Abstract: The paper employs public policy research method to analyze China’s policy implementation mechanism on reducing scattered coal consumption, and put emphasis on policy drawbacks. The results show, China's scattered coal policy is driven mainly by environmental protection actions, is implemented mainly by target responsibility system, is featured by administrative means. Despite obvious achievements, current scattered coal policy faces many challenges in the long run, including: weak scientific basis for policy formulation caused by unclear object and scope of scattered coal control, weak cross-department coordination ability, ever-increasing local financial pressure, and insufficient market mechanism and so on. Aiming to addressing these challenges, the paper puts forward corresponding countermeasures from the aspects of scientific basis, department coordination, market mechanism, and standard system.