The Environmental Protection Storm

On January 10, the State Environmental Protection Administration of China (SEPA) once again started what the media has previously called a 'storm' of criticism, calling for the suspension of 82 projects totaling 112.3 billion yuan worth of investment. Compared to 2005 and 2006's two 'storms', this year there are slightly less projects and funding under fire. But experts believe that it will be even more lethal, directly affecting future investment in certain industries. 

Experts believe that the so-called 'lethality' of the current storm indicates that the SEPA has learned from previous experience. Projects called to stop had previously used various methods to delay environmental precautionary procedures, and in some cases eventually refused to carry them out entirely. By using 'effective face-to-face measures' and 'regional limits', the environmental protection department has carried out administrative penalties for the first time in 30 years. 

'Regional Controls' are what are used against regional governments and industrial groups who violate national environmental policy, blindly expand industry, and halt the environmental approval process of all their construction projects. The administrative regions affected by this round include Hebei province's Tangshan, Shanxi's Luliang, Guizhou's Liupanshui, and Shandong's Laiwu cities. Industrial groups affected include the four large power firms Da Tang International, Huaneng Power International, China Huadian, and China Guodian Corporation. 

SEPA's deputy director Pan Yue says that these areas are mostly already ignoring environmental capacity, still blindly developing with high-energy consumption and producing high levels of pollution. For example, Tangshan has built 70 iron and steel businesses, and the 80 percent of which have not undergone environmental evaluation, are small-scale, scattered, and producing severe atmospheric and water pollution. 

In SEPA's latest report, 23 of the 82 projects identified are serious violators of the 'three simultaneous' environmental evaluation system, and 59 are serious violators of the 'environmental criticism' system, including iron and steel, metallurgy, energy, and chemicals. Metalworks and metallurgy are the most represented, composing 37 percent of the total identified projects. 

'This reflects that the nation will expand its industrial restructuring policy, and through strong measures, push firms to increase their environmental quality,' says Capital Iron and Steel Group's director of the board, Zhu Jimin. 

'We really are tired, there is no one to do environmental criticism, it's not being carried out,' says Pan Yue.' Chen Lin, Manager of investor relations at Datang International Electric, says that SEPA's requirements will be closely observed and actively implemented by Datang, and that they will meet these requirements as early as possible. Da Tang's Tangshan City 50 megawatt plant as well as operations in Gansu province were listed. 

Another high-level Datang employee tells this paper that according to the actual implementation of the project, Datang's will not change operations much, and that due to Tangshan Thermoelectric Company's involvement in heating Tangshan City's 14 million square meters of residential area, a shut down of the 50 megawatt plant would have a palpable effect. 

Datang International recently met with Datang's local government, and according to SEPA's requirements, on January 11 will start to gradually shut down the 50 megawatt plant. The details of this process are still being discussed. 

Zhu Jimin says that the passing of policies that will enforce restrictions on industry and regions is beneficial to competition, and that for Capital Steel and Iron Works, every ton of steel's environmental cost is 50 yuan. He says that Capital Steel produces ten million tons every year, and thus cost of making the steel green would be 500 million yuan.