Beijing–Tianjin–Hebei Air Quality Improvement–Hebei Policy Reforms Program (RRP PRC 49232) SECTOR ASSESSMENT: ENVIRONMENT (AIR POLLUTION) Sector Road Map A. Sector Performance, Problems, and Opportunities 1. Air pollution problems in the PRC. Decades of unsustainable economic growth in the People’s Republic of China (PRC) have resulted in severe degradation of the air, water and soil quality throughout the country. In 2014, 74 of PRC’s prefecture-level and higher level cities recorded annual concentrations of fine particulate matter (PM2.5) exceeding the national standard of 35 micrograms per cubic meter (µg/m3) by 83%, with 7 of the 10 most polluted cities in the PRC located in the Beijing-Tianjin-Hebei (BTH) region.1 High levels of air pollution are among the first environmental problems that the PRC’s leadership has addressed with an unprecedented scale of reforms and actions which include the first “Action Plan of Pollution Prevention and Control” (hereinafter CAAP) outlining targets to be achieved in 2013–2015 in key regions, a new vision for the PRC’s urbanization which emphasizes improved ecological environment in cities, and a new environmental protection law unleashing long-needed reforms in the government performance assessment system. 2. Air quality and emissions in Hebei Province. Hebei province (Hebei) surrounds Beijing and Tianjin Municipalities, bordering Bohai bay to the east. Despite its advantageous geographical position, Hebei’s resources driven and heavy industry based economy has made the province lag behind other coastal provinces like Jiansgu and Zhejiang in terms of gross domestic product (GDP) and overall economic performance. In 2014, Hebei’s GDP totaled CNY2.94 trillion with a per capita GDP of CNY39,846. The same economic structure has also caused significant environmental degradation. High emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) from Hebei have translated in some of the highest levels of PM2.5 recorded in the PRC in 2014, averaging 95 µg/m3 in the 11 cities in Hebei (86 µg/m3 in Beijing and 83 µg/m3 in Tianjin), several times higher than the PRC national standard and the recommended World Health Organization value of 10 µg/m3 (Table 1). Table 1: Sulfur Dioxide and Nitrogen Oxides Emissions in 2012 in BTH Region and a Proportions Sulfur dioxide (SO2) Nitrogen oxides (NOX) Region (thousand tons) (thousand tons) Beijing 130 290 Tianjin 270 410 Hebei 1,600 2,100 Total in BTH Region 2,000 2,800 National total 21,000 23,400 Proportion to national total 9.5% 12.0% a Clean Air Alliance of China (CAAC). 2014. Can Beijing, Tianjin and Hebei Achieve Their PM2.5 Targets by 2017? Assessment of the potential for air quality improvements in the Beijing-Tianjin-Hebei region under China's new air pollution action plan, Beijing-Tianjin-Hebei - AQM policy report series. Available at: http://en.cleanairchina.org /product/6659.html Source: Clean Air Alliance of China. 3. Sources of pollution in the BTH. A 2014 study into the composition of PM2.5 in the BTH indicates that industrial processes (steel, cement, coking industries) account for 54% of the 1 PM2.5 is particulate matter with an aerodynamic diameter less than 2.5 micrometers. It is one of the most harmful air pollutants due to its ability to penetrate deep in the lungs. 2 primary fine particulate matter emitted in Hebei; residential sector (coal and stalk burning) accounts for 29%; industrial boilers contribute to 6%; transportation and power sector to 4% each; and heating to the remaining 3%. Sources of secondary PM2.5, include (i) SO2 emitted by industrial boilers, industrial processes power and residential coal burning; (ii) NOX emitted by transport, industrial boilers, power sector, heating, and industrial processes; (iii) volatile organic compounds (VOCs) emitted by solvent use and industrial processes such as coking, paint, and pharmaceuticals production; and (iv) ammonia (NH3) emitted by nitrogen fertilizer application and 2 livestock farming–the estimates for the latter sources still being highly uncertain. Pollution sources in the region, especially Hebei, contribute to 28%–36% of PM2.5 recorded in Beijing, and under certain weather conditions, to as high as 50%. B. Government’s Sector Strategy 4. The “Ten Articles” composing the national CAAP provide that the PRC’s PM10 drops by about 10% by 2017 compared to 2012 levels, and by 25%, 20% and 15% in the BTH Region, Yangtze River Delta Region and Pearl River Delta Region respectively. The above “articles” represent the strictest air pollution control measures ever adopted in the PRC, with a shift from total emission control to air quality targets. These targets for the key regions including the BTH and several priority cities in Hebei, showing that the BTH region was assigned the toughest goals (Table 2). Such efforts require adequate knowledge of the sources and composition of the PM2.5 which is currently limited by insufficient ambient air quality and air emission monitoring capacity, both hardware and software, especially in Hebei. Recent modeling studies suggest that it is unlikely that the BTH targets will be achieved because of inadequate targets to control NOx and 3 VOCs, significant ingredients of PM2.5 in the BTH. Additional reductions of NOx and VOCs emissions from iron and steel making industries; power generation; petrochemical, industry, and road transport are needed to achieve the provincial and regional targets. Table 2: Average Annual PM2.5 Concentration Reduction Targets Province Target (%) (key area) (baseline year: 2012) Beijing -25 Tianjin -25 Hebei -25 Category 1 polluted citiesa -33 Category 2 polluted citiesb -30 Shanxi -20 Shanghai -20 Shandong -20 Guangdong -15 Chongqing -15 Inner Mongolia -10 Jiangsu -20 Zhejiang -20 a Shijiazhuang,Tangshan, Baoding,Langfang, Dingzhou, and Xinji. b Xingtai and Handan. Source: Asian Development Bank. 2 Secondary PM2.5, formed through the chemical transformation of gaseous primary pollutants such as sulfur dioxide (SO2), nitrous oxides (NOx), certain volatile organic compounds (VOCs), and ammonia (NH3), accounts in Hebei for 59% of the total fine particulate. 3 Clean Air Alliance of China (CAAC), 2014. Can Beijing, Tianjin and Hebei Achieve Their PM2.5 Targets by 2017? Assessment of the potential for air quality improvements in the Beijing-Tianjin-Hebei region under China's new air pollution action plan, Beijing-Tianjin-Hebei - AQM policy report series. Available at: http://en.cleanairchina.org/ product/6659.html 3 5. Hebei Province environmental policy framework. Following the release of the national CAAP, Beijing, Tianjin and Hebei have issued their own strategies to comply with the targets set forth at national level. The “Implementation Program of the Air Pollution Prevention and Control Action Plan in Hebei Province” (hereinafter HCAAP) targets four key industries, including steel, cement, flat glass and electricity production. These four sectors have been imposed reduction targets to be achieved by 2017 (60 million tons of steel, 60 million tons of cement, 40 million tons of coal and 38 million weight cases of glass). Enterprises in these four key sectors have been forced to invest in de-sulfurization, de-nitration, and particulate matter control technologies, for a total of 606 air pollution emission control projects since 2014. Out of a total of “Fifty Articles”, ten of the measures listed in the HCAAP aim at improving the existing environmental regulatory enforcement. These measures include an emphasis on (i) monitoring and supervision capacity; (ii) accountability of local governments in enforcing environmental laws, with the inclusion of the attainment of PM2.5 targets as a legally binding socio-economic development indicator; (iii) environmental information disclosure; and (iv) leverage on public participation in the enforcement of environmental regulations. 6. Apart from stringent and comprehensive policies addressing criteria pollutants (particulate matter, SOx and NOx), the HCAAP also calls for control of VOCs emitted by organic chemicals, pharmaceuticals, surface coating, plastic products, packaging, printing and other key industries to be achieved by 2017. However as of September 2015, the Province is yet to issue an emission standard for VOCs emissions from its key industrial sectors, leaving a significant source of PM2.5 for Hebei and the entire BTH basically uncontrolled. 7. Hebei environment protection department (HEPD) has also yet to issue “Management Methods for Motor Vehicle Exhaust (amendment)” aiming at vehicle emissions control. As of now, no guidelines do specifically target emissions from the provincial heavy duty diesel fleet (estimated to comprise about 500,000 trucks) and there is no plan to include this category in the above policy document. HEPD currently lacks sufficient information on the categorization of these vehicles or their emissions, likely to be important contributions to NOX and particulate matter pollution. Tailpipe measures targeting heavy duty diesel vehicles have proven successful in air pollution control in Tokyo, Japan, and some European countries in the past and would contribute to overall pollution reduction in Hebei and the region. It is urgent to address this source of pollution. 8. More than 50 policy documents have stemmed from the national CAAP and HCAAP to upgrade the provincial regulatory framework on air pollution. These include provincial “Regulations on Air Pollution Prevention and Control” - to be issued by the end of December 2015 - providing more and/or