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Mr. Anish Kumar Roy 38 Ministry of Energy, Principal Assistant (Team Leader) Telecommunications and posts Secretary

Mrs. Normah Ab. Rahim 39 Ministry of Energy, Assistant Secretary Telecommunications and Posts

Mr. Francis Xavier Jacob 39 Ministry of Energy, Principal Assistant Telecommunications and Posts Director (Dept, of Electricity Supply)

Mrs. Norlaili Shahuddin 36 Ministry of Energy, Principal Assistant Telecommunications and Posts Director (Dept, of Electricity Supply)

Mr. Azhar Omar 32 Ministry of Energy, Assistant Director Telecommunications and Posts (Dept, of Electricity Supply)

Mr. Mohd Shif Ismail 42 MARA Institute of Technology Senior Lecturer

Mr. Azni Zain Ahmad 37 MARA Institute of Technology Senior Lecturer

Mr. Azhar Abdul Aziz 34 University of Technology Senior Lecturer Malaysia

Mr. Rosli Abu Bakar 32 University of Technology Lecturer Malaysia

Dr. Farid Nasir Ani 36 University of Technology Senior Lecturer Malaysia

Dr. Hishamuddin Jamaluddin 35 University of Technology Assoc. Proffessor Malaysia

Dr. Malcom Pereira 39 Petronas Research & Scientific Senior Executive Services Sdn. Bhd.

Mr. Sulaiman Shaari 32 MARA Institute of Technology Lecturer

Mr. Tan Yew Min 29 Pertonas Research & Scientific Mech. Engineer Services Sdn. Bhd.

Mr.Mhd. Suhaimi Ahmad 34 Economic Planning Unit Assistant Director

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• Some Thoughts on Global Environmental Situation

K.R. Umesh Chief Engineer Environmental Engineering Business Division Toyo Engineering Corporation

• Expected Role of and Her Direct Investment Firms in Making Greater Contribution in Malaysian Environmental Management

Dr. Masahisa Nakamura Associated Head Research Division,

LAKE BIWA RESEARCH INSTITUTE

• ENERGY SAVING AND ENVIRONMENTAL PRESERVATION SYMPOSIUM

Francis Xavier Jacob Principal Assistant Director Department of Electricity Supply, the Ministry of Energy Telecommunications and Posts Malaysia

Dr. Malcolm Pereira Senior Executive Petronas Research and Scientific Services Sdn. Bhd.

Dr. Hishamdin Jamaldin Associate Professor University of Technology Malaysia

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31 K.R.UMESH Chief Engineer Environment Engineering Business Division Toyo Engineering Corporation

Some Thoughts on Global Environmental Situation

Without our own realization the Global Environment has been eroding at a pace that calls for some deep thinking on the part of each individual to take some immediate action and make this Earth a more Livable place for the future Generations to come.

Advances in Science and Technology during the 20*h century have contributed a great deal to our well-being and it is our responsibility to enjoy the fruits of these advances judiciously and preserve the Earth's Environment that not only protects us but also provides us with limitless pleasure for millenniums to come.

In the World of Buddhism the principle of Rebirth is an accepted belief which means that once being born and having served a purposeful life one returns to the original state only to be reborn to lead a purposeful life again. The same can be said with regards to the Earth's Precious Resources in that it could be wise to return them to their original form after utilizing for Man's needs so that Future Generations can benefit from the same again.

To achieve this today for the sake of the future a great deal of sacrifice will have to be called upon the present avaricious lifestyles of the Human Species.

TEC's Approach for Global Environmental Conservation

1. Energy Conservation

TEC as a Plant Engineering and Construction Company has been active in the field of Environmental concern through the development of Innovative Technologies in the field of Environmental Conservation. Energy Conservation which directly relates to a reduction in Global Warming has been achieved in large scale industrial plants such as Ammonia, Urea and Ethylene with a reduction in energy consumption of 30%, 25% and 60% respectively. Based on such a background it is our

32 established practice to continue making efforts for developing new energy saving technologies.

2. Prolonging Plant Life

One of the most important ways of conserving natural resources and hence reducing wastes is to make use of the various man made products to the maximum possible extent of their life. In order to achieve this in the field of plant business one needs to have some means to foresee the life of the plant that is to be constructed as well as adopt equipment where advanced materials can be used. TEC has been very active in the development of New Materials and Plant life Prediction Procedures that contribute immensely to the prolonging of plant's life to it's safe and ultimate limit.

3. Waste Management

In general as individuals we face an embarrassing question when asked if we have been really involved in the area of waste management and honestly speaking it is rather difficult to answer this question positively. However we believe that the time is ripe for the introduction of advanced technologies in the field of waste reduction, reuse and recycling.

With safety as the prime factor , technologies that turn toxic materials into innocuous materials will be predominant in the field of waste management and prevention of irreparable contamination.

Laws, regulations Governmental support and social consensus will be necessary in order to promote these objectives and achieve the final objective of an Environmentally rich and safe Earth.

33 Expected Role of Japan and Her Direct Investment Firms in Making Greater Contribution in Malaysian EnvironmentalManagement.

Masahisa Nakamura

Lake Biwa Research Institute, Japan

Outline of Address

Malaysia and Japan have had a long history of mutual dependency, particularly in terms of trade. The Malaysian aspiration in industrialization and the Japanese interest in regional economic cooperation in the past decades have brought the two nations even closer. In the process, transfer of experience has taken place in certain fields of technology and economic institutions.

Has Japan also contributed greatly to the enhancement of Malaysian environments? To some extent, yes. But some of the most serious issues facing the nation have been left unresolved in part due to the intensifying industrial activities there for which Japanese industrial interests take a significant part.

For example, while a significant portion of hazardous wastes generated in Malaysia has either direct or indirect linkage with the operations of direct investors from Japan, the Japanese interests had so far little to do with the development of Malaysian hazardous waste management. There could be a number of reasons why this was the case.

Regardless, the industrial trade and technology agencies in the two countries ought to collaborate with Malaysian environmental agencies for helping reduce the environmental burden created by the rapid industrialization. In addition, they ought, by inviting the Japanese environmental agencies to take part in and to play a key role, to work out a industry-environment collaboration scheme for the whole of the East Asian region, without which the concept of regional economic development will soon be seriously impeded through environmental structural impediments.

34 mmr- 10.0 l i M ASEANUi B*

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35 ENERGY SAVING AND ENVIRONMENTAL PRESERVATION SYMPOSIUM Miyako Hotel, on 29th March 1994

INTRODUCTION AND ENERGY POLICIES

I am Francis Xavier Jacob from the Department of Electricity Supply of the Ministry of Energy Telecommunications and Posts Malaysia. With me here is Dr. Malcolm Pereira from PETRONAS, the national oil company of Malaysia and Dr. Hishamuddin Jamaluddin from the University of Technology Malaysia.

I will touch on the policy aspects of the government of Malaysia and some of the activities undertaken with regards to energy, energy efficiency and its effects on the environment. Dr. Malcolm will deal with the environmental effects of energy processing and utilisation in terms of the Clean Air Action Plan as proposed by the Department of Environment, Malaysia, while Dr. Hishamuddin will cover the present status of energy saving and environmental preservation research activities being carried out in Malaysian academic and corporate organisations.

In Malaysia, we have the Four Fuel Policy to guide us on the utilisation of energy in the country. This policy emphasises the reduction of the use of oil as the energy source in the country and the increase in the use of indigenous sources of energy. Malaysia's energy resources are oil, coal, hydro and natural gas. In 1989 the energy mix for the generation of electricity, for example, was 44 % oil, 24 % hydro, 20 % natural gas and 12 % coal. Under this policy, this was gradually changed and in 1991 this mix was 35 % oil, 28 % natural gas, 25 % hydro and 11 % coal. By the year 1995, natural gas is expected to account for over 60 % of the energy demand.

We also have the oil and gas depletion policy. This policy determines the level of extraction of oil and gas in the country to sustain the level of these important fuel sources in the future.

In terms of energy efficiency and conservation, there are no specific policies at the moment, but there are moves to establish such policies modeled along the Japanese and Thai methods.

Recently, with the realisation of the privatisation of the electricity supply industry in Malaysia, the government has approved the formula for future changes in the electricity tariffs in the country. Under this formula, the electricity tariff rates in the country will be allowed to increase by a factor related to the consumer price index in the country minus an efficiency factor. Therefore, only if the Director General of Electricity Supply is satisfied that the utility companies are efficient in their operation, will the full consumer price index increase be allowed to be passed through. Otherwise the utility companies will have to bear part of the increase in the cost of production themselves. It is thus hoped that this will encourage them to be more energy efficient in their operations.

In terms of control on the effects of energy related activities on the Environment, this comes within the purview of the Department of Environment which is under the Ministry 36 of Science, Technology and the Environment. Where energy utilisation is concerned, the major aspects being looked into are :-

a) conversion from leaded to unleaded oil for motor gasoline b) conversion to gas utilisation for electricity generation and industrial use c) mandating a reduction of sulphur content for diesel d) mandating the use of electrostatic precipitators for coal fired plants e) promoting the use of natural gas for vehicles f) popularising low smoke oil for two-stroke engines and eventually phasing out two-stroke engines g) encouraging the use of agricultural waste (including wood wastes, palm oil wastes and rice husk) for cogeneration activities h) exploring the possibilities of increasing other new and renewable sources of energy, eg. solar energy, wind in the overall energy mix.

The National Task Force on Clean Air, organised by the Ministry of Science, Technology and Environment has set up several working groups, one of which deals with the energy aspect. This working group is chaired by the Ministry of Energy, Telecommunications and Posts. This task force was formed late last year as a result of a study done by the Japan International Corporation Agency (JICA) in 1993 on air quality in the Klang Valley of Malaysia.

What is the situation of energy efficiency measures in the country? Currently a study is being carried out by the Ministry of Energy, Telecommunications and Posts, Malaysia on the situation in just the industrial sector. Under this study, energy audits have been carried out in 30 selected industries and the results are currently being analysed. Some of the major findings at the current moment are as follows:-

a) Energy efficiency is not a priority in most industries as energy cost is only a small portion of the total production cost. b) Most industries, however, are aware of the need to use energy efficiently. c) There is a gap in information regarding efficient technologies and services among industries and there is a need to have a good information system on this.

The major obstacles to the attainment of an efficient energy system in the country are:-

i) the lack of systematic feedback and evaluation of existing efforts. ii) the lack of incentives to conserve energy and improve efficiency of energy use. iii) the lack of clear energy efficiency policies and regulations. iv) the lack of institutional capacity for enforcement of current policies.

Added to this is the perceived inadequacy of current technology transfer and technical assistance. Current levels of funding and staffing in the various bodies with regards to this are also viewed as inadequate.

37 INTRODUCTION

I am Dr Malcolm Pereira from PETRONAS Research and Scientific Services, the research arm of PETRONAS, the national petroleum company of Malaysia. My presentation would outline the Clean Air Action Plan as proposed by the Department of Environment, Malaysia which seeks to formulate guidelines, and ultimately standards, on activities associated with the environment.

ACTION PLAN FOR CLEAN AIR (AS OF 1994)

ENERGY

• Between 1994 and 1995, reduce sulphur content in vehicle fuels from 0.5 to 0.2 %, and, from 3 to 2 % for industrial fuels; these are target values and may be implemented in accordance to prevailing technical and economic conditions.

• Between 1993 and 1997, utilise more natural gas for transport, industries and households.

TRANSPORT

• Between 1994 and 1997, phase out minibuses and taxis which are over 10 years old.

• Between 1996 and 2000, develop heavy commercial vehicle infrastructure outside the Kuala Lumpur Restricted Zone.

• Between 1997 and 2001, phase out cars above 10 years, which have not been converted to natural gas.

• From 1999, introduce electric cars for city use.

• Between 1994 and 1996, initiate replacement of two stroke motorcycle engines with four-stroke engines. •

• From 1994, introduce Light Rapid Transit, bus and rail commuter service. Create restricted zones and roads in Kuala Lumpur. Possibly introduce "One Day Without A Car" programme.

38 INDUSTRY

• Between 1994 and 1997, replace heavy fuel oil utilisation with natural gas and phase out boilers using solid fuel without pollution abatement systems.

• Between 1994 and 1996, phase out incinerators without pollution abatement systems.

• Between 1994 and 1997, increase chimney height for better pollutant dispersion.

• From 1994, ban new problematic industries, especially in the Klang Valley.

• Between 1995 and 1999, relocate problematic industries from Kuala Lumpur city limits.

COMMUNICATION, PUBLIC AWARENESS AND PARTICIPATION, HOUSING AND AGRICULTURE

• Between 1993 and 1999, 'build up' electronic mailing, tele-conferencing and video- phoning network.

• From 1994, promote car-pooling and high-occupancy vehicles.

• Between 1996-1999, introduce central sanitary landfill and incinerators outside the Klang Valley.

ENFORCEMENT, LEGAL MEASURES AND RESEARCH AND DEVELOPMENT

• From 1994, regulate use of petrol and diesel engines without emission control systems. Privatise vehicle inspection and maintenance for emission control.

• From 1995, regulate installation of catalytic converters.

• From 1994, expand and privatise air quality monitoring and new pollution control equipment. •

• Between 1994 and 1996, study effects of air pollution on public health. Develop alternative fuels.

39 MANPOWER, TRAINING AND FINANCING

• Between 1994 and 1996, set up training centres on air quality, ambient and pollutant source monitoring and combustion management.

• From 1994, hire more staff for the Department of the Environment.

• From 1994, initiate import duty rebate and relief for environmentally-ffiendly equipment.

• From 1995, facilitate loans for relocation of industries to outside of Kuala Lumpur.

40 INTRODUCTION

I am Dr. Hishamuddin Jamaluddin from University of Technology, Malaysia, and I will be presenting a brief perspective on the research and development activities being conducted at our national universities and other corporate and research organisations.

PRESENT STATUS OF ENERGY SAVING AND ENVIRONMENTAL PRESERVATION ACTIVITIES IN MALAYSIAN ACADEMIC AND RESEARCH ORGANISATIONS

BACKGROUND

• Malaysia is planning to be a fully industrialised nation by the year 2020. • Currently industrial growth is very significant; more than 7% per annum. • The effects of industrialisation on the environment could cause serious problems if counter measures are not taken; there have been some cases reported. • Malaysia is susceptible to depletion of its indigenous energy resources.

ROLE:

Academic and research organizations have the capability to develop the human and technical resources to cater to the R&D requirements to achieve sustainable economic development.

ACADEMIC INSTITUTIONS

There are nine academic institutions in Malaysia which have research activities:

ITM - Institut Teknologi MARA UTM - University of Technology Malaysia USM - University of Science Malaysia UKM - National University of Malaysia UPM - Agriculture University of Malaysia UM - University of Malaya UIA - International Islamic University UUM - Northern University of Malaysia UNIMAS - University of Malaysia Sarawak

Presently, all the above institutions are involved in energy and environmental preservation studies with the exception of UUM, UIA and UNIMAS.

41 RESEARCH AND CORPORATE ORGANISATIONS

There are quite a number of organisations in Malaysia but those which are involved in environment and energy research are:

PETRONAS - The national petroleum company of Malaysia RRI - Rubber Research Institute TNB - Tenaga National Berhad (The main utility company in Malaysia) PRIM - Forest Research Institute of Malaysia SIRIM - Standard and Industrial Research Institute of Malaysia PORIM - Palm Oil Research Institute of Malaysia MARDI - Malaysian Agriculture Research and Development Institute

RESEARCH ACTIVITIES

ENERGY

There are 3 areas of research:

1. Energy Saving Buildings:- Energy saving in building involves auditing and rational design. Industries:- Energy saving in industries involves auditing and studies of heating, refrigeration, ventilation and combustion. Efforts are also being made to develop energy efficient building materials.

2. New and Renewable Energy Projects currently being conducted include those on wind, solar, biomass, biogas, fuel cell and mini-hydros.

3. Non-renewable Energy The activities centre on the efficient utilisation of oil, coal and natural gas; projects to promote conversion to utilisation of natural gas are being conducted.

ENVIRONMENT

R&D activities involve projects on air , water and noise pollution, and , waste disposal: present activities mainly deal with monitoring , assessment and the treatment of water and waste.

FUNDING

• Projects are mainly funded by the government ,that is, the Ministry of Energy, Telecommunications and Posts, the Ministry of Science, Technology and the Environment, and, the Ministry of Education. •

• Other financial sources are domestic organisations and agencies, government to government cooperation programs, other foreign agencies.

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• SSSEE^SS (nedo ) Global Environment Issues (1/2)

1. Global Warming

2. Depletion of the Ozon layer

3. Acid Rain

4. Movement of Harmful Waste across National Boarders hEDQ GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT Global Environment Issues (2/2)

5. Environment Pollution in Developing Countries

6. Ocean Pollution

7. Desert Expansion I oo 8. Deforestation (Tropical Forests)

9. Decrease of Wildlife Species

hEDD GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Global Environment Technology

1. Development of Environmental Friendly Production Technologies 2. Development of Technologies for Reducing Environmental Pollutants

3. Development of Technology for CO2 Fixation and Utilization 4. International Projects 5. Other Survey Activities hEDD GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Global Environment Technology 1. Development of Environmental Friendly Production Technologies (1) High Performance Bioreactor for Production of Biochemicals (1990~1999) (2) Environmentally Friendly Technology for the Production of Hydrogen (1991 — 1998) (3) Environmentally Friendly Technology for the Utilization of Reusable Metallic Materials (1991 ~ 1998) (4) Environmentally Friendly Technology for Advanced Catalysts (1992 ~ 2001) (5) Environmentally Friendly Technology for Non Metallic Materials Recycling (1993~2002) KEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Global Environment Technology

2. Development of Technologies for Reducing Environmental Pollutants

(1) Biodegradable Plastics (1990 ~ 1997)

(2) Advanced Refrigerant for Compressive Heat Pumps (1990~ 1994)

hEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Global Environment Technology

3. Development of Technology for CO2 Fixation and Utilization (1) Utilization of Bacteria and Algae (1990-1999) (2) Utilization of Catalytic Hydrating Reactions

1 (1990-1999) (3) Northwest Pacific Carbon Cycle Study (1990-1994)

(4) R&D on High Temperature CO2 Separation, Fixation and Utilization (1992-2001)

NEQO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Global Environment Technology

4. International Projects (1) Co-operation Program on Efficient Petroleum Consumption in Developing Countries (1992-1997) (2) International Cooperative Projects (IEA etc.)

5. Other Survey Activities hEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT NEDO’s Role

Relationship between MITI, NEDO and the Non-Government Sector

Subsidy Consignment Non-Government NEDO Consignment Sector

Ministry of NATIONAL Joint Research Private Companies International Research Institutes Trade and Industry LABORATORIES Universities

GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT International Cooperation Programs

(1) International Researcher Exchange Program

(2) Researcher Training Program

LOI (3) International Joint Research Grant Program

(4) International Research Cooperation Program

NEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT NEDO’s Projects (Co-operation Programme)

14. Co-operation Programme on Efficient Petroleum Consumption in Developing Countries a. Verification Research on Raw Material Preheating in the Electric Steel Smelting Process ------Indonesia b. Verification Research on High-efficiency Low Grade Oil Combustor ------—Thailand for Environmental Pollution in Developing Countries

NEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT PROJECT SCHEDULE

1990 1991 1992 1993 i 1994 1995 1996 1997 1998 1999

(App 1. High Performance Bioreactor for 72 72 70 283 i 80 roximately 1,000) the Production of Biochemicals 297 j 500 42 134 (Appr oximately 5.000L 2. Production of Hydrogen 1,050 | 1,325 3. Utilization of Reusable Metallic 75 479 (Approximately 10,000) Materials (Fe) 150 ! 800 4. Utilization of Reusable Metallic —^ 2001 Materials (Non-Fe) 290 I 380 39 onm 5. Advanced Catalysts W 4-UU I

361 1,087 1,187 (Approximately 5,600) 6. Advanced Refrigerant for Compressive Heat Pumps 1,497 j 882

180 200 298 540 j 208 (Appr oximateh / 1,800), 7. Biodegradable Plastics i

1,134 1,315 1,282 1,590 i 1,660 (Appro ximately 14,2001 8. Utilization of Bacteria and Algae 9. Utilization of Catalytic Hydrating 581 900 851 900 : 1,000 (Approximately 10,0001 Reactions 495 599 626 (Approximately 3,000) 10. North west Pacific Carbon Cycle Study (NOPACC) 673 | 723 39 290 | 380 11. Isolation Fixation and Utilization i "■> ZUU1 at High Temperature

1,295 | 1,495 12. Co-operative Program on 324 Efficient Petroleum Consumption in Developing Countries 20 27 81 | 1,052 13. Others i >

123 209 208 267 j 282 14. Survey Activities — .

Total 2,946 4,499 5,564 9,003 110,767 C02 Global Recycling System

vx

combustion C02 recovery liquid C02 X n C02 storage methanol synthesis

hydrogen generation Scope of the Project — Ha generation

Oil refinery plants, etc. Membrane separation

> Catalytic hydrogenation

High-performance catalysis m m m

Stationary sources of CO2 generation Process of COa concentration Process of re-utilizing CO2 Utilization of waste heat

1 f Re-utilized products Liquid fuel Methanoletcjj (transport fuel) Gaseous fuel Chemical products ^ (ethylene, propylene, benzene, C1 chemistry Higher alcohol, acetic acid, etc.) PROJECT SCHEDULE

R&D Items '90

Development of CO2 separation membranes Search for CO2 separation membranes Design, production, and evaluation of the membranes Bench plant test

Development of hydrogenation catalysts Search for catalysts Design and performance-evaluation of the catalysts Bench plant test Development of total system Study of the methods of hydrogen generation Verification plant test Iron smelting i6J$&St±#S<7>e6'* (Blast furnace method) A dynamic industrial society, Richness in life &*$!>na Steel products

i5V<7>«ll6] Recent trends ______♦ ft&il • ttfrfc Enhancement steel and combination With non-ferrous metals • >-y*(SME$9) • Platings (tin, zinc) • t—^—(#) • Motors (copper) toikKtmtamm With non-metallic materials Research for steel recycling • dA^<7)ie* • Increased use of plastics, rubber, etc. ^^77 Renewal technology of scrap • • iSSUttifi • Fragmentation and selection technology • SriSWttifi • Innovative melting technology Xfv yya*a#T • ^.;Mf — • Low energy Degradation of scrap quaRty Lowering of iron content of products

Negligence Earth is Inundated with large refuse

3 4 5 6 7 8 9 10 (Fiscal Year) 1991 1992 1993 1994 1995 1996 1997 1998

1. *S-£$eSB9$E% Comprehensive Basic Research X?7-y7<7>$*8b|6]i9g Investigation of the future trend of scrap p #ax * 7 y y@i£' • i&FSMficim* tmmtmm Research and evaluation for scrap recovery/me Iti ng HI techniques m&r? n -trxdJffMffi t ff Evaluation of an integrated process and listing of pending tasks m flB 2. yymi±yotxtcNif

Research of a reclamation process for scrap metal Evaluation

Study on the tramp element removal techniques using solid phase processing

Study on the tramp element removal techniques using liquid phase processing 3. m*M*3l!x?7'yy%#yatxcMf 5Bf% Research of an environmentally friendly scrap melting process

Study of elementary technology for pre-heating scrap flMUHnSx y 7 7 y>8#y a -b x tcMt 5 Elemental study of environmentally friendly scrap melting process

4. #89W%-&yo-t;XCIKIt5m% Research of a new steelmaking process US-6-y n -b X 9IS<7> ft Ad) *> X y AE3C System study to realize an integrated process

eaxmy? > v okm - • m t$ Design and construction of the Integrated test plant aatmy? v kc «* * Overall linkage verification test using the Integrated test plant R&D of New Energy

1. Solar Energy & Wind Einergy

2. Geothermal Energy Coal Gasification 3. Coal Energy Coal Liquefaction — Development of Coal Resources 4. Energy Conversion, St< )rage & Super Conducting Technology 5. Alcohol and Biomass E■nergy

GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT R&D of Industrial Technology

1. Basic Technologies for Future Industries

2. Medical & Welfare Equipment Technology

3. Fine Chemicals from Marine Organisms etc.

i NEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT NEW ENERGY DEVELOPMENT

FY 1993 Unit: Billion Yen 1. Solar Energy 11.7 2. Geothermal Energy 3.9 3. Coal Energy 19.7 4. Energy Conversion and Storage 11.0 (& Superconducting Technology) (3.6) 5. Alcohol and Biomass Energy 2.3 6. Others 27.6 Total 79.8 hECO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT INDUSTRIAL TECHNOLOGY

FY 1993 Unit: Billion Yen 1. Research and Development. 21.9 ■ The National R&D Program (Large-Scale Project) ■ Basic Technologies for Future Industries ■ Medical & Welfare Equipment Technology etc. 2. Global Environment Technology 8.2 3. International Cooperation Programs 6.4 4. Research Facility Development Program 0.3

Total 36.4 bEDO GLOBAL ENVIRONMENT TECHNOLOGY DEPARTMENT (#*K#2)

3 — i? x.j> Is — ’>3 >S#J©fti£©iS^?

B® : K. R. UMESH Trends in Japan's Energy Conservation and Cogeneration Technology Development

I. Trends in Japan's Energy Consumption Pattern II. Japan's Approach for Energy and Environmental Conservation III. TEC's Contribution Towards Energy and Environmental Conservation IV. Recent Developments in Cogeneration Systems

© 1994 Toyo Engineering Corporation I. Trends in Japan's Energy Consumption Pattern

1. Long Term Energy Supply and Demand Outlook 2. Sectorwise Energy Consumption Trends 3. Energy Consumption Trends in the Industrial Sector 4. Power Industry Energy Efficiency Trends in Industrialized Countries 5. Energy Consumption Trends in the Refining Industrialized Countries 6. Energy Consumption Trends in the Steel Industry

© 1994 Toyo Engineering Corporation Long Term Energy Supply and Demand Outlook

700

■ New Energy ■Coal 0 Hydroelectric Energy D Natural Gas ■ Nuclear Energy ■ Oil

1982 1989 2000 2010 Year

Copyright 1994 Toyo Engineering Corporation (Source NEDO 1994) Copyright Energy Consumption 1010 Kcal 200,000 250,000 100,000 150,000 300,000 50,000 Toyo

Engineering 1973 1979

Corporation 1980

Sectorwise 1981

Energy 1982 Fiscal

Consumption

Year 1983

1984

Trends

1985 in

Japan

1986 1987 (Inlstltute

of ■ ■Others □Community ■

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Economics

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Sector

Japan)

Copyright

Energy Consumption 1016 Kcal

100,000 120,000 140,000 1994 40,000 80,000 20,000 60,000

Toyo

Engineering 1973 1979 1979

Corporation 1980 Energy

Consumption 1981 1982 Fiscal

Trends

Year 1983

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Sector 1985 96 1987 1986 (Inlstltute of

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Textiles Chemicals Ceramics Iron Pulp

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& &

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Japan)

Energy Efficiency Trends In the Power Industry

Copyright 1994 Toyo Engineering Corporation (Source Denkl Jlgyo Rengokal 1993) Energy Consumption and Savings Achieved in the Refining Industry

Annual Consumption Savings after Energy Annual Saving Countermeasures Processing Fuel Steam Power Total Annual Annual Crude (Heavy Oil) Import Import (H.O Base) Savings Savings Processed 1000kl 10001 1000 kWh 1000 kl 1000 kl % 1000 kl 1973 10870.4 1916.8 2,191,975.5 11,541.1 250,797.7 1980 9963.6 1723.0 2,791,635.0 10773.7 233.1 2.0 218,293.7 1981 9312.7 1242.0 2,762,712.5 10128.5 329.3 3.2 200,352.5 1982 8872.9 1702.8 2,714,856.1 9,689.0 231.9 2.3 186,008.4 1983 9099.5 1588.4 2,701,619.7 9,868.4 219.1 2.2 189,607.7 1984 9074.8 1703.0 2,909,502.7 9904.8 179.6 1.8 188,960.3 1985 8520.4 3400.7 2,781,059.3 9,428.2 188.6 2.0 176,790.5 1986 8793.0 2610.0 2,418,919.2 9,560.5 201.4 2.1 168,094.8 1987 8927.0 2141.6 2,285,192.5 9630.5 214.0 2.2 164,818.5 1988 9688.8 2495.7 2,371,822.1 10,436.9 149.8 1.4 174,229.7 1989 9934.6 2703.8 2,046,057.1 10,556.8 139.3 1.3 185,110.9 1990 10614.2 2440.5 2,064,195.2 11,228.0 84.7 0.8 204,971.2 1991 11251.1 1957.8 2,094,657.2 11,909.8 85.0 0.7 215,207.5

© 1994 Toyo Engineering Corporation (Source : Nihon Sekiyu 1993) Energy Consumed per Unit of Crude Processed

Fiscal Year

Copyright 1994 Toyo Engineering Corporation (Source : Nihon Seklyu 1993) Breakdown of Energy Saving countermeasures

1988 1989 1990 1991

Energy % Energy % Energy % Energy % Savings Savings Savings Savings 1000 kl 1000 kl 1000 kl 1000 kl Improved Combustion Efficiency 6.47 3.7 3.3 2.3 2.9 2.5 3.6 3.1 improvements in Heat Transfer 55.16 31.8 21.3 14.3 45.4 39.8 13.8 12.1 Rate Minimization of Heat Loss 4.52 2.6 8.4 5.6 4.4 3.9 2.7 2.4 Maximum Heat Recovery 17.44 10.1 23.1 15.4 17.8 15.6 23.0 20.1 improved Conversion of Heat to 52.05 30.1 26.2 17.5 12.5 11.0 28.0 24.5 Mech. Enerqy Minimization of Power Loss 0.52 0.3 1.4 0.9 0.3 0.3 Improved Conversion of Power to 3.92 2.3 10.1 6.8 2.6 2.3 3.5 3.1 Heat & Mechnical Energy Others 33.12 19.1 55.6 37.2 28.0 24.6 39.7 34.7 Total 173.2 100 149.4 100 113.9 100 114.4 100

© 1994 Toyo Engineering Corporation (Source : Nihon Sekiyu 1993) Energy Consumption Trends In the Iron & Steel Industry

Japan USA GB GDR France Brazil China Country

Copyright 1994 Toyo Engineering Corporation (Japan Federation of Iron and Steel) II. Japan's Approach for Energy and Environmental Conservation

1. Global Energy Consumption trends and Global Warming 2. Integrated Approach Towards Evironment, Economy and Energy 3. Governments Policy on Economic Development Aid and Environmental ODA 4. Activities Of Major Organizations Committed to Energy and Environment

© 1994 Toyo Engineering Corporation Global Energy Consumption Trends Joules

MM

Person

per

Consumption

Energy

1955

Copyright 1994 Toyo Engineering Corporation (Source : Science 1989) Trends In C02 Discharge Rates 19501.62 Billion Tons

Note : D C = Developing Countries Copyright 1994 Toyo Engineering Corporation J-A = Japan Australia (Source: Science 1990) Trends in C02 Discharge Rates 1980 5.17Billion Tons

Others 6%

Copyright 1994 Toyo Engineering Corporation (Source : Science 1990) 2- Integrated Approach Towards Environment,Economy,and Energy

1) Restructuring of Energy Supply and Demand - Promotion of Research and Development Program for Development of Alternate Sources of Energy. 2) Promotion of Environmentally Compatible Industries - Leadership in careful determination of VPE for Industries - Support of ISO Environment Management Committee - Support for Energy Conservation and Recycling 3) Solid Waste Treatment and Recycling - Promotion of Countermeasures for Alternate Resources 4) Promotion of Technology for Global Environmental Preservation - Prevention of Ozone Layer Depletion - Countermeasures for Global Warming Development of Regenerable Sources of Energy Development of Natural Systems for C02 Destruction

——-— ------:------0 Toyo Engineering Corporation © 1994 Toyo Engineering Corporation 33/OOt'AOIAoa IV 3. Government's Policy on Economic Development Aid and Environmental ODA

1. Government's Policy on Economic Development Aid On the basis of a New Ideology in June 1992, The Government of Japan established the Basic Principles for extending Economic DevelopmentAid to The Developing Countries. Principles were also laid out at this time for extending maximum support to these Developing Countries for solving the Environmental Problems that arise as a result of rapid Economic Growth. Concretely speaking The Green Aid Plan was established and enforced in the year 1992 in order to solve the problems associated with Energy and Environment in the Developing Countries. Fundamental Ideology : Environmental Protection Governing Principle : Sustainable Development Immediate Concern : Asian Countries 2. Environmental Preservation Aid (Environmental ODA) In June of 1992 at the United Nations Environmental Development Conference the Government of Japan deeply committed itself to the International Community by promising to allot an AID Package of 8 to 10 billion $ US for Global Environmental Preservation.

0 Toyo Engineering Corporation © 1904 Toyo Engineering Corporation aa/oof'AOiAttx to 4. Activities Of Major Organizations Committed to Energy and Environment

New Energy Technology Development Organization (NEDO) NEDO which is a major arm of the Ministry of Trade and industry is involved in the Development of the following alternates sources of energy Combined Cycle Coal Gasification Power Systems Coal Based Hydrogen Plants Solar Energy Wind Power Molten Carbonate Fuel Cells Geothermal Energy

© 1994 Toyo Engineering Corporation Research Institute for Innovative Technology for the Earth (RITE)

Under direct commission from NEDO RITE is currently involved in the development of the following major Environmental Conservation Projects Biological C02 Fixation and Utilization Chemical C02 Fixation and Utilization Advanced Refrigerants for Compression Heat Pumps Biodegradable Plastics Biological Production of Hydrogen by Environmentally Acceptable Technologies Technology for Recovery and Reuse of Metallic Materials

© 1994 Toyo Engineering Corporation III. TEC's Contribution Towards Energy and Environmental Conservation

1. TEC's Voluntary Plan on Environment (VPE) 2. A Typical Case History of Energy Saving Technologies Applied in Ammonia Plants 3. Examples of Other State of Art Energy Saving Technologies

© 1994 Toyo Engineering Corporation 1. TEC's Voluntary Plan on Environment

Under the leadership of Ministry of International Trade and Industry, an Ideology and Master Plan was set by TEC's top Management in order to establish TEC's Voluntary Plan on Environment. The Management also decided to immediately establish a Committee for Environmental affairs. TEC's Senior Executive Director is the Chairman of the Committee and the Manager of the Environment Business Department is the Vice Chairman. The other members of the Committee are selected people from various departments. On the basis of the Ideology set in " TEC's VPE " the Environment Committee is actively pursuing establish the following 1. Environment Preservation Guideline for Plant Construction 2. Environment Management System which includes internal audit The results of the investigation by the Environment Committee are reported to TEC's top Management Committee for final approval before any further action is taken. A brief explanation of The Basic Ideology and Principles of TEC’s Voluntary Plan for Environment are as follows.

------——:— ------— 0 Toyo Engineering Corporation 6> 1994 Toyo Engineering Corporation aa/ooi'AOiAoa ?z Corporate Creed on Global Environment

TEC owes its corporate existence to those communities it serves. Their prosperity is of utmost concern and for all to prosper we must build a sustainable society where human dignity will be respected and environmental conservation will be achieved on a global scale.

TEC pledges to do its utmost to be a part of the solution to pressing environmental issues through worldwide environmental engineering services geared to harmonize industry and the environment.

0 Toyo Engineering Corporation © 199-1 Toyo Engineering Corporation 33/UOI’AOtAOOI. ?3 Action Policy

In implementation of its Corporate Creed on Global Environment, TEC will operate in line with this Action Policy 1. Better Environment Through Engineering Business Standards TEC's engineering and construction work will meet or exceed the engineering and environmental standards of the communities where the work is performed. The following measures will be taken in business operations to meet this commitment. 1) Engineering in Harmony with the Environment. 2) International Cooperation and Technology Transfer. 3) In-house Environment Guidelines. 2. Business Practices Promoting Environmental Protection 3. Employee Education and Community Awareness

------0 Toyo Engineering Corporation © 1994 Toyo Enqinoorinq Corporation ' 33/8OPA0IA601 ?4 TEC's Environment Conservation Technologies

- Freon substituted Cleaning System ii TECLEAN ii

- Suspended Filter Water Treatment System " BIOPOP "

Magnesium Hydroxide Flue Gas Desulfurization System

TEC - Lodge Electrostatic Precipitator

Gas Leak Detection System

0 Toyo Engineering Corporation © 1994 Toyo Engineering Corporation aaxaoi ’AOiAoot 43 2. A Typical Case History of Energy Saving Technologies Applied in Ammonia Plants Block Flow Diagram of AMMONIA Process

N<*$TEAMRWQRMIN.G

NG %

RSH + H2—► RH + H2S SULFUR REMOVAL H2S + ZnO ---- "ZnS + H2O

AIR STEAM REFORMING CnHm + nH20 * nCO + (-7^- + n)H2

CO SHIET CONVERSION CO + H2O—►CO2 + H2

◄i CO2 REMOVAL

CO + 3H2 ■ CH4 + H2O METHANATION CO2 + 4H2 CH4 + 2H2O

NHs SYNTHESIS 3H2 + N2 2NHs

868 Nhb

(?) Toyo Engineering Corporation © 1994 Toyo Engineering Corporation 3378-OPAOIA606C 27 MORE EFFICIENT ENERGY SYSTEMS

HIGHER EFFICIENT MACHINE HIGHER TEMP. AND PRESS. OF H.P. STEAM STEAM INTEGRATION GAS TURBINE HP PROCESS CONDENSATE STRIPPER Heat Pumps

Direct Heat Pump Systems Indirect Heat Pump Systems

Distillation Compressor Distillation Compressor Column Column

Condenser

Reboiler/Condenser

Bottoms Bottoms

Distillate

Copyright 1994 Toyo Engineering Corporation Gas Expanders and Hydraulic Turbines

fl-O Expander Motor/Generator

FCC Gas Expander System Regenerator

C02 Removal Process .Acid Gas Hydraulic Turbine System Absorber Stripper

Feed Gas

Reboiler

Hydraulic Turbine

Copyright 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) Ammonia Water Absorption Refrigeration System

Condenser

Absorber Rectifier

NH3 Subcooler

To Proses^ V Evaporator

From Process

Desorber LT Heat

Copyright 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) IV. Recent Trends in Cogeneration Systems

1. Status of Combined Cycle Power Generation Systems 2. Recent Trends in Cogeneration Systems

© 1994 Toyo Engineering Corporation Conventional Fossil Fuel Conventional Gas Turbine Power Generation System Power Generation System Flue Gas GT Exhaust Steam Turbine

Boiler Generator Generator

Condenser Compressor Gas Turbine

Flue Gas Conventional Combined Cycle Power Generation System HRSG

Steam Turbine

Compressor Gas Generator Turbine

Copyright 1994 Toyo Engineering Corporation (Source ; Tokyo Electric Power Company 1993) Advanced Combined Cycle System

Boiler Flue Gas

Generator

MR Steam Turbine Compressor Gas Turbine LP Steam Turbine

Condenser

Copyright 1994 Toyo Engineering Corporation (Source : Tokyo Electric Power Company 1993) Trends in Combustion Temperature and Thermal Efficiencies

Comb.Temperature Combined Cycle Gas Turbine Only

£ 58 I o s 1

i—

Year

Copyright 1994 Toyo Engineering Corporation (Source : Tokyo Electric power Company 1993) Review of Gas Turbines in the 1100 °C Range in Japan

Company Tokyo Electric Tohoku Chuubu Chuugoku Kyuushuu Electric Electric Electric Electric

Site Kimitsu West Nigata Yokkaichl Yanai Shin Oilta

Train No. 1 2 3 4 1 1

Output (MW) 1000 1000 1090 560 700 690

AirTemp.°C 32 32 15 18 20 7

Type Single Shaft Single Shaft Multi Shaft Single Shaft Single Shaft Single Shaft

GT No. 7 7 6 5 6 6

ST No. 7 7 2 5 6 6

Fuel LNG LNG LNG LNG LNG LNG

Start-up 85/12-86/11 87/12-88/11 84/12-85/10 88/2-88/7 90/11-92/12 91/6

Vendor GE GE Mitsubishi GE Hitachi Hitachi

© 1994 Toyo Engineering Corporation (Source: Tokyo Electric Power Company 1993) Review of Gas Turbines in the 1300 °C Range in Japan

Company Tokyo Electric Kansal Electric Chuubu Electric Chuugoku Kyuushu Electric Electric

Site Yokohama Himeji Kawagoe Shin Nagoya Yanal Shin Oita

Train No. 7 8 5 6 3 4 7 8 2 2

Output (MW) 1400 1400 670 670 1650 1650 1458 1458 700 870

Air Temp °C 5 5 22 22 22 10 5 5 5 5

Type(shaft) Single Single Single Single Single Single Single Single

GT No. 4 4 6 6 7 7 6 6 4 4

ST No. 4 4 2 2 7 7 6 6 4 4

Fuel LNG LNG LNG LNG LNG LNG LNG LNG LNG LNG

Schedule 96/7 - 98/7 96/7 - 98/7 95/5 96/7 97/1 97/12 98/4 ~ 98/9 2002/3-20 94/3 - 96/1 94/2-9/7 02/8

Vendor GE GE Mitsubishi Hitachi Hitachi Mitsubishi N A NA Hitachi Mitsubishi

© 1994 Toyo Engineering Corporation (Source : Tokyo Electric Power Company 1993) Cogeneration Systems

Steam System

Waste Heat Steam Absortion Ref, Air Condyionlng Boiler System Generator

Prime Mover Air Heater Heating

Steam Hot Water Hot Wate^ Supply Generator Tank

Hot Water System Hot/Chilled Water Generator

Flue Gas Water ♦ Absorption r Heater Ref. System A r C

Prime Mover ------> • Air Heater [w |4------Heating

Jacket Type # Hot Water Tank Hot WaterSupply Water Heater I Hot Water Heater

Copyright 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) Cogeneration Systems

Steam and Hot Water System

Waste Heat Absorption Boiler Ref. System Generator

Prime Mover Air Heater Heating

Steam Generator

Jacket Type Hot Water Tank Hot Watej^ Supply Water Heater

Copyright 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) Features of the Prime Movers in Cogeneration Systems

Gas Engine and Diesel Engine Gas Turbine

Capacity (kW) 50 - 3,000 (Small & Medium Sized) 500 - 100,000(M3dium & above)

Power Generation Efficiency (%) 20-45 20-30

Overall Thermal Efficiency (%) about 80 about 80

Exhaust Gas Temperature (°C) about 500 about 500

Exhaust Gas Heat Recovery Hot Water Middle Pressure Steam

Status of Cogeneration Systems Application

No. Installed Total Capacity (1000 kW) Average (kW/Unit)

Public Sector 844 404 479

Industrial Sector 663 2,101 3,169

Total 1,507 2,505 1,662

© 1994 Toyo Engineering Corporation (Source: Japan Cogeneration Research Institute 1993) Prime Mover Based Breakdown of Cogeneration Systems Application

No. Installed Capacity (kW) Average (kW/Unlt)

Public Sector 22 47,480 2,158

Gas Turbine Industrial Sector 142 1,027,900 7,239

Total 164 1,075,380 6,557

Public Sector 359 112,000 312

Gas Engine Industrial Sector 157 82,255 524

Total 516 194,255 376

Public Sector 464 244,574 527

Diesel Engine Industrial Sector 365 991,088 2715

Total 829 1,235,662 1491

© 1994 Toyo Engineering Corporation (Source: Japan Cogeneration Research Institute 1993) Breakdown of Cogeneration Systems Application in the Public Sector

Office Hotel Recreation Gasoline Stores Health Care Facilities Stands Centers

No. Installed 143 170 112 78 102 81

Capacity (kW) 48,816 94,104 57,934 4,8155 64,586 30,137

Average (kW/Unit) 341 554 517 62 633 372

Research Computation Hospitals Schools Others Total Centers Centers

No. Installed 36 4 57 21 40 844

Capacity (kW) 10,349 7,916 24,371 13,897 47,129 404,054

Average (kW/Unit) 287 1979 428 662 1178 479

© 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) Cogeneration Systems Application in Food Industry

Beverages Bread Others Total

No. Installed 14 12 78 104

Capacity (kW) 18,105 9,838 77,934 105,877

Average (kW/Unit) 1,293 928 1,011 1,018

Cogeneration Systems Application Energy industry

Gas Oil Others Total

No. Installed 13 24 2 39

Capacity (kW) 7,124 308,792 26,350 34,266

Average (kW/Unlt) 548 12,866 13,175 34,266

© 1994 Toyo Engineering Corporation (Source: Japan Cogeneration Research Institute 1993) Cogeneration Systems Application in Large Scale Industries

Textiles Pulp and Paper Metal Electrical Machinery

No. Installed 55 43 44 45 63

Capacity (kW) 147,237 151,046 273,665 67,980 118,553

Average (kW/Unit) 2,677 3,513 6,220 1,511 1,882

Cogeneration Systems Application in Service Industry

Printing Service Mining Timber Others Municipal

No. Installed 11 10 6 45 59 18

Capacity (kW) 17,970 6,660 30,274 24,220 55.589 12,095

Average (kW/Unit) 1,634 666 5.046 1,730 942 692

© 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) Cogeneration Systems Application in Medical and Ceramics Industry

Medical Other Total Glass and Cement Ceramics Chemicals Soda Total

No. Installed 19 109 128 10 14 24

Capacity (kW) 47,100 572,821 619,921 66,800 61,010 127,890

Average (kW/Unit) 2,479 5,255 4,843 6,688 4,358 5,329

© 1994 Toyo Engineering Corporation (Source: Japan Cogeneration Research Institute 1993) ACT 90 Gas Engine Cogeneration System Development Program

Gas Enaine Tvoe -1 Gas Enaine Tvoe - 2 Power 135 kW Power 160 kW Generation Coolina 105 Mcal/h Coolina 164 Mcal/h Heatina 146 Mcal/h Heatina 164 Mcal/h Hiqh Efficiencv at Low Loads Flexible Heat and Power Generation Features Maximum heat recoverv Hiah Exhaust Temperatures Flywheel Tvoe Generator Heat Pipe Waste Heat Recoverv Sinale Effect Absorotion Refriaeration Double Effect Absorption Refiaeration Overall efficiency > 80 % Gas Engine Shaft Efficiency > 40 % Development Target Environmental Consideration NOx < 300 ppm (02=0%) Operation Mode Completely Automated Plot Area about 0.3 ~ 0.5 m2/kW Grid Protection Relay Digital Type

© 1994 Toyo Engineering Corporation (Source: Japan Cogeneration Research Institute 1993) #00 ACT 90 Gas Turbine Cogeneration System Development Program

Gas Turbine Tvoe -1 Gas Turbine Tvoe - 2 Generation Power 485 ~ 500 kW Power 667 ~ 900 kW Heatinq 1143^731 Mcal/h Heatinq 1298 ~ 546 Mcal/h Heat to Power Ratio (2.4 ~ 1) Control Heat to Power Ratio (2.3 ~ 0.7) Control Features bv Air Preheat Control bv Steam Injection Selective Catalytic NOx Reduction Direct NOx Reduction Hiah rom Induction Gen. (30,000) Hiah rom Synchronized Gen. (15,000) Overall efficiency > 80 % Gas Engine Shaft Efficiency > 40 % Development Target Environmental Consideration NOx < 150 ppm (02=0%) Operation Mode Completely Automated Plot Area about 0.3 ~ 0.5 m2/kW Grid Protection Relay Digital Type

© 1994 Toyo Engineering Corporation (Source : Japan Cogeneration Research Institute 1993) BgfnBB

SB$ : ##

: ### B86I OUTLINE OF YOKKAICHI REFINERY

* OPERATION STARTED : IN MAY 1958

^SHAREHOLDERS SHOWA SHELL SEKIYU 75% MITSUBISHI GROUP 25%

% CDU CAPACITY 240.000 B/D (38.160KL/D)

%AREA 1.530.000 M2

MNO.OF EMPLOYEES : 652 (EXCLUDING CONTRACTOR WORKERS) YOKKAICHI INDUSTRIAL AREA

AOKOS/H 11 KASUMI KOMBINAT

YOKKAICHI PORT

KOMBINAT CRUDE DISTILLATION GAS KEROSENE NAPHTHA

OIL PROCESS

HDS HDS

HDS VAC.GAS LUBE

OIL OIL FLOW

PLANT HDS ISOMERIZATION .

PLATFORMER

OF

YOKKAICHI BITUMEN GAS/LP CAT.CRACKER

GAS

PLANT AROMATICS

REFINERY

UNIT SULFUR GAS GAS

RECOVERY TREATING

RECOVERY ^ ■*» ^ ^ ** ^

GAS KEROSENE XYLENE LUBE BITUMEN BENZENE GASOLINE FUEL SLACK LP PROPYLENE FUEL SULFUR

GAS OIL

BASE OIL

GAS WAX

OIL Pattern of Unloading ( 1993 ) Refinery Manager

Deputy Refinery Manager

Energy conservation committee Departments Chairman : Manager of Manufacturing Technical Department Process 1 Vice-chairman : Manager Process 2 of Process 1 Department Members : 19 persons

Sections

Energy conservation Energy conservation group (2 persons) promoters (40 persons)

{ Regular Meeting } (1) enercon promoters meeting twice / year (2) enercon appraisal meeting twice / year (3) enercon meeting (Showa Shell Group) once / year TREND OF FUEL CONSUMPTION

800

700

600

500

400

300

200 . , , .. Expected consumption Actual consumption , T . x (without energy saving)

100 31 85 82 83 '84 86 '87 88 89 90 ' 91 '9 : co YEAR Main Items On Energy Conservation

1.1 Decrease of stripping steam 1.2 Change in operating condition -decrease of operating pressure

1. PROCESSING -proper reflux ratio TECHNOLOGY -direct hot charge for the seconder/ unit 1.3 Reduction of sour water production 1.4 Decrease of tank heating temperature 1.5 Operational optimization with ACS/DCS

2. FUEL COMBUSTION 2.1 Change in burner type FACILITIES 2.2 Installation of automatic 0% analyzer in the flue gas line 2.3 Renewal of air preheater

3.1 Rearrangement of heat train 3.2 Increase of heat exchanger surface area 3.3 On stream cleaning of critical heat exchanger 3. HEAT RECOVERY 3.4 Recovery of low level heat -installation of steam generator and BFW preheater -dobble effect system in PDU

4.1 Renewal of low efficiency pump, blower and 4. ADJUSTMENT OF ‘ turbine generator ROTATING EQUIPMENT 4.2 Impeller cut 4.3 Driver "change 4.4 Application of rotation speed control

5. CATALYST 5.1 Replacement by more active and stable catalyst -reduction of recycle gas flow rate REPLACEMENT -decrease of reaction temperature and pressure

6.1 Installation of power recovery turbine

6. OTHERS 6.2 Tank insulation 6.3 Installation of gas turbine generator 6.4 Installation of liquid ring pump 6.5 Flare gas recovery

3-7 FLUE-GAS DUCTS

ZzzZVWV. Z/

— LIGHTING TORCH

3 — 8 ■5'?-

i5^gS V V 9 fi-G 3 NEW LAW FOR ENERGY SAVING

1) introduced 1st Aug. 1993 2) report to the government - energy consumption (fuel, power) - list of energy consuming facility capacity, utilization, modification, etc - list of enegy saving facility - total ammount of production - energy efficiency - others

3) guideline/target - air ratio (02 in flue gas), furnace/boiler - flue gas temperature in boiler - heat recovery rate of flue gas in furnace

4) advice from government - for insufficient factories, the government order to improve TYPICAL FUEL PROPERTIES

FUEL GAS 70 % COMPOSITION H2 51.8%vol 01 20.1 %vol 02 11.5 %vol 03 8.3 %vol 04 6.0 %vol 05+ 1.4 %vol N2/02/C02 0.9 %VOL H2S/RSH CONTENT 30- 100 ppmwt CALORIFIC VALUE 12,200 kcal/kg (Net)

FUELOIL 30% DENSITY 0.93 g/cm3 VISCOSITY 80 cst @50 SULPHUR CONTENT 0.10-0.20% NITROGEN CONTENT 1200- 1500 ppm CALORIFIC VALUE 10,000 kcal/kg *0 (h##* ■Outline of Flue Gas Treatment System ® I Outline of Flue Gas Treatment System (2

to Stack

Outlet damper

Washing/Recirculation Water Mldlum I 1 Limestone □ Gypsum

to Gypsum facility J Absorber to Flyash I bleed pump facility #Washing water pump pR ©act i o rv CaCO, + S 0, +1/2 H, O - CaSO, • 1/2 H, O CO, Limestone CaSO, *1/2 H, 0 + 1/2 0, +3/2 H, O - CaSO, • 2 H, 0 0 y p e u m Desulfurizers

Chemical reaction of SQx absorption S02 + CaC03+^02 + 2H20 -CaS04 2H20 + C02

Construction of No. 1 Flue Gas Treatment Unit

4-3 Flue Gas Reheater | Construction

Gas outlet For heat transference, both the heat extract­ Heating medium heater ing and the reheating side of the reheater are Heating medium tank provided with fin tube type heat exchangers through which a heating 1' % t-K Tube bundle medium is recirculated with aK* pump. The heat extracting side is dedusted with disper­ sion of steel shots. (Steel Shots Cleaning System) Gas outlet . am#-]

Principle of Flue Gas Reheater >

Heated heating medium (BFW) from the heat extractor is circulated through the reheater to heat up the flue gas and then returned to the reheater to be heated up again. With this forced recirculation of the heating medium heat is exchanged between the heat extracting side and the reheating side.

Recirculation pump\4***

Heat extractor Reheater

Low temperature gas |

4 — 4 i. n Electrostatic Precipitator

Construction of Dry Type Construction of Wet Type Electrostatic Precipitators Electrostatic Precipitators

Driving motor of discharge electrode rapping device Transformer-rectifier set

Principle of Electrostatic Dust Precipitation i High voltage direct current power supply Discharge electrodes are subjected |i...... I'l' j'l'------to high voltage to have a corona Collecting electrode discharge from the discharge ^7 electrodes and their facing collect­ ing electrodes. When dust laden flue O j Q _ . ** Dust gas passes through this electric Dust " © Charged dust field the dust particles within it get © negatively charged and start to Dust containing Q \ t Cleaned move towards the positively- flue gas $- => gas charged collecting electrodes by the O Q Discharge electrode electrostatic force and adhere to their surface. As a result, the flue ® O gas gets cleaned up. o

4 — 5 eg 0 6 wa

eg B rfr TU ® ffi Introduction

Japan's recovery from the ashes of the Second World War has been a miraculous feat. In particular, the high economic growth achieved after 1955 was quite remarkable. Nevertheless, the industrialization policy pursued amid this rapid economic development had the consequences of creating inadequacies in urban infrastructure and generating serious pollution problems. Above all, the massive tide of pollution that swept across Japan around 1960 became an enormous obstacle that suddenly confronted Japan's high economic growth regarding its process of producing material affluence. In Yokkaichi City, the first petrochemical complex in Japan started full operation in 1959. Very shortly thereaf­ ter, pollution problems surfaced, such as marine pollution, causing malodor in fish and a high incidence of respiratory illnesses suffered by residents of the areas surrounding the complex. As the effects of the pollution worsened, complaints of residents quickly intensified. In response, the Municipal Government of Yokkaichi started taking action. First, it campaigned for the Mie Prefectural Government and the cen­ tral government to conduct research into the causes of the pollution and for to pass laws to control it. While pursu­ ing such administrative measures, the City Government took an independent initiative to help those who were adversely affected in health terms. The methods of controlling pollu­ tants and the principles concerning assistance towards health victims adopted by Yokkaichi City at this time were later to be incorporated into national legislation, thus making a great contribution to the promotion of Japan’s anti-pollution measures.

5 — 1 Yokkaichi today has managed to strike a balance between vigorous industrial activity and a pleasant residential environment. The city has a manufacturing output value in excess of 1.5 trillion yen, mainly in petrochemicals. Not­ withstanding this, it stays within the environmental limits deemed not harmful to health, with regard to such pollutants as sulfur and nitrogen oxides.

5-2 I The Petrochemical Complex Development and the Outbreak of Pollution

1. Industrial Policy and Establishment of the Petrochemical Complex

(1) Construction history of the complex

To promote reconstruction of the Japanese economy after the end of the Second World War, in July 1955 the Ministry of International Trade and Industry adopted the "Petrochemi­ cal Industry Promotion Policy" under the "Petrochemical Scheme, Phase I." In August the same year, cabinet approval was given on the "Use of Ex-navy Fuel Depots." Based on such government policy decisions, the fuel depot site of the old Imperial Navy, which had attracted strong private-sector interest, was sold off to Showa Oil Co., Ltd. and the Mitsu­ bishi Group. Thus, construction of the petrochemical com­ plex began. The government, under the promotion policy, began to build petrochemical complexes also in Niihama City, Ehime Prefecture, in Iwakuni City, Yamaguchi Prefecture, and in Kawasaki City, all of which launched into operation from 1958 to 1959. In 1958, Showa Oil Co., Ltd. started operation as the newly established Showa Yokkaichi Sekiyu Co., Ltd., at a crude oil processing capacity of 40,000 barrels per day (present level 180,000 barrels per day). Following this, in 1959, Mitsubishi Petrochemical Co., Ltd. started operating its ethylene center with a manufacturing capacity of 22,000 tons per year (present level 272,000 tons per year). These two facilities formed the nucleus of the Number 1 Complex. At about the same time, Mitsubishi Chemical Industries Ltd., Mitsubishi Monsanto Chemical Company, Japan Synthetic Rubber Co., and Chubu Electric Power Co., Inc.’s Mie Thermal Power Plant all began operation. Thus, Japan’s first petrochemi­

5-3 cal complex was formed. Map 1 shows the location of the complex. Then, in December 1960, MITI announced the Petrochemi­ cal Scheme 2. In compliance with this plan, Yokkaichi saw further development. On 900,000 m2 of reclaimed land in the Umaokoshi area, Daikyo Oil Co. (now Kosumo Oil Co.) started processing crude oil at a capacity of 50,000 barrels per day (present level 175,000 barrels per day) and Daikyowa Petro­ chemical Co. started manufacturing ethylene at 41,000 tons per year; Chubu Electric Power’s Yokkaichi Thermal Power Plant also started operation. All were in full operation from 1963, forming the Number 2 Complex. Furthermore, in response to the growing demand for ethylene and its derivatives, the Number 2 Complex was expanded. To the reclaimed site in the Kasumigaura area of 1.27 million m2 came Shin Daikyowa Petrochemical Co. (now Toso) with an ethylene manufacturing capacity of 300,000 tons per year (present level 377,000 tons), Toyo Soda Co. (now Toso), and Kyowa Petrochemical Co. Full operation of these plants commenced in 1972. This is the Number 3 Com­ plex. Its location is shown in Map 1. The building of new ethylene complexes and expansion of existing facilities took place in a similar manner in var­ ious other parts of Japan, such as in Chiba City, and in Kurashiki City in Okayama Prefecture. As a result, all of these areas were obliged to deal with serious pollution problems.

5 — 4

(2) Background to the establishment of the Yokkalchl complex ^

In the second half of the 1950s, as Japan underwent j steady economic recovery, existing industrial areas were stretched to their limits in terms of industrial land, water, and material transport requirements. It had become necessary to develop new coastal industrial zones. To coincide with this, MITI adopted its Petrochemical Industry Promotion Policy, and the national government was strongly promoting the development of the heavy chemicals industry. Local governments, for their part, were bent on developing new industrial areas, for current economic and financial reasons. They therefore heavily promoted establishment of the Yokkaichi petrochemical complex. In trying to analyze the background to establishment of the Yokkaichi complex, the most important factor is the existence of the vast land that formerly was the Imperial Navy's fuel depot. This facility was built by the old Japanese Imperial Navy, in order mainly to refine and store aviation fuel. It already had provision for securing water for industrial use and facilities for marine transport. Thus, it was extremely suitable for conversion into an industrial site. In the end, this land was won, after heated pursuit by many private companies, by Showa Oil and the Mitsubishi Group, as mentioned above. Upon completion, the facility began operation as the largest petrochemical complex in Japan.

2. The Outbreak of Pollution and Its Conditions

(1) Marine Pollution and Malodorous Fish

The environmental pollution of Yokkaichi started first with water pollution. From around 1955, complaints began to be heard that the fish caught in sea areas near Yokkaichi

5 — 6 "smelled of oil and were inedible." By 1959, when the petrochemical complex started full operation, such malodor­ ous fish were being found in wider areas and were becoming a more serious problem. In March 1960, the offensive smell of fish from was pointed out at the Central Wholesale Market in Tsukiji, Tokyo, dealing a big blow to the liveli­ hood of local fishermen. The catch in the area around Yokkaichi plummeted from 17 thousand tons in 1956 to 4 thousand by 1964. As for the causes of the foul smell of the fish, the Specialist Committee of the Ise Bay Water Pollution Countermeasures Promotion Council established by reported in 1961 after research that pollu­ tion due to mineral oil was responsible. This finding was backed up later by a research report issued by the Science and Technology Agency. Subsequently, long disputes raged between the fishermen, who claimed compensation, and the corporations in the petrochemical complex. In Figure 1, the distribution of the malodorous fish at the time is given. This figure has been based on data including the interview survey of fishermen in 1960.

5 — 7 Kuwana City Tomisuhara

Yokkaichi City

Suzuka River

Ise Bay Tokoname City ISakamatsu Suzuka City ;■ / > Chiyozaki Shiroko

Figure 1 Distribution of the Malodorous Fish

(2) Atmospheric pollution and damage to health

The problem of ”smelly fish” due to water pollution caused great damage to fishermen, but grave harm was brought to wider groups of citizens by air pollution due to sulfur dioxide and other gases. Atmospheric pollution in Yokkaichi emerged as a problem in around 1959 - 1960, when the petro­ chemical complex started full operation. The areas most affected were Shiohama and Isozu, which were adjacent to the facilities (see Map 1). There was a high incidence of respiratory illnesses, such as asthma. This became a seri­ ous social issue.

5-8 In October I960, after repeated complaints of damage voiced by local residents, the City of Yokkaichi established the Committee on Environmental Pollution in Yokkaichi City and started investigating atmospheric pollution. According to research results published the following year, pollution was most evident in the Isozu area, particularly in winter, as it lay to the leeward of the complex when the seasonal northwesterly wind blew. The sulfur dioxide level at times recorded 1 ppm, a value unimaginable by today’s standards. Meanwhile, results of the health impact survey through medical examinations carried out on residents showed that respiratory diseases were extremely common in areas sur­ rounding the facilities, and that many people in the Isozu area in particular suffered from asthma and other throat problems. In this way, air pollution, especially sulfur dioxide pollution, was gradually established as strongly linked with respiratory illnesses. Still, adverse effects on health became increasingly serious, as affected areas in­ creased.

(3) Pollution complaints — especially regarding offensive smells —

Figure 2 shows annual levels of numbers of complaints made by residents concerning pollution between 1960 and 1975. The number of complaints saw massive increases from about three to four years after the Number 1 Complex went into full operation and the Number 2 Complex started full operation. In 1972, the annual level of complaints reached 600. The main complaint was malodor. This is because, although sulfur dioxide itself is not necessarily offensive to the human nose, the leakage of malodorous substances such as hydrogen sulfide and methylmercaptan, that originate from crude oil, and the aldehydes of petrochemicals, became the immediate targets of complaints from residents, with no adequate countermeasures being taken by the plants. Thus,

5-9 !

this "smell" pollution became a prominent part of "Yokkaichi Pollution"; from the residents' point of view, "smelly" came to mean the plainest evidence of the actual existence of pollution.

1200r 1060 Air Pollution

® 1000 Water Pollution C Noise and Vibration (0 Offensive Smells o. 800 o 555! Others o 600- o u

Figure 2 Annual Levels of Numbers of Complaints concerning Pollution Made by Residents between 1960 and 1974

(4) Residents’ campaigns

The residents that first rose in protest against the pollution created by the petrochemical complex were the fishermen seriously affected by the malodorous fish problem and the people of the Shiohama area who were the early victims of pollution in the city. In April 1960, the Chair­ man of the Joint Community Association of Shiohama made a petition against the City of Yokkaichi based on complaints from residents who could hardly bear the constant noise, smoke, and malodor, claiming that the residents were suffer­ ing from "the gases and noise from the plants." Meanwhile, fifteen fishermen's unions, mainly of Yokkaichi, formed the

5—10 Ise Bay Fishermen's Federation for Water Pollution Control, and began campaigning for compensation from the companies involved. However, the problems caused by smoke and noise only worsened. In 1963, the effects of pollution began to emerge in the areas surrounding the Number 2 Complex. In protest, campaigning by residents grew intensity. In July that year, the Yokkaichi Pollution Action Council was formed, compris­ ing opposition members of the municipal assembly and trade unionists. It made forceful appeals to the then Mayor, urging that measures be taken to prevent pollution. In April 1964, Mie Prefecture established a pollution department in the Yokkaichi Public Health Center. In the following month, Yokkaichi City instituted a pollution control section in the Municipal Government. Thus, anti­ pollution measures were strengthened, but it must not be forgotten that intensifying residents' campaigns were re­ sponsible for the policy decisions. n Promotion of Anti-pollution Measures

1. Commencement of Fact-finding Surveys

(1) Research by the Yokkaichi City Anti-pollution Committee

In response to daily intensifying complaints against pollution, the City of Yokkaichi in October 1960 established the Yokkaichi City Anti-pollution Committee, commencing basic data gathering on pollution, led by Professor Katsumi Yoshida of Mie (Prefectural) University and Professor Hi­ roshi Mizuno of Nagoya University (both authorities on public health). Its interim report of March 1961 revealed that "the sulfur dioxide level of the Isozu area was nearly six times that of other areas." To investigate the effects on the human body, questionnaires and mortality rate surveys were carried out, leading to a report in February 1962 that concluded that "mortality rates from respiratory organ failures and circulatory diseases are on a gradually rising trend.” Using the results of these surveys, Yokkaichi City and Mie Prefecture took measures, including the provision of free medical check-ups for pollution-induced diseases and presenting demands to the central government for regional designation, for application of the Smoke and Soot Regula­ tion Law.

(2) Special Research Committee on Air Pollution in the Yokkaichi Area

In November 1963, when the air quality of Yokkaichi was deteriorating considerably, the Japanese government dis­ patched the Special Research Committee on Air Pollution in the Yokkaichi Area, led by its Chairman Masatake Kurokawa, former head of the Agency of Industrial Science and Technol­ ogy. At the time, there were no restrictions on smoke

5—12 emissions from the petrochemical complex. However, as the government realized the gravity of the situation, it set up an enquiry with the primary aim of applying the Smoke and Soot Regulation Law to Yokkaichi. The research commission submitted a report in March the following year, setting out desirable pollution countermeas­ ures to be taken by the private and public sectors. It made 10 recommendations, including designation of the Yokkaichi area under the Smoke and Soot Regulation Law, the dispersal and dilution of flue gases, and the establishment of atmos­ pheric pollution monitoring systems. Moreover, the report used the lessons of Yokkaichi air pollution as a pointer for the "direction to be taken in counteracting industrial pollution in future Japan," and demanded that the government reconsider its industrial policy. Based on the recommendations made by the Kurokawa research commission, the government made a cabinet decision to designate Yokkaichi as an area for application of the Smoke and Soot Regulation Law. After allowing a two-year adjustment period, the government began enforcing the act from May 1966.

2. Control Measures against Pollution Source

(1) Enactment of Anti-pollution Legislation

In the mid-1960s, various anti-pollution measures finally began to be implemented. Amid the rapid economic growth, problems of pollution were surfacing not only in Yokkaichi but in all other parts of Japan as well, leading the government to seriously confront the prevention of pollution. Accordingly, 1967 saw the passage of Basic Law for Environmental Pollution Control, which defined the basic laws on the prevention of environmental pollution. This Basic Law for Environmental Pollution Control does not directly lay down actual pollution control rules or

5-13 measures, but enactment of the law brought about great national awareness of pollution control, and various regula­ tory laws were passed, one after another: first, in 1968, the Air Pollution Control Law and the Noise Regulation Law; then, in 1970 the Water Pollution Control Law and in 1976 the Vibration Regulation Law. Meanwhile, local government bodies were improving their own legal provisions for envi­ ronmental protection, as seen for example in the enactment of the pollution prevention ordinance in Mie Prefecture in 1967.

(2) Pollution control implemented by the Air Pollution Control Law

Atmospheric pollution caused by sulfur dioxide, which had not shown much sign of abating despite application of the Smoke and Soot Regulation Law, changed significantly in condition due to the new regulatory means introduced by the Air Pollution Control Law. The reason is that the Smoke and Soot Regulation Law was a simple emission level control device, whereas the Air Pollution Control Law was a method of controlling pollution at the point of impact, attempting to control the effect that every chimney had at ground level. Consequently, there were no longer areas around the facilities that suffered air pollution at excessive levels. In the short term, however, the area affected by pollution was enlarged, giving the impression that this was just a diffusion of pollution. Nevertheless, as the plants from then on started switching to higher grade fuels with lower sulfur content and started installing flue gas desulfurizers that directly removed sulfur dioxide from the smoke emitted, gradual improvements were made in controlling air pollution.

5-14 (3) Introduction of total emission volume control

After enactment of the Air Pollution Control Law in 1968, thanks to the phased strengthening of point of impact regulations, which resulted in chimneys becoming taller, sulfur dioxide pollution in Yokkaichi saw a gradual decrease in the pollution-affected areas after a brief period of pollution spreading temporarily to wider areas. However, in Yokkaichi, where numerous chimneys puffing vast quantities of smoke stand close together in a vary small area, the chimneys created a combined effect, and in some areas, it had become extremely difficult to meet levels that complied with public health standards. To arrive at a fundamental solution to this problem, the Mie Prefectural Government began research into a completely new method of emission control. Under this system, the sulfur dioxide emission level that does not threaten health is first of all deter­ mined. Then, by using computer simulation, each chimney is given an emission level allowance. This system, known as total emission volume control, was adopted into the pollu­ tion prevention ordinance in Mie Prefecture in April 1972, the first such measure implemented in Japan. Until then, sulfur dioxide emission control had been conducted throughout Japan in accordance with standards required by national legislation. The ordinance, therefore, attracted national interest as an example of local govern­ ment taking its own initiative to effect pollution control, and also as a regulatory method that could fundamentally eliminate pollution. Total emission volume control was later adopted into national legislation. In the Air Pollution Control Law, it is applied to sulfur oxides and nitrogen oxides. In the Water Pollution Control Law, it is applied to the COD (Chemical Oxygen Demand) of areas such as Ise Bay and Tokyo Bay.

5 —15 (4) Corporate efforts at pollution control

The first action against air pollution to be taken by private enterprise was to make the smokestacks taller. After the recommendations made by the Kurokawa Enquiry described in n-1. above, numerous chimneys approximately 100 meters high were built in order to disperse and dilute the sulfur dioxide emission, heralding the "high smokestack era" for the Yokkaichi complex. As a result, the sulfur dioxide was dispersed over a wider area, reducing its levels in the areas immediately surrounding the plants; however, a new problem emerged: the widening of pollution-affected areas. Public opinion clamored for drastic countermeasures. The pressure led to the introduction of sulfur reduction equipment for heavy oil and to the installation of flue gas desulfurizers. The manganese desulfurizer at the Yokkaichi Thermal Power Plant of Chubu Electric Power Company went into operation in autumn 1967. Begun as a project of the Agency of Industrial Science and Technology, it was capable of removing more than 90% of the sulfur coming out of the chimneys. The Umaokoshi Refinery of Daikyo Oil Co., mean­ while, in 1968 introduced heavy oil indirect desulfurization equipment. Using this to remove the sulfur from heavy oil and to produce low-sulfur heavy oil, Daikyo Oil Co. succeed­ ed in reducing the average 3% or so sulfur content down to 1.7%. Thus, by reducing the sulfur content of the heavy oil used and by dusulfurizing the emissions, a breakthrough was achieved in the effort to control pollution at the source, and a great step forward was taken. Furthermore, with implementation of the total emission volume control applicable to sulfur oxides under the pollu­ tion prevention ordinance, in Mie Prefecture, the sulfur dioxide pollution in Yokkaichi gradually diminished. In 1976, at all monitoring stations in the city, an environmen-

5-16 tal level not harmful to human health was achieved. Figure 3 shows the annual environmental levels of sulfur dioxide; Figure 4 gives the comparative annual levels of fuel used by the plants and sulfur oxide emission.

—— Isozu — “Yokkaichi Commercial High School Implementation of the Air Pollution Control Law

'72 Implementation of ZT\ overal quantitative control

Accomplishment of the environmental standards

Figure 3 Annual Environmental Levels of Sulfur Dioxide

5-17 Fuel consumption Sulfur oxide emmissions

<3)CO >> to M oC oc -p ♦H to W

Figure 4 Comparative Annual Levels of Fuel Used by the Plants and Sulfur Oxide Emissions

(5) Other countermeasures

As regards pollution other than by sulfur dioxide, there was wide variation in the types of pollutants target­ ed, although serious countermeasures only began from the mid 1960s. What is more, with high economic growth, some pollu­ tant emissions saw an increase rather than a decrease, along with plant expansion. In view of this situation, from 1971 Yokkaichi was designated one of the Number 1 priority Pollu­ tion Prevention Plan Areas, along with Mizushima in Okayama Prefecture and Ichihara in Chiba Prefecture under the Basic Law for Environmental Pollution Control. Thus, both private and public sectors were required to actively promote anti­ pollution measures.

5—18 Meanwhile the first oil crisis, that suddenly struck in 1973, dealt a severe blow to economic growth, but ironical­ ly, served to rapidly improve environmental conditions.

3. The State of Pollution and Future Measures

(1) Background factors leading to pollution problems

From the 1960s to the mid-1970s, Japan suffered nation­ wide from worsening pollution problems that created health hazards and illnesses. The three main social factors behind these problems may be summarized as follows: First, Japan is a country of extremely small geographi­ cal area where a large population lives at high concentra­ tion, engaging in vigorous production and consumption activities. Japan today, although occupying only 0.3% of the entire land surface of the world, has an extremely high level of energy consumption and a high ratio of car owner­ ship for its habitable area. Such activity, however, is not evenly distributed over all habitable areas, but is heavily concentrated in the metropolitan areas, especially the coastal areas of Tokyo Bay, Ise Bay, Osaka Bay, and the Seto Inland Sea. Because of the massive business activities taking place in the urbanized areas, conditions were ripe for direct manifestations of pollution. Second, because Japan followed an industrialization policy based on fostering the heavy chemicals industry, its economy grew rapidly centering on industries that posed a large environmental burden, such as petrochemicals, steel, electricity, paper and pulp. This resulted in huge pollu­ tion problems. Third, although Japan’s economic development was led by large private sector plant and equipment investment, public sector investment lagged behind. Public sewerage, waste disposal and treatment facilities, and roadside environmen­ tal provisions were inadequate. Such lack of public invest­

5-19 ment not only contributed to industrial pollution but also played a large part in creating the "urban pollution" which will be discussed later. Due to these social factors, serious environmental pollution problems emerged. Consequently, Japan had to impose one of the world's most rigorous pollution control re­ gimes. Thanks to legal measures and technological develop­ ment during this period, pollution originating in factories and other workplaces was radically reduced.

(2) Present state of pollution and future environmental measures

By the mid-1970s, the industrial pollution, that had formerly brought grave environmental consequences, was relatively under control; however, "urban pollution" then began to emerge as a concern. That is to say, in Yokkaichi, as in other parts of Japan, many problems emerged of the type that could not easily be dealt with via conventional approaches to pollution control. These included the prob­ lems of air, noise and vibration pollution due to automo­ biles, of water pollution due to domestic sewage and agricultural of livestock drainage, and problems involving the disposal of industrial waste. These problems should be viewed not as new types of pollution; rather, they are urban pollution problems that became more apparent as a result of the fact that pollution control had been directed mainly toward industrial pollution. Pollution resulting from urbanization, such as water pollution from domestic waste water; atmospheric pollution; and noise and vibration caused by automobile use, that had been relatively overshadowed by industrial pollution became more obvious. It goes without saying that industrial pollution con­ trol must be continued in the future. Urban pollution, however, requires quite a different and very long-term approach. Future countermeasures are bound to be improved,

5-20 but the sources of pollution are numerous and cannot be specified. Moreover, the creators of the pollution are also its victims. Moreover, a vast public sector investment will be needed, which is not going to be procured overnight. The following figures analyze the state of environmen­ tal pollution after the mid-1970s. Figure 5 shows the changes in annual environmental levels of sulfur dioxide. Following compliance with envi­ ronmental standards in 1976, the levels declined further, the levels for the past decade remaining mostly unchanged at low values. Figure 6 shows the changes in annual environ­ mental levels of nitrogen dioxide. Here again, environmen­ tal standards had been met and values had been level for some time, but in the past several years, levels have in­ creased slightly. The problem of nitrogen dioxide appears as a combined effect of industrial and urban pollution. In 1974, under the pollution prevention ordinance in Mie Pre­ fecture, total emission volume control of nitrogen oxides was implemented: since then, gradual reduction of nitrogen oxides from industrial sources has been realized. By con­ trast, the urban pollution factor, that is, nitrogen oxide emission due to automobile use, mainly of large vehicles, has increased. This had an impact on environmental levels and the figure shows a leveling off as a result. However, the small increase seen in environmental levels over the past few years are partly the effects of increases in nitro­ gen oxide emissions from industrial sources, in the wake of business upturns. Figure 7 shows the levels of complaints against pollu­ tion. With pollution gradually coming under control, the number of complaints has been going down. Moreover, the complaints against offensive smells, which had been a marked feature of complaints in Yokkaichi, have decreased in terms of number and in proportion to the total number of com­ plaints .

5—21 Figure 8 shows the changes in annual levels of COD (Chemical Oxygen Demand) in the sea areas off Yokkaichi Port. There has also been a leveling off here. With regard to COD as well, total volume control was implemented in 1979 under the Water Pollution Control Law. Some improvements have been seen, but no rapid solution is envisaged, as domestic waste water from sources such as ordinary house­ holds, which are difficult to regulate, is a large contribu­ tory element. The final point to make is that, as has been seen above, environmental pollution problems have become diverse and widespread. Therefore, future environmental action should not be limited simply to countermeasures against pollutions that arise but should be based on a wider per­ spective. In short, we should seek to create a pleasant environment by using past experience in tackling environmen­ tal problems which have recently shown larger scopes of effect, as with the global environmental issues that have recently aroused great public interest, and by taking com­ prehensive measures to actually prevent the occurrence of pollution and so preserve the human and natural environment.

5—22 « SO* Density ppm

0.01 Figure Figure Accomplishment Environmental

5 6

Dioxide Changes Nitrogen Changes

Standards of

the

in

in

Dioxide

Annual Annual

Environmental Environmental 5 — 23

. "' Levels

Levels - ■ . - .

-- ■ - „

“ —

Yokkaichi High Monitoring Average Isozu _ - Mihama

Yokkaichi Average High Monitoring

of School of

School

of Primary Sulfur

Commercial of

Stations all

Commercial Stations all

the

Schoo the

COD Density ppm Number of Complaints 800 . Figure '68 / 628

Figure "

'70

8

'72 off Changes 7

'74 Levels Yokkaichi

'76

Year in

Year

of '78 Annual

Complaints

Port '80

Levels '82

5 '84

Made 24

of '86

COD

against '88

in

'90 the

Pollution

... Sea — Noise Water Offensive Air Others -

Off Off Off Areas

Pollution

and Pollution Tomisuhara Cosmo Ishihara

Vibration Smells

Area

Area

M Assistance to Victims

1. Early Efforts to Provide Assistance to Victims

(1) Events leading up to the establishment of a medical assistance system

The Committee on Environmental Pollution in Yokkaichi City, inaugurated in October 1960, through the course of its subsequent research gradually revealed the damages to health triggered by air pollution. This raised the issue of the medical fees of the affected patients. In February 1962, the Shiohama Area Joint Community Association demanded that Mie Prefecture and Yokkaichi City provide such free medical services to affected patients as "free regular check-ups at public hospitals." In response to this demand, Mie Prefecture first of all started offering free check-ups at the then Prefectural University Shiohama Hospital (now Prefectural Shiohama General Hospital), but the free treatment that the residents wanted did not materi­ alize. Consequently, the Shiohama Area Joint Community Association started operating a free medical system from August 1963, providing the finance itself. However, the financial burden was too great for the Association, and the system had to be scrapped after only three months. Mie Prefecture later financed the medical expenses of seriously ill patients "for research purposes" but this also proved short-lived. Therefore, as a follow-up, Yokkaichi City in April 1964 started paying hospital charges for seriously ill patients as an emergency measure. By then, there was wide­ spread demand for a more long-term system.

(2) Yokkaichi City pollution-related medical assistance system

In October 1964, the Yokkaichi municipal assembly voted for the public financing of medical expenses related to

5-25 pollution. Accordingly, the municipal government announced the policy of instituting from fiscal 1965 an assistance system for medical treatment necessitated by pollution. In February 1965, the Yokkaichi City Pollution-related Medical Service Council was established to deliberate on the criteria for certification of victims and the designation of assisted areas. In May of the same year began an assistance system administered by local government, for victims of pollution-triggered diseases; it was the first of its kind in Japan. When the first adjudicating panel met, all 18 patients listed for consideration, including fourteen seri­ ously ill patients who needed hospital admission, were officially designated victims. As an independent undertaking of Yokkaichi City, this system commenced with the entire expenditure coming out of the municipal budget, but Mie Prefecture decided to subsi­ dize it from the first fiscal year of operation. Moreover, the Ministry of Health and Welfare deliberated on subsidiza­ tion, and from fiscal 1967 the national, prefectural and municipal governments all funded the financial resource for the system, with additional donations from the corporations concerned.

(3) Assistance provided by central government

In February 1970, roughly five years after establish­ ment of the Yokkaichi City Pollution-related Medical Assist­ ance System, assistance to patients began under national legal provisions. Under the Special Measures Concerning Relief for the Victims of Pollution-related Diseases, this national system began paying out medical and care allow­ ances, in addition to medical expenses incurred by designat­ ed pollution victims. There were three requirements for designation under this system: the area according to cer­ tain set pollution levels, the period of residence in the area, and the contracting of the designated disease (bron-

5 —26 chial asthma, chronic bronchitis, or emphysema). These requirements are based on those of the Yokkaichi City’s Assistance system. The weakness of these systems, however, was that they were of a supplementary social benefit framework devised on the principle of public financing of medical fees, with no provision made for income support of the victims.

2. Yokkaichi Pollution Litigation and Improvement of the Compensation System

(1) The Yokkaichi pollution suit

From around 1964, when anti-pollution protests were gathering momentum, some members of the municipal assembly and some trade unions started voicing a call for judicial "clarification of the responsibility of companies." Thus, the movement toward pollution litigation began. In August 1966, briefings were held between defense lawyers and local representatives, and preparations for litigation were set in motion. About a year later, in September 1967, the nine designated victims from the Isozu area filed suit in the Yokkaichi Court of the Tsu District Court against six compa­ nies, i.e., Showa Yokkaichi Sekiyu Co., Ltd., Mitsubishi Petrochemical Co., Ltd., the Chubu Electric Power Co., Inc., Ishihara Sangyo Kaisha Ltd., Mitsubishi Chemical Industries Ltd., and Mitsubishi Monsanto Chemical Company, for damages and compensation. This case became a lengthy process of argument over unprecedented and difficult issues, such as proof of causal relations between corporate activities and damage to health, and the demonstration of interrelation and common responsibility of action by more than one company. In July 1972, four years and ten months after the start of the legal action, the Yokkaichi Pollution Suit came to an end. The judge's decision was acceptance of almost all claims made by the plaintiffs, and the six defendant corpo­

5-27 rations were ordered to pay out an approximate total of 88 million yen in compensation. Thus, the case was a total victory for the plaintiffs. This court decision, the first of its kind ever on large-scale air pollution in Japan, had great repercussions, shocking not only companies operating petrochemical complexes throughout the country but also forcing the reconsideration of regional development and public pollution policies of the national and local govern­ ments . In the Isozu area in September 1971, while the Yokkaichi Pollution Suit was still in progress, a second lawsuit was being prepared, with 104 patients and bereaved relatives forming a plaintiff body. However, because of the plaintiffs' victory in the aforesaid pollution suit, the second group of patients and the six companies decided to settle out of court. After direct negotiations, the compa­ nies agreed to pay a total of 569 million yen in compensa­ tion. This pollution litigation and the subsequent out-of- court compensation settlement offered great encouragement to other victims of pollution-caused diseases. Claims against companies located in petrochemical complexes for new compen­ sation, including income support, became more prevalent.

(2) Assistance given by the Yokkaichi Pollution Action Cooperation Foundation

As outlined earlier, assistance to health victims of pollution took the form of Yokkaichi City starting medical assistance from May 1965 and the national government paying out medical allowances from February 1970. However, such assistance was limited to medical assistance and was not completely satisfactory to patients seeking income support. Given the situation, the impact of the Yokkaichi Pollution Suit was great, and gave impetus to the establishment of a new assistance scheme.

5—28 After the outcome of the Yokkaichi Pollution Suit, Mie Prefecture and Yokkaichi City both announced plans to "establish a pollution action foundation with private-sector funding to promote assistance to pollution sufferers in the Yokkaichi area." One year later, in September 1973, the Yokkaichi Pollu­ tion Action Cooperation Foundation was established, with funds made available from 28 corporations located in the petrochemical complex. In addition to medical fees, the foundation began providing income support allowances to pollution-caused disease victims to afford then financial security, as well as a solatium in the event of death, contingency money and pensions. Patient assistance by this foundation preempted the national scheme. At the time it was a radical attempt, as the private sector was asked to finance it and the assist­ ance provision was on a much better scale than before. Nevertheless, there was criticism of the fact that the system was set up not as a compensatory act by corporations, but as a voluntary contribution of funds.

3. Current Compensation System

(1) Events leading to the enactment of the Pollution-related Health-damage Compensation Law

The various pollution suits filed throughout Japan in the early 1970s all resulted in victory for the plaintiffs. The companies found guilty of being the sources of pollution were ordered to pay compensation. Moreover, questions were raised as to the administrative policies of the national and local governments. As well, from the point of view of providing speedy assistance to victims, doubt was cast on the wisdom of asking the courts to adjudicate disputes concerning industrial pollution. In this context, the government's the Pollution-related Health-damage Compensa­

5-29 tion Law was passed in October 1973 and was enforced from September of the next year. The main thrust of the system based on this law is to use an established framework to solve problems that should ordinarily be resolved through methods such as legal action between the parties concerned. The basic requirements are that the cause of the damage be due to pollutants emitted by the perpetrators, that often there is more than one perpe­ trator that cannot be specified, and that there is a need for speedy assistance to victims.

(2) Outline of the system

The Pollution-related Diseases Compensation System aims to provide assistance through financing obtained from the perpetrators of pollution. Subject to this system are those areas with high incidence of respiratory diseases due to atmospheric pollution (Category 1 Areas) and those with high incidence of Minamata and Itai-itai disease (Category 2 Areas). The financing for the compensatory payments neces­ sary comes from the corporations that have emitted the pollutants; this is based on the P.P.P. (Polluter Pays Principle) proposed by the OECD. With regard to air pollution, individual perpetrators are not determined, but the cause of pollution is understood to be sulfur oxides emitted from factories and automobile exhaust. Funds are drawn mainly from pollution burden levies imposed on factories and from part of the automobile tonnage tax. With regard to Minamata disease and other diseases, however, the party responsible for the emission of substances causing the disease can be determined. There­ fore, the financing comes from levies imposed on specific companies. The compensatory payments offered to victims under this system are an improvement on those available under previous schemes. In addition to medical expenses, disability com­

5-30 pensation is paid in proportion to the degree of loss of victims' ability to work, as well as compensation payments to relatives of deceased victims. This system also stipu­ lates the provision of rehabilitation opportunities, so that victims can regain their health. A person can be certified as a designated victim if meeting the following criteria, in the case of respiratory diseases caused by air pollution: - First, an area is specified (designated area) where there is a high incidence of bronchial asthma or chronic bron­ chitis (designated diseases) due to heavy air pollution; - If the person has lived or commuted to the above area for a certain period of time (exposure condition) and con­ tracts one of the designated diseases; that person then can be certified. In the case of Minamata disease or Itai-itai disease, medical proof that the person has contracted these diseases will is sufficient for certification. Figure 9 shows the areas designated under the System. Figure 10 shows the numbers of certified victims in Yokkaichi City.

5-31 [ ---Area name] is a former Class 1 area, [ • ---lArea name! is a Class 2 area.

Okinawa

Niigata (Minamata disease)

Toyama (Itai-itai disease)!

Kurashiki, Tamano Bizen I Kobe I Amagasaki Shimane Tokyo (19 wards) (Chronic arsenic poisoning)

Kitakyushu . I it T\) j^'nChiba Omuta \ rL \ ! Yokohama, Kawasaki J \ °/[ P \ Fuji J X \ \ Tokai, Nagoya {Yokkaichi, Kusu -cho Osaka, Toyonaka, Suita, Sakai, Moriguchi,, Higashi Osaka, Yatsuo Miyazaki (Chronic arsenic poisoning)

*1 Kumamoto. Kagoshima (Minamata disease)

Figure 9 Areas Designated under Pollution-related Health Damage Compensation System

5—32 I I Accumulated victim number Y//A Newly designated victim number

Number of victims

925 903 840 907 .896 867 876 866 867 829

399 406 400203 353.-I—T—ri

05 81 38 33 42

Year

Figure 10 Numbers of Certified Victims in Yokkaichi City

(3) Reform of the system and future provision for victims

The assistance system, implemented under the Pollution- related Health-damage Compensation Law has since its establishment played an important role in helping the victims of ill health due to pollution-caused diseases. Nonetheless, because the problem of air pollution has abated, there is now demand for the system's review, from the standpoint of making it fairer and more rationalized. The Environment Agency undertook the task of reforming the law in relation to the future of the system, taking advice from the Central Council for Environmental Pollution Control. Figure 11 shows the average levels of sulfur oxides in the designated areas and the number of certified victims.

5 —33 Thus the proposed amendment to the Pollution-related Health-damage Compensation Law was passed in September 1987 and enforced from March of the following year. The main points of reform were: - Designated areas of air pollution will be abolished and no new victims will be certified; - Projects will be undertaken to prevent damage to health by the effects of air pollution. The newly planned projects for the prevention of health damage will be financed by profits generated from funds comprised mainly of donations by companies concerned. Figure 12 shows how the system operates after the amendment.

Number of designated victims S0X density (PPb) (in thousand persons) 30

- 20

10

Figure 11 Average Levels of Sulfur Oxides in the Designated Areas and the Number of Certified Victims

5-34 Figure 12 Indemnification System Organization

Designated Victims Health Damage Protection Program

A A A * Designation Renewal, etc. * Indemnification Furnishment Total: Approx. ¥98.8 billion

Chief of the Local Government U 1 Ulits ucoiguoucu nica Annual Program Budget Payment ¥2.5 billion

Pollution-related Health Damage Fund Indemnification/Protection ¥50 billion

! i t Contribution ¥40 billion Plant & Factory Assessment Direct Air Pollution Source Approx. ¥79 billion 8 ¥10 billion to 2 Contribution

National Automobile Air Pollution-related Government Corporate Body/Bodies

Motor vehicle weight tax Investment Approx. ¥19.8 billion National Government

Source = Bearer

5-35 6 ) Realizing Environmentally Friendly Sources of Energy

Electricity may be generated from a Dispersed generation systems using with the Kansai Electric Power Construction and Operation Schedule Dispersed Generation Systems lumber of different sources, including renewable energy sources may be best Company (KEPCO) and the Central Fiscal year beginning April 1 — Installed capacity 2kWx 140 lydro, thermal, and nuclear power put to work when connected to existing Research Institute of Electric Power 1966 1987 1966 1989 1990 1991 1992 1993 Photovoltaic (solar) Industry CCRIEPI) jointly undertaking 3kW x 40 generation systems. In addition to these power grids. With this in mind, research arrays 500kW and development is being conducted at implementation of the project under 5kW x 20 existing systems, new power generation Photovoltaic arrays :echnologies that use natural renewable the Rokko Test Center for Advanced NEDO funding. Testing began in Wind turbines 16.5kW x 2 33kW 50kW x 14 energy sources, such as solar and wind, Energy Systems on methods of February, 1987 and is ongoing. The Fuel cells are currently undergoing active research interconnecting dispersed photovoltaic, results will contribute to an safer and Wind turbines 200kW x 1 900kW and development. It is a fact, however, wind, and fuel cell power generation more effective use of new, dispersed Total 1,433kW :hat systems utilizing solar and wind systems with existing distribution lines. generation systems, for the user and energy are unstable sources of supply, The project was planned by the New the environment. Fuel cells : rKE as their output is affected by the weather Energy and Industrial Technology 0H3 installation I ' Operation & Testing and other uncontrollable factors. Development Organization (NEDO), (##%# 7 )

ess: w m ECONOMICS OF SOLID WASTE MANAGEMENT

1. INTRODUCTION

- History of solid waste legislation in Japan

- Revised Solid Waste Management Adt of 1992 Industrial Waste Recycling Promotion Act of 1992

- Realizing Recycling in the Public Sector 1. Designation of industrial categories for promotion of recycling bottles, cans and used papers(setting specific targets for recycling)

2. Changing of manufacturing processes and raw materials for achieving higher recycling rate

3. Obligating municipal governments for separate collection of categories of reusable solid wastes 4. Setting sufficiently high fees for collection of solid wastes requiring extraordinary or special management and treatment - To what exte/it would recycling be achieved? Economics of Recycling 1. Public-sector waste recycling 2. Private-Sector(in-plant) waste recycling 3. Invisible cost of recycling

7-1 2. Economics of Public-sectpr Solid Waste Recycling

- Definition of Solid Wastes

- How would solid waste generation be curtailed? 1. Longer product life 2. De-distribution of used goods 3. Charging of fees

- Economic Tools for Solid Waste Reduction 1. Charge system 2. Subsidy system 3. Deposit-refund system

- Conditions of Economically Justifiable Recycling 1. solid wastes must exist in sufficient quantity 2. there must be useful attributes associated with solid wastes 3. there must be technology for reuse and recycling 4. there must be demand for recycled goods In other words, the goods made of recycled materials must be cheaper than those made of virgin materials. In addition, the cost difference must be sustained for a significant period of time.

- Benefits associated with recycling 1. cost saving ip treatment and disposal 2. reduced environmental impacts both in the natural resource system and in waste receiving sites 3. longer life in waste disposal site 4. development of production systems of low-energy and low- resouce requirements 5. enhance ment in national resource-security 6. greater employment opportunities 7. environmental education

7 — 2 - Benefit - Cost Analysis

Max (Social Benefit - Social Cost) means...... Max (Savings in Social Cost) means...... Max (Costs incurred with the use of virgin materials + Treatment and Disposal Costs - Costs associated with the use of recycled materials)

- Try to maximize the following three items between virgin- material and recycled-material systems 1. the difference in collections costs 2. the differences in environmental impacts 3. the differences in resouce aquisition

- The issues to be addressed: 1. underestimation of environmental impacts associated with disposal sites 2. underestimation of environmental and resouce-exploitation costs associated with virgin materials 3. technological innovation to minimize environmental impacts associated with recylign process Is a key 4. the greter the difference in technological efficiencies between treatment-disposal vs. recycing, the more attractive the recycling would be 5. Keep the cost of recyling minimum

7 — 3 Economics of Private-sector(in-plant) Solid Waste Recycling

- Cost items 1. Raw material costs (raw materials, energy, water, other material requirements) 2. Environmental protection costs(water and air emission control costs, solid waste treatment disposal costs, insurance costs) 3. Manufacturing cost, depretiation cost, overhead costs, other R&D costs)

- Recycling Modes 1. One-way production 2. Low-waste production low resouce requirement change to high grade raw materials change manufacturing process to reduce wastage water-recycling, changing of wastewater treatment system 3. In-plant reuse and recycling(wastes in one process to be used as raw materials in others 4. Use of left-over materials as a raw material 5. By-product manufacturing from wastes

- Benefit - Cost Analysis

Max(Benefits form production and sale - Cost of production) means.... Max(Savings in cost through reuse and recycling)

means....

Max(Savings in Cost - Incurred new costs for recycling) A B

(1) In the case of Low-waste production A: Savings in law material and in environmental protection B: Incurred costs in R&D and sale (2) In the case of In-plant recycling A; Savings in law material and in environmental protection B: Total costs of the recycing process

7-4 or

Max(Profits in sale of products A + Savings in costs B - Incurred costs of recycling) C

(3) By-products manufacturing C: Sales price of products and sales price of by-products A: Savings in environmental protection B: Total costs of the additional process for by-product production

7-5 Invisible Costs in Promoting Recycling

- Transaction Cost between industries and waste management firms

(1) either will act to their advantage(opportunistic behavior) (2) either behave under imperfect information

(3) recycling and by-product production require costly investment in equipment and specialized man-power (4) need a system involving industries, management firms, administration and citizens

(5) information system is the key

7-6 TRANSNATIONAL INDUSTRIAL OPERATIONS AND HAZARDOUS WASTE MANAGEMENT IN DEVELOPING COUNTRIES

MASAHISA NAKAMURA LAKE BIWA RESEARCH INSTITUTE, JAPAN

ABSTRACT: Rapidly industrializing developing countries are facing emerging problems of industrial hazardous wastes. The wastes are generated not only by the domestic manufacturing operations but also by foreign direct investment operations and their subsidiaries. The quantity and quality of hazardous wastes generated in these countries may be such that the host countries will have difficulty successfully managing them. Further, in considering the nature of the direct investment activities which are promoted through bilateral and multilateral trade policies formulated by the respective economic development sectors, many of the technical, managerial and institutional issues are bound to lie beyond the realm of responsibility of the environmental sector in charge of waste management in the host countries. This paper will shed some light to this problem. 1. INTRODUCTION

According to an OECD estimate(as of 1985), the amount of hazardous wastes generated over the entire world was about 3.5 billion tons annually, and approximately 5 to 10 million tons was produced by industrializing developing countries. This estimate is too outdated to describe the situation today, but the figures imply that the amount of hazardous wastes generated in industrialized countries is still dominating, and that the problems associated with such wastes must be contained by themselves and must not unduly affect other countries. As for the transboundary movement of wastes, particularly from industrialized developed countries to developing countries, the Basel Treaty which came into effect in May 1992 is expected to play a crucial role in checking the transboundary shipment of hazardous wastes. However, it does not deal with the issues

7-7 pertaining to the inadequate management in developing countries

of the wastes generated by the industries engaged in direct investment manufacturing activities there. Many industrializing developing countries in Asia adopt an

economic policy which allows direct industrial investment from more industrialized countries. While such an economic policy allows the host countries to take opportunities for greater

economic growth and transfer of technology, they are also bound to face management problems of industrial wastes directly or indirectly generated through the activities of investing firms, not to mention those generated by the domestic industries. There is no international regulatory mechanism specifically directed to regulate hazardous wastes generated by these firms, and the management of such wastes is generally regarded mainly as domestic issue to be dealt with by the host countries themselves and are subjected only to their regulatory requirements. This paper takes the view that much of the difficulties associated with this issue seems to stem from the inadequate integration in the international trade policy framework the necessary considerations to deal with their environmental consequences.

2. DIRECT INVESTMENT AND WASTE GENERATION: A MALAYSIAN EXPERIENCE

The countries going through an early phase of industrialization tend to neglect hazardous wastes management. It was the case with many countries which are today called developed and industrialized. The management of hazardous industrial wastes became a major social issue in theses countries

7-8 only after cases of health Impacts and ecological damages involving hazardous wastes were publicly revealed. Even then, such accidents and impacts were often regarded as necessary evils of industrialization. The situation in many industrializing East Asian countries resembles that in those countries of some years ago. In East Asia, industrialization has taken place in phases. The countries in the region first resorted to industrialization which was designed for import substitution of basic industrial consumer goods to save valuable foreign currencies. Today, however, it has reached to the stage in which industrialization is the basic driving force for gaining national economic strength. It can be achieved only through production of high- value industrial products, which can be exported to other developed countries as well as to many industrialized countries which have phased out the production facilities because of high cost of production at home. The trend in direct investment by countries like Japan, U.S.A. and EC countries has thus settled in particularly in the ASEAN region. In the process, the industrial waste problem of a magnitude which these developing countries would not have expected otherwise has also been created. Let us take the case involving Japanese direct investments in Malaysia as an example. Malaysia had a GNP of 75.8 billion ringlts(1 ringlt is about 0.4 US dollar) as in 1990, or about 1% of that of Japan. In the same year, the total direct investments from abroad amounted to 17.6 billion ringits, of which Japan contributed to 4.2 billion ringits. The major

7-9 Japanese investment categories are; electric and electronic(1.86

billion), chemical and chemical products(0.73 billion), industrial machineries(0.37 billion), and plastic and plastic products(0.31 billion) and textile and textile products(0.22 billion). As for hazardous industrial wastes, the amount produced in 1987 is estimated to be about 0.37 million cubic meters per year (the amount generated in Japan in 1987 is reported to be about 253 million tons, though the definition of hazardous wastes differs from that in Malaysia.) There is no recent estimate available for Malaysia, but the amount must have increased

Table 1. Number of Japanese Firms Engaged in Direct Investment, by Country Invested (Source: Toyo Keizai, Kaigai Shinshutukigyo Soran, 1987) Country Industrial Ind. Mai. Phi. Sin. Tha. Tai. Category Food 7 5 8 13 30 15 Textile 19 12 11 5 35 30 Chemicals 31 33 13 40 36 71 Ceramics 6 13 3 7 7 11 Steel 9 10 1 5 14 7 Non-metal 3 6 4 11 19 13 Machinery 12 10 4 22 16 59 Electric/ 11 50 12 69 47 136 Electronic Automotive 14 9 7 1 18 24 Others 39 47 19 57 67 147

Total 151 195 82 230 289 519 Ind.(Indonesia), Mai.(Malaysia), Phi.(Philippines) Sin.(Singapore), Tha.(Thailand), Tai.(Taiwan) significantly over the past several years.(GNP has increased from 57.2 in 1987 to 75.8 billion ringit in 1990.) Taking into

7-10 account the specific weight of the hazardous waste mixture, the amount generated annually today may even be close to 1 million tons, or about 3% of that produced in 1987 in Japan.

It is extremely difficult to make an estimate of the amount attributable to direct investment industrial activities, and even more so with regard to those attributable to individual foreign countries. However, out of 58.6 billion ringits proposed to be invested in the manufacturing sector during the 1986-1990 period, some 42% came from abroad as direct investment proposals. The Japanese contribution has been approximately 30% the total

Table 2. Comparison of Industrial Hazardous Waste Generated in Japan and in Malaysia (in 1,000 tons, as of 1987)

Japan Malaysia Generated Treated/Disposed To be Treated/Disposed a. 99,000 13,400 110 b. 66,000 8,800 27.5 c. 22,000 3,200 129.8 d. 18,000 2,500 e. 11,000 100 f. 34,000 7,900 109.7 Total 250,000 35,900 377.7 a. mineral sludge, oil sludge, paint sludge, heavy metal sludge b. dusts, mine tailings, clinker ash c. waste acids, waste alkali, waste oil and hydro­ carbon d. incineration residue e. metal wastes f. asbestos, paints and dye wastes, medical wastes, photo-processing wastes, plastics, resins, etc. foreign contribution in recent years. Since industrial wastes are generated by manufacturing industries, one could make a first-cut estimate that 0.42 million tons of hazardous wastes could be attributed to direct foreign investment, and about 12%(0.42 x 0.3) of 1 million tons or 0.12 million tons could be

7-11 attributed to the Japanese direct investment activities.

Note however, the categories of industries contributing most to generation of hazardous industrial wastes include electric and electronic production(52% by volume according to 1984 statistics), metal plating(14%), chemical manufacturing, rubber mills, plastic manufacturing, etc., and they are the industries to which direct foreign investments including those coming from

Japan have the greatest influence. It is therefore important to note that the countries engaging in direct investment take a stand that a significant portion of industrial hazardous waste problem is being created by them, and they take appropriate measures to reduce generation of wastes and make significant contribution for resolving the difficult issues pertaining to hazardous waste management.

3. ECONOMIC POLICY AND ENVIRONMENTAL STRUCTURAL IMPEDIMENTS

The industrializing countries accepting direct investment activities are bound to face hazardous industrial waste management problems. The environmental agencies in most of these countries have developed their respective legislation and guidelines. Most have developed respectable systems of monitoring generation, storage, haulage, treatment and disposal of hazardous wastes. In terms of regulatory provisions, many developing countries have now reached the point of being well equipped with necessary tools. Despite shortage of experienced manpower, they have achieved a great deal in the past decades in creating the institution on management of hazardous industrial

7-12 waste. The industrializing countries, however, have serious difficulties in operationalizing hazardous waste management at least in two respects. First, most of them have yet to succeed in developing adequate treatment and disposal facilities for hazardous wastes. Second, they have not been able to direct industries, including those involved in direct investment activities, to engage in source control, i.e., to detoxify, to reduce and to recycle wastes. These difficulties seem to be deep-rooted structural impediments originating from the way environmental policies are formulated in investing as well as invested countries. These structural impediments may be described as follows:

(1) Most of all, no general understanding seems to exist as to the sharing of the responsibility on resource mobilization between the investing and invested national governments. If the host government places relatively low priority on mobilization of public funds to the construction of hazardous waste management facilities, then the environmental agency will have to resort to financial resources from private sources in the form of commercial investment, a difficult proposition yet in most developing countries. (2) The promotion of source control will have a lot to to with industries' initiatives assisted by the industrial development agency and with the capability of the environmental agency to facilitate industries. There has to be well-coordinated efforts of the two agencies not only of

7-13 the host country but also of the countries of origin of

direct investments. Of absolute importance, however, is the

economic incentive. Unless the industries find the costs associated with source control bearable or the gain in resource savings adequately attractive, waste treatment,

waste reduction and resource recovery will not be realized. Strong enforcement capability of the environment agency and satisfactory level of local waste management service are two major factors contributing to the enhancement of economic incentive.

In addition, there are other more specific structural impediments related to direct investment operations, the resolution of which requires more fundamental and broader analysis of the current system of direct investment. They are:

(3) that while the development of investment strategy depends almost entirely on the firm management at home, the development of environmental counter measure program rests almost entirely on the resident management at the host

country. (4) that there are in general multiple countries engaged in direct investment in a single host country, each having

different evolutional processes in waste management and legislative and institutional development at home, resulting even in different definition of hazardous wastes. (5) that because industries, being competitive even among those from the same investing country, are generally very reluctant

7—14 to reveal information on production processes, it is

difficult to have them collaborate on aspects of waste management which require information on raw materials used.

(6) that, the firms involved in direct investment would have difficulty developing an economically efficient program for resource recovery and waste reuse because their production scale and the number of waste streams are too limited.

These structural impediments are compoundingly interrelated and are far beyond the realm of issues to be successfully dealt with by the environmental sector of the host countries alone where such investments are promoted. Further, unlike the cases involving impediments on trade such as GATT, no authoritative international mechanism has yet been proposed for overcoming such impediments.

4. OVERCOMING THE IMPEDIMENTS

The countries involved in direct investments transactions will have to manage hazardous industrial wastes by properly taking into account the aspects of the structural impediments discussed above. The analysis of Malaysian experience suggests that international arrangements hitherto unexplored may have to be instituted to make waste management more responsive to the needs both of the investing and host countries.

Responsibility of the Investing Countries>

7-15 a. Role of Environmental Agency of the Investing Country

The foreign firms seeking to engage in direct investment in

developing countries receive in-depth and professional guidance and support both from the agency promoting economic development in the investing country and form the their own national

resident representative organizations. On the other hand, the professional guidance and support they receive on their waste management generally amount at most to instructions on regulatory provisions from the environmental agency of host country, and there is usually no resident focal point responsible for providing proper technical information on the subject. To what extent the economic development agency and the environmental agency of the host country collaborate on matters pertaining to waste management problems facing investing firms vary very much on individual countries. Some are much more conscious and have more well-coordinated actions than others. Unfortunately, however, the environmental sector of the investing country plays a very limited role in the transaction

involving waste management associated with direct investment, perhaps except for preparation of the general guidelines at home which in most cases do not reach individual investing firms at all. This absence of resident environmental focal point with proper technical capability is making coordination and collaboration with the host country on waste management extremely difficult. The structural impediments mentioned above can hardly overcome without such a coordinating resident

7-16 focal point. b. Collaboration Among Investing Countries As mentioned earlier, the backgrounds leading to the

development of institution and legislation on hazardous waste management vary, subtly in some cases but widely in other cases, even among industrialized developed countries, not to mention between them and industrializing developing countries

in general. The differ mainly because the evolutional processes of industrialization, and therefore the national industrial orientations, differ among countries. The industrial waste management capability would naturally be affected by the industrial policy of the country. The guidelines for the national waste management legislation and institution are produced by international organizations such as WHO and UNEP, but resolution at the host country of differences in the national legislations and institutional orientations of the investing countries can be made possible only by working out specific operational details of individual waste management cases. Today, the environmental agencies of developing countries hosting direct investments are expected to take that responsibility. But, even in industrialized countries like Japan, the industrial development agency and environmental agency jointly work out the details of legislative framework pertaining to specific types of industries, and their local(prefectural, municipal)

counterparts do the same with regard to the actual management of wastes on site.

7-17 In other words, there has to be a formal mechanism for

dealing with industrial hazardous wastes as well as related environmental issues which involves the national environmental

resident focal points(or those representing the resident regional focal points) of all of the countries participating in direct investment activities within the host country. The mechanism will of course has to be linked to the expanded

parent system which is to function for the whole of the economic development region(like ASEAN), so that it will serve to prevent firms from relocating to neighboring countries with less stringent waste management practices.

Responsibility of the Host Countries> a. Shared Responsibility with Industrial Sector In the developing countries accommodating direct investments, the industrial waste management policy is bound to be shaped as a result of evolving compromise between development and conservation. The environmental regulatory agency, mandated to ascertain that economic development not be unduly affected by the demanding environmental regulatory requirements, is often caught in conflict both with the profit« seeking industrial interests and the unrealistic demand and reaction of the potentially affected citizens. In addition, the environmental regulatory agency in the investing country

play very little role in the whole of the transaction. The environmental regulatory agency of the accommodating country, therefore, is left all by itself to fight the lone battle

7-18 against these conflicting interests.

In effect,. the burden is much too heavy for the environmental regulatory agencies of industrializing developing countries with regard to the management of ever-increasing hazardous waste, a significant portion of which may be

attributed to direct investment operations. This is as compared to the resources they have to carry out the mandate, and in comparison with the situation commonly found in industrialized countries with relatively successful management.

It is imperative that the heavy burden be properly reassigned to the industrial sector within the country as well as that of the investing countries. The assigned responsibilities could be pursued appropriately, for example, if there is a mechanism through which the environmental sector of the accommodating countries could notify the situation review to that of the investing

countries with respect to the performance of the investing firms. Specific technical issues on waste management facing investing countries could be identified by the former and resolved as appropriate by having the investing environmental

sector working with the counterpart in the host country.

3. Shared Responsibility for Prevention of the Transboundary Dumping

The shared responsibility should also encompass the potential impacts to the neighboring countries in terms of transboundary dumping. The behavior of the investing firms is

dictated to a great extent by the cost they will have to incur

7—19 on meeting environmental requirements. Those firms which find the management requirements of waste too demanding in one country may relocate the factory to less demanding countries in the neighboring areas. Without an institutional arrangement

involving shared responsibility among the countries in the whole of the region where transnational investment takes place, the current form of Basel Treaty alone will not be able to

prevent investing firms from behaving opportunistically in the region. In the region like East Asia, for example, where there are still significant gaps in the technical and managerial capability in hazardous industrial waste management among the countries, such opportunistic behaviors will cause serious hazardous waste problems to be continually transcended to newly industrializing countries in the region.

5. CONCLUDING REMARKS

In the past decades, the hazardous waste management programs in the industrialized countries have undergone stages of significant development. Evolution of technology in waste reduction, recycling and reuse, new and innovative managerial measures and legal provisions, coupled with the consumer demand for more environment-friendly products, are beginning to prove that hazardous wastes can in fact be effectively managed. Thanks to such developments, illegal dumping, rampant only a few decades ago in those countries, seems to have been greatly curtailed. It appears also that the technology and the management system developed and tested in these countries are being gradually

7—20 transferred to developing countries, with measurable success in some cases.

As for the management of hazardous industrial wastes generated by transnational industrial operations, no proper institutional mechanism exists between the investing countries and host countries, though it is not the case with economic development and trade transactions from which the wastes are generated. It is important, therefore, to view the hazardous industrial waste problems not as those to be dealt with only by the host country environment agency against investing firms, but as those requiring collaborative regional mechanism based on which both development sector and environmental sector of the investing as well as host countries take proper roles. It is also very important to develop a regional institutional mechanism through which opportunistic behavior of investing firms in the region could be checked.

6. REFERENCES

Nakamura, M. , "Industrial Hazardous Waste Management Issues in Malaysia and the Responsibility of Prime Direct-Investor Nation, Japan", Kankyo Gijyutu(Environmental Technology), Vol.29, No.3-4, 1993.

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