Europe China Research and Advice Network (ECRAN)

Transcription

1 Europe China Research and Advice Network (ECRAN) 2010/ Short Term Policy Brief 36 Waste Management in China March 2012 Author: Neil Blakeman This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of ECRAN and can in no way be taken to reflect the views of the European Union. This project is funded by the European Union This project is implemented by a Consortium led by Steinbeis GmbH & Co. KG für Technologietransfer

2 Background Briefing: Waste Management in China Executive Summary China s waste management problem is important to the EU because it is linked to a number of global issues (environmental damage, greenhouse gases and public health) and it represents commercial opportunities for EU companies. China also continues to be a destination for EU waste. Integrated and sustainable waste management seems to be a long way off for China. The Chinese authorities face a very significant set of challenges including the volume of waste, rapid growth in consumption, rising costs and ineffective implementation of policy. There is urgent need for progress given the detrimental impact waste has on the environment, energy efficiency, the economy and people s health. Conversely, successful action could have a very positive impact. Waste volumes are forecast to continue increasing so the challenge of decoupling economic growth and materials consumption is significant. Due to fast growing waste volumes and the struggle to manage pollution and harmful health impacts (for example, dioxins from incineration), waste management remains a sensitive area with Chinese policymakers, and increasingly the Chinese people. Discussions regarding policy, data and programmes are therefore not straightforward. Current policy initiatives and budgets, even with the increased focus on waste in the 12 th Five Year Programme, do not look adequate to address the challenges. This is compounded by the number of ministries and levels of government that need to act cohesively together, and a lack of enforcement at regional and local levels. It is not clear whether strategic thinking has a long enough timeframe and is done in sufficient depth. Effective engagement with the EU would probably be welcomed by China, and could provide valuable assistance across a number of disciplines, categories of waste and organisations. EU collaboration should focus on types of waste and aspects of waste management which are more dangerous, more polluting, will grow dramatically and which, if treated effectively, could deliver energy saving and environmental benefits. Ideally, this would mean agreeing engagement in areas of greatest impact, e.g. hazardous waste, municipal solid waste and industrial waste. There is good experience in certain Member States which can be shared. Cofunding might be an option, at least with the Chinese providing in-kind support. The EU will need to appoint a combination of Chinese project management and waste management expertise - officials working together with external resources. To maximise impact for the EU, an approach involving a range of organisations and support for business is recommended (although there are risks with intellectual property rights). This should be coordinated and project managed by an external project team (under EU direction) to identify cross-cutting issues, realise synergies and maximise impact. To ensure effective and successful delivery, this would ideally be jointly planned and monitored with the Chinese side. Neil Blakeman 2 of 11

3 Main Points This document focuses on solid waste, providing a background summary of the estimated volumes, treatments, future drivers and challenges. Recent and emerging policy is considered together with the estimated national budget and highlights of some recent initiatives. The picture is one of an incomplete policy framework, variable implementation and patchy enforcement. The number of government departments involved, together with the dynamics between them, makes the task of improving national and local waste management that much greater. A range of foreign companies are involved in waste management, but it appears that many have not found this a straightforward process, even when compared to other areas of foreign involvement in China. It is likely to require careful negotiation and patience, but EU engagement could play a valuable role in assisting China. Neil Blakeman 3 of 11

4 1. Background / Context 1.1 Types and quantities of waste This document focuses on solid waste (rather than aqueous or gaseous). In China, solid waste is classified in three categories and generates the following estimated annual volumes: industrial solid waste (ISW), mainly from mining and steel, 2 billion Tonnes (T) municipal solid waste (MSW), million T hazardous waste (HW), 15+ million T By comparison, total EU waste generated is 3 billion T (of which 100 m T is hazardous). It is currently a challenge to find accurate, up-to-date estimates for many important measures of waste. There is a possibility that more useful estimates based on recent academic surveys and analysis may be released in the future. 1.2 Treatment of waste Waste separation remains a great challenge although schemes have started to be implemented in major cities. Reports regarding recycling rates indicate mixed messages. Anecdotally, anything which generates a margin is taken away by recycling companies (state-run and private), suggesting high recycling rates. Landfill remains the dominant means of disposal for 60% of the remaining MSW collected in China. A further 25% is dumped, and 13% incinerated (there are plans to increase this to 35%). In the EU, on average, 42% of MSW is recycled, 38% goes to landfill, and 20% is incinerated. A high proportion of the MSW collected in China is organic or catering waste (c.50%), apparently offering opportunities for waste to energy (WTE) treatment, mostly through incineration. There were plans to more than double the number of plants to 148, during the past five year planning period (there were 93 at the end of 2009). The economics and implementation of the expansion in incineration have since been challenged this is explored in more detail below. 1.3 Macro drivers Key macroeconomic trends are expected to continue in China: sustained growth in the economy, including industrial production, urbanisation (now over 50%), and growing consumption. These trends will all continue to drive unprecedented increases in the quantity of waste generated, placing significant demands on the emerging waste management processes and infrastructure. Neil Blakeman 4 of 11

5 1.4 The scale of the challenge A comprehensive World Bank report was written in 2005 (we are not aware of anything as comprehensive that has been written since). It identified issues and recommendations for waste management in China, a number of which are still valid today: China surpassed the US as the world s largest waste generator in 2004 By 2030, MSW from China s urban areas was forecast to increase by 150% to 480m T, more than twice the amount estimated to be generated in the US over the same period (the total China figure could potentially reach 600m T) [these estimates implied c. 250 m of MSW in 2010]. In 2002 over 1 bn T of ISW was generated in China (over five times the amount of MSW). The figure for HW was 10m T. All aspects of the waste management system were undergoing wholesale change. It was established that China needed to move up the waste management hierarchy, promoting waste minimisation, reuse and recycling, over other waste disposal methods new landfills were expected by 2025 [c already existed in major cities] China could face an eight-fold increase in the waste management budget by Increasing waste incineration from the then figure of 1% to a targeted 30% would at least double global ambient dioxin levels (a highly toxic Persistent Organic Pollutant (POP)) Continuing challenges included increasing coverage, environmental requirements, cost-effective service delivery, brownfield sites and sludge disposal. A number of critical issues were identified, including: information availability, decision-making processes and institutional arrangements, operating facilities, financing, private sector involvement and carbon financing. Bearing in mind consistent growth in China s GDP, and the likely associated increase in MSW per capita, if China does not significantly improve its waste management, it seems quite possible that the 600m T estimate for MSW in 2030 could be too low. For hazardous waste, management and measurement are focused on industrial sectors (although they probably significantly underestimate the quantity); there is little or no management system for household hazardous waste. 1.5 Existing legislation Legislation, regulations and guidelines in China have been growing but compared to the EU, there is still much to do both in terms of the central framework and local implementation, measurement and enforcement. Some of the key legislation and regulations include: Neil Blakeman 5 of 11

6 Laws o Environmental protection law (1989) o Environment pollution caused by solid waste (amended in 2004) o Cleaner production promotion law (2002) o Circular economy promotion law (2008) Administrative regulations o Hazardous waste o Medical waste o E-waste Department rules: hazardous waste, municipal waste, recyclable waste, waste import/export Local regulations 2. Current policy 2.1 Policy initiatives Issued last year, the 12 th Five Year Programme, running from 2011 to 2015, reflects increasing concerns in terms of energy security, energy efficiency and energy utilisation, together with a greater focus on the low carbon agenda, recycling, pollution control and safety, and protection of the environment. Specifically, the programme gives greater attention to waste management and recycling. As part of the development of a circular economy, and intensifying environmental protection, the programme encourages: strengthened regulation (including on heavy metals, hazardous waste and soil pollution) accelerated construction of waste treatment facilities upgraded waste separation, recycling systems and recovery of renewable resources With sustained pressure on China s level of greenhouse gas (GHG) emissions, effective management of MSW could offer a modest but not insignificant reduction in GHG, as well as offering a positive economic impact and more energy efficient growth. In spring 2011, the State Council approved proposals by 16 ministries to strengthen the work of urban waste management companies, allowing treatment of perhaps 80% of urban refuse. A month ago, the Ministry of Environmental Protection (MEP) issued its own plan for the next three years; one of the nine major objectives is to achieve a significant improvement in the control of pollution arising POPs, hazardous chemicals and waste. In terms of other recent developments and targets: 35 Landfill Gas (LFG) utilisation projects had been completed and commissioned throughout mainland China by the end of 2010, reducing methane and GHG emissions Neil Blakeman 6 of 11

7 Recently, a target of building 1200 sewage plants in the next 5 years was set, with a combined treatment capacity of 46 m tonnes By 2015, the comprehensive utilisation rate of ISW is targeted at 72% and the urban household MSW treatment rate at 80% An extensive survey has been undertaken over recent years by the China Society for Environmental Sciences (CSES); the data from this will hopefully allow more rigorous policymaking and implementation There is also growing recognition that certain types of waste require particular attention, for example hazardous waste, medical waste and e-waste, with more detailed regulations and guidelines gradually being published. 2.2 National budget In terms of China s investment in waste treatment facilities, certain estimates have recently been reported. China Solid Waste Net estimated RMB 170bn ( 20bn) during more than double the amount invested in the previous 5 years. Standard Chartered Bank estimated that investments in municipal waste treatment will quadruple to RMB 286 bn ( 34bn) for central, provincial, local and private sector spend. These sources therefore imply a cost of RMB bn ( 4-7bn) per annum. The 2005 World Bank report estimated a required annual spend of c. RMB 115 bn ( 14bn) by 2010, apparently double the current estimated budget. 2.3 Comment Given the wider objectives which the MEP has to address, including pollution reduction and the safety of drinking water, realistically only limited resources can be allocated to solid waste management. However, the effective management of waste can in itself make an important contribution to these key objectives. It is not clear whether the extent of the growing challenges is fully understood in government or if sufficient priority is being given to addressing them. The number of ministries and levels of government involved exacerbates the problem. There are arguments that the rate of increase in waste volumes starts to decrease as an economy matures and waste management improves. Some estimates suggest that this may occur around in China s case although it may be premature to rely on this scenario. The World Bank states that a planning horizon of 25 years is needed for waste management although, again, it is not clear whether the planning period and system is sufficiently robust. The increase in incineration and WTE plants is understandable given pressures on landfill, but concerns exist about this expansion. For example, it can be unclear whether suitable pollution controls are effectively put in place resulting in concerns about the level of dioxins and the extent to which coal or oil is being used. International waste markets are increasingly interconnected, for example, through the export of EU and US recyclable waste for processing in China, with its resultant problems. Neil Blakeman 7 of 11

8 It is understandable that policy implementation takes time, however in certain respects China could learn from other countries and consider more accelerated development, potentially advancing more quickly than some developed countries have done. 3. The role of central and local government Central government provides the policy framework for waste management, largely driven by the National Development and Reform Commission (NDRC), Ministry of Finance (MOF), MEP and Ministry of Housing and Urban-Rural Development (MOHURD, formerly the Ministry of Construction). This leaves significant responsibilities for Provincial and Municipal government to determine local policy and ensure effective implementation. The number of government departments involved in aspects of waste management, at national, provincial and local levels, increases the challenge of ensuring integrated policy and implementation. There seems to be considerable variation in policy, standards and enforcement, including funding, responsibilities and transparency. This is coupled with issues and sensitivities, such as corruption and unemployment levels as a result of closing down unregulated waste management companies. The proportion of funding for waste management from central budgets is not known at this stage. It is also unknown how squeezed these budgets may become at the local level, given local government funding constraints. 3.1 Can pilot city provinces play a role? Five cities and two provinces will reportedly set caps on GHG emissions in preparation for the launch of local carbon markets. These will set overall emissions control targets, submit proposals on how to hit the targets, and establish a dedicated fund to support the project. In addition, 100 other entities are to organise their own regional CO2 emissions trading platforms. The State Council has approved an implementation plan drawn up by Guangdong, China's biggest CO2-emitting province, to cutting carbon intensity by 20%. As part of addressing the environmental agenda, it is understood that Guangdong is actively considering waste management issues and opportunities. 4. Entities already involved in waste management A range of entities (outlined below) are involved in waste management: i) Companies The increase in a national pilot programme announced last year reportedly triggered the development of a large number of waste recovery companies. These are estimated by one source to be around 100,000 in number, providing jobs for 18 million people, reportedly with the potential for revenue to grow at 30% annually. These are both state-owned and private entities; many of the latter are believed to operate illegally without regulation. Neil Blakeman 8 of 11

9 Registers of companies with environmental or waste handling permits are sometimes published by officials, particularly for hazardous waste. A number of foreign waste processing companies are already active or considering the market, for example, Veolia and Safetykleen. Elements of the waste management industry have become increasingly interconnected commercially. For example, high proportions of certain types of waste are now exported from developed countries to China for processing, and Chinese companies have acquired some European companies in their supply chain. ii) Government As outlined earlier in this report, the Chinese government has given greater attention to developing waste management policy over recent years, including examples of cooperation with other countries, particularly where technology transfer is involved (for example, with Japan and Germany). Local government departments and related agencies are increasingly active: various specialist institutes, foundations and trade associations exist, all of which can play a role in supporting effective engagement. This may be directly related to waste management, but also in areas of environmental science, energy efficiency, etc. iii) Non-Government Organisations NGOs are also in evidence. Arguments regarding incineration, for example, have been strongly put forward and are relatively highly publicised. As a minimum, they give local populations a chance to air their views. Local NGOs have been supported by overseas NGOs. iv) Multilateral agencies Organisations such as the World Bank have in the past played an important role in identifying issues and recommendations. 5. Prospective cooperation with the EU The prospects for cooperation will depend largely upon effective engagement and sufficient resources from the EU (including funding, technology, expertise and capacity building), and the receptiveness or otherwise of various players on the Chinese side. We understand that relevant funds have already been earmarked by the EU. Hopefully the Chinese will at least commit to providing in-kind support (for example, offices, accommodation and subsistence etc.). The EU will need to appoint a combination of Chinese project management and waste management expertise - officials (from the EU and Member State agencies) working with external specialist resources. Neil Blakeman 9 of 11

10 5.1 Possible future scenarios from the Chinese perspective include: i) Active international cooperation from China to learn best practice and transfer technology with a number of partners, including the EU. This would allow a range of cooperation options to be more fully explored and tested. ii) A preference to work with the US and/or Japanese, rather than EU. At one level, if the results are good, this may be acceptable from some perspectives. However, relations could be complicated by other tensions in bilateral relationships (for example, in commercial or foreign affairs) and would leave EU companies and other players marginalised. iii) The Chinese go their own way, perhaps selectively accepting loans, incentives and technology. 5.2 Areas of collaboration If the key players in China are engaged effectively, the prospects for cooperation with the EU and real progress could be significant. There are a number of levels at which collaboration could take place: i) Government / Agencies Overall coordination would be at the EU level (for example, managed by DG Environment and through the Environment Sector Dialogue, with a cross-ministry group on the Chinese side). Due to capacity and the need for more specific and focused engagement, projects would probably be better driven at the level of Member States. Such assistance could include exchanges of staff and expertise to support areas such as planning, drafting legislation, guidelines, standards, policy, management models, and measurement and targets at a central and regional level. To accelerate the process and maximise impact, coordination with other relevant groups (listed below) would be important, for example the EU Chamber of Commerce Working Group for the Environment. ii) Academic, science & research Greater cooperation could be funded in these areas, including sharing course content, collaborative case studies and research, preferably with a practical bias. iii) Think tanks, journalists and NGOs Similarly, further regular analysis of future scenarios, underlying issues and human rights would better inform the debate about how best to allocate resources and determine priorities. Organisations such as Green Beagle in Beijing and the World Wide Fund for Nature (WWF) have been active in this area. Waste pickers are very substantial in number (one estimate indicates 3.8m people) and could be an important community group. Neil Blakeman 10 of 11

11 iv) Promoting commercial opportunities Engagement by EU waste management specialist companies could be more actively encouraged and facilitated, for example through trade and investment promotion. This would lead to more sharing of technology and know-how through consultants, contractors etc. As always, care would need to be taken over the protection of intellectual property rights. It is worth noting that collection methods vary from one country to another in terms of the range of vehicles, transfer stations and treatment plants. The Japanese or US experience and technology may be more readily applicable in certain cases. Exporting solutions and technologies does not always work local adaptation is likely to be needed. Anecdotally, some foreign firms have found it slow and difficult to penetrate certain markets partly due to market access issues. Local investment may be an important step. Trade associations can play a role in helping to facilitate engagement and identify opportunities, such as the International Solid Waste Association (ISWA) and, at the country level, organisations such as the Chartered Institute of Waste Management (CIWM) in the UK. 6. Conclusions Realistically, integrated and sustainable waste management seems to be a considerable way off in China. The Chinese authorities face a very significant set of challenges in terms of scale, cost and effective implementation. If they are unsuccessful or too slow in achieving progress, the negative impacts should not be underestimated - in terms of the environment, energy efficiency, the economy and public health. Equally, the benefits of concerted, successful action could be very positive. In a number of respects, there needs to be a change in attitudes and behaviour regarding waste management, both among officials and much of the Chinese public. Related issues include the need for transparency and to build public trust, for example, with the building of new incinerators. EU Policy Implications: There is a real need and opportunity to actively work with China on waste management. EU entities will need to approach waste management with an open mind. They will need to recognise the progress China has made, understand evolving policy and challenges, treat China as an equal partner, and adapt their response. For example, over-ambitious environmental targets and timeframes may be counterproductive. To maximise impact for the EU, a combined approach across a range of entities seems likely to have the greatest impact. This should be coordinated and project managed to identify cross-cutting issues, realise synergies and maximise impact. Ideally, this would be jointly planned and monitored with the Chinese side. EU collaboration should focus on types of waste and aspects of waste management which are more hazardous, more polluting, will grow dramatically and which, if treated Neil Blakeman 11 of 11

12 effectively, could deliver energy saving and environmental benefits. A prerequisite will include genuine agreement on effective, close working by the key players on the Chinese side. Ideally, this would mean agreeing engagement in the areas of greatest impact, across: o Hazardous waste o Municipal solid waste o Industrial solid waste It is understood that a reasonable budget for collaboration has been created by the EU. Specific programmes and projects need to be identified and agreed. A useful start to cooperation might be a workshop which seeks to honestly and openly discuss the challenges and cultural issues at play. Neil Blakeman 12 of 11