keqi ctg pollution en report
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1
A Peek into the Dirty Secrets of China’s Flagship Coal-to-Gas Model Project
Table of Contents
Datang Hexigten Project Introduction ........................................................................................................... 3
The ‘Legend’ of Zero Wastewater Discharge ................................................................................................. 4
Suspected Illegal Informal Pond .................................................................................................................. 4
Manmade Waste Water Lakes .................................................................................................................... 8
Air Pollution ..............................................................................................................................................11
Policy Recommendations: No Active Promotion until a Working Model is Established ..............................14
References ....................................................................................................................................................16
Appendix 1: Financial Analysis of Datang Coal Chemical ..............................................................................18
Appendix 2: 54 Coal-to-Gas Projects Completed, Under Construction or Planned ......................................21
2
In an effort to deal with air pollution and make up for insufficient natural gas supplies in the
east, China has been pushing a coal-to-gas program that has been fraught with debate
because of the pollution and greenhouse gas emissions that result from the production
process. According to statistics compiled by Greenpeace, as of October 2014 there were 54
coal-to-gas projects at different stages of development nationwide (See Appendix 2). The
total production volume of these projects currently stands at 240.8 billion cubic meters.
Over 80% of these projects are in China’s arid northwest.
However, since two model projects, namely the Datang Hexigten Coal-to-Gas Project and the
Kingho Coal-to-Gas Project in Ili, went into production late last year, they have been
consistently troubled by technical and environmental issues, including a reported accident in
January 2014 that killed two people as well as air pollution that has caused local residents to
lodge official complaints (Hexigten EPB, 2014; Zhang, 2014).
In order to give an initial assessment of the actual environmental performance of coal-to-gas
model projects, a team from Greenpeace East Asia (hereafter ‘Greenpeace’) carried out an
on-site survey of the Datang Hexigten Coal-to-Gas Project for a total of seven times between
April and October 2014. During two of these visits, the team took test samples of drinking
water1, water and sediment collected from an informal pond, as well as wastewater
collected in the vicinity of the plant. Greenpeace also interviewed nomadic families living
around the plant to understand how their lives have changed. Additionally, the team also
examined open flue gas emissions data available from government websites2.
Greenpeace’s survey found that wastewater treatment did not meet with the project’s
claimed ‘zero wastewater discharge’3 policy and even official data showed that flue gas
emissions had exceeded standard levels for extended periods of time4. The survey also
showed local residents’ strong opposition to the project. Based on the findings, Greenpeace
is concerned that, as one of the only two projects currently in operation in China’s
coal-to-gas sector which reflects the general technological levels across the sector, Datang
Hexigten project showcases the additional environmental and social challenges facing the
sector whose negative carbon implication is already a much debated issue (Gong & Li, 2014;
Yang & Jackson, 2013). Greenpeace strongly recommends the Chinese government seriously
1 Testing results of the drinking water samples are not discussed in this report. Based on the analytical results by both
Greenpeace Research Laboratories and an accredited independent third-party testing facility in China, concentration of metals and metalloids in most or all of the samples were below limits of detection and few organic compounds were identified overall. For details, please see http://www.greenpeace.org/eastasia/publications/reports/climate-energy/2014/keqi-ctg-pollution-en-report/ 2 See the Platform for the Self-monitoring and Information Disclosure by the Enterprises subject to Intensive Monitoring
and Control of the State in Inner Mongolia (http://nmgepb.gov.cn:8088/enterprisemonitor/webpage!indexPage.action); supervisory monitoring data disclosed by Chifeng Municipal Environmental Protection Bureau (http://www.cfhb.gov.cn/sjzx/hjsj/gkyjpsj/jdxjcsj/index.html). In order to tackle pollutions at sources, the Chinese government has created a list of key state monitored and controlled enterprises and put in place an emission data monitoring and information disclosure system where both environmental agencies in different levels and the enterprises are required to monitor and disclose emission data. 3 We cannot find any open sources about the project’s own definition of “zero wastewater discharge”. Anyway, there is a
good general overview of zero wastewater discharge in China written by China Water Risk http://chinawaterrisk.org/resources/analysis-reviews/zero-liquid-discharge-a-real-solution/. 4 Please see the section of Air Pollution below for details.
3
reconsider the development of coal-to-gas projects.
Datang Hexigten Project Introduction
The Datang Hexigten Coal-to-Gas Project is located in Hexigten near the city of Chifeng in the
Inner Mongolia Autonomous Region, only 15km from the Dalai Nur (“Dalinuoer” in
Mandarin) Nature Preserve, a national-level preserve established to protect a unique
ecosystem of lakes, wetlands, grasslands and forests that support many rare species of bird
(Inner Mongolia Dalinuoer Nature Reserve Managing Office, n.d.)
The synthetic natural gas produced by this project, which requires 40 million cubic meters of
water every year, is mostly transported by pipeline to Beijing and once fully completed the
project is expected to fulfill 1/4 of Beijing’s natural gas needs (Chifeng Municipal Water
Resources Bureau, n.d.; Wang, 2014 ).
The original scale of project investment was 22.6 billion RMB, but due to continual technical
adjustments and environmental considerations in actual implementation, total investment
has already surpassed 33 billion RMB and looks like it will continue to increase (Guo, 2014).
Comparatively, many coal chemical businesses, including the Datang coal-to-gas project,
continue to operate at a loss (See Appendix 1).
Figure 1: Relative Locations Surrounding the Coal-to-Gas Plant
Note: Based on Google Earth, Image © 2014 Digital Globe © 2014 Mapabc.com
① Coal-to-Gas Plant, ② Xilin Gol Coal Mine (coal source), ③ Dashimen Reservoir on the Xar
Moron River (water source), ④ Dalai Nur National Nature Preserve, ⑤ Waste Water Evaporation
Pools
4
The ‘Legend’ of Zero Wastewater Discharge
Datang has repeatedly said in promotional materials that this project has achieved ‘zero
wastewater discharge’ and in an interview with China Chemical Industry News on October
16th, the Director of Environmental Security for the Datang Energy and Chemical Company,
Mr. Hao Jun, said that ‘there is no drainage outlet at the Hexigten project and we have no
other option but to ensure zero discharge.’ (Chen, 2014)
Suspected Illegal Informal Pond
However, Greenpeace’s survey team found an informal pond in sandy soil near the Datang
Hexigten facility filled with contaminated water containing a number of hazardous
substances.
The rectangular informal pond is located 200 meters to the northwest outside the plant area
and measures 68m x 56m x 5m5 with no visible anti-seepage measures as seen on the edge
of the formal evaporation pond discussed below. The water in the pond was an inky black
with black powder-like solid waste floating on the top. There was also a very pungent odor
surrounding the pool. From the pit, a 150cm-diamter pipe extends from the direction of the
plant. There are no other active industrial projects within a radius of several kilometers in
the area of the plant.
Analysis of satellite images show that digging on the informal pond began before November
2010, but images did not show any water accumulation until May 3rd 2013. The water
accumulation in the pit was confirmed by site visits and satellite images from later dates.
5 The figures of 68m and 56m are based on GIS analysis by Greenpeace. The depth of 5m was estimated by Greenpeace
survey team during the field visits.
5
Figure 2: Location of the Informal Pond outside Western Wall of Plant
Note: Based on Google Earth, Image © 2014 Digital Globe © 2014 Mapabc.com
Figure 3: Satellite Image of the Informal Pond, Taken on November 6th, 2010
6
Figure 4: March 3rd, 2013 was the first time water was observed in the informal pond–
using LandSat8 satellites
Local herders had previously reported the informal pond to local environmental authorities
and on July 5th 2014, the Hexigten Environmental Protection Bureau (EPB) released a public
response that described the informal pond as a ‘initial rainwater runoff from a drainage pipe
to the west of the plant’, adding that ‘all runoff water has been retrieved by the plant and
sediment has been fully cleaned.’ (Hexigten EPB, 2014)
However, on three separate visits by the Greenpeace survey team on August 2nd, August 8th
and August 30th 2014, it was found that the informal pond was still filled with accumulated
water and there was no sign of any cleanup efforts. Moreover, the water level observed in
the visit on August 30th had risen by about one meter compared to the visit on August 8th.
Greenpeace also carried out sampling and chemical testing of the water and sediment in the
informal pond. Results showed that this turned out to be contaminated water that
contained heavy metals and hazardous organic pollutants, many of which could be from
coal-relevant production.
On August 2nd and 30th, Greenpeace workers collected two separate batches of water and
sediment samples from the informal pond using scientific methods, recording the entire
process. While the batch obtained on August 2nd was delivered the Greenpeace Research
laboratories, based at the University of Exeter in the UK, the batch on August 30th was sent
7
to an accredited national-level third party independent testing facility in China6.
Results from the third party testing facility show a range of PAHs including benzo[a]pyrene.
The concentration of benzo[a]pyrene was 41.5ng/L, 0.38 times higher than national
standard7. Other PAHs found in tests included phenanthrene, acenaphthene, fluorene,
pyrene, chrysene, fluoranthene, benz[a]anthracene, benz[b]fluoranthene,
indeno[1,2,3-cd]pyrene, dibenz[a,h] anthracene and benzo[g,h,i]perylene8.
Qualitative screening of the two waste water samples sent to Greenpeace Research
Laboratories for testing showed that both contained organic compounds with similarly
complex compositions. Compared with waste water samples that were taken far from the
discharge pipe (CN140015), samples taken nearer to the discharge pipe (CN140016)
contained more complex compounds. A total of 15 volatile organic compounds (VOCs) were
isolated, 13 of which could be reliably identified (i.e. compounds identified to better than 90%
match to mass spectrum libraries) as well as 44 semi-volatile organic compounds (SVOCs)
being isolated, 25 of which could be reliably identified, including multiple phenolic
compounds (e.g. cresol, xylenol, etc.) as well as phenanthrene, fluorene, fluoranthene and
several other PAH derivatives.
In addition, analysis from both sides9 indicated that sediment from the informal pond
contained similar heavy metals and a series of organic compounds including PAHs as found
in the wastewater samples.
Ultimately, regardless of the source of wastewater samples, the composition of the
contaminated water from the informal pond has caused a certain degree of hazardous
substances to accumulate in the sediment of the informal pond.
Based on the above findings, Greenpeace challenges the Datang Hexigten Coal-to Gas
Project to confirm whether or not the informal pond has been used as a seepage pit to
dispose of contaminated water with hazardous substances. According to China’s Water
Pollution Prevention and Control Law (2008)10, Amendment (VIII) to the Criminal Law
6 As to the detailed description of sample collection and analysis, please see
http://www.greenpeace.org/eastasia/publications/reports/climate-energy/2014/keqi-ctg-pollution-en-report/ 7 Here national standard refers to the Integrated Wastewater Discharge Standard (GB8978-1996). According to the
standard, benzo[a]pyrene is classified as Category One Pollutant, which is defined regardless of industry, discharge method or the function of the water. All samples are taken from discharge points outside factory workrooms or treatment facilities with discharge concentrations reaching no more than 0.00003mg/L, i.e. 30 ng/L. 8 The range of PAHs found here are not included in the Integrated Wastewater Discharge Standard (GB8978-1996) with the
exception of benzo[a]pyrene. However, due to the hazardous nature of these compounds, both the US EPA and EU have listed a number of PAHs as the priority substance to regulate. For details, please refer to US EPA, Priority Chemicals http://www.epa.gov/osw/hazard/wastemin/priority.htm; EU Directive 2000/60/EC. DECISION No 2455/2001/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 November 2001. 9 Please seehttp://www.greenpeace.org/eastasia/publications/reports/climate-energy/2014/keqi-ctg-pollution-en-report/.
And please note that the testing results of Greenpeace Research Laboratories and the third-party testing facility are not directly comparable due to different methods employed in the analyses and that the sediment samples were not collected at the same time. 10
See http://www.gov.cn/flfg/2008-02/28/content_905050.htm.
8
(2011)11 and Environmental Protection Law (2014 revision)12, the use of seepage pits to
dispose of water with hazardous contaminants is explicitly banned and those who violate
can face penalties or even criminal charges in severe cases.
Manmade Waste Water Lakes
Greenpeace also found that a formal evaporation pond located 6km to the southeast of the
Datang Hexigten goal-to-gas plant had become a long-term holding pool for waste water.
According to the facility’s introduction and its own environmental impact report,
evaporation pools should be used for storing waste water only in the case of an emergency,
stating that “waste water may be temporarily be released into an evaporation pool for waste
water that has not met with reuse standards during testing periods or in the case of faults in
the waste water treatment process” (Datang Hexigten Coal-to-Gas Project, n.d.; Datang
International Power Generation Co., Ltd & Wuhuan Science and Technology Co., Ltd, 2008).
This clearly states that the evaporation pond is to be used only temporarily in the case of
emergencies and not as a place for the longer-term storage of industrial waste water.
During site surveys, the Greenpeace team found that the total area of the evaporation pond
covered an area of 1.1 square km. Though construction had not even been completed, in the
course of less than one year there were two evaporation pools nearly 5 meters deep13 that
had been filled with production waste water. Workers from Datang Chemical said that the
evaporation pools were currently at 70% capacity and that after phase two and three of the
project began production, even larger evaporation pools would be needed (Duan, 2014).
There was also a clear pungent odor surrounding the evaporation pools.
On August 30th 2014, the Greenpeace team collected waste water samples from this
evaporation pond, recording the entire process. All samples were collected using scientific
methods, and were also sent to a nationally accredited independent third party testing
facility as well as the Greenpeace Research Laboratories, based at the University of Exeter in
the UK for analysis.
Test results from the third party testing facility show that the waste water in the evaporation
pools contained similar heavy metals and organic compounds as were found in the waste
water taken from the informal pond, reaching levels that were several times (in the case of
some PAHs, hundreds of times) greater than latter. Meanwhile, current national standard,
i.e., the Integrated Wastewater Discharge Standard (GB 8978-1996)14, are not applicable for
evaporation ponds. However, as a point of reference, levels for volatile phenols, phenol,
benzo[a]pyrene and chemical oxygen demand (COD) in the sample were several times (up to
181 times for benzo[a]pyrene) above the national standards set for waste water discharges
11
See http://www.gov.cn/flfg/2011-02/25/content_1857448.htm. 12
See http://www.nnhb.gov.cn/web/201404/25/80012.htm. 13
Estimated by Greenpeace survey team in the field visits. 14
See http://kjs.mep.gov.cn/hjbhbz/bzwb/shjbh/swrwpfbz/199801/t19980101_66568.htm
9
(where they apply).
Results from Greenpeace Research Laboratories also showed that the waste water from the
evaporation pond contained a total of 154 different kinds of VOCs, 41 of which could be
reliably identified (i.e. compounds identified to better than 90% match to mass spectrum
libraries) as well as 209 SVOCs, 47 of which could be reliably identified. Compared with the
water samples taken from the informal pond, the waste water samples from this location
contained more types of phenol derivatives. Also found were a series of hazardous
pollutants including PAH derivatives, benzene derivatives (particularly alkylated benzenes),
substituted quinolones and pyridines, many of which are common to the highly hazardous
wastes arising from coal gasification operations (Gai, Jiang, Qian, & Kraslawski, 2008; Wang,
et al., 2011; Xu, Han, Hou, Jia, & Zhao, 2014).
Table 1: VOCs identified in wastewater sample of the formal evaporation pond
No. of chemicals isolated VOCs (154)
Compounds identified to better than 90%
Phenol & derivatives Other compounds
Phenol
Methylphenol
Ethylphenol
Azido‐phenol Dimethylphenol (3
isomers)
(E)‐3‐Phenyl‐2‐butenal
1‐(2‐Ethylphenyl)ethan‐1‐one
1‐Methyl‐2,3‐dihydroindene
2‐Cyclopenten‐1‐one, dimethyl‐
Methylbutane
Propanone
Benzaldehyde
Benzenemethanol
Toluene
Decane
Dodecane
Tetramethylhexadecane
Diisopropyl ether
Isopropyl(6‐phenylhex‐5‐ynyl)amine
N‐Benzyl‐3‐pyrroline‐N‐oxide
N‐Benzyl‐N‐(phenylethyl)amine
1,3,5‐Trimethyl‐1H‐Pyrazole
Dimethylthiophene
trans‐3‐Methoxy‐5‐(4‐methoxyphenyl)‐1,2,4‐
trioxolane
Tetrahydro‐2‐methyl‐2‐furancarboxaldehyde
5‐Phenyl‐2‐tetrahydrofurylmethyl 2'‐pyridyl sulfide
Benzene derivatives
Tetramethylbenzene
Difluorobenzene
Dimethylbenzene
1‐Methyl‐2‐(1‐propynyl)benzene
Propenylbenzene
4‐Ethenyl‐1,2‐dimethylbenzene
Pyridines derivatives
Methylpyridine
Dimethylpyridine
Trimethylpyridine
2‐Pyridinecarboxylic acid
Naphthalene & derivatives
Naphthalene
1‐Methylnaphthalene
2‐Methylnaphthalene
Note: Results from the Greenpeace Research Laboratories.
10
Table 2: SVOCs identified in wastewater sample of the formal evaporation pond
No. of chemicals isolated SVOCs (209)
Compounds identified to better than 90%
Phenol & derivatives PAHs & derivatives
Phenol
Methylphenol (2 isomers)
Dimethylphenol (3 isomers)
Trimethylphenol (2 isomers)
Ethylphenol
Diethylphenol (2 isomers)
Ethylmethylphenol (3 isomers)
Propylphenol
Methoxyphenol
Methylpropylphenol
9H‐Fluorene
Hydroxymethylnaphthalene
9H‐Fluorenol (2 isomers)
Other compounds
Methyl‐4‐indanol
Ethylanisole
1,1'‐Biphenylol (2 isomers)
Ethynylbiphenyl
2‐Cyclohexene‐1‐carbonitrile
2,3‐Dihydro‐2‐methylbenzo[b]thiophene
3,4,5,6,7,8‐Hexahydro‐(2H)‐
naphthalenone
Allyl toluenesulfonate
10‐Azatricyclo[4.3.1.0(1,6)]deca‐2,4‐diene
Hydroxyphthalide
2,3‐Dihydro‐1H‐inden‐5‐ol
(4‐Fluorophenyl)butynone
Benzo[d]isothiazole
(E)‐2‐(2H(1)‐4‐Methoxyphenylethene
Methoxyphenylacetone
1‐Methylene‐1H‐indene
Dimethyl‐3‐phenylaziridine
Pyridines derivatives
Phenylpyridine
9H‐Indeno[2,1‐b]pyridine
3,5‐Diacetyl‐1H‐pyrazole
5‐(Phenylmethyl)‐2‐pyridinamine
Quinoline derivatives
Isoquinoline
Methylisoquinoline
Methylquinoline
7,8‐Dihydro‐6‐methyl‐6H‐pyrrolo[2,3‐
g]quinoline
Note: Results from the Greenpeace Research Laboratories.
Figure 5: Total Ion Chromatograph for the sample collected from the formal evaporation
pond (SVOCs)
Note: Results from the Greenpeace Research Laboratories.
6 . 0 0 8 . 0 0 1 0 . 0 0 1 2 . 0 0 1 4 . 0 0 1 6 . 0 0 1 8 . 0 0 2 0 . 0 0 2 2 . 0 0 2 4 . 0 0
1 0 0 0 0 0 0
2 0 0 0 0 0 0
3 0 0 0 0 0 0
4 0 0 0 0 0 0
5 0 0 0 0 0 0
6 0 0 0 0 0 0
7 0 0 0 0 0 0
8 0 0 0 0 0 0
9 0 0 0 0 0 0
1 e + 0 7
1 . 1 e + 0 7
1 . 2 e + 0 7
1 . 3 e + 0 7
1 . 4 e + 0 7
1 . 5 e + 0 7
1 . 6 e + 0 7
1 . 7 e + 0 7
1 . 8 e + 0 7
1 . 9 e + 0 7
2 e + 0 7
2 . 1 e + 0 7
2 . 2 e + 0 7
2 . 3 e + 0 7
T im e - - >
A b u n d a n c e
T I C : S 1 4 1 0 0 8 0 1 . D \ d a t a . m s
11
Wastewater discharge standards used by the coal chemical industry are currently the
Integrated Wastewater Discharge Standard (GB 8978-1996) released in 1996. This covers
only a limited number of substances (39 indices are suitable for all industries) and permitted
levels are high. The test results from the Datang project show that these standards are not
suitable for today’s coal chemical industry and are in urgent need of being updated.
The way in which wastewater is being dealt with at the Datang facility shows that the ‘zero
wastewater discharge’ policy is merely a myth used in promotion and that this leading
‘model project’ in China’s coal chemical industry has serious problems that are not easily
resolved.
Air Pollution
Most of the synthetic natural gas products made by the Datang Hexigten project are used by
Beijing, which is already plagued by serious air pollution. However, according to local
residents Greenpeace interviewed, the exhaust produced by this ‘model project’ has also
created extremely serious air pollution for nearby residents. Herders living in Darihanwula
Sumu told Greenpeace that they have been plagued by air pollution since test production
began in December 2013.
In on-site interviews conducted by Greenpeace, most residents reacted strongly, saying that
as long as they were downwind from the Datang facility, there was a strong smell and they
couldn’t sleep at night. Some even said that they felt dizzy. Some pointed out that their
livestock have also been adversely affected with cows and horses gasping for air and
ultimately dying, with both ‘number and quality’ declining.
The air pollution problem has been recognized by the local government. In a response to a
complaint issued by the Hexigten EPB on July 3rd, it was admitted that the Datang coal-to-gas
project has produced a ‘strong odor in the test production phase’ (Hexigten EPB, 2014).
The environmental impact report for the Datang coal-to-gas project at Hexigten indicates
that there are two main sources of exhaust (Datang International Power Generation Co., Ltd
& Wuhuan Science and Technology Co., Ltd, 2008). One is the chemical portion, including
procedures like pressurized gasification, low-temperature methanol wash, coal gas wash and
separation, cooling, coal storage facilities and wastewater treatment, which emit organic
and inorganic pollutants such as carbon monoxide, sulfur dioxide, hydrogen sulfide,
ammonia gas, phenols, benzo[a]pyrene and particular matter.15 Another portion of the
process is the power generation facility, the typical pollutants of which are sulfur dioxide,
nitrogen dioxide and particulate matter.16
15
These emissions should comply with Malodorous Pollution Emissions Standards (GB14554-93) issued in 1994 and General Air Pollution Emissions Standards (GB16297-1996) implemented in 1997. 16
Thermal Power Plant Pollution Emissions Standards (GB13223-2003) implemented in 2004 applied to emission prior to July 2014 and afterward the new standards (GB13223-2011) that went into effect on July 1, 2014 applies.
12
In addition, based on the multiple VOCs that were found in waste water samples from the
informal pond and the evaporation pond, it is possible that volatile pollutants given off by
the pools could possibly contribute to air pollution in the surrounding areas.
However, open emission data available at government websites17 show that only emissions
from the thermal power plant are monitored, not inclusive of the other two main pollution
sources, the chemical plant and the wastewater treatment unit. However, even the limited
data from the thermal power plant indicate that levels of nitrogen oxide have been above
permitted levels for extended periods of time.
Greenpeace used open flue gas emission data disclosed at government websites18, including
both company self-monitoring and government monitoring data to analyze daily average
data for the Datang coal-to-gas project.
Based on the emission data monitored by the Datang Hexigten project itself, it was found
that in the 296 days between January 1st and October 23rd of this year, monitoring data for
facility was unavailable for the periods between April 5th-June 10th and August
26th-September 5th.
Data show that in the 203 monitored days, daily average nitrogen oxide levels exceeded
permitted levels19 for 196 days, constituting an extended period, and the highest
percentage above national standards were 303% (i.e. the daily average level of 805mg/m³ at
the Monitoring Site 2 on July 16th 2014 compared to the permitted level of 200mg/m³).
Particulate matter exceeded permitted levels for 23 days and at the highest percentage
above national standards were 208%. Sulfur dioxide exceeded permitted levels for 21 days
and the highest percentage above national standards was 632%.
On the other hand, the emission data monitored by the Chifeng Municipal Environmental
Protection Bureau (EPB) also indicated that daily average nitrogen oxide levels exceeded
permitted levels in the first three quarters of 2014.
However, despite compliance failures there is no denitration equipment installed in the plant,
as pointed out in a supervisory monitoring report on the Datang project’s emission data in
the third quarter of 2014 by the Chifeng Municipal EPB20.
17
See the footnote 2. 18
See the footnote 2. 19
Here Thermal Power Plant Pollution Emissions Standards (GB13223-2003) & (GB13223-2011) are applied. The limits are set for maximum allowed concentrations, not designated for daily average. 20
See http://www.cfhb.gov.cn/sjzx/hjsj/gkyjpsj/jdxjcsj/201408/P020140811631668800323.pdf
13
Figure 6: Daily Average Concentrations of Nitrogen Oxide (Monitoring Site 1)
Note: Prepared by Greenpeace based on data from Platform for the Self-monitoring and Information
Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State in Inner Mongolia21
Figure 7: Daily Average Concentrations of Nitrogen Oxide (Monitoring Site 2)
Note: Prepared by Greenpeace based on data from Platform for the Self-monitoring and Information
Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State in Inner Mongolia
Table 3: Above-Standard Nitrogen Oxide Levels at the Datang Coal-to-Gas Project
Note: Prepared by Greenpeace based on data from Chifeng Municipal EPB22.
21
See http://nmgepb.gov.cn:8088/enterprisemonitor/webpage!indexPage.action 22
See http://www.cfhb.gov.cn/sjzx/hjsj/gkyjpsj/jdxjcsj/index.html.
Nitrogen
Oxide
National Standard
(mg/m³) No. of days
above
Standard
(mg/m³)
Highest Recorded
Level ( mg/m³)
Highest % above
Standard Before July 1st
2014
After July 1st
2014
450 200 196
912 303
February 24th,
Monitoring Site 1
July 16th,
Monitoring Site 2
14
Policy Recommendations: No Active Promotion until a Working Model is
Established
The problem of concentrated greenhouse gas emissions from coal-to-gas technology has
received a great deal of attention and the issues of air pollution and waste water disposal at
Datang’s Hexigten project, a flagship model program in China’s coal-to-gas development
efforts, must not be overlooked (Gong & Li, 2014; Yang & Jackson, 2013). This issue warrants
close attention by the National Energy Administration and Ministry of Environmental
Protection. The truth is that Datang’s Hexigten Qi project and Kingho’s Yili project, two of
China’s four coal-to-gas model projects begun during the 11th Five Year Plan, still have many
problems that are not yet resolved. While construction has yet to begin on the other two
projects, production volume at the two operational projects remains far below design
specifications. Considering all this together, it would seem that China’s coal-to-gas industry
still lacks a successful model to follow.
The haze that shrouds nearly much of China should be a warning that the old path of
‘pollute first, clean up later’ is a mistake. As far as the coal-to-gas industry is concerned, we
should remain cautious and careful. Greenpeace calls on industry and government to
consider the following:
First, China’s National Energy Administration should adopt a more cautious policy by
establishing a model before expanding.
China’s energy policy under the 13th Five Year Plan is currently being developed and planned
coal-to-gas production has the potential to reach 50 billion cubic meters per year. This is the
wrong signal and may cause multiple projects to push ahead blindly. We recommend that
the National Energy Administration set production volume of China’s coal-based synthetic
natural gas to be below 20 billion cubic meters by 2020. The first four model projects can be
completed first and used as a platform to gain experience in production technique and
resolve technological bottlenecks like excessive energy and water use as well as pollution. At
the same time, this will allow for environmental standards to be established and sufficient
time to consider the next step of expansion.
Second, The Ministry of Environment Protection should implement a strict Coal Chemical
Pollution Emission Standards as soon as possible. Technology used to treat waste water in
the coal-to-gas industry is a global problem as there is a great deal of highly toxic waste
water and sediment created in the production process. It is easy to see through the lie of
‘zero wastewater discharge’ when evidence is so clear to the contrary in the form of huge
lakes filled with hazardous waste water that cannot be fully treated. This is also due to the
lack of discharge standards in the treatment of waste water. The Waste Water Discharge
Standards passed in 1996 are seriously outdated and are far from applicable to the
treatment of waste water produced by the coal chemical industry.
We call on the Ministry of Environment Protection to strengthen the monitoring of volatile
organics and other pollutants. The Ministry of Environmental Protection should also make
15
information more available to the public and place all coal chemical projects on the list of
national priority monitored institutions. The scope of public information should include gas
emissions, waste water and sediment that result from production processes in coal chemical
plants as well as pollutants produced by thermal power plants connected to them.
Third, the NDRC should implement practical controls on the increase in carbon emissions
by the coal chemical industry. The energy efficiency of coal-to-gas projects is far lower than
other technology pathways and produces extremely concentrated carbon emissions, nor
does it as of yet have a way of being economically viable(Ding, Han , Chai, Yang , & Shen,
2013; Li , Yang, Zhang, Kraslawski, & Qian, 2014). This is extremely detrimental to national
efforts to conserve energy and reduce emissions, very possibly leading to a new high carbon
lock-in effect and impact China’s ability to reach peak carbon emissions levels it has set by
2030.
The NDRC should work with China’s long-term environmental policies to strictly control the
development scale of coal chemical industries like coal-to-gas and integrate the coal
chemical industry into China’s coal market system as soon as possible. It should also begin
collecting a carbon tax.
Fourth, relevant government departments should give greater consideration to the
carrying capacity of water resources. China is a country with a serious water deficit and
water resources are unevenly distributed throughout the country with water necessary to
maintain ecosystems often being used for industrial purposes. The coal chemical industry,
including coal-to-gas manufacturing, uses massive amounts of water and most facilities are
located in inland regions of northwestern China, placing great pressure on local water
resources. In 2011, the State Council implemented a system to ensure the ‘strictest
management of water resources’, establishing three ‘red lines’ including total water usage
for each province, requiring that they to follow them explicitly23.
We recommend that national plans for coal chemical development are brought in line with
water resource management policies and that water intensive coal chemical projects be
strictly controlled. Local governments should reflect the true scarcity of water resources in
the water prices and consider very carefully the use of water transfer projects or water
rights exchange trials. They should also strictly forbid industrial use of agricultural or
ecological water resources.
23
See Opinions of the State Council on Applying the Strictest Water Resources Control System(2012) (http://www.gov.cn/zwgk/2012-02/16/content_2067664.htm)
16
References Bernton, H. (2014, May 3). China’s coal solution has carbon downside across globe. The Seatle Times.
Retrieved from
http://seattletimes.com/html/specialreportspages/2023517279_chinaenergyxml.html
Chen, D. (2014, October 17). 一个煤制气示范工程的真实面貌[The true face of a coal-to-gas model
project]. China Chemical Industry News. Retrieved from
http://mp.weixin.qq.com/s?__biz=MjM5OTI1NDg0OQ==&mid=201015024&idx=1&sn=1c325
2bd628acf972adc0000db838454&scene=2&from=timeline&isappinstalled=0#rd
Chifeng Municipal Water Resources Bureau. (n.d.). 赤峰市水利资源开发利用情况汇报 [Report on
water resources use and development in Chifeng City]. Chifeng: Chifeng Municipal Water
Resources Bureau.
Datang Hexigten Coal-to-Gas Project. (n.d.). 灰渣场蒸发塘简介[A brief introduction of evaporation
pond][Billboard]. Chifeng: Datang Hexigten Coal-to-Gas Project.
Datang International Power Generation Co., Ltd & Wuhuan Science and Technology Co., Ltd. (2008).
内蒙古大唐国际克旗日产 1200 万 m3 煤制天然气项目环境影响报告书简本[An abridged
environmental impact report of Datang Hexigton Coal-to-Gas Project with a daily capacity of
12 million m3]. Retrieved November 17, 2014, from Doc88:
http://www.doc88.com/p-772457570715.html
Ding, Y., Han , W., Chai, Q., Yang , S., & Shen, W. (2013). Coal-based synthetic natural gas (SNG): A
solution to China’s energy security and CO2 reduction? Energy Policy, 55, 445-453.
doi:10.1016/j.enpol.2012.12.030
Duan, X. (2014, August 8). 神华有意接手大唐克旗煤制气 更看重管道资产[Shenhua shows
interest in taking over Datang Hexigten Coal-to-Gas project: More valuing pipeline assets].
21st Century Business Herald. Retrieved from
http://money.21cbh.com/2014/8-8/xMMDAzMDdfMTI2MTcxMg.html
Gai, H., Jiang, Y., Qian, Y., & Kraslawski, A. (2008). Conceptual design and retrofitting of the
coal-gasification wastewater treatment process. Chemical Engineering Journal, 138(1-3),
84-94. doi:10.1016/j.cej.2007.05.032
Gong, M., & Li, H. (2014). High carbon emission risks of smog control measures——The case of
replacing coal with coal-to-gas. In Y. Qi (Ed.), Annual Review of Low-carbon Development in
China (2014) (pp. 62-76). Beijing: Social Sciences Academic Press.
Guo, L. (2014, September 10). 大唐发电煤化工项目巨亏调查 10 年砸 600 亿[Invistigation of huge
loss of Datang Power's coal-to-chemical projects: 60 billion in 10 years]. China Securities
Journal. Retrieved from
http://money.21cbh.com/2014/9-10/4MMDAzMDdfMTMwMjI4Mg.html
Hexigten Environmental Protection Bureau (EPB). (2014). 关于达日罕乌拉苏木牧民对大唐公司环
境信访案件办理情况的答复(克环发[2014]131 号[A reply to herders of Darihanwula Sumu
about the environmental complaint against Datang Company(Hexigten EPB No. [2014]131].
Chifeng: Hexigten EPB.
Inner Mongolia Dalinuoer Nature Reserve Managing Office. (n.d.). 自然保护区概况[Overview of the
Nature Reserve]. Retrieved November 17, 2014, from China's Dalinuoer:
http://www.kqdlh.com/view_zrbh_article.php?id=1204
Li , H., Yang, S., Zhang, J., Kraslawski, A., & Qian, Y. (2014). Analysis of rationality of coal-based
synthetic natural gas (SNG) production in China. Energy Policy, 71, 180-188.
17
doi:10.1016/j.enpol.2014.04.018
Wang, D. (2014, September 24). 内蒙古煤制气年底暖京城[Coal-based synthetic natural gas from
Innter Mongolia warms Beijing end of this year]. Beijing Daily, p. 5. Retrieved from
http://bjrb.bjd.com.cn/html/2013-09/24/content_111198.htm
Wang, W., Han, H., Yuan, M., Li, H., Fang, F., & Wang, K. (2011). Treatment of coal gasification
wastewater by a two-continuous UASB system with step-feed for COD and phenols removal.
Bioresource Technology, 102(9), 5454-5460.
Xu, P., Han, H., Hou, B., Jia, S., & Zhao, Q. (2014). Treatment of coal gasification wastewater by a
two-phase anaerobic digestion. Desalination and Water Treatment, 1-11.
doi:10.1080/19443994.2014.884474
Yang, C.-J., & Jackson, R. B. (2013). China's synthetic natural gas revolution. Nature Climate
Change(3), 852-854. doi:doi:10.1038/nclimate1988
Zhang, L. (2014, January 19). 内蒙古大唐国际克什克腾旗煤制天然气公司发生中毒事故已致 2死
4 伤[A poisoning accident in Inner Mongolia Datang International Hexigten Coal-to-Gas Co.,
Ltd killed 2 injured 4]. Retrieved from
http://inews.nmgnews.com.cn/system/2014/01/19/011398154.shtml
18
Appendix 1: Financial Analysis of Datang Coal Chemical
In addition to the problems of environmental pollution connected with the Datang Hexigten
coal-to-gas project, another point that should be of special interest to investors are the
continued losses of Datang Power’s entire coal chemical business unit, which can be mainly
attributed to high capital costs, the difficulty of operation and the lack of mature technology.
Financial reports of the Datang International Power Generation Co., Ltd. clearly show that
revenue from its coal chemical business unit is severely behind. In the company’s 2013
financial report, its coal chemical business showed the poorest performance out of all
business units with a total loss of 2.18 billion RMB, creating a striking comparison with its
high-revenue generating power production and coal product units.
2013 Power
Production
Coal
Products
Coal
Chemical
Other Units Total
Unit Revenue
External Transactions 65,629,209 4,210,348 4,937,628 450,273 75,227,458
Inter-unit Transactions 756,266 21,639,602 6,373 106,405 22,517,646
Total Revenue 66,394,475 25,849,950 4,944,001 556,678 97,745,104
Unit Performance 9,494,603 462,951 -2,186,275 435,511 8,206,790
Depreciation/Amortization 8,824,693 217,942 988,499 93,357 10,124,491
Revenue (Losses) from
Selling Off of Land,
Facilities and Equipment
43,630 33 -167 43,496
Revenue from Long-term
Investment
-16,926 -16,926
Losses from Asset
Depreciation
-717,657 -545,480 -674 -1,263,811
Interest Revenue 64,730 7,093 6,293 1,388 79,504
Interest Payments 6,794,882 292,225 1,009,725 87,676 8,184,508
Profit from Jointly
Operated Companies
24,329 438,513 214,979 677,821
Profit from Joint Ventures 133,030 114 133,144
Income Taxes 2,395,068 181,576 -249,920 63,284 2,390,008
Source: Datang International Power Generation Co., Ltd. 2013 Financial Report
However, despite being the worst performing business unit in the company, coal chemical
operations took up one of the largest portions of the company’s assets.
The following balance sheet shows coal chemical operations to hold the second largest
proportion of assets at Datang Power, reaching 23.7%, but contributes only 5.2% of its
revenue. Meanwhile, the coal chemical business unit ran at a loss in 2013, having a generally
negative impact on the company’s overall profitability.
19
Asset Ratios for 2013
Revenue Ratios for 2013
Profit Ratios for 2013
Power: 63.5%
Coal: 9.4%
Coal Chemical: 23.7%
Other: 3.4%
Power: 66.9%
Coal: 27.2%
Coal Chemical: 5.2%
Other: 0.6%
Power: 115.7%
Coal: 5.6%
Coal Chemical: Loss
Other: 5.3%
Source: Derived by Greenpeace from Datang International Power Generation Co., Ltd. Annual Report 2013
The disappointing performance of the coal chemical business unit caused Datang Power to
announce on July 8, 2014 that it had signed a ‘Restructuring Agreement for Coal Chemical
and Related Projects’ that would restructure operations at the Hexigten Qi coal-to-gas
project, Duolun coal chemical project, the Hulun Buir fertilizer project and Xilinhot mining
project in Inner Mongolia as well as the Fuxin coal-to-gas project in Liaoning Province24.
This news resulted in a massive 20% increase in the value of Datang Power stock, which
reached a new record high of 3.76 RMB at the end of the trading day.
Note: Based on open data available from Yahoo Finance.
Most investment analysts are optimistic about the deal and believe that the constant
problems and continued losses that the Datang Group faced in its coal chemical business,
which it viewed as a way to diversify its coal business, simply turned out to be more trouble
than it was worth.
24
See http://static.sse.com.cn/disclosure/listedinfo/announcement/c/2014-07-07/601991_20140708_4.pdf
20
Analysis by Nomura Securities titled “Goodbye Coal Chemical” states that delays and forced
technical conversions of the Datang coal chemical project ‘severely tested the patience of
investors’ and the divestment of this business took the pressure off that kept its stock price
so low25.
Analysis by Deutsche Bank also says that this was ‘good news for the company’ as the
market generally felt it was the coal chemical business that had caused losses for the
company, resulting in the stock price of Datang Power to drop 46%, 30% and 122% over
6-month, 12-month and 36-month periods26.
25
See Lam, J., & Tang, T. (2014). Quick Note - Datang International Power (991 HK, Buy) - Let it go – GOOD bye coal-chemical. Hongkong: Nomura. 26
See Deutsche Bank. 2014. Datang Int'l Power Alert - Significant value unlocking potential from coal chemistry business disposal.
21
Appendix 2: 54 Coal-to-Gas Projects Completed, Under Construction or
Planned
No. Project Name Province Capacity (billion cubic
meters(bcm)/year) Project Progress
1 Datang Coal-to-Gas Plant,
Hexigten Qi
Inner
Mongolia 4
Phase 1 of 1.33
bcm/year in
production; Phase 2
under construction
2 Kingho Coal-to-Gas Plant, Ili,
Xinjiang Xinjiang 5.5
Phase 1 of 1.375
bcm/year in
production; Phase 2
design tendering
3 Datang Coal-to-Gas Plant,
Fuxin Liaoning 4
Phase 1 under
construction
4 Huineng Coal-to-Gas Plant,
Ordos
Inner
Mongolia 1.6
Phase 1 under
construction
5 Inner Mongolia Mining
Coal-to-Natural-Gas Plant, Ili Xinjiang 2
Phase 1 under
construction
6 Guodian coal-to-gas plant,
Xing'an League Mongolia 4 In preparation
7 Xinmeng coal-to-gas plant,
Ordos
Inner
Mongolia 4 In preparation
8 Beikong coal-to-gas plant,
Ordos
Inner
Mongolia 4 In preparation
9 CNOOC coal-to-gas plant,
Ordos
Inner
Mongolia 4 In preparation
10 Hebei Jiantou coal-to-gas
plant, Ordos
Inner
Mongolia 4 In preparation
11 Huaxing coal-to-gas plant,
Ordos
Inner
Mongolia 4 In preparation
12 China Power Investment Corp
coal-to-gas plant, Huocheng Xinjiang 6 In preparation
22
13 Suxin Energy coal-to-gas
plant, Hefeng Xinjiang 4 In preparation
14 Guanghui coal-to-gas plant,
Kamusite Xinjiang 4 In preparation
15 Huaneng coal-to-gas plant,
Zhundong Xinjiang 4 In preparation
16 SINOPEC coal-to-gas plant,
Zhundong Xinjiang 8 In preparation
17 Longyu coal-to-gas plant,
Zhundong Xinjiang 4 In preparation
18 Zhejiang Energy Group
coal-to-gas plant, Zhundong Xinjiang 2 In preparation
19 Xinjiang Tianye Group
coal-to-gas plant, Zhundong Xinjiang 4 In preparation
20 CNOOC coal-to-gas plant,
Datong Shanxi 4 In preparation
21 Wanneng coal-to-gas plant,
Fengtai Anhui 2.2 In preparation
22 Shenhua coal-to-gas plant,
Ordos
Inner
Mongolia 4
Feasibility study being
compiled
23 Guodian Pingmei coal-to-gas
plant, Nilka Xinjiang 4 Being filed
24 China Power Investment Corp
coal-to-gas plant, Yinan Xinjiang 6 Being filed
25 TBEA coal-to-gas plant,
Zhundong Xinjiang 4 Being filed
26 Huadian coal-to-gas plant,
Zhundong Xinjiang 4 Being filed
27 China Coal coal-to-gas plant,
Zhundong Xinjiang 4 Being filed
28 Yan Mining coal-to-gas plant,
Xinjiang 4 Being filed
23
Zhundong
29 Kailuan coal-to-gas plant,
Zhundong Xinjiang 4 Being filed
30 Changji Shengxin coal-to-gas
plant Xinjiang 1.6 Being filed
31 Huahong Mining coal-to-gas
plant, Zhundong Xinjiang 2 Being filed
32 Shendong Tianlong
coal-to-gas plant, Zhundong Xinjiang 1.3 Being filed
33 Sanyi coal-to-gas plant,
Zhundong Xinjiang 4 Being filed
34 Beikong New Energy
coal-to-gas plant, Zhundong Xinjiang 4 Being filed
35 Ziguang coal-to-gas plant,
Hami Xinjiang 0.8 Being filed
36 Hongsheng New Energy
coal-to-gas plant, Zhangye Gansu 4 Being filed
37 Huaneng coal-to-gas plant,
Hulun Buir
Inner
Mongolia 4 Being filed
38 Jinneng Group coal-to-gas
plant, Shuozhou Shanxi 4 Being filed
39 Xinfeng Cement coal-to-gas
plant, Handan Hebei 1.8 Being filed
40 Xing'an Boyuan Coal-to-gas
plant, Xing'an League
Inner
Mongolia 4 Submitted to NEA
41 Huaneng coal-to-gas project,
Weinan Heyang Shaanxi 4
Contract signed Oct
2014
42 Anhui Jingwan coal-to-gas
project, Anqing Anhui 4
Contract signed Oct
2014
43 Zhendong New-Energy
coal-to-gas project, Baotou
Inner
Mongolia 6
Contract signed Aug
2014
24
44 Bohai Chemical coal-to-gas
plant, Ordos
Inner
Mongolia 8
Contract signed Feb
2014
45 Tianjin Energy Investment
coal-to-gas plant, Hulun Buir
Inner
Mongolia 16
Contract signed Jan
2014
46 Jinshajiang Chuangtou
coal-to-gas plant, Ningdong Ningxia N/A
Contract signed Jan
2014
47
Inner Mongolia Fortune
Energy coal-to-gas plant,
Bayannaoer
Inner
Mongolia 4
Contract signed Jan
2014
48 Hebei Jiantou coal-to-gas
plant, Hulun Buir
Inner
Mongolia 16
Contract signed Nov
2013
49 Xinjiang Energy coal-to-gas
plant Xinjiang 8
Feasibility study
tendered Oct 2013
50 Guoneng coal-to-gas plant,
Baotou
Inner
Mongolia 4
Contract signed Sep
2013
51 Guochu Energy coal-to-gas
plant, Alxa League
Inner
Mongolia 4
Contract signed Sep
2013
52
Shandong Energy Shenglu
Energy & Chemical coal-to-gas
plant, Ordos
Inner
Mongolia 10
Contract signed Sep
2013
53
Xinjiang Development and
Construction Corp Xiexin
Coal-to-gas Plant, Yining
Xinjiang 4 Contract signed Sep
2013
54 Inner Mongolia Mining
coal-to-gas plant, Hohhot
Inner
Mongolia 4
Contract signed Sep
2013
Data Sources and Processing: This list of coal-to-gas project at various stages of development (as of
October 2014) is an update to the list published by Greenpeace in June 201427, which is compiled
based on a wide range of public information available online, including government documents, EIA
reports and news reports, project lists created by other institutions. We eliminated projects that
have had no new information since 2012. For more information, please contact Greenpeace.
27
See the Chinese version http://www.greenpeace.org/china/zh/publications/reports/climate-energy/2014/chinese-coal-to-gas-industry-analysis/. Please contact Greenpeace for the English version.