Shanxi province has introduced new rules curbing water use for steel, cement and aluminum production, state media reported.
Under the new policy, producers which exceed mandatory water usage standards will have to pay incremental levies, Xinhua said, citing Shanxi's Development and Reform Commission.
The levies, which came into effect last Friday, range from doubling the cost of water if usage exceeds standards by less than 20 percent, to five times the cost and the potential cutting off of water supply in cases where usage standards are exceeded by more than 60 percent. China has ordered steel and aluminum producers in 28 cities to slash output as part of a war against winter smog. Coal-rich Shanxi has vowed to cut its pollutant PM 2.5 concentration by 40 percent from October to March.