200,000 tons respectively in 2008.