MAC: Mines and Communities

China 'declares war' on polluting industries

Published by MAC on 2014-03-18
Source: Reuters

"The battle against pollution will be waged via reforms in energy pricing to boost non-fossil fuel power and cutting capacity in the steel and cement sectors..."

See previous article on MAC: China's smog threatens health of global coal projects

Over 95 percent of Chinese cities failed to meet environmental standards: minister

By David Stanway


8 March 2014

Beijing - Almost all Chinese cities monitored for pollution last year failed to meet state standards, the vice-minister of environmental protection said on Saturday as he outlined the country's plans to redress the environmental consequences of rapid industrialization.

Out of the 74 cities that Beijing monitored, 71 had various degrees of problems, Wu Xiaoqing said at a news conference on the sidelines of the annual parliament session in Beijing.

Only Haikou in the island province of Hainan, the Tibetan capital Llasa and the coastal resort city of Zhoushan met standards.

The environment has emerged as one of Beijing's key priorities amid growing public disquiet about urban smog, dwindling and polluted water supplies and the widespread industrial contamination of farmland.

China's environmental policy goals also serve a wider agenda, aimed at diversifying and "upgrading" the country's resource-intensive economy.

Wu said the country's pollution problems will only be thoroughly solved by fundamental changes to the way it develops its economy.

"When we were chasing GDP growth, we were also paying the price of pollution, and this price is heavy, is massive," he told reporters.

Premier Li Keqiang said in his report to parliament on Wednesday that the country would "declare war on pollution" in the same way it declared war on poverty, but critics say stronger rhetoric might not be enough without deeper legal and institutional reform.

Wu said improving the way laws are enforced is a crucial element of China's plans, and changes to the country's 1989 environmental protection law, currently being deliberated by parliament, will help raise the costs of violating standards and ensure that polluters pay.

Shifting the Pollution Burden

China's pollution action plan has focused primarily on the heavy industrial heartlands of Beijing, Hebei and Tianjin as well as the commercial and manufacturing centers around Shanghai and Guangdong, where heavy industrial capacity and overall coal consumption will be cut.

But campaigners have expressed concern that the burden of pollution is likely to be shifted to other regions, with high-emission sectors like thermal power still on course to expand rapidly in big, coal-rich regions like Inner Mongolia, Ningxia or Xinjiang.

"Premier Li's statement will ignite hopes for people living under the threat of smog but it would be even more encouraging if the central government realized that there are a lot of regions outside the scope of the current air pollution action plan," said Huang Wei, campaigner with Greenpeace in Beijing.

Wu said at the press conference that the three main regions covered in the current action plan occupied just 8 percent of China's total area, but were responsible for 55 percent of national steel production, 40 percent of total cement output and 52 percent of gasoline and diesel.

As a result, they produce 30 percent of the country's pollution and average emissions were five times higher than other regions.

"China's central and western regions are rich in coal, and their environmental capacity is better than the Beijing-Hebei-Tianjin region, so we are encouraging them to develop coal-to-gas and to replace coal burning in eastern regions."

"We also hope that these regions will also implement stricter environmental regulations," he added.

(Reporting by David Stanway; Editing by Kim Coghill)

China to 'declare war' on pollution, premier says


4 March 2014

BEIJING - China is to "declare war" on pollution, Premier Li Keqiang said on Wednesday at the opening of the annual meeting of parliament, with the government unveiling detailed measures to tackle what has become a hot-button social issue.

It is not uncommon for air pollution in parts of China to breach levels considered by some experts to be hazardous. That has drawn much public ire and is a worry for the government, which fears any discontent that might compromise stability.

"We will resolutely declare war against pollution as we declared war against poverty," Li told the almost 3,000 delegates to the country's largely rubber-stamp legislature in a wide-ranging address carried live on state television.

Curbing pollution has become a key part of efforts to upgrade the economy, shift the focus away from heavy industry and tackle the perennial problem of overcapacity, with Li describing smog as "nature's red-light warning against inefficient and blind development".

"This is an acknowledgement at the highest level that there is a crisis," said Craig Hart, expert on Chinese environmental policy and associate professor at China's Renmin University.

"Their approach is going to have to be pro-economy. I think they will pump money into upgrading plants. This could be another green stimulus although it is not being packaged that way."

China has published a series of policies and plans aimed at addressing environmental problems but it has long struggled to bring big polluting industries and growth-obsessed local governments to heel.

Li said efforts would focus first on reducing hazardous particulate matter known as PM 2.5 and PM 10 and would also be aimed at eliminating outdated energy producers and industrial plants, the source of much air pollution.

China will cut outdated steel production capacity by a total of 27 million tonnes this year, slash cement production by 42 million tonnes, and also shut down 50,000 small coal-fired furnaces across the country, Li said.

The 27 million tonnes of steel, equivalent to Italy's production capacity, amounts to less than 2.5 percent of China's total, and industry officials have warned that plants with another 30 million tonnes of annual output went into construction last year.

The targeted cement closures amount to less than 2 percent of last year's total production.

The battle against pollution will also be waged via reforms in energy pricing to boost non-fossil fuel power. Li promised change in "the way energy is consumed and produced" through the development of nuclear and renewables, the deployment of smart power transmission grids, and the promotion of green and low-carbon technology.

The National Development and Reform Commission (NDRC), the country's economic planner, said in its report that new guidelines would be issued on relocating key industries away from urban centers to help tackle smog.

Nor Just Smog

China does not just suffer from smog, which has once again this winter enveloped large parts of the heavily populated east, and will this year also aim to tackle severe water and soil pollution.

The NDRC said it would also take action this year to tackle agricultural pollution, including the contamination of farmland by heavy metals, with 3.33 million hectares (8 million acres) believed to be too polluted to grow crops.

Last month, the government said it would spend 2 trillion yuan ($330 billion) on tackling pollution of scarce water resources.

Li said China would also aim to convert 333,300 hectares of marginal farmland to forest and grassland and would continue to fight desertification and recover wetlands.

The NDRC said China would seek to ensure that polluters pay by establishing a new mechanism to compensate victims of environmental damage and by holding local officials accountable.

Parliament is also mulling amendments to environmental protection legislation that will grant new powers to fine and punish offenders.

In a separate report on Wednesday, the Ministry of Finance said China would spend 21.1 billion yuan on energy conservation and environmental protection in 2014, up 7.1 percent on 2013. It said 64.9 billion yuan would be allocated to agriculture, forestry and water conservation, up 8.6 percent.

(Reporting by Michael Martina, Li Hui, David Stanway and Stian Reklev; Writing by Ben Blanchard and David Stanway; Editing by Raju Gopalakrishnan and Robert Birsel)

China says gets tough on polluters, nixes projects worth $19.5 billion

By David Stanway


11 February 2014

China's environmental watchdog vetoed as many as 32 projects with a total investment of 118.4 billion yuan ($19.5 billion) last year as it stepped up efforts to get tough on industrial polluters, a senior official said on Tuesday.

Zhai Qing, the vice-environment minister, told reporters his ministry was working to improve its environmental assessment capabilities and strengthen its powers to monitor and punish polluters.

"I think our ability to enforce and monitor is extremely important... and since last year, we have been constantly trying to strengthen our abilities," he added.

Beijing is under intense pressure to clean up its heavily polluted air, water and soil in the face of mounting public anger, but enforcement has been identified as one its biggest challenges, with the Ministry of Environmental Protection (MEP) struggling to find the clout to take on powerful industrial interests and growth-obsessed local authorities.

Officials have acknowledged that the ministry's punitive powers are limited. Fines are far lower than the cost of compliance and many big companies are willing to pay up and continue breaking the law.

The ministry is now hoping to extend its authority as China's new leadership promises to abandon the crude pursuit of economic growth. A new environmental law is likely to raise the fines imposed on polluters, and sources say the ministry's powers could be expanded further in a government shake-up expected to take place in March.

Zhai said the ministry had made it a rule not to trust local statistics. Officials are also making use of unmanned aircraft and satellite technology to collect its own pollution data, and its inspection teams were now working more closely with the police to try to force companies to comply, he added.

Inspectors were also showing up unannounced at factories to avoid being misled by company officials.

The ministry imposed "tough punishments" on the regions of Guizhou, Henan and Inner Mongolia last year, and also suspended environmental approvals for projects in six cities as a result of violations, Zhai said.

China considers new powers for pollution watchdog as part of government shakeup

By David Stanway and Benjamin Kang Lim


10 February 2014

BEIJING - China could grant its undersized environment ministry new powers over resources, possibly allowing it to veto future projects, and more muscle to punish polluters as part of a government shake-up to tackle decades of unchecked growth.

Sources with ties to the leadership told Reuters that the government was considering a sweeping reorganization of cabinet ministries next month that will dissolve the Ministry of Land and Resources and transfer some powers to the Ministry of Environmental Protection (MEP), long regarded as too weak to punish law-breaking polluters.

Amendments to China's 1989 environmental law, likely to be rubber-stamped at the annual session of the country's legislature next month, are expected to also give the environment ministry the powers to impose unlimited penalties on firms that fail to rectify problems and allow regulators to suspend or shut down persistent offenders.

A nationwide monitoring system will be established to force industries to disclose exactly how much pollution they cause, and it will become a criminal offence to misuse or switch off pollution control technology and misreport emission levels.

China's big polluters routinely exceed government emissions limits, say environmentalists, and high pollution levels have sparked widespread social unrest, which is a major concern for China's leadership.

The proposals are part of Beijing's efforts to steer the economy away from investment-led growth, which has fuelled three decades of double-digit expansion per year, towards a lower but more sustainable pace leaning more on consumption and services.

Despite vows to get tough on industry, China's ability to impose environmental safeguards on local governments and powerful state-owned firms remains in doubt following a series of toxic chemical spills, smog scares and food safety scandals.

"China will not be able to stop polluters from violating the law without stronger penalties," said Alex Wang, an expert in Chinese environmental law at UCLA in the United States. "For companies making billions of yuan in profit each year, these fines have been less than negligible."

China has already stripped dozens of powers from ministries, including the powerful National Development and Reform Commission (NDRC), in a bid to move away from bureaucratic interference in the world's second-largest economy and towards better regulation.

The NDRC, a sprawling superministry with a huge swathe of duties ranging from cutting greenhouse gases to deciding energy prices, has long been under fire for resisting reform and for heavy-handed intervention in the economy.

The leadership sources told Reuters that proposals have been made to slim down the NDRC into a sort of "macroeconomic planning and research" body with no powers of approval.

"More Weapons"

The new amendments will abolish a "maximum fine" system in favor of unlimited penalties for repeat offenders. Officials say firms have preferred to pay the relatively small fines up front rather than face much higher compliance costs.

"To a relatively big enterprise, the level of punishment cannot even be compared to the cost of complying with the law or even with our administrative costs," Ji Gang, an official with the MEP's law enforcement division, told the Xinhua-run Economic Information Daily in January.

Creating a monitoring system to identify polluters will help enforcement and also encourage the public to supervise factories, said Huang Wei, a campaigner with environmental group Greenpeace in Beijing.

But the environment ministry will also need a bigger budget and a rise in status in China to fulfill its goals.

"In many cases, the big SOEs (state-owned enterprises) pretend to comply but actually go above the environment ministry's head and ask the NDRC for more lenient treatment," said a government policy researcher who did not want to give his name, citing the sensitivity of the issue.

The environment ministry said last year that it planned to spend 40 billion yuan ($6.60 billion) over 2011-2015 to boost its monitoring capacity, but it will not be enough unless China strengthens the bureaucratic position of the watchdog, said Wang of UCLA.

"Effective regulation is impossible without a regulatory body with sufficient authority to hold the major state-owned firms to account," he said.

The planned environmental law changes have been broadly welcomed by activists, but they are concerned about new restrictions on the public right to sue polluters.

A previous draft said lawsuits could only be filed via the government-affiliated All-China Environmental Federation. Critics said the clause would restrict citizens' rights to sue in contentious cases, and it was criticized even by the People's Daily, the mouthpiece of the Chinese Communist Party.

Subsequent amendments also allowed government-registered environmental organizations that have been operating for at least five years to launch legal action. Chinese environmental group Friends of Nature said the change was not enough and the clause remained "detrimental to the public interest".

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