September 8 (China Daily) --
David Bohigian, US Commerce Assistant Secretary, is now leading the third US
Clean Energy and Environment Trade Mission to
China
. Comprising 19 leading clean
tech enterprises, the mission is another example of the allure of
China
's
clean technology market.
The US government projected the
market will increase to $186 billion in 2010 and to $555 billion in 2020 as the
nation pushes forward the use of renewable energy and steps up efforts for
environmental protection. Bohigian spoke with China Business Weekly reporters
Ed Zhang and Wang Xu about how the two nations can lift their cooperation on
energy and environment protection to the next level.
Q: What are the results of
meetings with Chinese officials?
A: This morning, we met the new
Minister of Environmental Protection. We also met a host of officials from the
National Development and Reform Commission. They had important talks with our
companies to help them understand better how to deploy clean energy
technologies in
China
.
It's really a great opportunity for the companies on the mission to understand
some new regulatory and legal frameworks that you have here, whether it's the
new Circular Economy Law, or the Renewable Energy Law. All of these provide
great opportunities for
US
renewable energy and environmental protection companies.
Q: What are you focusing on with
this mission?
A: This is the first time we have
included environment technology firms with the clean energy firms. The first
two delegations were mainly composed of clean energy firms. Now we bring a
whole new sector here to help address some of the real issues
China
has had over the past several
years. I think it's important to help these companies to meet Chinese
businesses to make new deals. That's what's new and exciting about this
delegation. Thanks to the previous two missions, hundreds of millions of
dollars of technology have been deployed here. And we hope for similar results
for this mission.
Q: Could you give us an example
of achievements of the previous two missions?
A: One of the best indicators of
interest from the previous mission is that we got a number of companies again
on this mission coming back to
China
to deepen their relations with the business community and the officials. We
have had real results as well. During the previous two missions, the Guangzhou
Bus Company bought 20 clean energy buses from US-based Eaton Group. Since then
there were 200 more clean energy buses, purchased by Guangdong Bus Company.
Q: In the near future, what's the
focus of the 10-year energy and environment cooperation framework of the two
countries?
A: The 10-year framework we put
in place includes transportation technology, clean energy technology, clean
water, clear air and forestry and wetland protection. All these five elements
are crucial for our cooperation in the years ahead. What we are doing now in
the first year of the 10-year plan is to develop deeper relations and really
build the trust to make sure we meet our goals such as
China
's Five-Year Program.
Q: Which
US
technologies do you think have the greatest
market potential in
China
?
A: If you look at
China
's energy mix, coal still provides the
majority of
China
's
fuel. So clean coal technology and carbon capture technology have a major
opportunity in the years ahead really. When you look at
China
's renewable energy targets
between 2006 and 2010, solar and wind play a large part. And hydropower also
has real potential. Obviously, the work we have done together in civilian
nuclear applications is a major area of cooperation.
And clearly there is great
potential on environmental technologies, such as clean air and clean water
technologies. Each one of the areas has real opportunities for cooperation.
Q: There are a lot of companies
involved in energy protection, ranging from State-owned companies to those from
private sectors. What are the majority of US clean tech companies' clients in
China
?
A: Later this week, we will be in
Jinan
, the capital city of
Shandong
province. The provincial government
is holding a green exposition over there and there will be more than a thousand
Chinese firms attending the expo. Then we are going to
Guangzhou
and
Nanjing
.
With this schedule we see real opportunities at local levels. One thing
important to know is the pollution prevention energy efficiency program that
will be introduced later. That program enables end-users, industrial firms, and
power producers to work on a polluter-pays principle. The benefit of the
program is that the firms could deploy their technology at no cost to the users
but they share the savings on pollution charges between the two of them.
Q: What are the areas that
China
can improve to boost the development of the clean tech sector?
A: Areas such as IPR,
market-based pricing, and the ability for US companies to not merely transfer
technology but to enter into different types of relationships with Chinese
partners. Improvements in these areas will be important to help our
relationship move further. Our companies are pleased with the policy
opportunities such as the recently passed Circular Economy Law and the like.
September
5 (China Daily) -- A national check on energy-saving performances of over 900
industrial enterprises in 2007 shows there is a great potential to cut energy
intensity. The total energy that these firms had saved in various ways last
year was equal to 38.17 million tons of coal.
What
was impressive was the way they spared this amount of amount of energy rather
than the amount itself, according a report published by National Development
and Reform Commission (NDRC).
The
message is that the degree of emphasis that an enterprise places on
energy-saving makes the difference. The heavier the pressure is from
governments, the greater are the efforts the enterprises make in cutting their
consumption of coal, gas or oil.
All
these enterprises had signed responsibility documents with relevant government
departments to achieve specific goals in energy-saving. And 879 of them
completed their yearly goals in cutting energy consumption per unit of output,
thus accounting for 92.02 percent of the total firms checked.
It is
no coincidence that more than 91 percent of these firms have made specific
energy-saving plans. They have broken up the total amount of energy that they
must cut on an annual basis for workshops or even groups. The amount of energy
to be saved by a workshop or a group has been linked to the economic benefits
of all members in the workshop or group. Failure to save the required amount of
energy means less bonuses or even fines.
Little
wonder that many of these firms have worked out ways to collect heat or other
forms of energy discharged and then reuse them.
The
total sum of money these enterprises had invested in technology innovation for
lowering energy intensity amounted to more than 50 billion yuan in 2007. Which
was much more than what they had spent on this earlier. The more than 8,000 new
energy-saving technologies are expected to save 200 million tons of coal
annually.
The
Chinese government has set itself a goal of cutting energy intensity by 20
percent between 2006 and 2010. That means 4 percent for each of the five years.
But energy intensity was cut by 3.66 percent in 2007 and only by 1.23 percent
in 2006. The percentage in the first half of this year reached 2.88.
In
spite of the fact that only a quarter of the five-year goal has been reached
during the past two years, the check results are inspiring. They show the great
potential that enterprises have for achieving their targets.
What
is even more encouraging is the severe punishments by NDRC for those firms that
have not met their goals. They are given one month to make specific plans for
fulfilling their goals, and then a specific period of time to meet them. Those
who fail will be deprived of the benefits of the government's preferential
policies, which their successful counterparts will enjoy. And the approval of
their increased land for industrial use will be suspended.
With
the resolve of the central government and efforts by the enterprises, it should
be possible to meet the energy-saving target.
September 1 (China Daily) -- In
tandem with the growing need for energy efficiency and environmental
protection,
China
is in critical need of energy- management-related expertise, which is essential
for any practical solution to its environmental problems.
Yet the complexity of the
technical know-how required - including energy consulting, design and auditing
- means professional and specialty training would be the prerequisite to
helping the country achieve its goal to reduce energy consumption per unit of
GDP by 20 percent within the 11th Five-Year Plan (2006-2010).
This vast market potential has
already attracted international players in the energy field. Following an
agreement signed between German Energy Bureau and
China
's
State Administration of Foreign Experts Affairs (SAFEA) in March this year,
which opened a joint training program for
China
's
energy managers, the Association of Energy Engineers (AEE) from the
United States
has also brought its expertise to
China
.
The program trains Certified
Energy Managers (CEM) through a five-day training and examination program.
Since its inception in 1981, the CEM credential has become widely accepted and
used as a measure of professional accomplishment within the energy management
field in the
United States
and abroad.
Jointly launched by AEE and
SGS-CSTC Standards Technical Services Co, Ltd under SGS Group, the world's
leading inspection, verification, testing and certification company, this
training program targets energy management personnel from Chinese enterprises
and requires a minimum entry level of related education and work experience. It
is expected to bring Chinese energy managers to a level of competence that
allows them to be productive in the energy engineering area.
"The importance of this
training program is large for
China
,"
says Bruce Colburn, director of the AEE CEM China Team. "Although you have
very capable and trained engineers in general, energy efficiency is a specialty
area which we find requires additional enhanced training."
"(We think) CEM is the
vehicle to use to bring rapidly a high level of understanding on behalf of the
Chinese technical community," he says.
Jiang Jianxin, electric
supervisor from Shanghai Science and
Technology
Museum
, says the
technical know-how of energy management is what Chinese enterprises need most
in their current move to reduce energy consumption driven by mounting energy
costs.
"Many Chinese enterprises
think that if you want to cut down energy consumption, you need to invest a lot
in buying energy efficient equipment, but that's not true. Energy conservation
relates more to a proper level of management. Even if you have very efficient
equipment in the first place, their efficiency will get impaired as time goes
by. So what you need basically is how to control costs through technical
renovation and proper management." Jiang tells China Business Weekly,
adding that he himself is very interested in enrolling in such a training
program.
"We have been progressing on
an annual four percent reduction in energy consumption in the past four years
through consistent energy management," says Jiang. "But it would be
highly desirable if we could get more systematic training."
According to Zhou Jichao, energy
analyst from the AEE CEM China team, SGS and AEE are currently running the
first of what they hope would be many hundred such training programs in
China
,
which would be extended into fields such as energy auditing as well. The
benefits, says Zhou, can be simply defined in terms of cash savings in that the
training program could help cut energy consumption by 5 to 15 percent on
average.
"It is not unusual for
people after the training to go back to their factories or commercial
enterprises and identify and help implement low cost energy saving measures
that can more than pay for the cost of the training program itself within
weeks. The program pays for itself and pays rapidly." Colburn explains.
According to Shen Longhai,
director of the Energy Service Company (ESCO) Committee of China Energy
Conservation Association,
China
lacks professional talents in energy management in general. Although there are
a lot of energy related training programs in
China
, the country still does not
have its own official energy manager certificate competitive enough to gain
national recognition.
"
China
needs to accelerate the
cultivation of energy managers in terms of energy planning, auditing,
measurement and verification as the key to promoting the implementation of
energy efficiency projects throughout the country. Education is always the
first step to get the public to realize that energy conservation brings
long-term returns-on-investment apart from immediate environmental
benefits," Shen notes.
China
is nevertheless stepping up efforts to
raise the level of energy efficiency. In the newly issued Law of the People's
Republic of
China
on Conserving Energy starting to take effect on April 1, 2008, key
energy-consuming companies are asked to submit their energy consumption reports
each year and have their energy management personnel attend related training
programs.
Meanwhile, the country is making
headway in supporting the development of ESCOs as the vehicle to help more
companies in the industrial sector to reduce their energy bills and carbon
footprints , Shen says.
With a comprehensive service
package including energy efficiency analysis, project design, installation and
construction, and M&V of energy savings, ESCOs generally assist energy
consuming enterprises in achieving energy conservation with both retrofitting
plans and new construction projects. It is carried out through the Energy
Performance Contracting (EPC) mechanism, which is a financing technique that
uses cost savings from reduced energy consumption to repay the cost of installing
energy saving equipment.
Statistics from China Energy
Conservation Association show that the amount of energy saved from EPC projects
in
China
has increased from 560,000 tons of coal equivalent in 2003 to over 3 million in
2007.
"However, more preferential
policies from the government are still needed to help finance those small and
medium sized ESCOs in their efforts to disseminate energy saving technologies
to commercial enterprises," Shen says.
September 22 (Xinhua) -- Foreign financial agencies are eager to play a
role in
China
's
coal industry, as the world's No.1 coal producer looks to diversified sources
to finance the fast-expanding industry.
As the world's No.1 producer and consumer of coal,
China
needs more energy, especially
coal, to fuel its booming economy.
"The central bank would continue to encourage coal companies to
seek multiple channels to raise funds, including securitization, direct
financing and energy fund," said Ma Delun, vice governor of the People's
Bank of China, at the China (Taiyuan) International Coal and Energy New
Industry Expo 2008.
"Although China's coal industry has good returns, it is still weak
in funding the industry development by itself, notably in the areas of coal-to-liquid
(CTL), coal-bed gas exploration, and coal gasification, which are challenged by
huge investment risks," said Mao Jinmin, director of the People's Bank of
China's Taiyuan branch.
"
China
needs diversified investment sources and professional financial services to
nurture the coal industry," he said during the exposition.
In
Shanxi
, where one third of
China
's
coal output are churned out, private capital are commonly used to finance
traditional coal mining, which is environmentally-risky. While the application
of clean energy technology and deep processing of coal are capital-strapped.
On a energy forum held during the exposition, professionals from many
overseas financial institutions suggested
China
utilize international capital
market to fund its industry. The world's leading mining firms such as Rio
Tinto, Anglo American Xstrata and
China
's Shenhua are all good
examples, they said.
"Many energy companies including Sinopec and PetroChina saw good
market value and P/E ratio after getting listed in Hong Kong bourse, "said
Huang Xingling, deputy representative of Hong Kong Exchange's Beijing Office at
the forum.
She said the overseas listing could not only raise fund, but also help
improve the corporate management and enhance the company's international
reputation.
"Since bank loans, the main source of capital for China's coal
firms, were no longer easy to get as a result of the nation's tight monetary
policy, we advised that company make good use of listing, corporate bonds,
private fund and merges and acquisition to raise money," said Wang
Zhonghe, managing director of Deutsche Bank China.
Deutsche Bank has helped many Chinese energy enterprises raise funds in
overseas in recent years. In 2005, as the main underwriter for $3-billion-IPO
for Shenhua Group, Deutsche Bank helped secure the subscription of many
institutional investors despite the big fluctuation in global capital market.
Ede
I jjass, deputy director of the World
Bank's sustainable development department, said the bank has invested
in many coal processing projects in
China
. It is in talk with
Shanxi
on a plan to
finance a coal-bed gas development project.
"To support the development of clean and renewable energy is our
important goal," he said at the forum.
At the exposition, the
US
coal mining machinery producer Taggart Global, LLC not only presented its
mechanical solution program, but also allied with US Quintana Capital Group to
provide financial services to support
China
's coal firms in coal chemical
and coal-bed gas exploration.
Xinhua leart from sources with the provincial government that
Shanxi
is considering
large-scale listing of the coal enterprises in the province to take advantage
of the global capital market.
Insiders noted government should beef up policy support, including
lowering the threshold of the entrance of the foreign capital and further
encouraging the participation of private funds.
China
’s renewable energy develops
rapidly
September
18 (Asia pulse) --
China
's
renewable energy industrial sector develops rapidly with the government
support.
The
sector started to enjoy favorable policy in 2006, and received investment
topping $12US billion for its projects in 2007. The amount of renewable energy
utilized equaled to about 220 million tons of standard coal in 2007, accounting
for 8.5 per cent of total primary energy consumption, which is expected to
reach 10 per cent in 2010.
According
to the statistics, small hydropower generating units outgrew large ones in
newly added installed capacity in 2006.
China
's hydropower installed
capacity reached 145 million kW in 2007.
China
has
promoted development of wind power via franchise bid. In 2006,
China
's
wind power installed capacity reached 1.33 million kW, more than the total
amount in the past twenty years. In 2007, the installed capacity of wind power
increased by about 3.40 million kW to 6 million kW.
Meanwhile,
the power output of biomass energy reached 2 million kW in 2007. The solar
photovoltaic output has grown rapidly in recent years, and amounted to over
2,000 megawatt in 2006. The renewable energy is key for
China
to maintain sustainable
economic development, said Shi Dinghuan, chairman of the Chinese Renewable
Energy Society.
By
2020,
China
's
renewable energy is expected to take up 15 per cent of the total primary energy
consumption. That means the installed capacity of hydropower and wind power has
to reach 300 million kW and 30 million kW respectively.
According
to the current development pace,
China
's actual installed capacity
of wind power will far exceed 30 million kW by 2020, and installed capacity of
biomass energy and solar energy will reach 30 million kW and 1.8 million kW
respectively. The amount of
China
's
renewable energy utilized is expected to equal to 600 million tons of standard
coal by 2020, which is significant for greenhouse gas reduction and ecological
protection.
The
Chinese government will further strengthen international exchange and
cooperation in renewable energy development.
It has
formulated plan to promote technology cooperation with foreign government and
enterprises, said the source.
September
22 (China Daily) -- The coming two decades, for sure, will witness
China
's growing
demand for more energy sources to drive its fast economic growth. But 2018
should be a pivotal year.
Before
that, the energy demand growth rate will keep rising and after the year, it
could ease off if
China
realizes the peak of its industrialization and urbanization.
Chen
Jiagui, vice-president of
China
's
top think-tank the
Chinese
Academy
of Social Sciences,
made the prediction during a recent interview with China Business Weekly. The
economist also warned of the "severe energy supply shortage"
China
may
encounter if this coal-dependent country doesn't speed up exploration of coal
reserves and other energy sources.
"We
will encounter another decade of a tight supply and demand balance of
energy," Chen says. "Total energy consumption will continuously
increase at a higher speed in
China
because more provinces will accelerate their speed of industrialization."
Compared
with international standards, out of
China
's 31 provinces,
municipalities and autonomous regions, 24 are still in the mid-phase of
industrialization or just starting to become industrialized.
In
China
's energy
consumption mix, industrial development accounts for 70 percent of the total.
"At
the early stage of industrialization, the provinces will unavoidably consume
more energy because they have to take off by developing heavy industry,"
says Chen.
In
addition, energy demand will be intensified, Chen adds, because more rural
Chinese have been urbanized. The country has aimed to increase its urbanization
rate to 60 percent by 2020 from the current 45 percent.
Chen
urges the country to take further measures to encourage the enterprises to
conserve energy and stresses that the basic theme of
China
's energy strategy should give
priority to thrift and relying on domestic resources.
Statistics
show domestic sources provided more than 90 percent of the country's energy
needed, and its self-sufficiency rate is higher than OECD (Organization for
Economic Cooperation and Development) countries' and the
US
' by 20 and
30 percentage points.
Chen
even warns if
China
continues its development model adopted before 2007, it will double its energy
consumption to 5 billion tons of standard coal equivalent by 2020 from last
year's 2.65 billion. Last year's consumption increased 7.8 percent from the
year before, even as consumption growth slowed 1.81 percent year-on-year.
However,
if tougher energy-saving measures are put in place,
China
's energy consumption is
forecast to reach 2.9 billion tons of standard coal equivalent in 2010 and 3.8
billion in 2020.
"We
cannot sustain the energy supply if the former scenario comes true," Chen
warns. "And we also cannot pay the environmental cost while burning
increasing amounts of coal."
The
latest research from another think-tank research organization has shown that
China
's energy
consumption is very likely to reach 3.1 billion tons of standard coal
equivalent by 2010, 100 million tons more than the earlier ceiling set by the
government. And by 2020, when
China
is expected to realize its goal of becoming a well-off society, the country's
energy consumption will reach 4.3 billion tons of standard coal equivalent,
according to the think tank.
Lu
Zhongyuan, vice-president of the
Development
Research
Center
of the State Council, describes the numbers as "the most likely
scenario" for
China
's
energy consumption.
Energy
efficiency has long been regarded as a way to reduce production costs as
China
moves
forward to becoming a market economy despite the fact that before 2006 the
notion was not as high on the government agenda as it is today.
Figures
show that
China
's
energy consumption density per unit of GDP has been falling. In 1980-90, the
annual pace was 3.6 percent and dropped to 3.6 percent in 1991-2005. However,
China
made
great strides from 1991 to 1995, when the energy density was cut by 5.8 percent
annually.
Partly
based on these impressive achievements,
China
's top legislative body, the
National People's Congress, has approved a goal of cutting energy consumption
in 2006-10 by 20 percent.
In
2006 and 2007,
China
reached a little more than 5 percent of that goal. To achieve the overall goal,
the country will have to cut energy density by a minimum average of 5 percent a
year from 2008 to 2010.
The
government has taken various measures in recent years, such as linking
energy-saving performance to decide the career futures of officials and the
leaders of State-owned enterprises.
In
addition, as the world's second largest energy producer,
China
has a
relatively strong foundation in energy generation and supply, helping maintain
its economic growth at an average annual rate of 9.8 percent from 1980 to 2006.
To
complement these measures, the government is determined to increase the output
of hydropower, nuclear and renewable energy in a big way.
China
has
planned that renewable energy will account for 10 percent of the total
consumption in 2010, and the figure will rise to 15 percent in 2020.
Coal
accounts for about 70 percent of the total consumption in the country's energy
mix. Currently, only 145 billion tons of coal reserves can be extracted
immediately, despite that official figures show the country's coal reserve may
reach 1 trillion tons.
What's
more, Chen says, the current mining methods can only help extract 30 percent of
145 billion tons, which means the immediate reserves can only sustain 20 years
of
China
's
coal consumption if no further exploration efforts are not made.
"We
will not avoid an even more severe energy supply shortage," says Chen.
"Unless we accelerate our steps to find the exact locations where the coal
be buried and at the same time we improve our mining skills."
September 3 (China
Daily) -- Favorable policies that support the development of new energy
vehicles are expected to come out this year, yesterday’s China Business News
quoted an insider from the China Association of Automobile Manufacturers as saying.
The regulator has
completed soliciting public opinion on the draft policies, which include
preferential taxes on new-energy vehicles, according to the insider.
The Olympics last
month opened the way for the biggest showcase of alternative fuel vehicles in
China, but there’s a lot more coming, according to the Minister of Science and
Technology.
A "green
fleet" of 500 vehicles running on a range of alternative fuels have been
used since the start of the Olympics. In July, Wan Gang, Minister of Science and
Technology, said it was not just an exhibit but the start of an industry.
Wan said in an
interview with the China Business News that his ministry is planning to promote
"one thousand alternative-fuel vehicles in 10 cities". In four or
five years, he said the mass production of alternative-fuel vehicles will
become a reality, making up 10 percent of annual output each year.
An officer from
the Ministry of Industry and Information Technology said
China
is
inefficient in energy use and energy wasting is quite pervasive. Vehicle oil
consumption per 100 kilometers in
China
is 20 percent higher than that of
Japan
,
and 25 percent more than that of
Europe
.
But policies on
alternative-fuel vehicles, aiming to save energy and reduce pollution, are
being designed by the Ministry of Industry and Information Technology, the
National Development and Reform Commission and the Ministry of Science and
Technology, Ou Xinqian, Vice Minister of Industry and Information Technology,
announced this at the 1st China Green Energy Automotive Development Summit
2008. Though not specified, the policies are expected to be carried out within
the year.
The State Council
issued papers to promote the development of alternative-fuel vehicle in
February 2006, and listed "energy-saving and alternative-fuel
vehicles" and "hydrogen and fuel-battery technology" in the
priority topics and frontier technology respectively in the Essentials of
National Medium and Long-Term Science and Technology Plan (2006-2020).
The "rules
on the manufacture of alternative vehicles" published last November also
lit the hope for domestic players to develop in accord with standard game
rules.
Domestic
automakers are enthused about the research and development in alternative-fuel
vehicles. BYD Auto, Chery, Brilliance Auto, Changan Auto, SAIC, Dongfeng Motor
and FAW have all made plans on the development of alternative-fuel vehicles.
SAIC presented
its hybrid model last year, and BYD introduced its iron cell electric car
earlier this year. Chery subsequently debuted the first carbinol fuel car two
months ago.
Statistics show
there are currently 76 models of sedans and passenger vehicles powered by
hybrid, pure electric and fuel cells, manufactured by 27 companies.
But now, new
energy vehicles are still rare to see on the street as their higher prices and
lagging consumption incentive policies. The Toyota Prius and Honda’s Civic
Hybrid, the two most popular hybrid vehicle models in the Chinese market, are
suffering flat sales.
September 4 (China
Daily) -- A possible solution to the growing price of oil came off the
production line last week.
The V3 LingYue
compact car has been developed using independent research at the South East
Motor Corporation depot in
Fujian
and will start being shipped in early October.
Using Sanling
technology the
1.5L
MIVEC engine, with a variable valve timing system, improves fuel efficiency and
reduces fuel consumption. Under
60 km
,
fuel consumption is only
4.3L
.
It is expected
that 3,000 will be supplied per year, retailing at between 60,000 and 80,000
yuan. They go on sale on September 19.
Industry analysts
say the compact car market is warming up due to increasing oil prices and the
need for global emission reduction and protection of the environment.
Yuzhang Ling,
chairman of South East Motor Corporation said last Thursday when the car came
off the production line, that the depot has fully absorbed international
resources and experience and mixed them with "re-innovation" to
develop the car. He said it has enhanced the autonomy of the South East
Automotive research and development and innovation capability, creating a high
starting point of independent research and development.
At the beginning
of this year, V3 LingYue showed outstanding performance of the successful
completion of the "plateau, cold, high temperature" three-high polar
test, he said.
South East Motor
Corporation says it has continuously increased investment in independent
research and development in the southeast since 2006. That has resulted in
technology research and development centers, vehicle testing floors and
physical and chemical composition test floors equipped with advanced
international laboratories.
Comprehensive
European and American laboratory equipment has been introduced, plus a vehicle
emissions laboratory, environmental laboratory, modeling rooms, a multi-channel
road simulation laboratory, silencer laboratories, a professional CATIA studio,
and CAD modeling studios. One vehicle emissions laboratory even has national
laboratory accreditation.
The manufacturer
says the V3 LingYue has achieved a breakthrough in design, engine performance
and configuration, which will happily sit alongside
Japan
's
Mitsubishi, the
US
's
Chrysler and Dodge, brand benchmarks of good.
September 22 (China
Daily) -- It was far beyond Yves Chapot's expectation that after only two
years, his company Michelin delivered the 100,000th "green" truck and
bus tire to Chinese consumers.
Since it
introduced its fuel saving tires to
China
's commercial vehicle market
(the world's biggest) in 2006, the French tire maker has made energy
conservation and environmental protection a point of pride for its new
products.
"
China
's 11th
Five-Year Plan (2006-10) calls for cutting energy consumption per unit of gross
domestic product up to 20 percent by 2010. Michelin is making its own efforts
under the Chinese government's guidelines," says Chapot.
Michelin says
that with more than 400 million sold since its European launch in 1992, the
green tires represent three-fourths of Michelin sales in
Europe
.
By replacing the carbon black in the tire treads with silica, the green tire
guarantees a 3 percent saving on fuel consumption, thereby enabling the tire to
maintain the same level of grip while reducing heat loss.
"Green tires
take up two thirds of our replacement market in
China
. Most of the tires we offer
here are of lower rolling resistance," Chapot adds.
Michelin is the
only tire maker providing green wheels for trucks and buses in
China
.
Industry
forecasts say that by 2010 the total tire demand in the Chinese market will be
around 300 million units. The demand will inevitably speed up and also hasten
the application of environmentally friendly technologies.
"We think
the road mobility in
China
is facing great challenges which result from a shortage of energy, as well as
traffic problems. We hope the green tire will contribute to improving the road
situation in
China
,"
says Chapot.
To publicize its
efforts in
China
, Michelin
chose
Shanghai
to host its 2004 Challenge Bibendum, considered one of the world's most
important events promoting the development of clean energy, road safety and
fuel economy. Michelin's late CEO Edouard Michelin founded the event in 1998 to
celebrate the 100th birthday of the Michelin Man, the company's mascot and
advertising logo, known to the French as "Bibendum".
The event
returned to
China
again in 2007.
"The return
to China was one way for Michelin and our partners to help the Chinese
government chart the way forward for more fuel-efficient, cleaner, safer and
less congested roads; an atmosphere that respects both people and the
environment," says Chapot.
"In the
future, we will continue to contribute to local communities with very strict
respect to the environment and concrete commitments to local developments and
specific needs," he says.
Michelin has sunk
$440 million into the Chinese market since 1996. "The investment in
China
has
proved to be the correct decision for Michelin," says Chapot.
Michelin was the
first international tire maker to set up its office in
China
.
After
establishing its sales office in Hong Kong in 1988, Michelin set up its first
mainland representative office in
Beijing
in 1989 to promote its products and prepare the distribution channels in major
cities.
"It shows Michelin's
confidence in
China
and the local market. The policy of market opening-up and reform offers a good
opportunity to Michelin by providing a favorable business investment
environment," says Chapot.
However, in the
early times, "how to leverage the cultural differences and combine
Michelin's company culture with
China
's
developing environment was the big challenge for Michelin", he
says."Michelin needed to build up a strong local management team."
In late 1980s, a
personal automobile was still out of reach for most Chinese people and as a
result
China
's
tire industry was in its infancy and professional talent was scarce.
"In the
early 1990s, most of the Chinese managers' knowledge about management was quite
limited, so Michelin Group sent over 10 managers from
France
,"
says Chapot.
"It
leveraged the strengths and weaknesses between different cultures and the
knowledge spread better and faster inside the company."
The company later
also sent Chinese employees to
France
for training.
"We
understood the challenge very well from the beginning. That's why most of the
people that Michelin Group sent to
China
were not managers but
technology experts," adds Chapot.
However, today,
15 Chinese are now working in high-level positions in
France
and
other regional headquarters.
In
China
, it has
5,500 employees and plans to hire more as its business expands.
In 1994, the
Chinese government jump-started the country's auto industry development with a
policy officially sanctioned linking cars with the family, by first time
putting forward that the private purchase of vehicles set to be encouraged to
change the sedan consuming restructure.
Before that,
sedans in
China
are limited to be sold to public. They are majorly produced for official usage.
Passenger car
production in 1995 increased 85,000 units over 1994, more than the total
production volume of 1991.
At the end of
1995, Michelin's first joint venture operation in China, Michelin Shenyang Tire
Co Ltd was established and it was transformed into a wholly foreign-owned enterprise
in 2003. The total investment currently reaches $150 million.
In 1998,
China
became
the tenth largest auto market in the world. More auto manufacturers came to
China
,
establishing production facilities to grab market share.
In April 2001,
Michelin Group and Shanghai Tire and Rubber Co Ltd formed a new joint stock
company, Shanghai Michelin Warrior Tire Co Ltd, for the manufacture and sale of
radial passenger car tires with a total investment of $200 million.
The company
produced domestic Warrior brand tires and started to produce Michelin brand
tires in 2002.
Michelin's
headquarters in
China
moved
to
Shanghai
in
2001. In the same year, Michelin (
China
)
Investment Co Ltd was set up in
Shanghai
, which
gave the company more opportunities to develop and reinforce Michelin's
long-term commitment in
China
.
"In 1990,
the car inventory in
China
was 5.5 million. Now the number is up to 160 million. The fast developing
Chinese market gave Michelin a big sales volume increase," says Chapot,
declining to disclose specific figures.
"But we have
to use different ways to solve problems. In
Europe
,
it usually takes us half a year to make a decision since the market is quite
stable and the strategies are often made for the longterm. But in
China
, we may
make it in six weeks. The development and changes in
China
are very fast, so Michelin
should make new decisions more actively and specifically," he adds.
Michelin's top
rivals in
China
are US-based
Goodyear and
Japan
's
Bridgestone. The three brands occupy 60 percent of
China
's tire market.
However, Chapot
thinks there is still huge potential for Michelin to develop.
"For example
the truck tire market is the largest in the world, while the radial tire only
takes 25 percent of the share," says Chapot.
"Moreover,
the passenger and light truck market is held by international brands or local
brands, while the truck tire market is dominated by domestic brands," he
says, implying the segment will be Michelin's target in the future.
"Michelin's
goal in the passenger and light truck market is to grow faster than the market
average to keep our leading position."
September 25 (China
Daily) -- Environmental protection has become an emerging feature of the
automotive industries in
China
and elsewhere.
German carmaker
Volkswagen is set on proving that the auto industry, hampered by complaints of
producing gas-guzzlers at the expense of the environment, can go green if
automakers change their ways.
"As a
multinational partner that has the longest history of cooperation with China's
automotive industry, Volkswagen has both the responsibility and the obligation
to promote the sustainable development of the enterprise and the industry with
various types of environmental protection measures," says Christian Koch,
executive vice-president of Volkswagen Group China for production and logistics
and member of the board of management.
The automaker
launched a green production campaign in Shanghai in July, together with its two
complete vehicle joint ventures, Shanghai Volkswagen and FAW-Volkswagen, and
its component suppliers including Volkswagen FAW Engine (Dalian) Co Ltd,
Volkswagen FAW Platform Co Ltd, Shanghai Volkswagen Powertrain Co Ltd and
Volkswagen Gearbox (Shanghai) Co Ltd.
"Through
this green production campaign, we hope to build on the past achievements and
make new headway," says Koch.
To implement the
program, Volkswagen released its "22 group rules on environmental
protection" in
China
.
Volkswagen's
green production experts and managers from both home and abroad gathered in
China, reviewed the progress of implementing the 22 rules with local employees
and mapped out detailed arrangements for the next stage.
"We are
ready to make innovative efforts to advance the environmental agenda of
China
's
automotive industry. We believe that it is the only way to ensure genuine green
auto products and services for our consumers," says Koch.
"In the
production field, Volkswagen's 22 group rules are strictly implemented in two
main categories, namely common environmental protection rules and environmental
protection rules for infrastructure and environmental protection rules in
production," says Stephan Krinke, manager of the environmental analysis
product department at Volkswagen.
The first
category concerns common rules guiding cooperation with business partners,
minimum industrial land use, a ban on the use of hazardous materials, noise
control, soil and ground water protection, water resources recycling, energy
conservation and waste management.
The second
category is more focused on the environmental protection in production stages
involving special techniques.
"It covers
all the four main techniques in complete vehicle production, namely pressing,
welding, painting and assembling, and relates to component making as well. It
also deals with hazardous material discharge control, special ingredient use
control and other details," says Krinke.
Through the
implementation of the rules, Volkswagen says it has achieved a green production
process that achieves a balance between economic development and ecological
conservation.
All the ventures
have also established a set of "green production rules" tailored to
their own products and production flow.
For example,
FAW-Volkswagen obtained the ISO14001 environment management certificate as early
as in 2002. At present, all the Volkswagen joint ventures in
China
have
passed the ISO14001 environment management certification.
Its diesel car
strategy has demonstrated some initial results and its Jetta SDI and Bora TDI
have won the Green Product Award for two years in a row.
In the production
process, "we recycle the steam with an advanced drying kiln to reduce the
usage of natural gas. Moreover, the move can help save 50 tons of water every
week," says You Zheng, senior manager of the programming department of
FAW-Volkswagen.
In 2004, the
venture began to take 45 measures in techniques and 38 steps in management to
improve environmental protection, with a total investment of 3.3 million yuan.
"The action has helped us save 1.6 million yuan and 70,289 tons of coal
equivalents during the past four years," adds You.
Besides, the
venture invested 940,000 yuan to install solar equipment in canteens and
bathhouses. "We reclaim the cost within one year and save 1,360 tons of
coal equivalents."
Volkswagen FAW Engine
(
Dalian
) Co Ltd not only produces the most
advanced green TSI engines in
China
but also tries to minimize the environmental impact of its production with
effective industrial land, power conservation, waste gas treatment, domestic
waste treatment and sewage treatment.
The venture
applied for the certificate of environment management system standards three
months into production in 2007 and was granted the ISO4001 environment
management system certificate at the end of the year.
Volkswagen FAW
Platform Co Ltd has so far invested 7.05 million yuan in environmental
protection.
It now has a
sewage treatment facility able to treat 10 tons of sewage per hour and a
specialized garbage classification facility. It has adopted measures to
mitigate the environmental impact of energy-intensive equipment like the
painting line, exercised strict control on the electricity use at various
stages of production, and complied with or even outperformed the criteria set
out by state environmental protection authorities.
Volkswagen has
also adopted a series of steps such as the material and component tests at the
newly established Volkswagen Group China Central Lab, the Supplier Improvement
Program and the Green Dealership Certification to ensure the compliance with
environment standards both before, during and after production.
And in April
2007, Volkswagen Group China launched a Powertrain Strategy, in which it
promised to reduce the fuel consumption and tailpipe emissions of all
Volkswagen products in
China
by 20 percent by 2010 with the TSI engine and DSG gearbox that features low
fuel consumption and high power output.
The new TSI
engine is now already powering Volkswagen's Magotan and Skoda Octavia models.
In addition, Volkswagen and
Tongji
University
have worked on
joint research programs including the development of solar hybrid and fuel cell
cars and a diesel-powered taxi demonstration project.
September 11 (China
Daily) --- Economical cars priced around 100,000 yuan ($14,622) will take lead
in the auto market for the remainder of the year, the Beijing Morning Post
reported Wednesday.
The Ministry of
Industry and Information Technology granted production permits to 27 car
models.
About 10 are
brand new models with engine capacities ranging from 1.3-liter to 1.8-liter,
according to a paper on vehicle manufacturers and products released recently by
the ministry.
Domestic car
brands are keeping pace with joint venture brands on the approval list.
FAW-Volkswagen, a
joint venture between leading Chinese auto maker FAW and German auto giant
Volkswagen, is going to launch its new Magotan FV7187 and FV7207, which
according to analysts will be equipped with the latest dual-clutch gearbox
(DSG) transmission technology. Changan Ford's new Carnival models, with an
engine capacity of 1.3-liter and 1.5-liter are also on the list, following
Ford’s launch of the face-lifted Focus earlier this month.
Among domestic
brands, two Jianghuai Auto's A-class sedans with engine capacities of 1.3-liter
and 1.5-liter got production permits, and are set to be on market this month.
Meanwhile, Southeast Motor also sees its first independently developed compact
sedan permitted.
Besides the new
models, other previously permitted models will also be available in the market
in September or October, livening the sluggish auto market in the first half.
Dongfeng
Citroen's C-Quatre, the Chery A3, new Bora, and Focus 08 will rush into the
economical car market in September, together with the ChanganV101, Zhonghua Grandeur
Wagon, and Skoda Fabia. The expected prices range from 80,000-160,000 yuan.
However, due to a
lackluster first half year, the market is still facing pressure from unsold
stock of old models. Dealers are looking to mark down prices for these models
in an effort to meet their sales target, and the new models are likely to enter
a price war.
The adjusted auto
consumption tax that has taken effect since September 1, raises tax rates on
big cars with an engine capacity above 3.0-liter. However, the tax rate remains
unchanged for those with an engine capacity between 1-liter to 3-liter, and
more favorable to cars with engines below one liter. The policy changes could
have a positive effect on economical cars as price-sensitive consumers may turn
to this sector in concern at the rising cost of vehicle ownership.
Sales of vehicles
with engine capacities ranging from 1.3-liter to 1.8-liter took up 61.20
percent in the overall market in July, according to Gasgoo.com.cn, a media
channel specializing in the automotive industry.
Beijing
: Congestion worries after car ban lifting
September 24 (CCTV.com)
-- Sunday saw the lifting of vehicle control measures in
Beijing
. The measures were put in place for
the Olympics and Paralympics.
Beijing
traffic saw
radical increase on Sunday, the first day after the city's two-month
alternating odd-even license plate system for the Olympic Games ended.
It's just gone
eight in the morning in
Beijing
and this is traffic downtown in the Chinese capital. This is also the first day
following the lifting of car ban controls, operational since July the 20th to
ease congestion and improve air quality during the Olympics and Paralympics.
The ban on
vehicles on alternate days according to their car plates, was aimed at taking
45 percent of all private vehicles off the roads. But with all cars now back on
the road, drivers think traffic could get a lot heavier. Although, perhaps, not
right away.
Beijing
bus driver said,
"Today's traffic is ok because it's Sunday. Monday will be a hard day for
us because people will be driving to work. Buses will slow down a great
deal."
The traffic
control forced private car owners to take public transport. Some may have
balked at first, but they soon got used to the idea and found it a pleasant
experience.
Subway passenger,
said, "The subway is very convenient. Much faster than driving. We should
drive less and use the subway more."
Earlier, the
success of this scheme had prompted many members of the public to call for a
continuance of the policy. Authorities shelved the request, but restrictions
are still in place for government-owned cars, which make up some 10 percent of
Beijing
's 3.3 million
vehicles. And this is welcomed by citizens.
Passenger said,
"Car ban measures should be put on government vehicles, not on common
people's private cars."
Beijing
's traffic
authority says it has received many submissions from car owners comfortable
with restrictions and hope they will stay in place.
The city will
also continue to improve its public transport service by expanding networks
while keeping fares low.
Experts say the
car ban might be a cure for congestion but not necessarily the best one. There
are other possible methods, such as congestion charges and raising parking fees
that have proved effective in other countries.
Guangzhou
Toyota
ignites coming price war in auto market
September 27 (China
Daily) -- Guangzhou
Toyota Motor Co Ltd launched the 2009 Carmy G, a heavyweight model in the
country's mid- and high-grade market.
Insiders speculated this move could ignite a
new round of price wars in
China
's
auto markert.
The new model has four variations priced
between 208,800 yuan ($30,526) for the
200G
and 242,800 yuan for the
240G
Navi Luxury.
"The Carmy
240G
has a discount of 11,500 yuan, including three
newly-added safety features that are worth 6,500 yuan in total plus a 5,000
yuan price reduction," said Feng Xingya, director and vice executive
general manager of the Guangzhou-based automaker.
The three safety features include a vehicle
stability control (VSC) system, a traction control (TRC) system and a car
reversing radar system, according to Feng.
The combination of new model's launch and
price reduction at one time may trigger a new round of price wars in
China
's
domestic market, which suffered year-on-year sales decline for the first time
in August in recent years.
But due to accumulating pressure from soaring
raw materials and sluggish auto consumption, automakers in
China
are now
facing the dilemma of having to boost sales by slashing prices.
So, Guangzhou Toyota's move is regarded as a
strategic one to boost sales of mid- and high-grade models.
Camry, a typical model in
China
's mid-
and high-grade auto market, recorded a total of
72,173 in
sales from January to August this year,
becoming the best seller in the segment, well ahead of its counterparts from
other brands.
However,
China
's automakers have been
encountering unprecedented pressures on achieving their 2008 sales targets
since the second quarter. There is no exception for Guangdong Toyota, facing
the tough task of achieving its sales goal of 210,000 vehicles in 2008.
"It is hard to achieve this year's sales
goal, but we will try our best." said Hu Su, vice general manager.
In addition, Guangdong Toyota will extend a
second production line in the middle of 2009, where initial annual capacity
will be 120,000 units. It is another tough task for Guangdong Toyota to relieve
the problem of over-capacity of production against the background of low auto
consumption.
"As Chinese people have a strong desire
for cars, it is sure the market will develop sooner or later. There will be a
new mode produced on the second production line, together with the Camry."
Feng said.
September
15 (China Daily) -- The government may consider further oil price hikes and
pricing deregulation early next year following its oil price rise in June,
analysts and industry insiders say.
"With
the successful conclusion of the 2008 Beijing Olympic Games, Chinese
policymakers will refocus on macroeconomic management, so energy price
normalization will likely feature prominently in the post-Olympic policy
package," Morgan Stanley analyst Wang Qing tells China Business Weekly.
Chinese
oil refiners have suffered huge losses due to the gap between international
crude oil prices and domestic prices of refined petroleum products, which are
still controlled by the government.
The
government raised gasoline and diesel prices by 17-18 percent in June, while
electricity charges for commercial units went up by 0.025 yuan per kWh from
July 1.
But
refined oil prices are still lower than the international market level. For
example, diesel in
China
is
sold 25 percent cheaper than in the
United States
and 50 percent cheaper than in
Japan
and
Singapore
.
Jin
Sanlin from the
Development
Research
Center
of the State Council says refined oil prices are likely to surge 5 to 10
percent, which might cause CPI to increase by 0.1 percent, even taking higher
raw material costs into account. "So the oil price hikes will not have a
big impact," he says.
Although
all experts and industry insiders agreed that
China
's leadership had achieved the
consensus on putting refined oil prices into market operation, they still
thought the government might not consider further price hikes until early next
year.
Tong
Lixia, a researcher from the Ministry of Commerce, says before the consensus
turns into reality, the government will gradually boost refined oil prices to
bridge the gap with the international market.
That's
because the main problem the government faces now is about how to prevent an
economic slump, while oil prices hikes will restrict consumption and increase
inflation. "Raising oil prices is contradictory to the stimulation of
economic growth, so it is not a good moment for price deregulation now,"
she says.
Jin
Sanlin agreed. He says although it is possible that there will be further
boosting of energy prices this year, it is not the best time to put the prices
in the hands of the market. "Next year will be more reasonable," he
says.
But
chief economist with Galaxy Securities Zuo Xiaolei says price reform should be
put into place promptly. "
China
hasn't suffered double-digit inflation like its neighbor
Vietnam
, so it
has the capacity to bear the energy price restructuring," she says.
Morgan
Stanley's Wang Qing also says CPI inflation may have dropped from 6.3 percent
in July to 5.5 percent in August, paving the way for another round of energy
price hikes in the coming months.
Morgan
Stanley suggests if the prices of refined products, electricity power and coal
are raised by 10 percent for the second round, it will cause PPI inflation to
increase by 0.88 percent, 0.44 percent and 0.23 percent respectively, while CPI
inflation will increase by 0.35 percent, 0.52 percent and 0.03 percent
respectively.
Morgan
Stanley employed a 62-sector model to quantify the impact of energy price
hikes. The sectors that are most negatively affected by refined fuel price
hikes include gas production, coking, chemicals, and transportation, while the
sectors that are most negatively affected by power tariff and coal price hikes
include coking, non-metal minerals, and chemical fertilizers.
"Although
the impact of energy price normalization on CPI inflation seems affordable, the
energy price will not be raised by 10 percent. Refiners have been under less
pressure recently due to a sharp fall in the price of crude oil," says Wei
Weixian, an economist from the
University
of
International Business
and Economics. The international crude oil price recently tumbled below $
108 a
barrel from $147 per barrel in July.
"And
many industries have suffered from rising prices of raw material costs and
labor costs, so I predict the energy prices will not surge to 10 percent in a
short period, probably up to 5 percent," he adds.
Economist
Cai Zhizhou from
Peking
University
disagreed.
"Energy
prices rising by 10 percent is normal and will not have a big impact on CPI
inflation," he says. "And energy price hikes are a crucial method to
optimize the industry structure, so that hi-tech and environmentally friendly
industries will distinguish themselves."
September 3 (Xinhua) -- An overnight fall in the
crude oil price on the New York Mercantile Exchange (NYME) is a good news for
China's economic development and its industries, market analysts said.
PRICE
PLUNGE AS RISK WEAKENS
The
price of oil plunged more than 5 U.S. dollars on the NYME on Tuesday after
producers said Hurricane Gustav had wrought less damage than feared to
Gulf of Mexico
energy facilities.
The
gulf is a major energy production location of the
United States
, providing 27 percent
of the nation's crude oil and 20 percent of its natural gas.
Forecasters
expected earlier that Gustav, the first storm of the 2008 Atlantic hurricane
season, would pose a serious threat to offshore oil and gas installations in
the gulf at the end of August. Its effect to oil production facilities proved
minimal.
In
reaction to this, the contract price of light sweet oil for October dropped
5.75 U.S. dollars or 5 percent from Monday to close at 109.71 U.S. dollars a
barrel on Tuesday. It touched a five month low of 105.46 U.S. dollars in
intra-day trading.
The
drop was accompanied by a slowing global economy that started this year and
dragged down oil demand and consumption. The price of crude dropped about 26
percent from record 147.27 U.S. dollars per barrel on July 11.
The
latest fall indicated there was still room for the price to decrease and this
would benefit China's economy to a certain extent, domestic market analysts
said.
EASE
INFLATION PRESSURE
The
"price fall of crude oil will help China to tame inflation, which is one
of the country's biggest pressures currently," said Tang Min, the China
Development Research Foundation deputy secretary general.
Because
of booming economic development and severe natural disasters this year, the
country's consumer price index (CPI), a main gauge of inflation, rose 7.9
percent in the first half over the same period last year.
This
nearly doubled the country's target figure. Earlier this year,
China
set a target of limiting CPI to 4.8 percent for all of2008.
"Prices
of world goods and commodities have risen sharply this year amid surging oil
prices, because oil is one of the most important raw materials and components
of industry.
"Now,
with the price drop, this means China, the world's second biggest oil importer
and consumer, will pay less money to purchase from overseas markets," Tang
said.
China
's
oil imports increased sharply amid a booming economy and surging demand. Last
year, the nation imported 163 million tonnes of crude, up 12.4 percent over the
previous year. This accounted for nearly 50 percent of the oil consumed nationwide,
according to China Customs figures.
"Meanwhile,
falling oil price pass on to other domestic industrials, and it will pull down
prices of the whole industrial chain," Tang said.
According
to National Bureau of Statistics figures, the producer price index (PPI) for
the country's industrial products jumped 8 percent in the first seven months
over the same period last year.
"
China
is expected to face less inflation pressure if the oil price continue to
fall," Tang said.
GOOD
FOR OIL REFINERS
"A
falling crude price is no doubt good news for domestic oil refiners, whose
profits were squeezed by high world oil prices and a relatively lower domestic
price," said Zhuang Jian, an Asian Development Bank economist.
"Refiners
can buy cheaper crude from overseas markets if the price fell. This will help
them to reduce business costs and increase profit fundamentally."
The
country's oil companies have been losing money for each barrel of foreign oil
they refined and sold to domestic consumers as they could not pass on the
increase under the government-set refined oil prices.
China
Petroleum and Chemical Corporation (Sinopec),
Asia
's
biggest oil refiner, for example, saw its first half net profit fall 73.4
percent over the same period last year, dragged down by big losses in its
refining sector.
The
leading refiner confirmed losses of 46 billion yuan (6.7 billion U.S. dollars)
in its refining sector, despite receiving government subsidies of 33.4 billion
yuan.
"Meanwhile,
the surging oil price put the government in a dilemma. On one hand, oil
refiners expect the country to lift the refined oil price. On the other hand,
it fears a free refined price may spark severe inflation and harm other
downstream industries," Zhuang said.
To
solve the problem that resulted from soaring world crude prices, the government
raised the benchmark gas and diesel oil retail prices to 6,980 yuan and 6,520
yuan, respectively, per tonne in June, up more than 16 percent and 18 percent.
But it seems less useful to make up refiners' losses.
"In
a long-run perspective, the country should adjust the refined pricing mechanism
when the world price is relatively low.
"Raising the domestic refined price is not an easy job at
present, which needs good timing. But a falling world oil price has made the
issue easier to realize," said Zhuang.
September 2 (HK Edition) -- Rong Guangdao,
chairman of Sinopec Shanghai Petrochemical, urged the central government to
increase subsidies for the bleeding oil refiners and asked the authorities to
improve the transparency of the subsidy system.
Due to the soaring oil price and mismatched
prices of domestically refined oil products, Sinopec Shanghai incurred a 433
million yuan loss through June.
In recent months, Rong said, domestic
refiners are facing tough times amid skyrocketing oil price, which reached $147
per barrel in mid-July.
Although the refiner received a 1.6
billion-yuan subsidy, Rong said the amount is far from adequate to combat the
soaring crude oil costs.
In the first half of the year, the company's
total spending on crude oil shot up 60.50 percent year-on-year to 25.68 billion
yuan, while the average cost of crude oil surged 42.88 percent to 5,608 yuan
per ton.
"The worst moment lies in the third
quarter," Rong said.
Although the central government is expected
to continue to subsidize the refinery business in the second half, Rong said
the policy hardly soothes his anxiety.
"We've not received any subsidy in July
and August, the conventional peak season... and we don't know how much we will
get in the second half."
Rong called on the government to enhance the
transparency of the existing system in gauging the size of subsidy. "We
hope the government can bring up a fairer and more transparent mechanism
regarding the oil subsidy."
The company's CFO, Han Zhihao, said the
company has reduced its full-year capital expenditure to 1.8 billion yuan from
2.5 billion yuan as a result of the oil price hike.
Han noted the cutback will cause delays in
some petrochemical and refinery projects.
However, the company will not cut the number
of such projects.
Commenting on the oil price trend, Rong
expected the oil price to linger at around $110 per barrel by the end of the
year, adding that the company's break-even point is about $100 per barrel.
Rong predicted the business environment will
bottom out in the fourth quarter in anticipation of the central government
launching policy to help small and medium-sized enterprises.
Regarding the price of domestic crude oil,
he said it is hard to predict the extent of correction in the second half,
adding it depends on the nation's economy and the international oil price
trend.
China
's coal liquefaction craze cools off
September 19 (Xinhua) --
China
's coal-to-liquid (CTL) frenzy
has cooled after it exposed the country's many coal-rich provinces to huge
investment risk. As a result, the government has called off several
controversial projects.
"Although CTL was widely considered as
a good way to expand the coal industry chain, it was still uncertain that the
massive investment would be worthwhile in commercial operation," Zhou
Dadi, the former director of the Energy Research Institute under the National
Development and Reform Commission (NDRC), told Xinhua at the ongoing China
International Coal and Energy New Industry Expo
2008 in
Taiyuan, northern China's Shanxi Province.
Early this month, the NDRC issued an order
that all CTL projects except two involving the Shenhua Group should be stopped.
"It aims to control the business risk of the country's CTL industry, which
was still in an experimental stage," it said.
"Coal liquefaction is a technology-,
talent- and capital-intensive project, but most domestic enterprises lack
advanced technologies, management experience and equipment."
Zhou added the "technology bottlenecks
many small CTL projects, of which many were financed by bank loans. It will be
troublesome if the loans default, which will hurt the interests of many
depositors."
"Small investment in CTL projects does
not make sense. Heavy investment, however, is likely to turn sour if the
mid-and-small enterprises cannot be freed from the technology obstacles."
He also expressed doubt about its
profitability as coal prices continued to surge and oil began to plummet from
its peak of $146.50 per barrel in July.
Shenhua Group, the nation's largest coal
company, announced at last year's expo it would produce
China
's first barrel of liquid fuel
from coal in 2008. It would use self-owned technology known as direct coal
liquefaction.
During an inspection tour in June 2006,
Premier Wen Jiabao described the project as a major scientific and
technological experiment. His comments came against a backdrop when oil imports
had soared in recent years to fuel
China
's booming economy, spurring
the nation to look for technologies that could turn some of its coal reserves,
one of the world's largest, into fuel and other chemicals.
After that, the CTL craze swept the nation
as many coal-rich provinces rushed to pour billions of yuan to commercialize
the projects without necessary risk assessment.
As insiders have estimated, the output
capacity of the existing and the planned CTL projects combined at 16 million
tonnes, with investment planned at 120 billion yuan ($17.55 billion).
As Wen warned: Enterprises should not rush
to commercialize the CTL projects blindly before the test projects are proved
successful. NDRC then issued a circular urging for the "healthy
development" of the CTL industry and raised the threshold for coal
liquefaction projects to a minimum annual output capacity of 3 million tonnes
for fear of excessive production. The construction frenzy showed no signs of
abating.
"We fully understand the NDRC's
decision since CTL is restricted by many factors, including huge demand for
water and massive money input," Chen Liming, Sasol
China
executive vice president,
told Xinhua on the sidelines of the expo.
The company has partnered with Shenhua
Ningxia Coal Group and Shenhua Coal Group to develop two CTL plants, which was
exempted from the NDRC ban.
South
Africa
's Sasol Ltd is the world's biggest
producer of motor fuel from coal.
"It takes time for government to adjust
the industry pattern," Chen said.
China
is not the only country
suffering from the CTL dilemma, said Sun Qingyun, assistant to governor of
West Virginia
. Speaking
at the expo, he said the only two CTL projects in the
US
state were also challenged by
many potential risks in the coal-abundant area.
"People are frustrated with the hefty
CO2 generated from the liquefaction process, which is the main obstacle
hindering the expansion in "the Almost Heaven" state, referring to
the old John Denver song.
"Everybody knows CTL is a good thing,
but no one wants a plant built near his backyard."
Sasol's Chen, however, remained optimistic
about the future of the CTL application in
China
. "It is an unstoppable
trend as
China
is rich in coal but strapped for oil. CTL will surely partly ease the oil
imports pressure."
Previous page 1 2 Next Page
September 11 (China Daily) -- T The
country's largest oil and gas producer has begun a feasibility study on the
third west-east natural gas pipeline, after work started on the second gas
pipeline in February.
Feasibility study of China National
Petroleum Corp (CNPC) should produce a preliminary plan next year, Yang
Jianhong, deputy director of the oil and gas pipeline department at the China
Petroleum Planning and Engineering Institute, was quoted by the 21st Century
Business Herald as saying.
The pipeline will start from the Xinjiang
Uygur autonomous region and will end in
Fujian
province, supplying natural gas to the energy-hungry Yangtze and
Pearl river
deltas, Yang said. The two other pipelines do
not cover
Fujian
.
CNPC could not be reached for comment
yesterday. Company sources said earlier "the plan for the project is still
at a very early stage as the company just started building the second gas
pipeline in February".
Analysts said the project will be a similar
length to the 9,102-km second gas pipeline, but it needs more investment due to
higher raw material costs.
The nation's second west-east natural gas
pipeline, with total investment of 142.2 billion yuan, comprises a main line
and eight sub-lines.
With a gas transmission capacity of 30
billion cu m a year, it will cover 12 provinces and autonomous regions before
reaching the eastern
municipality
of
Shanghai
and southern
Guangdong
province.
The company's first project to pipe natural
gas from western to eastern
China
went into commercial operation at the end of 2004. It runs from Xinjiang's
Tarim
Basin
to
Shanghai
.
That pipeline has already supplied 42
billion cu m of natural gas to the eastern region. That's a saving of 54
million tons of coal and 21 billion kWh of electricity, CNPC said on its
website.
It has also changed the energy structure of
Shanghai
. In 2002,
natural gas accounted for just 0.9 percent of
Shanghai
's total energy consumption, but in
2007 the figure was 4 percent.
China
wants to raise the proportion of natural
gas in its total energy consumption to 5.3 percent in 2010 from 2.8 percent in
2005, as it tries to curb pollution. Analysts said the pipelines will be
pivotal to reaching this target.
In line with the government push to use more
clean energy, the CNPC is doing more to develop natural gas. The company's
natural gas production has grown 20 percent for the past three years
September
23 (China Daily) -- China National Petroleum Corp (CNPC), the country's largest
oil producer, began building an 8.2-billion-yuan ($1.2 billion) refinery in the
Ningxia Hui Autonomous Region on Sunday.
The
project will have an annual refining capacity of 5 million tons. It is
scheduled to come onstream at the end of 2010, CNPC said on its website.
Once
in operation, the project will produce 1.73 million tons of gasoline and 2.38
million tons of diesel per year, with annual sales revenue of 15 billion yuan,
it said.
The
project is an important part of CNPC's plan to boost refining capacity along
its oil pipelines in western regions such as Ningxia, it said.
The
company earlier said it plans to invest 12 billion yuan this year in its
Dushanzi refinery in Xinjiang, which would be the largest petrochemical project
in the western region.
The
company "has invested 18.6 billion yuan in the Dushanzi refinery and
petrochemicals complex, and will accelerate construction of the project this
year", CNPC said in an earlier statement.
Construction
of the project started in 2005, with a total investment of around 30 billion
yuan. It consists of oil refining facilities with a capacity of 10 million tons
per year and ethylene production facilities with an annual capacity of 1
million tons.
Industry
insiders said
China
will have 21 giant oil refining projects by 2010. These projects will have
total processing capacity of 240 million tons per year, accounting for 57
percent of the country's total.
The
country's third largest oil producer China National Offshore Oil Corp (CNOOC)
said it plans to invest 45 billion yuan to expand its new Huizhou oil refinery
project in
Guangdong
province, which is expected to come onstream next month.
The
company signed a framework contract for the project on Aug
26 in
Shenzhen, under which it will be
expected to boost the capacity of the refinery to 22 million tons per year from
the present 12 million during the 12th Five-Year Program period (2011-2015).
CNOOC
will also add a new ethylene production project to the Huizhou refinery, with
an annual capacity of 1 million tons.
The
nation's oil companies are quickening their pace in oil processing to meet
rising domestic demand. According to the China Petroleum and Chemical Industry
Association, the nation processed 200 million tons of crude oil and produced
120 million tons of refined oil in the January to July period, an increase of
5.8 percent and 6.9 percent respectively over the same period last year.
The
total output value of petrochemical products hit 3.83 trillion yuan in
January-July period on high demand in world markets, representing a 32.4
percent increase on a yearly basis.
September 21 (Reuters) -- BEIJING - Asia’s biggest
refiner, Sinopec Corp, will cut refining runs and slash crude oil imports by up
to 10 percent to draw down its hefty stocks, one of the starkest signs yet of
weakening oil demand in the world’s No. 2 consumer.
The
company will import around 1 million tonnes less than it originally planned
each month from September to December, a company official who declined to be
named said on Friday. That equates to more than 235,000 barrels per day (bpd),
or around 3 percent of
China
’s
implied daily oil consumption.
“There
are very high volumes of fuel stocks in the market, so plants can moderately
reduce operation rates or conduct maintenance plans as required,” said the
official.
China
’s thirst for fuel had already visibly dimmed after a record surge
in pre-Olympic gasoline and diesel imports, but news that Sinopec would be
cutting domestic production in addition to halting its import spree suggested
an even sharper slow-down.
“
China
’s implied
oil demand surged fast in the first half, so full-year growth would not fall
below around 5 percent even if there is no growth for the rest of the year,”
the official added.
Beijing
leaned hard on its oil
firms to increase inventories ahead of the August Olympic Games, to prevent
shortages that could mar an event it hoped would showcase
China
’s progress.
Spurred
on by tax breaks and patriotism, Sinopec and rival PetroChina bought
unprecedented amounts of motor fuel, turning
China
briefly into a net gasoline
importer for the first time.
The
shipments sent
China
’s
apparent demand soaring as well, because the government does not report
inventory levels, so oil piped into storage tanks shows up in implied
consumption figures.
But
Sinopec and PetroChina halted fuel imports in September as traders said that
companies had overstocked their tanks, which were brimming even after the
Olympics.
Now
real demand appears to be flagging as the financial crisis weighs on exporters,
and local supplies have risen as independent domestic traders who had hoarded
fuel over the summer begin releasing stocks as prices fall, the Sinopec
official said.
“Sinopec’s
decision to cut crude imports may reflect that oil products consumption growth
in
China
could have slowed
down after
Beijing
raised fuel prices in late June,” said Lawrence Lau, analyst at Bank of China
International.
Beijing
shocked traders with an unexpected 17-18 percent rise in state-set
pump prices in late June. Car sales have slumped since then, further eroding
consumption already undermined by weakening manufacturing and export
growth.
The
firm might also be feeling the pinch of the global economic crisis, and want to
untie some of the cash currently languishing in liquid form in oil storage
tanks, Lay added.
Whatever
the reason, further signs of weakness in
China
’s underlying consumption
could pile more pressure on oil prices, which have rebounded slightly in recent
days after plunging more than $
50 a
barrel from their record high $
147.27
in
July.
The
move by Sinopec, which processed about 3.2 million bpd of crude in the first
half, follows similar run cuts by peers from
South
Korea
to
Singapore
,
responding to a slump in free-market profit margins caused in part by ebbing
demand from
China
.
But
global refining margins have picked up recently and the tumble in crude oil
prices has helped refiners in
China
,
whose revenues are fixed by
Beijing
’s
regulated pump prices.
June’s
retail price rise and the retreat of oil markets in the face of global
financial woes has pushed margins back towards levels where the firm can earn
something from processing -- $95 per barrel would be low enough, a company
source told Reuters.
Sinopec
and PetroChina have been discreetly cut back runs in the past, driven by
mounting losses to cut off supplies to the market. Now it appears oil stocks
are so ample they are being forced to forgo potential profits to avoid flooding
the market.
Lower
prices would take a while to feed through to the bottom line however, as the
firm often buys feedstock several weeks before it processes it, and a
government subsidy will be cut back in the third quarter to match price
falls.
Last
year Sinopec, which has less production capacity than PetroChina, imported 113
million tonnes of crude oil, and this year shipments are closer to around 10
million tonnes a month.
September 3 (Agencies) -- LONDON: From
fuel-efficient stoves for displaced Congolese families to drought-resistant cashew
trees in Brazil, some aid agencies offering carbon offset schemes want to marry
emissions savings with help for people living with climate change.
A London-based coalition is launching a new
funding scheme to address concerns about existing trade in carbon credits -
primarily that this excludes the world's poorest communities, which are most at
risk from the impact of global warming.
"This is very much not a minor
absolution for your carbon sins, but is honestly a compensation payment for the
impact you know your personal carbon emissions will have," said Andrew
Simms, policy director at the New Economics Foundation (NEF), coordinating the
initiative with the International Institute for Environment and Development
(IIED).
The consortium says its scheme differs from
conventional carbon offsetting - which has focused mostly on promoting
renewable energy - because it will also help vulnerable people cope with
phenomena such as more severe droughts and floods.
In the jargon, it will fuse mitigation -
measures to curb carbon dioxide emissions - with adaptation - activities
enabling people to deal with climate-related problems they are already
experiencing.
Over the coming year, the approach will be
tested in regions expected to be worst and soonest hit by climate change in
Africa, Asia and
Latin America
.
Pilot projects will prioritise adaptation:
for example, teaching Indian children to swim so they can survive floods, and
planting the drought-resistant cashew trees whose fruit pulp families plan to
sell to schools for income.
But they will also include mitigation steps
such as providing solar-powered lighting for girls in
Mauritania
to do their homework
after dark, and solar-powered freezers to store the Brazilian cashew apple pulp
which makes juice.
The partners - including the UN Children's
Fund (UNICEF), Greenpeace, CARE International and Trocaire - describe the
scheme as a way for charities, business and individuals to take responsibility
for the damage caused by their carbon emissions in the short term.
They call people who help fund the scheme
investors, rather than donors; the capital involved is human as well as
financial.
"It connects me with a human being at
the other end of the world who's being affected by my pollution, and I then
invest in that person and relate to that person, and feel there is solidarity
between us," said Saleemul Huq, head of the climate change group at IIED.
"It's not buying and selling - it is
much more investing in people."
Voluntary work
Some existing projects backed with money from
unregulated or so-called voluntary carbon emissions trading have been accused
of not delivering promised environmental and social benefits. Critics also say
carbon credits offer polluters a guilt-free way to carry on emitting greenhouse
gases.
"Offsetting is something that people
have little faith in because they don't know where the money goes," said
Betsy Joseph of aid agency Mercy Corps, which has launched a separate
initiative aimed at strengthening the relationship between carbon offsetting
and poverty reduction.
Its "Cool Carbon" Web site invites
individuals and businesses to calculate the cost of their carbon usage and
donate that amount to carbon-neutral projects that also create jobs.
In
Bosnia
,
for example, it is partnering with a pastry manufacturer to convert used
cooking oil into biodiesel that could power city buses in
Tuzla
.
"People can look at the progress of the
projects online, and this should give them more faith that their money is going
somewhere tangible, with more of a connection to those they are helping,"
said Joseph.
The United Nations has called for around $86
billion in new financing by 2015 to help the world's poor cope with climate
change. But so far funds from governments and a levy on UN-regulated carbon
trading amount to a fraction of what aid agencies say is needed. A growing
number regard the sale of voluntary carbon offsets as one way to fill the gap.
The market for voluntary carbon trades is
growing rapidly, more than tripling between 2006 and 2007 to reach a value of $331
million, according to a report from environmental information providers New
Carbon Finance and Ecosystem Marketplace.
But charities have found it difficult to
access buyers in the voluntary market, partly because offset companies, which
act as brokers, prefer large projects that deliver high volumes of emissions
savings.
"The transaction costs are quite high
for small projects," said Andrew Scott, policy director at Practical
Action, which is planning to raise around 400,000 pounds ($782,000) over five
years by selling carbon credits from four energy projects in
Sudan
,
Peru
,
Sri Lanka
and
Bangladesh
.
"It is a very slow, time-intensive
process for the initial assessment and verification, and you do begin to wonder
whether it is worth the effort."
Michael Schlup, director of the Gold Standard
Foundation, which administers a widely used quality label for clean energy
projects that also support sustainable development, questioned whether the
carbon market was the best place to raise money for climate change adaptation
work.
"People see it as a miracle cure, but it
could be a diversion from other policy measures," he said, adding his
organisation had not yet tried to convert climate change adaptation into a
service people could pay for.
For potential investors, one of the key
obstacles is that while tons of carbon dioxide emissions now have a price, it
is difficult to put a value on measures to help people survive weather
disasters and adapt to long-term climate stresses.
"I think this is a very valuable exercise
but the hard thing is to see how to link it to the carbon market," said
Schlup. "With mitigation, you have tons of carbon, but with adaptation,
are you saving lives or dollars?"
There are also tensions between market
demands and the needs of poor communities. For instance in a Practical Action
project in Bangladesh, an offset company chose a stove design that produced the
lowest emissions but was not favored by local women.
"Human development and emissions savings
objectives are not always win-win," Scott said.
September 26
(Xinhua) -- UNITED NATIONS -- Chinese Premier Wen Jiabao attended the United
Nations High-level Meeting on the Millennium Development Goals (MDGs) Thursday
morning and gave a keynote speech on
China
's development objectives.
In his
speech, Wen urged the international community, especially developed nations, to
intensify efforts to realize the Millennium Development Goals (MDGs).
He
promised that
China
will take a series of actions to help poor countries attain the Millennium
Development Goals, including providing them with agricultural technology
support and more food assistance.
China
will also "cancel the
outstanding interest-free loans extended to least developed countries that
mature before the end of 2008," he said.
Convened
by UN Secretary-General Ban Ki-moon, the high-level event is aimed at
generating future action to realize the MDGs by 2015.
Representatives
of some 150 countries, including more than 90 heads of state or government, are
attending the meeting.
This is
the first summit-level gathering on the MDGs since September 2000, when world
leaders committed to the goals laid out in the Millennium Declaration.
World
leaders have vowed to halve extreme poverty and improve the situation in eight
areas including health, education, women's rights, environment, the protection
of children and the establishment of a global development cooperation
partnership.
Chinese
Premier Wen Jiabao Thursday called for joint efforts from governments around
the world to realize the goals set in the Millennium Declaration.
"Counting
from today, we have only seven years to go before the end of 2015 to reach the
goals" of halving the proportion of people living on less than a dollar a
day, and "no more than 12 years before the end of 2020" to
significantly improve the lives of at least 100 million slum dwellers, Wen said
in his speech at the United Nations high-level meeting on the Millennium
Development Goals (MDGs).
"I
hope that we, leaders present today, will join hands to shoulder greater
responsibilities as statesmen and pay closer attention to and show more
compassion for the poor regions and people in the world," he said.
Wen
emphasized the importance for governments to give top priority to development. The
first and foremost development goal should be economic, with educational,
cultural and social development also being high on the agenda, he said.
He urged
respect for the right of all countries to choose their own development paths
suited to their national conditions, and called for efforts to resolve regional
conflicts and ethnic strife through peaceful means.
On
international assistance in eliminating poverty, Wen said developed countries
in particular should assume the responsibility of helping underdeveloped
countries.
"Assistance
should be provided selflessly, with no strings attached. It is particularly
important to increase assistance for least developed countries and
regions," he said.
Wen
proposed that donor countries double their donations to the World Food
Programme in the next five years and that the international community do more
to cancel or reduce debts owed by least developed countries and provide
zero-tariff treatment to their exports.
Efforts
should also be made to improve the working mechanisms for the development goals
in the Millennium Declaration and coordinate the functions of international
organizations to jointly overcome the difficulties facing developing countries,
he said.
China
mulls 'green tax' to help cut emissions
September 13 (Xinhua) -- The Chinese
government is looking into the possibility of imposing "green tax",
an environmental tax for polluters, to cut their emissions, Pan Yue, deputy
minister of environmental protection, said on Friday.
Several government agencies have organized an
inter-ministerial team and brought together experts to come up with a research
paper on environmental taxes, according to the official.
Pan, however, did not give details of the
scope of the tax or when the policy would come into effect, Saturday's China
Daily reported.
The team is also studying the feasibility of
levying environment-related fees, policies of ecological compensation and
setting up a trade model for emissions, he said at a forum on new environment
policies for ensuring sustainable development in
China
.
To tackle environmental woes in the past
decades, the ministry has been working with banks, insurers and commerce
authorities on policies to accelerate the growth of clean industries and firms,
while banning or discouraging those that consume more energy or discharge more
pollutants.
The taxation authorities had taken up advice
from the ministry to cut tax rebates for exports of more than 50 categories of
high energy-consumption products in June last year. The move lowered the exports
of the products by 40 percent last year.
The major challenge in environmental
protection lies in combining efforts of the administrative, economic and
legislative departments toward the cause.
September 15 (China Daily) -- On August 5,
two environment and energy exchanges opened almost simultaneously in
Beijing
and
Shanghai
, the
first of their kind in
China
.
Obviously no one wants to fall behind the
starting line. Both of the exchanges want to secure a leading position in a
nascent market in
China
:
trading environmental equities.
China
's
11th Five-Year Plan (2006-10) calls for cutting energy consumption per unit of
gross domestic product (GDP) up to 20 percent by 2010 while reducing major
pollutants, such as sulfur dioxide by 10 percent. And the government is now
encouraging market-based measures to achieve these goals.
As a result, in addition to
Beijing
and
Shanghai
two other cities are also expected to try to grab a slice of the market.
However, since a legal and structural
framework for emissions trading has yet to be established in the country,
neither the Shanghai or Beijing exchanges is actually carrying out any trades
at the moment.
Nonetheless,
Tianjin
is also mulling over an environment
and energy exchange.
Changsha
, the capital city
of
Hunan
province, is reported to have drawn up a plan to assign credits for dust,
carbon dioxide and chemical oxygen demand (COD), a major measurement of water
pollution, with a view to facilitating the trade of those credits as early as
next year.
Compared with
Changsha
's
straightforward schedule, the working plan of two environmental exchanges in
Beijing
and
Shanghai
seems to be rather vague.
The Shanghai Environment and Energy Exchange
(SEEE) says it will collect, filter and publicize information for environment
and energy-related equity and emission credit trading, and provide a platform
for such deals between companies or institutions, according to a statement from
the Shanghai United Assets and Equity Exchange (SUAEE), the sole owner of the
environment and energy exchange.
Its counterpart in Beijing, the China Beijing
Environment Exchange (CBEE) will function to promote the exchange of
technologies for environmental protection, energy conservation and emissions
reduction, to provide a platform for trade of SO2 and COD discharge rights, and
to act as an information service for greenhouse gas emission reduction.
Cai Minyong, chairman of SEEE, says 55
projects are listed on the exchange, which involve the funding of environmental
projects, transfer of technologies and patents in the field of wastewater
treatment, urban domestic refuse disposal, and clean energies such as solar
power.
Cai estimates that by the end of 2008, the
total volume of trade at SEEE will reach 10 billion yuan.
CBEE, according to spokesperson Shuai
Xiaoshan, is dedicated to setting up a nationwide platform for trading COD and
SO2 emission credits, as well as technologies related to energy saving and
emissions reduction. The exchange has prepared about 30 technology
transactions.
The emissions trading project provides
economic incentives for reducing pollution emissions. It limits the amount of
pollution produced by industrial sources, such as power plants and factories.
When emissions fall below permitted levels,
the source is allowed to store the excess quota for future use or to trade with
other industrial units which cannot meet the pollution standards set by
environmental protection authorities.
China
started pilot projects for SO2 emissions trading in seven provinces
and cities including
Jiangsu
,
Shandong
and
Shanghai
in 2002.
In June, the Ministry of Environmental
Protection (MEP) planned to generalize this cap-and-trade system for SO2
emissions throughout
China
's
whole electrical power industry, according to a 10-year cooperation plan signed
between
China
and the
United States
.
Yet it is still unknown when the emissions
trading platform will be set up, says an official from MEP, because the process
of determining the emission caps and allocating credits is complicated, adding
that the country is still experimenting with pilot projects to find an
effective solution.
One pilot project that requires enterprises
pay for their emission permits, in the highly polluted
Taihu
Lake
area, on the border of
Zhejiang
and
Jiangsu
provinces, has pushed the efforts one step further.
Taihu
Lake
has
suffered from heavy algae infestations caused by excessive pollutants. Even if
industrial plants near the lake adhered to the strict emission standards, the
amount of waste was still more than the lake could handle.
On August 14, when the project was jointly
launched by MEP, the Ministry of Finance and the Zhejiang provincial
government, five polluting enterprises signed agreements with local
environmental protection bureaus to purchase the COD emission permits.
The pilot project also aims to establish a
primary market for emission permits and set up a trading platform by 2010.
But experts have predicted that the
emission-trading scheme is likely to meet opposition from polluting
enterprises.
For instance, strict emission reduction rules
will add to the costs of industries, such as installing waste treatment
facilities
Besides, those enterprises that have extra
quotas are reluctant to trade them; instead, they save them for future use,
because emission permits means the opportunity to expand production capacity.
This dilemma exemplifies the status quo of
China
's
burgeoning environmental equity exchanges: the market is there; the question is
how to mobilize it.
September
12 (China Daily) --
China
is drafting environmental guidelines for companies investing in or providing
economic aid to overseas countries.
The work
is being undertaken by the
Chinese
Academy
for Environmental Planning (CAEP), in
cooperation with the Global Environmental Institute (GEI) and the
University
of
International Business
and Economics.
The first
draft is now being discussed, the GEI said.
A report
released by the CAEP last week said the country lacked comprehensive
environmental protection policies in its overseas projects, although investment
had been expanding.
Statistics
show that between 2002 and 2006,
China
's overseas non-financial
direct investment grew by 60 percent annually. By the end of 2006, 5,000
Chinese companies had set up nearly 10,000 directly invested firms and invested
$90.6 billion in 172 countries.
"
China
should consider and take action as globalization has produced new environmental
challenges," Ge Chazhong, an official from the CAEP, was quoted as saying
by China Business News yesterday.
China
's overseas investment and aid
mainly focuses on exploring oil and other resources, processing, manufacturing,
and construction in African and Southeast Asian countries.
Without
proper management, such projects are likely to cause environmental problems,
the report said.
In April,
several companies, including China Mobile, Haier Group, and China International
Marine Containers, joined "Caring for Climate", a voluntary UN
initiative to combat global climate change.
Liu Meng,
director of UN Global Compact China Office, told China Daily earlier that these
companies' participation suggests that
China
's business sector is catching
up with its international counterparts on climate issues.
China National
Petroleum Corporation, the country's largest oil producer, has pledged to stick
to stringent environmental requirements before deciding on overseas projects.
However,
the report said there are still some environmental concerns over
China
's
overseas projects.
Although
China
's
banking industry has seen rapid development it its overseas credit business in
recent years, most banks have failed to take environmental concerns into
account.
Currently,
only four banks in
China
have either formulated independent environmental standards for financing, or
have joined the United Nations Environment Program Finance Initiative to reduce
environmental risks.
September 11
(Xinhua) --
China
's
environment watchdog has warned local government leaders that they face
penalties over failures to clean up the country's major rivers and lakes.
The
Ministry of Environment Protection on Wednesday put the leaders of 21
provincial-level governments on notice that they would be held personally
accountable for the continued pollution of seven main waterways.
The
ministry announced the measure at a national meeting on water pollution
prevention in east China's Jinan, which was attended by officials from the
National Development and Reform Commission and the ministries of supervision,
finance, housing and urban-rural development.
Environmental
Protection Minister Zhou Shengxian told the meeting that the new measure would
take effect early next year, although he did not reveal what penalties would be
handed out.
The 21
governments had given the ministry annual targets in their plans for pollution
prevention in the basins of the Huaihe, Haihe, Liaohe,
Songhua
rivers, the middle and upper streams of the Yangtze and Yellow rivers as well
Chaohu and Dianchi lakes.
The plans
were based on a five-year national guideline (2006-2010) to protect the water
resources.
Zhou said
the ministry would hold specific officials responsible for any failures to meet
the targets, but he did not say which provinces missed their goals for the past
two years.
"Through
the evaluation system, the ministry will reinforce its supervision of local
government implementation of the state's environmental protection
objectives," said Zhang Bo, deputy director of Shandong Provincial Bureau
of Environmental Protection, after the meeting.
He said
the ministry also required the local governments to publish their annual goals
on pollution control for public scrutiny.
The
Chinese government has set a target of reducing major water pollutant emissions
by 10 percent from 2005 levels by 2010.
Zhou told
the meeting that emissions had fallen by only 2.3 percent for the past two
years, meaning more reductions totaling 7.7 percent were required in less than
three years.
He said
local environmental watchdogs nationwide reported water pollution cases every
other day, and the number had increased by 30 percent in the first half year
from the same period of last year. He did not give the number of cases for
either six-month period.
He
reiterated that the reduction in pollution discharges to water bodies was the
fundamental to improving the environment.
The
ministry was established on March 27 from its predecessor, the State
Environmental Protection Administration. It completed an expansion in August,
which was reported to be aimed at reinforcing its role in the prevention and
control of water pollution.
In August,
the ministry submitted a proposal to the National People's Congress, China's
top law-making body, seeking powers to detain for up to 15 days people
responsible for illegally discharging dangerous chemicals into water and those
responsible for discharges of poisonous, radioactive and erosive substances, or
pathogens or illegally disposing of dangerous substances should be held
responsible.
The
proposal did not specify penalties, but said they should be determined
according to the severity of the incident.
According
to the Chinese law, only police authorities above county level have the power
to exercise administrative detention, which is different from criminal arrest
and lasts from one to 15 days. The punishment also applies to leaders
found guilty of dereliction of duty.
Staff and
senior officials environmental agencies that fail to transfer those suspected
of water pollution could face warnings, demerits, demotions, or dismissal,
according to the proposal.
Zhou said
on September 1 that 1.6 million cases of water pollution had been reported
through a government hotline since the beginning of 2003.
September 2 (Agencies) -- The massive effort
to clear the skies over
Beijing
for the Summer Olympics paid off, the city's environmental authority said
Monday, with the capital seeing its cleanest air in a decade.
The Beijing Municipal Environmental Protection
Bureau said that the improvement in air pollution was mainly the result of
special, and temporary, measures that closed factories and banned cars from the
roads during the Games.
The clear weather appears to be continuing
into September, with clear blue skies that have allowed a rare glimpse of
Beijing
's western hills,
which are usually obscured by smog.
The environmental bureau said in a notice on
its Web site that the density of major pollutants was cut by 45 percent in
August. It said there were 14 days with the best air quality,
"excellent" or level 1, and only one day rated at the worst quality,
or level 3.
Some months typically have less than a
handful of days with level 1 air quality.
"This is the best quality in the past 10
years," the statement said, referring to the 45 percent reduction.
The city's air pollution was a major concern
in the months leading up to the Olympics, but the worries largely evaporated as
the games began under relative blue skies.
"Temporary measures to reduce pollution
that were put in place in Beijing and surrounding provinces to guarantee clean
air for the Olympics played a fundamental role in improving the air during the
Olympic period," the bureau said.
Levels of major pollutants like sulfur
dioxide, carbon monoxide and nitrogen dioxide fell to levels normally found in
cities in developed countries, it said.
Beijing
typically has air that is two to three times more polluted than in
most Western countries. City officials shut down scores of factories, stopped
almost all construction and removed two million vehicles from the roads for a
two-month period that will last from July until after the Paralympics end on
Sept. 17.
The vehicle restrictions, which limit cars to
being able to circulate every other day based on odd and even license plate
numbers, have brought many in
Beijing
to debate whether the policy could be continued.
But critics say it does not counter the root
problem of pollution and will be ineffectual given that 1,000 new cars are
added to Chinese roads each day and given that a rising number of families are
buying second cars. Taxis and buses are also not covered by the restrictions.
Still, 56 percent of the more than 10,000
people surveyed online said they were in favor of continuing the restrictions.
Wang Li, deputy director of the Beijing
Traffic Management Bureau, was quoted as saying by state media on Aug. 23 that
there had not been a decision over whether to continue the policy.
But an editorial last week in the Beijing
News daily newspaper said a continuation of the policy faced many challenges,
especially from car owners and government officials reluctant to give up their
freedom to drive.
"Whether people will stand for a
continuation of the restrictions is a test of how socially responsible our country's
middle class is," it said.
