China’s tremendous economic growth and modernization has propelled the nation to a position where its consumption of energy imports outpaces its economy. As the world’s third-largest oil importer, after the United States and Japan, China imported a record-high 36.38-million tons of refined oil last year, 15.7% more than in 2005, to fuel an estimated annual economic growth of 10.7%, reports China’s official Xinhua news service. Meanwhile, China is one of the world’s largest producers of carbon dioxide emissions, second only to the U.S. So, with continued expectations of rapid industrial growth in China, the nation is focused on adjusting its energy mix to prevent both of these trends from escalating.
Since China is listed in the Kyoto Protocol as a developing nation, it is not bound to any particular greenhouse (GHG) emissions-reduction targets that apply to industrialized countries that have ratified the protocol. During the formation of the Kyoto Protocol, developing nations, such as China, made the point that industrialized countries, by comparison, contributed far more to creating the GHG-related problem and have more means to contribute to its solution.
At the same time, though, "[China’s] rise in greenhouse gases could easily offset any reductions that would be made by the European Union," warned Benita Ferrero-Waldner, the European Union’s head of foreign relations, during recent talks with Chinese Foreign Minister Li Zhaoxing. And since GHG’s are readily dispersed and long-lived in the atmosphere, a ton of a given GHG has the same effect on atmospheric concentration – and thus on climate change – whether it comes from Beijing or Hamburg. The bottom line, Ferrero-Waldner added, "Neither energy security nor climate change can effectively be addressed without China."
According to Chinese officials, it won’t have to. At the World Economic Forum’s Annual meeting this January, Zhang Xiaoqiang, vice chairman of China’s National Development and Reform Commission (NDRC), stressed that China intends to follow the Kyoto Protocol, and urged speeding up negotiations and establishing concrete emission targets. While China intends to keep its emissions low, Zhang pointed out that cement and steel production in China are highly energy intensive, and only around half as efficient as technologies used in steel mills in Japan, Europe, or the US, for example. To meet its targets, Zhang said, China would need help from the industrialized world.
Consequently, China’s status as a leading producer of greenhouse gases is being viewed globally as more and more of a business opportunity for foreign companies that can provide the necessary technological innovation. Indeed, in almost the same breath as her warnings regarding increased GHG emissions in China, Ferrero-Waldner said that the EU was already working with China on adopting new technology to trap and store carbon-dioxide emissions in coal-fired power plants. Meanwhile, on the other side of the Atlantic Ocean, U.S. President George W. Bush recently used his State of the Union address to emphasize the "critical role" for American technology and innovation in reducing global GHG emissions. Many such cooperative exchanges will undoubtedly be discussed at next month’s AchemAsia, the 7th International Exhibition-Congress on Chemical Engineering and Biotechnology (May 14-18; Beijing, China), organized by Dechema e.V., (Frankfurt, Germany; www.dechema.de).
The attraction and potential impact of such cooperation is already evident in China’s participation in the Kyoto Protocol’s Clean Development Mechanism (CDM). The CDM offers a way for industrialized countries to get "credits" towards their own emissions targets by funding sustainable development projects in developing countries. As a developing country, China has 164 projects either in existence or in the planning stages with help from around the globe, according to Lu Xuedu, deputy director-general of the office of global environmental affairs at the Ministry of Science and Technology. In 2006, China’s GHG reduction was more than 40% of the total reduction of the 40 countries involved in the CDM, according to Xuedu.
Targeting energy efficiency
China has set a target of reducing energy consumption per unit of GDP by 20% for the five-year period from 2006 to 2010. The goal is aimed at guiding China’s social and economic development, but the country is already behind schedule. Official figures from China’s NDRC show that in 2006 China failed to meet the 4% energy-reduction milestone. In fact, China witnessed an 0.8% increase in its energy consumption per unit of GDP in the first half of that year, and indexes for major pollutants have continued to rise. In a national meeting mapping out economic policies for 2007, China’s central authorities recognized that more efforts were needed to improve energy efficiency in the country and issued a stark warning to local governments that are uncooperative in the future.
Solid opportunities in cement
China is the world’s biggest cement producer, according to government figures, recording a production of 1.05 billion tons in 2005. The majority of the production currently comes from small factories, which are energy inefficient and use out-of-date environmental technologies. China’s 11th Five-Year Plan (2006-2010) for the cement industry aims to shut down some 1,600 small factories, phasing out 250-million tons of backward production capacity. According to the Asia-Pacific Partnership on Clean Development and Climate – launched in January 2006 by Ministers from China, Australia, India, Japan, Republic of Korea and the United States – old technology, primarily involving the wet-kiln process, will eventually be replaced in favor of dry processing technologies, energy-efficiency and process improvements, power generation from waste-heat recovery and enhanced co-processing of low-grade primary fuels and industry wastes.
State-of-the-art coal
China satisfies more than two-thirds of its power needs from coal, which produces approximately at least 75% more carbon dioxide than natural-gas derived power and generates significantly more nitrogen oxides, sulfur oxides, carbon monoxide, particulates and mercury per unit of heat. To meet the country’s rising electricity demand, a new coal-fired power plant is built every two weeks in China. By 2010, China’s coal-output capacity is expected to hit 2.45-billion tons, up 16% from 2005, to realize the goal of an overall balance of supply and demand. In 2005, China’s coal output stood at 2.26-billion tons.
With the goals of accelerating technological modernization in the industry and meeting projected growth in demand, the Chinese government is planning to establish five to seven major coal producers over the next five years. Each of the giants will have an output capacity of 100-million tons of coal annually under the proposals in the country’s 11th Five-Year Plan. The restructuring policies for the coal industry worked out by the National Development and Reform Commission allow for mergers, renovation and regrouping of small mines. By 2010, the output of large and medium-sized coal mines should account for 75% of the country’s total, compared with the current 56%.
The Asia-Pacific Partnership on Clean Development and Climate refers to a range of advanced coal and gas technologies with the potential to significantly reduce air pollution, including carbon dioxide capture and storage, as well as advanced power-generation systems. These include integrated gasification combined cycle (IGCC), oxy-fuel and post-combustion capture. The partnership also cites ultra-supercritical pulverized fuel, coal cleaning and treatment, poly-generation, hydrogen production, enhanced coal-bed and waste coal-mine methane, coal gasification and coal liquefaction as other important elements of a cleaner fossil energy future. Meanwhile, increased availability of liquefied natural gas is also needed to meet the rapidly growing need for high quality, affordable and low emission fuel in the region.
A shift towards biorefineries
One of the major steps China is taking to address the escalating demand for oil imports and increasing GHG contribution is the new Law on Renewable Energy, which took effect on January 1, 2006, with a stated goal of increasing the use of renewable energy to 10% of the country’s electricity consumption by 2010. Meanwhile, China has targeted a 10% ethanol gasoline blend by 2010, which would amount to a biofuel consumption of about 23-million m.t./yr.
In the longer term, senior Chinese officials have announced goals of reducing the nation’s use of refined oil by 10 million tons, or more than 25%, by 2020 through the use of liquid biofuels like ethanol and biodiesel, Xinhua reports. Shi Yanquan, deputy director of the Ministry of Agriculture’s department of science, technology and education, says using crops and excrement in rural China to produce biofuels would meet the country’s growing energy demands and boost rural economy. Apart from liquid biofuels, the government will focus on developing methane, compressed stalks for burning and oil-rich crops in the next five to ten years, Shi adds. The ministry plans to provide 40 million rural households with access to methane by 2010, more than double the number in 2005.
A fringe benefit of increased biomass use in China is the related environmental advantages that it offers. In comparison to fossil fuels’ greenhouse-gas contribution, biomass has a positive carbon-dioxide balance because it is derived from renewable resources. This is an important factor in the context of the upcoming 2008 Olympics in Beijing. China has pledged to stage a "green" Olympics and is expected to use the games to demonstrate the vigor with which it has embraced renewable energy.
China’s biomass projects will be funded, at least in part, by the Ministry of Finance, which has decided to increase input in projects involved in developing bioenergy and other alternative energies between 2006 and 2010. The ministry has not elaborated on the investment figures. The key consideration for foreign investors who wish to take advantage of government funds and other development opportunities provided within existing Chinese laws and relevant well-defined regulations is to maintain at least 10% Chinese ownership in its joint ventures. Such is the strategy outlined by Tiger Ethanol International Inc. (Montreal, Quebec) in its recent acquisition of 90% interest in Gallant Energy International Ltd. The company’s business model focuses on the development of facilities for the production of renewable ethanol in China.
Eventually, the biorefinery will proliferate, producing a range of downstream fuels and chemicals at a single facility. But in the meantime, the most popular end-routes for biomass in China are biodiesel, ethanol and PLA.
Biodiesel. There is much available land in China, as well as in other neighboring countries, for large crop plantations; and climatic conditions are good for producing oil-bearing crops such as Jatropha curcas and oil palms. The employment rate in Southeast Asian countries is often low, in particular in rural areas, and manpower is available to develop these plantations. Because of these factors, China (along with India) has announced large-scale biodiesel programs, reports SRI Consulting’s (SRIC; Menlo Park, Calif.; www.sric.com) late-2006 Biodiesel Report.
Only five years ago, the Asian biodiesel industry in Asia was inconsequential in relation to the rest of the world, according to SRIC. While there were already 67 plants known in Asia at the end of 2000 (corresponding to 4.5% of the total), biodiesel capacity in the region accounted for less than 1% of total world capacity. This has changed, with Asia accounting for 7.8% of the world’s total biodiesel production capacity in 2005. At the end of 2005, every second biodiesel plant known to be operational in Asia was located in China. According to SRIC, China’s 2010 annual biodiesel output from Jatropha oil is expected to reach 520 thousand m.t./yr while that from recycled fats and oils, such as used cooking oil and tallow, will reach 735 thousand m.t./yr.
Ethanol. Producing more than 4,525 thousand kiloliters/yr in 2005, China is the world’s third-largest ethanol producer, behind Brazil and the U.S. SRIC estimates that there are more than 200 ethanol production plants in China. SRIC expects the consumption of ethanol to increase at an average annual growth rate of about 4% for solvent use, about 5% for chemical raw materials use and about 7% for fuels use over the next five years. China’s aim to increase the use of ethanol in automobile fuels by 2010 is a major driver here.
PLA. Polylactide (PLA; poly lactic acid) is a biodegradable polymer made from renewable resources, such as corn and other cereals. It is said to be the biodegradable polymer with the highest market potential, with a current global production capacity of 250,000 m.t./yr. PLA can be used for thermoformed packaging, bottles, fibers and film, and for medical-engineering applications, such as sutures, screws and bone-connecting meshes.
Demand for biodegradable polymers in China has been rapidly escalating as the problem of plastic waste has gotten more serious. China’s Solid Waste Pollution Prevention and Control Law encourages plastic film and disposable package products that enable reduced solid waste. SRIC forecasts that Chinese demand for environmentally degradable polymers to continue to increase at an average annual rate of over 20% over the next five years.
One example of China’s important role in the PLA landscape, Harbin Weilida Pharmaceutical Co. Ltd. is building what is claimed to be the world’s first fully continuous PLA plant at Harbin Heilongjiang Province, China. When the 10,000-m.t. /yr plant starts up in the second half of 2007, it will be the first commercial plant to make PLA using a process developed by Uhde Inventa-Fischer (Dormat/Ems, Switzerland and Berlin, Germany; uhde.com).
As China continues its quest for sustainable development, surely a wealth of other "firsts" are to come.