Chinese Co-Chair: Wang Yangzu

International Co-Chair: Rudi Kurz

1. Main activities

1.1 Preparatory meeting

The preparatory meeting for the task force on the development of Chinese environmental protection industry(EPI) successfully held from April 11 to 12, 2002 in Beijing with the participation of 6 Chinese experts and 4 foreign experts. Mr. Wang Yangzu and Mr. Rudi Kurz were appointed chairman of each expert team. Working schedule and main activities discussed and formulated.

1.2 Three workshops

Workshop on the development and policy discussion for environmental protection industry in China was held from June 25 to 26, 2002 in Beijing with the participation of 6 Chinese experts and related staff from the environmental associations in Guangdong, Jiangsu, Shanghai, etc. Such topics as the development situation and suggestion of Chinese EPI, wastewater and waste gas treatment, municipal waste treatment, environmental service, environmental labeling and organic food, how to develop the Chinese EPI were discussed. Eleven papers were submitted in the workshop.(submitted to the second meeting of the third phase of the CCICED)

Workshop on the legal framework and development of EPI in Europe was held from t.28 to 29, 2002 in Frankfurt, Germany, with the participation of foreign experts.

Workshop on the EPI developing was held from Mar. 18 to 19 in Beijing, with the participation of all the task force experts and experts form Japan and Korea, and related commissaries from the environmental associations in Zhejiang, Fujian, Shandong. 18 papers were submitted in the workshop.

1.3 Three workgroup meeting

The first task meeting was held on Mar. 20, 2003 in Beijing. Discussed the suggestion of the development of Chinese EPI (first draft).

The suggestion of the development of Chinese EPI (first draft) was sent to the environmental associations of all the provinces, municipalities and main municipalities to discuss.

Because of the SARS, the 2nd task meeting planned to be held at June in Germany was rearranged to be held each from Jun. 26 to 27 in Germany and July 26 to 27 in China. The meeting discussed and amended the suggestion (first draft).

1.4 Compilation

Two compilations: the development and policy of China EPI, the market analysis of China EPI.(English/Chinese) in Nov. 2002

Environmental protection industry (English/Chinese), in Oct. 2003

1.5 Submitted the development suggestion of Chinese EPI

2. Main achievements

With the development for 30 years, Chinese EPI has become a system that has diverse and complete products and can basically meet the country’s demands, which are the technical and material base of pollution prevention, zoology protection and environmental quality improvement.

2.1 General situation of EPI

2.1.1 Industry scale

With the development for 30 years, EPI has become a comprehensive, diversified industry, including the production of environmental protection products, environmental protection services, comprehensive utilization of resources, ecological industry and production of cleaner products. The survey in 2000 indicates that there are 18,144 environmental protection industry enterprises, with 3.176 million workers and total profits of 168.91 billion yuan, taxes of 21.68 billion yuan, accounting for 1.9% of the GDP of the year.

2.1.2 Industry structure

Table 1-1 shows the developing situation of five fields in 1993,1997 and 2000.

Table 1-1 the structure of the national environmental industry

Note: some units in the investigation are engaged in many fields. So the sum of the units and employees in different fields are not equal the total number.

Environmental product manufacturing industry and environmental service industry are the traditional environmental industry. The investigation in 1993, 1997 and 2000 reflected that the units and employees were obviously decreased in the environmental product manufacturing industry. But the total annual income increased notably. The units and staff and the total annual income were all obviously increased in environmental service industry. It shows that the environmental product manufacture is developing towards the intensive industry and the environmental service has a very great developing potential.

2.1.3 Regional distribution

According to the survey of the industry conducted in 2000, environmental industry concentrated such developed regions as coastal areas and regions along the river. It is calculated that total annual income in Zhejiang and Jiangsu provinces exceeds 20 billion RMB, 10-20 billion RMB were obtained in Shandong, Guangdong, Liaoning and Hunan province.

From the mid of 1990s, the environmental industry began to quicken up the tempo in the west area. But the scale of the environmental industry is still in small size. There are only about 2940 units and 220,000 employees engaged in the environmental industry, about 16% and 7% of the total number.

2.1.4 Benefit analysis

The environmental industry has gained a certain economic scale and achieved good economic benefit. Compared to 1997, the total income, the profit, per capita income and per capita profit of environmental industry has increased 268%, 187%, 73% and 53% respectively in 2000.

2.2 The technique situation of environmental industry

2.2.1 Environmental protection products

The environmental product manufacture industry has become a system that has diverse and complete products and can meet the demand of the pollution treatment in technology and product structure. But the manufacture still focus on wastewater treatment equipments and air pollution control equipments, whose income were 9.45 and 9.11 billion yuan respectively, about 38.5% and 37.2% of the total income of manufacture.

•  Water pollution treatment equipment

Although the main enterprises were almost stand-alone and the integration was not high, the complete equipment supply has increased rapidly and the product variety and technology have been improved. The main problems are that the reproduction of the primary products was too large, the production serialization was discontented, the production level of complete equipment for sewage treatment computer control, membrane, biology and senior oxidization were scarce.

•  Air pollution treatment equipment

The dust catchers include multicyclone, electrostatic dust precipitator and fabric filter. The dust extracting-simple desulfurization equipment can be divided into middle and small sized ones, which can meet the market demand in technology and production. Electrostatic dust precipitator has reached world standard. Besides this, the fabric filter is another kind of dust collector which has many kinds of product and has reached high standard. The simple wet dust extracting- desulfurizing equipment has been developed and used widely, but still needs improving in the performance. There is still not domestic desulfurization treatment equipment for the power station. The production capacity of dust extracting- desulfurizing equipments in mid and small scare exceeds the domestic demand.

The manufacture of exhausted gas control equipments has become specialization and in large scale. The related technologies of the toxic and harmful gas treatment equipments include filtration, condensation, adsorption, absorption, combustion, catalytic oxidation-reduction, electron beam radiation and biological treatment. For its the complex variety and R$D fund shortage, The biological treatment of toxic gas is still in the lab research stage.

•  Solid waste treatment and disposal equipment

The municipal refuse disposal and industrial wastes treatment are still under developed. The treatment device and integrated utilization equipment are still in primary stage. The production of vehicle for municipal garbage transportation has been achieved certain scale. But the penetration-proof material for landfill, the machine for landfill, separating machine, composting machine, large-size incineration equipment and some complete equipment are still in developing stage.

•  Noise and vibration control equipment

The passive noise and vibration control equipment can meet the demand in China on the whole. And the function gap between the domestic and abroad products is narrow, some even at advance in micropore sound absorption and muffler. However, the quality, design and consistency of the equipment were unstable. There are no successful products on active noise and vibration control in domestic market. This falls far behind the advanced countries. Low noise equipments include low noise fan, low noise cooling tower, low noise motor etc, but the quality and producing technical gap between the abroad ones is far.

•  Environmental monitoring apparatus

The sales of environmental monitoring apparatus in 2000 is 1.3 billion yuan. The apparatus for sampling and analyzing can meet the domestic demand on the whole. The online monitoring equipment made in our country began to be used through import, assimilation and nationalization. But the kinds, consistency and reliability can’t meet the monitoring demand. The import trend hasn’t been changed.

•  Medicament and material

The medicaments and materials used for pollution control can meet the domestic demand on the whole mow. Stability, quality, consistency and diversity of the products are a little behind the developed countries. Some products are almost good enough to match the overseas advanced products.

2.2.2 Environmental service

The environmental service includes technology service, environmental consultation, operation of the pollution control facilities, environmental trade and finance service.

The environmental technology and product R&D was accomplished mainly by traditional research institutes and universities. The enterprise development system hasn’t been built up.

Our country can design and construct the treatment engineering on municipal wastewater, industrial wastewater, water recycle, dust removal and desulfurization, exhausted gas, noise and vibration. But the technology and design capacity on municipal refuse and dangerous wastes disposal are still in primary stage.

The units engaging in the environmental monitoring and analysis are mainly in environmental technology protection sectors, environmental research institutes and monitoring sectors. from recent years, some environmental firms and universities took part in the environmental monitoring and analysis.

Environmental consultation includes environmental impact assessment, environmental engineering consultation, environmental supervision, authentication of environmental management system and environmental symbolized products, authentication of organic food, environmental technology evaluation, life-cycle product evaluation, audit and training of cleaner production, environmental service and so on.

The units working for the environmental impact assessment are mainly from environmental protection sectors, environmental research institutes and universities. From recently years, some environmental consultation firms joined into this field. By the 20 years development, the policy, technical criterion and stuff’s ability of environmental impact assessment has become more and more perfect. The environmental impact assessment plays more and more important effect in the construction and developing management.

The whole level of environmental management system, environmental symbolized products, environmental information service, environmental engineering consultation, environmental audit, technology consultation on environmental engineering, environmental supervision needs improving.

Operation on the pollution treatment facilities is a new career, it will greatly develop in the pollution control field for its low cost and high efficiency with strengthening the environmental law and consummating the environmental economic policy.

The environmental finance industry is in primary stage. The exterior cost of environment and the existing system of investment and financing are restricting the development of the environmental finance industry.

In a word, the structure defect is obvious in the national environmental service, which restricts the development of the whole environmental industry.

2.2.3 Natural and ecological protection

The state paid more attention on natural resource and ecological protection, which now are the major point in the national development plan. However, the whole level of the industry is still low and stuff working for the industry is discontent. The investment in this field is insufficient. The development is in imbalance state. In the aspects of agriculture ecological protection, water source place ecological protection, ecological function district protection, sand prevention and desert ecology resume, the multiformity of biology protection and so on need quickening the development.

2.2.4 Resource recycle and reuse

The scale of resource recycle has been expanded and the level has been improved gradually in our country. Some corresponding encouraging polices have been published. However, some favourable policies for resource recycle haven’t been executed well. The investment is insufficient. The technology and apparatus fall behind the developed countries. The ecologic technology of industry is still in the primary stage. So the plan of the industry establishment on natural resource recycle and reuse should be strengthened according to the developing recycle economy theory.

2.2.5 Cleaner products

Cleaner products mean the environmental friendly products in the life cycle, named as harmless products or low harmful products. This field is in the primary developing stage and needs more improving.

2.3 Current problems of China’s EPI

2.3.1 Chinese EPI has made rapidly development in recently years, but the contribution to the national income is little and there is still huge developing space.

2.3.2 Unreasonable industrial structure and regional distribution

At present, the scale of environmental industry is small and the number is huge, which results in the relative low situation of the industry supply capability and level. The industry is short of big units and not fit for the market demand. The environmental service industry needs more development.

2.3.3 Compared with technical policies and market mechanisms, national policies for environmental protection industry impact the development of this industry much more deeply.

2.3.4 Although the environmental industry has formed certain scale, the environmental capital market is still not come into being.

2.3.5 Low technical content in the environmental protection product, low level of standardization and serialization, insufficient of innovation ability

2.3.6 Disordered market, serious local protectionism .

2.3.7 Weak competitiveness in international market of environmental protection product

2.4 The demands for environmental protection in the national Tenth-Five Year Plan

2.4.1 The investment demand

To realize the environmental objectives in the tenth-five year plan, it requires about 700 billion yuan in environmental protection, about 1.3% of the GDP, 3.6% of the national fixed capital investment. it requires:

• about 270 billion yuan in wastewater treatment
• about 280 billion yuan in air pollution treatment
• about 90 billion yuan in solid waste treatment
• about 50 billion yuan in ecological protection
• about 10 billion yuan in environmental infrastructure

2.4.2 the investment source

•  Form government

It requires 394 billion yuan, about 56% of the total investment demand. That is mainly from municipal construction maintenance fund, the finance budget investment, the charge of wastewater and rubbish treatment and others.

•  From enterprise

It requires 306 billion yuan, about 44% of the total demand. Which is undertaken by the pollution enterprise according to the rule that who pollutes the environment should pay the charge.

170 billion yuan is invested in new and rebuilt industrial engineering projects. In order to control new pollution source, “three stages in the same time” system should be strictly executed and the environmental investment should be sufficient in the project plan.

It requires about 86 billion yuan in old industrial projects on pollution control. The investment is mainly undertaken by the enterprises or loaned from the bank.

It requires about 50 billion yuan in closing, moving and repairing factories due to their serious pollution. The investment is mainly raised according to the concerned national policy.

In order to fasten the rate of the enterprise pollution treatment, the state will supply certain assistance and interest of the loan for the important pollution treatment projects and the technology demonstration projects.

•  From the society

Reform the pollution charge regulation and environmental protection investment & finance system. Stimulate and collect the social funds by the market mechanism.

2.5 The important field of environment industry development in Tenth-Five Year

2.5.1 wastewater treatment

•  Municipal wastewater

Focus on: technology and whole sets of equipment used for municipal wastewater treatment plant with capacity of more than 200 thousand tons per day and 100 thousand tons a day, and used for wastewater treatment and recycle in residential area.

•  Industrial wastewater

Focus on: technology and equipment or whole sets of equipment for multifunction water treatment, high organic water treatment equipment and technology.(in the fields of ferment, medicine, paper making, chemical engineering, coal, breed, etc. )

•  Water saving and wastewater exchanging to water resource

Focus on: technology and equipment for water saving in the industries of firepower plant, weave, petroleum chemical engineering, paper making, metallurgy, etc. Technology and equipment for industrial wastewater recycle and reuse in technics and circle water supply. Integrated utilization of municipal wastewater, water recycle and reuse in residential area, integrated utilization of sea water or salt water and desalt process.

•  Water body pollution treatment

Prevent and treatment of nonpoint pollution and eutrophication: the technology and equipment for senior biological treatment, ecological treatment, bottom sludge dredge, high efficient utilization of agriculture fertilizer, wastes disposal from livestock plant.

Prevention of sea pollution and coastal pollution: technology and equipment for wastewater treatment for the ships, wastewater treatment from oil extraction, leakage oil treatment, wastewater treatment for the ports.

Repair of slight pollution water body: developing the technology and equipment used for repair and rehabilitation of every kinds of water body and slight pollution water body.

2.5.2 Air pollution treatment

 The technology and whole sets equipment for desulfurization and dust control: used mainly for power station and middle-sized boiler

To control the development of the normal electrical precipitator, and extend the electrical precipitator to the treatment of high concentration, high ratio resistance soot, causticity gas and so on. To develop the monitoring apparatus and equipment, reduce the weight of main body, improve the standard and kind of material, consummate the technology of choosing type by computer. To develop the impulse power supply, microcomputer control, the equipment of adjustable pressure power, and the middle-small type electrical precipitator in propriety degree.

To develop the material and electrical fitting’s performance of the bag-type collector, and the quality of the product. To develop the new products that are resistant to corrosion, high temperature and high moist, and develop the bag-type collector that can treat 105 m3 gas, bear above 250℃ with above 3 years use age.

•  The equipment and technology for exhausted gas control

Focus on: high efficient and long life catalyst, design and manufacture the exhausted gas purification equipment in whole. Produce the high efficient and long life catalyst of exhausted gas, particulate control technology for diesel cars and catalytic technology for NOX removal gradually. Promote the development and industrialization of motor technology of using nature gas, liquefied petroleum gas and blend fuel, and of the exhausted gas control technology.

•  The equipment for toxic and harmful gas control

Focus on: the technology and equipment used in catalyze combustion for organic gas purification; organic gas recycle by carbon fiber; the biologic technology and equipment to control harmful industrial gas and malodor.

2.5.3 The treatment of solid waste

•  The technology and equipment for municipal solid waste

Focus on: the equipment and technology for the collection, separation, pretreatment; the technology and whole sets equipment for large-middle scale solid waste incineration with steady run and high economical efficiency e.g. incineration, generate electricity, surplus heat utilization, landfill and compost. The key technology and equipment: the whole sets for the landfill gas callback and reuse, new protection against the seep and overcast materials, landfill equipment, the technology and whole sets equipment for the landfill filtration water treatment, the technology and whole sets equipment for large style and simple style composition, the technology and equipment for non-oxygen treatment, the technology and equipment for the solid waste used to be fertilizer, construct material.

•  The technology and equipment for dangerous solid waste disposal

Focus on: the whole sets equipment and central treatment and disposal technology for the dangerous waste, the high temperature safe incineration technology and equipment, use as resource, valuable mental callback and recycle and so on.

2.5.4 Resource recycle and reuse

Mainly on integrated utilization of associated mineral; the new art for integrated callback and recycle gold, argentine, iron, rare soil, niobium, vanadium, titanium from associated mineral; improve the kaolin soil performance such as white chroma, particle size, and develop the integrated utilization technology for allophane, saggar, sulfur iron mine, diatomite and so on; quicken the development and application of the technology for gangue producing architectural material and processing utilization.

Use industrial solid waste to produce new architectural material; establish demonstration engineering projects with high technology, good profit and certain scale; form the advanced, in point technics and whole sets equipments for resource recycle gradually.

Establish the callback and recycle center of past-use household electronic equipment and car, waste paper, waste glass, waste plastic, waste tyre, waste battery and so on.

2.5.5 The equipment for noise and vibrancy control

Focus on: multifunction muffler, sound absorption component, vibration isolation and decrease component, low noise draught fan, muffler used for vehicle, and some special muffler and vibration decrease equipment.

2.5.6 Environmental monitoring apparatus

Focus on: automatic sampler, pretreatment equipment, flux meter, continuous and automatic monitoring equipment and system for CODcr, BOD5, TP, TN, ammonia nitrogen, cyanide, volatile phenol, oil, dust, sulfur dioxide and some other major pollutants, emergence monitoring equipment, alarm monitoring equipment, portable apparatus, electromagnetic monitoring instrument.

2.5.7 Environmental agents and materials

Focus on: desulfurization agent, sulfur fixation agent, agents for water treatment, membrane material, filler which is resistant to high temperature and corrosion and has long life, material for landfill, material for sound and vibration absorption, isolation and so on.

2.5.8 Environmental technology service

Built up the environmental innovation system based on combination of “produce, study and research” mainly by enterprises to speed the industrialization; set up the authentication system for environmental examining organization; improve the social service for environmental monitoring.

2.5.9 environmental consultation service

Promote the ISO14000 environmental management system, establish the third party authentication on environment symbolized products, environment technologies, environmental protection products and organic foods; develop the consultation service on environmental management and engineering, cleaner production audit, the consultation of environment technology, investment and finance, information and so on; improve the decision level and the supervision on environmental engineering.

2.5.10 Operation of pollution treatment facilities

Improve the market service on construction and operation of environmental infrastructure; improve the social service on industrial wastes treatment; accomplish the centralization of treatment, multi investment, socialization of service, operation market establishment, efficient enterprise management, and specialization of the staff; form the high efficient and low cost service system.

2.5.11 Environmental trade and finance service

Build up the extending and bargaining system for environmental technology; improve the import and export business on environmental technology, cleaner products, organic food and whole sets of equipment for pollution treatment; reform the pollution charge system and investment system on municipal wastewater, municipal solid wastes, sulfur dioxide, and industrial waste; improve the development of capital market and finance service for environmental industry.

2.5.12 Natural ecological protection

Improve the technology development and example establishment on treatment of water and soil lost and desertification; develop the water saving and irrigation technology used in arid area, sand area, and karst area; select the plant species resistant to drought , arid, and saline-alkali and use them in industry; rehabilitation of the polluted soil.

2.5.13 Cleaner products

Quicken the internationalization of the environmental symbolized products; develop the environmental symbolized products on biodegradation, recycle, low harmful, less pollutant discharge, water saving, energy saving and health protection.

2.6 The contradiction between supply and demand

The industrial supply and demand is the two basic factors to complete the existence and development of and industry. The efficient supply and demand is the two basic conditions of industrial development. The industrial development will be radically influenced if neither supply factor nor demand factor has some problems. At the same time, there is some particularity for environmental industry. Compared with other industries, environmental industry mainly depends on the government policies to guide the social demand and adjust the balance of supply and demand.

The own development of environmental industry under the economic environment of our country necessarily lead to these problems, and sometimes they are related to government policies.

Environmental industry has its particularity compared to others, which needs the governmental policy to lead the social demand and adjust the balance of the supply and demand. If the environmental industry under the market economy system needs to be continuously and healthily developed, it must depend on the government’s intervention and interference. Only effectively combining the government’s intervention and market function, the environmental protection industry can healthily develop.

2.7 International environmental industry trends

In many OECD countries, the environmental industry has displayed very high growth over the last 20 years. In the United States, growth has been around 5% per year, with highest growth in the segment of environmental engineering and construction. In Germany, which has the largest environmental market in the European Union(EU), growth in the environmental industry is estimated at 5-6% per year.

Forecasts point to higher growth rates in the future. Growth is being dr