40641-013: Hebei Small Cities and Towns Development Demonstration

Home , Bashang Grasslands, Guyuan County, Shangyi County, Zhangbei County

Environmental Assessment Report

Initial Environmental Examination Project Number: 40641-013 October 2013

People’s Republic of China: Hebei Small Cities and Towns Development Demonstration Sector Project (Zhangbei District Heating Component)

Prepared by the Hebei provincial government for the Asian Development Bank (ADB)

This Initial Environmental Examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

CURRENCY EQUIVALENTS (as of 10 May 2011) Currency Unit – yuan (CNY) CNY1.00 = $0.15 $1.00 = CNY6.5

ABBREVIATIONS ADB – Asian Development Bank

AP – Affected Person COD – Chemical Oxygen Demand EA – Executing Agency EIA – Environmental Impact Assessment EMC – Environment Monitoring Center EMP – Environmental Management Plan EPB – Environmental Protection Bureau GDP – Gross Domestic Product IA – Implementing Agency

IEE – Initial Environmental Examination MEP – Ministry of Environmental Protection NH3-N – Ammonia Nitrogen NOx – Nitrogen Oxide PMO – Project Management Office PPTA – Project Preparatory Technical Assistance PRC – People’s Republic of China SEIA – Summary Environmental Impact Assessment SPS – Safeguard Policy Statement ZCG – Zhangbei County Government

WEIGHTS AND MEASURES Ha – hectare km – kilometer km2 – square kilometer m – meter m2 – square meter m3 – cubic meter m3/a – cubic meters per annum mg/l – milligrams per liter

3 mg/m – milligram per cubic meter mm – millimeter t/a – tons per annum

CONTENTS Page

I. EXECUTIVE SUMMARY ············································································································· 5

A. BACKGROUND ························································································································ 5 B. IEE FEATURES AND FINDINGS ································································································ 6 II. DESCRIPTION OF THE PROJECT ··························································································· 7

A. JUSTIFICATION AND RATIONAL ······························································································· 7 B. THE FEATURES OF PROPOSED WORKS FOR 6 ROADS ···························································· 8 III. POLICY, LEGAL AND ADMINISTRATION FRAMEWORK ···················································· 9

A. NATIONAL AND LOCAL LEGAL FRAMEWORK ············································································ 9 B. ADMINISTRATIVE FRAMEWORK ····························································································· 12 C. APPLICABLE ADB POLICIES, REGULATIONS AND REQUIREMENTS ········································· 12 IV. DESCRIPTION OF ENVIRONMENT ······················································································ 13

A. PHYSICAL ENVIRONMENT ····································································································· 13 B. ECOLOGICAL RESOURCES ··································································································· 14 C. SOCIAL ENVIRONMENT ········································································································· 15 D. BASELINE OF ENVIRONMENTAL QUALITY ·············································································· 16 V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES ················· 28

A. EXPECTED POSITIVE IMPACT ······························································································· 28 B. POTENTIAL IMPACTS ············································································································ 28 C. POTENTIAL IMPACTS BEFORE CONSTRUCTION ····································································· 28 D. IMPACTS AND MITIGATION MEASURES DURING CONSTRUCTION ············································ 29 E. IMPACTS AND MITIGATION MEASURES DURING OPERATION ·················································· 36 C. IMPACTS FROM SMALL BOILER DEMOLITION AND MITIGATION MEASURES ····························· 39 F. UNANTICIPATED IMPACTS DURING CONSTRUCTION AND OPERATION ···································· 40 VI. ANALYSIS OF ALTERNATIVES ··························································································· 41

A. ENVIRONMENTAL CONSIDERATIONS ····················································································· 41 B. WITH-PROJECT AND WITHOUT-PROJECT SCENARIOS ·························································· 41 C. HEAT SOURCE ALTERNATIVES ····························································································· 41 D. ALTERNATIVE FUELS ············································································································ 42 E. ALTERNATIVE BOILER TECHNOLOGIES ················································································· 45 F. ALTERNATIVES OF SO2 EMISSION REDUCTION PROCESS ···················································· 46 G. ALTERNATIVES FOR FLUE GAS DUST REMOVAL ··································································· 47 VII. ENVIRONMENTAL MANAGEMENT PLAN ········································································· 49 VIII. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE ······································ 50

A. PUBLIC CONSULTATION ······································································································· 50 B. GRIEVANCE REDRESS MECHANISM ······················································································ 50

IX. CONCLUSION ························································································································ 52

I. EXECUTIVE SUMMARY

A. Background

1. Zhangbei County in north western Hebei province, China, is a county formerly in the Chahar province. Its name, which literally means "North of Zhang [jiakou]", derives from the fact that it is 40 km (25 mi) north-northeast of Zhangjiakou city. Zhangbei Town is the seat of the county government. Zhangbei County has a total land area of 4,185 square kilometres (km2) and a population of about 370,000. The city comprises 4 towns and 14 townships.

2. Due to the hysteretic urban construction and lack of centralized heat supply facilities before 2000, Zhangbei County tackled the heating supply issues in winter basically with the built-in small coal fired boiler for each enterprise, and then formed a forest of chimneys and cloak of smokes over the urban area, which caused severe environment pollutions. In current century, in order to save energy, reduce pollutants emission and improve the ambient air quality, the heat supply mechanism was started to promote from decentralization to centralization in accordance with the ideal scientific research.

3. After 2000, Zhangbei County introduced Zhangbei Huaying Heating Co., Ltd. to build the centralized heat supply plant, and put into operation in Xicheng (western) District. However, the heating supply system of Zhangbei County still had some problems, mainly come from the following aspects: (i) Firstly, the centralized heat supply level of the county is low;(ii) Secondly, the decentralized heat supply still threatens the environment;(iii) Thirdly, the economic waste is serious; and (iv) Fourthly, the heating capacity is insufficient. In conclusion, with the rapid expansion of the urban and rural industry and economy and the mushrooming of the civil heating, heating service for industry and domestic use, the conflict between social development and environmental protection became increased. The weakness of the decentralized heat supply with wasting the energy sources as well as polluting the environment has been affecting public. The centralized heat supply could enhance the energy utilization efficiency effectively; improve the environment and strengthen the heat supply quality.

4. To tackle the issues, Zhangbei Huaying Heating Co., Ltd. proposed to utilize the loan of Asian Development Bank to support the Zhangbei District Heating Component to build East Station Heat Supply Plant in the eastern urban area, and consolidate with the West Station Heat Source Plant to provide the heating services through the heating supply networks in the urban area to satisfy the demands for Zhangbei. The SEIA for the original Hebei Small Cities and Towns Development Demonstration Sector Project followed ADB’s Environmental Assessment Guidelines (2003) and ADB Environment Policy (2003). The proposed Zhangbei District Heating Component need to fulfill the domestic environmental impact assessment (EIA) process and ADB’s Initial Environmental Examination (IEE) process respectively, according to both the PRC related

6 environmental legislation requirements and ADB’s Safeguard Policy Statement (2009) (SPS) requirements.

5. In order to facilitate ADB’s final approval for the proposed Zhangbei District Heating Component, a consulting firm was assigned to assist the Zhangbei Government to prepare the related IEE in 2012.

B. IEE Features and Findings

6. The purpose of this IEE is to consolidate the results of the domestic EIA. The domestic EIA report has been prepared by qualified local institutes, Heibei Jidu Environmental Science and Technology Co., Ltd. using methodologies and standards consistent with relevant guidelines established by the PRC Ministry of Environmental Protection (MEP, former SEPA). The IEE was prepared in accordance with the requirements of the ADB Safeguard Policy Statement (2009)1 on the basis of the domestic EIA report that meets the requirements of the People’s Republic of China (PRC) EIA Law (2003) and associated regulations. The approval authority for the domestic EIA document is Hebei Provincial Environmental Protection Bureau (HEPB). The approval was gained in January 2013.

7. The IEE paid particular attention to issues such as project alternatives, public consultations, environmental economic analysis, environmental management plan and environmental monitoring program. Additional studies were undertaken in case deficiencies were discovered, to strengthen the IEE. The detailed environmental management plan (EMP) prepared under project implementation follows ADB requirements.

8. The IEE mainly contains nine sections. Section II of description of the Project presents the project rationale and its elements. Section III of policy, legal and administrative framework provides the PRC’s EIA administrative framework, ADB’s requirements and domestic EIAs situation at present. The information on physical and socioeconomic environment is illustrated in Section IV of description of environment. Section V, anticipated potential environmental impacts and mitigation measures, is a very important part of this IEE. In this section, the impacts and mitigation measures for both of construction phase and operation phase have been studied for the corresponding project activities. The environmental safeguard concerns are discussed in this section. Alternative analysis is given in Section VI. Environmental management plan is discussed in Section VII. Public consultations and grievance redress mechanism are described in Section VIII. The specific consultation activities for the proposed rehabilitation works for 6 roads are described in this section. Section IX is the conclusion of this IEE. The EMP entails a summary of the anticipated impacts and mitigation measures, environmental monitoring program, public consultation program, responsibilities for implementation and supervision, institutional

1 ADB. 2009. Safeguard Policy Statement.Manila, Philippines.

7 strengthening and training plan, reporting and supervision, work plan, cost estimates for environmental management, and mechanism for feedback and adjustment.

II. DESCRIPTION OF THE PROJECT

A. Justification and Rational

9. Zhangbei County is located in the northwest of Hebei Province, to the southeast of Inner Mongolia Plateau, and outside the ancient Great Wall. The geographical coordinates of Zhangbei County are 40º57′~41º34′N and 114º10′~115º27′E. Zhangbei is situated in a very important strategic location in the north-south transportation channel, only 227 kilometers from capital Beijing. With Guyuan County in the east, Shangyi County in the west, Kangbao County in the North and Zhangjiakou City, Chongli County and Wanquan County in the south, the total area of Zhangbei is 4,232km2 and the total population is 380,000 (2006). There are 4 towns and 14 townships under the administration of Zhangbei County. The county government is established in Zhangbei Town.The economic development target set in the 12th Five Year Plan of Zhangbei County are: county GDP will reach CNY 10.02 billion, with average annual growth rate of 15%; county investment in fixed assets will reach CNY 21 billion, with average annual growth rate of 10%; and overall financial income of the government will reach CNY 1.27 billion, with average annual growth rate of 16.1%.

10. In last decades, two district heating companies, namely Zhangbei Huaying Heating Company, Limited and Xinghuo Heating Company, Limted are contracted to construct and operate heating projects to satisfy the heating demand of west Zhangbei County. By the end of 2010, the constructed heating project has covered 2.84 million square meters. The proposed subproject will be connected with the west heating plant by the heating networks. As designed for the long-term heating capacity, the length of the heating network is 30km, with maximum pipe diameter of DN600. By now the construction of pipeline network and heating substations in Zhangbei County is almost completed. According to a preliminary survey, except for those within the service area of the west heating plant, most of the structures in Zhangbei County are heated by scattered heating source. Many increasing problems caused by ash storage, dust emission and fuel transportation associated with scattered heating are posing significant threats to the environment, despite that most of the small boilers are not equipped with de-dust and desulfurization devices. Many of the small boilers are being used beyond their service lifetime, operating at very low efficiencies and causing energy waste. The heating performance is not satisfactory as well.

11. After the subproject is completed, the operation of the small captive boilers will be terminated. Consequently, the emission of flue dust, SO2, NOx and wastewater will be reduced, and the environment will be improved, in the following ways: (i) The consumption of coal is reduced, so energy is saved. Environmental effects of coal and ash during loading, transportation and storage are mitigated. (ii) SO2, NOx and flue dust are important pollutants to air pollution. The

8 decrease of the emission of the pollutants will improve the environment. (iii) The small captive boilers are usually built in buildings near to residential and working places. During the operation of the boilers, a lot of noise is produced, which influences on the life of nearby residents. The new heating station will employ equipments with lower noise and sound proof facilities to ensure the life of nearby people is not affected by the heating facility. And (iv) Less land occupation. The demolishment of small boilers will return a lot of land back to the county for its development and construction.

12. In summary, the implementation of district heating will significantly improve local environment, and is important to the economic development and urbanization construction of the county. The improvement of infrastructure construction will not only make the county beautiful, but also improve investment environment, increase employment and boost economic development.

B. The Features of Proposed component

13. The designed capacity of the subproject is 216 MW. The service area is 3.05 million square meters. The construction includes: a new east heating plant and associating engineering, structure, electricity, automatic control and HVAC.

III. POLICY, LEGAL AND ADMINISTRATION FRAMEWORK

A. National and Local Legal Framework

14. This IEE and domestic EIA have been undertaken within the PRC national and local legal and institutional framework, which includes the PRC laws, regulations and standards listed below along with applicable provincial and local ordinances.

(i) Laws (1) Environmental Protection Law of the People’s Republic of China (December 26, 1989); (2) Law of the People’s Republic of China on Environmental Impact Assessment (October 28, 2002); (3) Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution (April 29, 2000); (4) Law of the People's Republic of China on the Prevention and Control of Water Pollution (Revised on February 18, 2008); (5) Law of the People's Republic of China on Prevention and Control of Pollution From Environmental Noise (October 29, 1996); (6) Law of the People's Republic of China on Prevention and Control of Environmental Pollution Caused by Solid Waste (December 29, 2004); (7) Cleaner Production Promotion Law of the People's Republic of China (Revised on February 29, 2012); (8) Law of the People's Republic of China on the Energy Conservation (Revised on October 28, 2007); (9) Circular Economy Promotion Law of the People's Republic of China (August 29, 2008); (10) Land Management Law of the People's Republic of China (August 28, 2004); (11) Water and Soil Conservation Law of the People's Republic of China (Revised on December 25, 2010).

(ii) Regulations (1) Document GF (2005) No. 39 Decision of the State Council on Implementing Scientific Outlook on Development and Strengthening Environmental Protection; (2) Order No. 253 of the State Council of the People’s Republic of China Regulations on Construction Project Environmental Protection Management (November 18, 1998); (3) Guidance Catalog of Industrial Restructuring (2011 edition); (4) Interim Measures for Public Participation of Environmental Impact Assessment (March 18, 2006); (5) Systematic Management Directory for Environmental Impact Assessment of Construction Project (October 1, 2008); (6) Notice on Practically Strengthening Risk Prevention and Strictly Executing Environmental Impact Assessment Management (Document No. HF (2012) 98);

(7) 10th NPC Standing Committee of Hebei Province Environmental Protection Act of Hebei Province (March 25, 2005); (8) 8th NPC Standing Committee of Hebei Province Regulations on Prevention and Control of Water Pollution in Hebei Province (October 25, 1997); (9) 8th NPC Standing Committee of Hebei Province Regulations on Prevention and Control of Atmospheric Pollution in Hebei Province (November 3, 1996); (10) Board No. 80 of NPC Standing Committee of Hebei Province Regulations on Construction Project Environmental Protection Management (December 17, 1996); (11) 10th NPC Standing Committee of Hebei Province Regulations on Pollutant Emission Reduction in Hebei Province (May 27, 2009); (12) Order [2008] No. 2 of People’s Government of Hebei Province Supervision and Administrative Measures for Prevention and Control of Environmental Pollution in Hebei Province (March 5, 2008); (13) JZ (2008) No. 10 of People’s Government of Hebei Province Several Opinions on Striving to Resolve Livelihood Issues; (14) Directory of Construction Project with Support, Restriction and Prohibition in Environmental Sensitive Area of Hebei Province (Environmental Protection Bureau of Hebei Province, Development and Reform Commission of Hebei Province, September 2005); (15) People’s Government of Hebei Province (JZ (2009) No. 89) Opinions on Construction Project Implementation with Prohibition (Restriction) Approval in Area of Hebei Province (Trial); (16) General Office of People’s Government of Hebei Province BZ (2009) No. 36 Notice on Division of Power for Document Approval for Environmental Impact Assessment of Construction Project; (17) Environmental Protection Bureau of Hebei Province JHBF (2007) No. 65 Interim Provisions for Several Issues of Construction Project Environmental Management; (18) JHBF (2007) No. 70 Compilation Points for Technical Assessment Report of Construction Project Environmental Protection; (19) Environmental Protection Bureau of Hebei Province JHBF [2008] No. 23 Notice on Strengthening Administration of Total Amount of Key Pollutant Emission of Construction Project; (20) JHBF (2007) No. 163 Pertinent Provisions on Strengthening Administration of Environmental Impact Assessment Document Compilation; (21) People’s Government of Hebei Province JZ (2007) Document No. 82 Notice on Printing and Distributing Comprehensive Implementation Plan of Energy Conservation and Emission Reduction; (22) Notice on Controlling Over Capacity and Repeated Construction of Some Industries and Guiding Sound Development of Industry (GF (2009) No. 38); (23) Notice of the State Council on Further Strengthening the Elimination of Backward Production Capacity (GF (2010) No. 7);

(24) Guidance Catalogue of Elimination of Backward Production Technological Equipments and Products in Some Industries (2011 edition) GCY [2010] No. 122; (25) JHBF (2010) No. 238 Notice on Further Strengthening the Public Participation of Construction Project Environmental Assessment; (26) Notice on Further Strengthening Prevention Environmental Risk of Environmental Impact Assessment Management (Document of Ministry of Environmental Protection, HF [2012] No. 77) (27) Board on releasing Compilation Requirements of Abridged Edition of Construction Project Environmental Impact Statement (Board of Ministry of Environmental Protection, No. 51 in 2012)

(iii) Technical Code of Environmental Protection (1) Technical Guidelines of Environmental Impact Assessment – General Principles (HJ 2.1- 2011); (2) Technical Guidelines of Environmental Impact Assessment – Atmospheric Environment (HJ 2.2-2008); (3) Technical Guidelines of Environmental Impact Assessment – Surface Water Environment (HJ/T 2.3-93); (4) Technical Guidelines of Environmental Impact Assessment – Acoustic Environment (HJ 2.4- 2009); (5) Technical Guidelines of Construction Project Environmental Risk Assessment (HJ/T 169- 2004); (6) Technical Guidelines of Environmental Impact Assessment – Ground Water Environment (HJ 610-2011); (7) Technical Guidelines of Environmental Impact Assessment Ecological Impact (HJ19-2011); (8) Technical Code on Identification for Hazardous Waste (HJ/T298-2007); (9) Technical Assessment Guidelines of Construction Project Environmental Impact (HJ 616- 2011); (10) Technical Code for Wet Flue Gas Desulfurization of Industrial Boiler and

(iv) Other Technical Documents (1) Environmental Impact Statement of Construction Engineering in East Station Heat Source Plant of the Urban Area Built by Zhangbei County, Zhangjiakou City at Loan of Asian Development Bank; (2) Overall Planning of Zhangbei County in 2003-2020 (Revised in 2011) —— Instruction Book; (3) Feasibility Study Report of Construction Engineering in East Station Heat Source Plant of the Urban Area Built by Zhangbei County, Zhangjiakou City at Loan of Asian Development Bank; (4) Geological Survey Report of East Heating Station in Zhangbei Huaying Heating Co., Ltd. (5) Required Data List for Construction Project Environmental Assessment Approval of Environmental Protection Department of Hebei Province;

(6) Power of Attorney for Construction Project Environmental Assessment; (7) Other technical data provided by Zhangbei Huaying Heating Co., Ltd.

15. The main applicable national environmental standards include:

(i) Integrated Wastewater Discharge Standard (GB8978-1996), 1998 (ii) Integrated Emission Standards of Air Pollutants (GB16297-1996), 1997 (iii) Environmental Quality Standard for Surface Water (GB3838-2002), 2002 (iv) Ambient Air Quality Standard (GB3095-1996), 1996 (v) Standard of Environmental Noise of Urban Area (GB3096-93), 1994.

B. Administrative Framework

16. Article 16 of the PRC EIA Law (2003) stipulates that an EIA is required for any capital construction project producing significant environmental impacts, so as to provide a comprehensive assessment of these potential environmental impacts. On 2 September 2008, the Ministry of Environmental Protection (MEP) released the Management Guideline on EIA Categories of Construction Projects, which came into effect on 1 October 2008. According to this guideline, a project is classified into one of the following three categories:

(i) Category A: Projects with significant adverse environmental impact, an Environmental Impact Statement (EIS) is required. (ii) Category B: Projects with adverse environmental impacts which are of lesser degree and/or significance than those of Category A; a Tabular environmental Impact Assessment Report (TEIAR) is required. (iii) Category C: Projects unlikely to have adverse environmental impact; an Environmental Impact Registration Form (EIRF) is required.

17. The EIS and TEIAR under PRC EIA regulations are similar to the EIA and IEE, respectively, and the EIRF is equivalent to the ADB Category C, under the ADB Safeguard Policy Statement (2009). Under PRC EIA Law (2003), public consultations are not required for TEIAR and EIRF. According to the Administrative Framework, this component need fulfill the TEIAR document (Category B).

C. Applicable ADB Policies, Regulations and Requirements

18. This IEE was prepared following the ADB’s Safeguard Policy Statement (2009).The additional project scope discussed in this IEE was classified as Environment Category B in line with the environmental assessment management framework (EAMF) as addressed in the SEIA. All projects funded by ADB must comply with ADB’s Safeguard Policy Statement (2009).

IV. DESCRIPTION OF ENVIRONMENT

A. Physical Environment

Topography and Geology

19. Zhangbei County is located at the northwest of Hebei Province, the southeast border of Inner Mongolian Plateau, and outboard of the ancient Great Wall. It is 227 kilometers away from the capital Beijing, as a strategically important place from north and south. The geographical coordinates are 40º57′~ 41º34′ northern latitude, and 114 º 10′ ~ 115 º 27′ eastern longitudes. It is adjacent to Guyuan County to the east, Shangyi County to the west, Kangbao County to north, and the Great Wall and Zhangjiakou City, Chongli County, Wanquan County as the boundary to the south. The project site selection is located at 390 meters at the east side of Chahar Avenue and the north side of Xinghua East Road in the urban area of Zhangbei County. The open spaces are all around the plant site. For the project, Xincun is 350 m from the northwest, and Dongchen Xinghua Community is 420m from the west. See Attached Fig. 1 for the geographical position of the project, and Attached Fig. 2 for the peripheral relations.

20. For the landform of Zhangbei County, the south, east and west are high, and the ground gradually changes from the stretching mountains to the undulating ripple from south to north. In the south, the ditches and ridges are linked together, and the peak and the dam port are alternatively distributed with the arc along the jetty head, and the landform carves up intensively and links up with the area under the dam by the scarp and straight wall. In the north central, the hills, hillock and bottomland are undulated, and the mires and lakes are scattered all over like stars in the sky. The west is Basalt lava platform, with ancient volcanic vent scattered upwards. Punched by the gully and river valley, the edge is often exposed with the mountain spring. The south has high terrain, and naturally forms the closed drainage and exterior drainage watershed. The closed drainage is mostly the north and south flow direction, so there is a saying of “with headless mountains, the water flows backwards”. The landform of Zhangbei County is roughly divided into four types, involving the mountainous area, hilly area, lava platform, and undulating plain. The micro geomorphologic unit includes ridge, hillside, ridge roof, sloping ridge, dryland beach, Eryin beach, lower wet beach, and mire, lake and low-lying land etc. The mountainous area is spread over the southern margin of the county, and is in the downstream of Yinshan Mountains, called as “jetty head” now. The hilly area is spread over the north of Danjing River and Hailiutu Township, the junction of Liangmianjing and Huangshiya Township along the large and small Wudeng Mountain, and the south of Xiaoertai and Baimiaotan Township, covering an area of about 700 square kilometers. The lava platform is spread over Tailugou, Dahe, Danjinggou, and Hailiutu Township in the south and west. The undulating plain area is spread over the middle and north section, with an area of about 2,000 square kilometers, covering about 48% of total area. The project construction place is the open space, and the natural terrain is relatively flat.

Climate

21. Zhangbei County is located at Bashang Grassland. The terrain within the border is wide and flat, and the climate is the temperate sub-arid region in East Asian continental climate. The winter is very long and cold, the spring and autumn has multiple winds and rains, and the summer is short and cool. The rainfall is less with uneven distribution and short frost- free period. It is influenced by Siberia cold air in most of the time annually, with dry climate and constantly changing. The average temperature is -19 ℃~ -15 ℃ in January and is 18 ℃~ 19 ℃ in July. The minimum air temperature is -37 ℃ and the maximum air temperature is 35.7 ℃ all year round. The first frost is end in the first ten-day period of June, and the frost- free period is 90-100 days. The mean annual precipitation is 401.6 mm. 80% of the rainfall focuses on June to September, mostly with rain, snow and hailstone, and the annual evaporation capacity of 1,200 ~ 2,000 mm. The annual mean sunlight is 2,897.8 hours, the active accumulated temperature is 2,448 ℃ all year round, and the accumulated temperature below 10℃ is 1,962.7 ℃. The annual prevailing wind direction is NW and S, and the average wind speed is 4.2 m/s for many years.

Hydrology

22. There are 25 rivers totally within the border of Zhangbei County. Except for Panchang River, they are inland rivers and originate from the jetty head in the south, injecting into the mire and water reservoir northwards. It can be divided into three river basins such as Anguli Mire, Jiuliancheng Mire, and Xiyan Mire. Anguli Mire Basin has 3 dry rivers and 17 tributaries. Jiuliancheng Mire Basin has 2 dry rivers. Xiyan Mire Basin has 1 dry river.The surface water body near the county includes Dongyang River and Bolicai River, which are Anguli tributaries. Dongyang River originates from the low mountains and hills in the southeast of the county. The upstream has 2 tributaries involving Dongyingpan River and Ganzihan River, flows from southeast to northwest in the east of the county, and feeds into Anguli River near Nanwanzi Village. Dongyang River is about 30 km in length, and is the perennial river. Bolicai River originates from the low mountains and hills in the southwest of the county, flows from the south to the north, and becomes Anguli River after converging with Lijiaying River and Tailugou River in the southwest of the county. Bolicai River is about 15 km in length, and the drainage area is 355 km2.

B. Ecological Resources

23. The natural vegetation in Zhangbei County is the grassland type. The vegetational type focuses on the hardy xerophytic perennial herb, with the associated undershrub. Before the Qing Dynasty, the vegetation was flourishing, expressed by “Flat desert and grasslands are far above the clouds”, and “The wind shakes the white grass in the endless sky”, with the prairie view. Since the reclamation, the natural vegetation gradually diminished, and changed the vegetational type to varying degrees. In combination with the terrain and soil texture, the vegetation composition of the whole county was divided into the grasses in the slope ridge land, the meadow in the lowlying land,

15 and the salt wormwood in the salinization bottomland. The wild plants focus on the xerophytic perennial herb. According to the preliminary investigation, there are now 315 species, 52 families and 195 genus, and 286 pastures, 76 species for the medicine, 17 poisonous species, and several edible species. The composition of the wild animals is simple. In the beasts, it gives the priority to the rodent species, and most are various voles. The birds are mainly the dry steppe and inland lake species, and most are migratory birds. There are thousands of insects. However, since the reclamation, the natural ecological damage has been serious, the plant degradation has reduced, and a large number of animals are extinct. Zhangbei County region possesses the abundant underground mineral reserves, and the lead, zinc, gold and silver have already been discovered. The ore reserves reach 8,000,000 tons, ranking the third throughout the country, which have been proved and approved by the country.

24. No rare, threatened, or endangered species have been recorded in the Project areas.

C. Social Environment

25. Zhangbei County stands by Inner Mongolia in the north, and is close to Beijing and Tianjin in the south, which is located at the northwest of Hebei Province and is 45 kilometers away from the urban area of Zhangjiakou City. The total area is 4,232 square meters, and the total population is 380,000 (in 2006). The county has jurisdiction over 4 towns and 14 townships, involving Zhangbei Town, Gonghui Town, Ertai Town, Dahulun Town, Tailugou Township, Youlougou Township, Mantouying Township, Erquanjing Township, Danjinghe Township, Dahe Township, Hailiutu Township, Liangmianjing Township, Haojiaying Township, Baimiaotan Township, Xiaoertai Township, Zhanhai Township, Sanhao Township, and Huangshiya Township. The county government is stationed in Zhangbei Town.

26. The urban land resources of Zhangbei County are relatively abundant, and the considerable reserved land resources. The urban development does not have too large threshold for the land space, while resting with the development time sequence, economic rationality and the integrity of the spatial arrangement. For the total quantity, the land resources can meet the expectable social and economic development demands during the quite period in the future, and any possible development opportunities during the economic development process in the north of Hebei.The planning and construction of the reserved land for the major infrastructure such as the external traffic basically do not split the city, which lays the development framework for the integrity of the urban land spatial structure.

27. No cultural, historical, or archaeological sites have been identified in the Project areas.

D. Baseline of Environmental Quality

28. Environmental Monitor Station of Zhangjiakou City had monitored the regional ambient air quality from October 16, 2012 to October 22, 2012, monitored the regional ground water from October 11, 2012 to October 13, 2012, and monitored the regional acoustic environment on October 11, 2012 and October 12, 2012. Environmental Monitor Station of Zhangjiakou City is the secondary station, and the monitoring data is valid.

Water Quality

29. The ground water development and exploitation in the urban area of Zhangbei County mainly are domestic water, industrial water and agricultural water. The ground water exploitation quantity in 2011 was 4,382,700 m3/a. See Table1 for details. The main source of the water supply is East Water Plant of Zhangbei. According to the statistical materials of the water plant, the annual exploitation quantity of the water source by the East Water Plant in 2011 was 3,143,600 m3. See Table 2.

Table 1: List for Ground Water Exploitation and Utilization in Urban Area of Zhangbei County Annual Water No. Unit of Water Supply Unit of Water Consumption Consumption Remark Ten thousand m3/a Water Supply Company Residents and units with the 1 314.56 of County water supply pipes in the county Hebei Mali Food Co., 2 Our unit 40 Self-contained well Ltd. Botian Sugar Industry 3 Our unit 70.2 Self-contained well Co., Ltd. 4 Yanbei Potato Co., Ltd. Our unit 6.4 Self-contained well 5 Others 7.31 Self-contained well Total 4,382,700 m3/a

Table 2 : Statistical Table for Month-to-month Exploitation Quantity of Water Source for East Water Plant in 2011 Month January February March April May June

Exploitation (m3) 198000 220590 233897 238689 301300 284351 Full Year Month July August September October November December 3143596 Exploitation (m3) 310119 300365 272194 269021 247781 267289

30. Monitoring and Assessment of Ground Water Environment Quality Actuality i. Monitoring Factors: pH, total hardness, permanganate index, total dissolved solids, ammonia nitrogen, nitrate nitrogen, nitrite nitrogen, sulfate, chromaticity, total coliform group, total bacterial count, chloride, fluoride ii. Monitoring Stationing: Three water quality monitoring points are arranged. See Table 3 for the detailed monitoring point location. See Fig. 4-1 for the monitoring point distribution.

Table 3 : Monitoring Stationing Table for Ground Water Actuality

No. Monitoring Point of Water Quality Monitoring Factors of Water Quality

1 Plant Site

Upstream of Plant Site (WulaoerFangzi pH, total hardness, permanganate index, total dissolved solids, 2 Village) ammonia nitrogen, nitrate nitrogen, nitrite nitrogen, sulfate, chromaticity, total coliform group, total bacterial count, chloride, Downstream of Plant Site (Dongliang fluoride 3 Village)

iii. Monitoring Time and Frequency: Each monitoring point is monitored for three days in succession, and the sampling is made once respectively for each monitoring well position per day. iv. Monitoring and Analytical Method: The sampling monitoring method is conducted in accordance with the pertinent provisions in Ground Water Monitoring Technical Code (HJ/T164-2004) and Quality Control Manual of Environment Water Quality Monitoring. See Table 4 for the detailed analytical method.

Table 4 : Analytical Method of Basic Items of Ground Water Environment Quality Analytical Method and Source of Detection Limit No. Name of Items Standard Method mg/L 1 PH Value Glass electrode method GB/T6920-1986 0.1 2 COMmn Acid process GB/T11892-1989 0.5 3 Total Hardness EDTA titration GB/T7477-1987 5

Nessler reagent 4 NH3-N HJ535-2009 0.025 spectrophotometry

5 Sulfate Ion chromatography HJ/T84-2001 0.09 Monitoring and Analytical Method of 6 Total dissolved solids Gravimetric method 4 Water and Waste Water 7 Nitrite Nitrogen Spectrophotometry GB/T7493-1987 0.003 8 Chloride Ion chromatography HJ/T84-2001 0.02 9 Chromaticity Dilution ratio method GB/T11903-89 15

Multi-tube fermentation method Monitoring and Analytical Method of 10 Total coliform group 3 and filter membrane method Water and Waste Water

11 F- Ion chromatography HJ/T84-2001 0.02 12 Nitrate Nitrogen Ion chromatography HJ/T84-2001 0.8 13 Total bacterial count Quantity method 100 v. Monitoring Results: See Table5 for the ground water quality monitoring results of this project.

Table 5 : Table for Monitoring Results of Assessment Area Unit: mg/L (PH excluded, total bacterial count: unit /L)

Monitoring Items Sampling Sampling Place Total Total Total Date Total Nitrite Nitrate COMmn PH Value NH3-N Sulfate dissolved Chloride Chromaticity coliform F- bacterial Hardness Nitrogen Nitrogen solids group count

Plant Site 0.5L 6.78 441 0.025L 84 684 240 0.003 2 <3 0.30 15 62

Upstream of Plant Site 0.5L 6.54 280 0.025L 80.6 478 235 0.003 2 <3 0.23 16 58 (WulaoerFangzi Village) Oct. 11

Downstream of Plant Site 0.5L 6.65 398 0.025L 75.8 504 247 0.003 2 <3 0.61 15 75 (Dongliang Village)

Plant Site 0.5L 6.83 439 0.025L 83 688 245 0.003 2 <3 0.30 17 65

Upstream of Plant Site 0.5L 6.59 280 0.025L 79.7 482 242 0.003 2 <3 0.21 15 70 (WulaoerFangzi Village) Oct. 12

Downstream of Plant Site 0.5L 6.70 396 0.025L 76.6 508 248 0.003 2 <3 0.62 16 50 (Dongliang Village)

Plant Site 0.5L 6.88 441 0.025L 87 692 246 0.003 2 <3 0.31 16 65

Upstream of Plant Site 0.5L 6.64 278 0.025L 81.2 486 245 0.003 2 <3 0.21 17 56 (WulaoerFangzi Village) Oct. 13 Downstream of Plant Site 0.5L 6.75 397 0.025L 77.8 512 248 0.003 2 <3 0.62 15 57 (Dongliang Village)

19 vi. Assessment Method: The single index method is adopted for the environmental quality actuality assessment, and the calculation mode is as follows. C I = C 0 In the formula: I — water quality index of the i item of assessment factor;

C —measured concentration of the i item of assessment factor, mg/L; C 0 —assessment standard of the i item of assessment factor, mg/L. The calculation formula of pH is: V − 7.0 I = pH pH V − 7.0 V > 7.0 u pH 7.0 −V I = pH pH 7.0 −V V ≤ 7.0 d pH In the formula: IpH— water quality index of pH value; VpH— measured value of pH value of ground water; Vd— lower limit value of pH value standard; Vu— upper limit value of pH value standard.

According to the ground water environmental functions, the ground water carries out the standard III in Quality Standard for Ground Water (GB/T14848-93). For assessing the water quality index in the project, the index items excluded in Quality Standard for Ground Water refer to Sanitary Standard for Drinking Water (GB5749-2006). See Table 6 for the ground water quality assessment results. We can see that various indexes in the assessment area meet the requirements of Class III standard in Quality Standard for Ground Water (GB/T14848-95) and Sanitary Standard for Drinking Water (GB5749-2006).

Table 6 : Table for Regional Ground Water Quality Assessment Results of Project (Computation Table for Single Index) Total Total Total Point Assessment Total Nitrite Nitrate No. Date PH Value NH3-N Sulfate dissolved Chloride Chromaticity coliform F- bacterial Location Results Hardness Nitrogen Nitrogen solids group count Monitoring 1 Plant Site Oct. 11 6.78 441 0.025L 84 684 240 0.003 2 <3 0.30 15 62 value Standard 0.44 0.98 0.125 0.336 0.684 0.96 0.15 0.13 0.3 0.75 0.62 index Maximum Over Standard 0 0 0 0 0 0 0 0 0 0 0 0 Multiple Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard WulaoerFangzi Monitoring 2 6.54 280 0.025L 80.6 478 235 0.003 2 <3 0.23 16 58 Village value

Standard 0.92 0.62 0.125 0.3224 0.478 0.94 0.15 0.13 0.23 0.8 0.58 index

Maximum Over Standard 0 0 0 0 0 0 0 0 0 0 0 0 Multiple

Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

Dongliang Monitoring 3 6.65 398 0.025L 75.8 504 247 0.003 2 <3 0.61 15 75 Village value Standard 0.7 0.88 0.125 0.3032 0.504 0.988 0.15 0.13 #VALUE! 0.61 0.75 0.75 index Maximum Over Standard 0 0 0 0 0 0 0 0 0 0 0 0 Multiple

Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard Total Total Assessment Total Nitrite Total coliform Nitrate No. Point LocationDate PH Value NH3-N Sulfate dissolved Chloride Chromaticity F- bacterial Results Hardness Nitrogen group Nitrogen solids count

Monitoring 1 Plant Site Oct. 12 6.83 439 0.025L 83 688 245 0.003 2 <3 0.30 17 65 value Standard 0.34 0.97 0.125 0.332 0.688 0.98 0.15 0.133 0.3 0.85 0.65 index Maximum Over Standard 0 0 0 0 0 0 0 0 0 0 0 0 Multiple

Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

WulaoerFan Monitoring 2 6.59 280 0.025L 79.7 482 242 0.003 2 <3 0.21 15 70 gzi Village value

Standard 0.82 0.622 0.125 0.3188 0.482 0.968 0.15 0.13 0.21 0.75 0.7 index

Maximum Over 0 0 0 0 0 0 0 0 0 0 0 0 Standard Multiple Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

Dongliang Monitoring 3 6.70 396 0.025L 76.6 508 248 0.003 2 <3 0.62 16 50 Village value

Standard 0.6 0.88 0.125 0.306 0.508 0.992 0.15 0.133 0.62 0.8 0.5 index

Maximum Over 0 0 0 0 0 0 0 0 0 0 0 0 Standard Multiple Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

Total Total Total Point Assessment Total Nitrite Nitrate No. Date PH Value NH3-N Sulfate dissolved Chloride Chromaticity coliform F- bacterial Location Results Hardness Nitrogen Nitrogen solids group count Monitoring 6.88 441 0.025L 87 692 246 0.003 2 <3 0.31 16 65 value Standard 0.24 0.98 0.125 0.348 0.692 0.984 0.15 0.133 0.31 0.8 0.65 index Maximum Over 1 Plant Site 0 0 0 0 0 0 0 0 0 0 0 0 Standard Multiple Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

Monitoring 6.64 278 0.025L 81.2 486 245 0.003 2 <3 0.21 17 56 value

Standard 0.72 0.617 0.125 0.3248 0.486 0.98 0.15 0.133 0.21 0.85 0.56 index Wulaoer 2 Fangzi Oct. 13 Maximum Over Village 0 0 0 0 0 0 0 0 0 0 0 0 Standard Multiple

Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

Monitoring 6.75 397 0.025L 77.8 512 248 0.003 2 <3 0.62 15 57 value Standard 0.5 0.882 0.125 0.3112 0.512 0.992 0.15 0.133 0.62 0.75 0.57 index Dongliang Maximum 3 Village Over 0 0 0 0 0 0 0 0 0 0 0 0 Standard Multiple Whether reaching Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard standard

31. Unified Test of Ground Water Level: The unified test of the ground water level is made for the research area. Six monitoring points are arranged totally. See Attached Fig. 4 for each monitoring point distribution. See Table 7 for the detailed monitoring points.

Table 7 : Table for Detailed Monitoring Points of Ground Water Level in Research Area Burial Depth of Water Place Well Depth Elevation of Water Level Level Plant Site 31 m 18 m 1379 WulaoerFangzi 30 m 19 m 1381 Dongliang 32 m 17 m 1376.5 Xincun 32 m 19 m 1378 DongchenXinghua Community 31 m 17 m 1381 Agricultural Scientific Research 32 m 18 m 1385 Institute

32. From Table 7, we can see that the average burial depth of the ground water level within the working area is more than 17 m, with the comparatively large thickness of the aeration zone. The main lithology of the aeration zone is the floury soil, and the layer shows the layering and continuous distribution, which plays a role in blocking the infiltration of pollutants and adsorbing the pollutants preferably. Moreover, the vertical permeability coefficient of the aeration zone is 6.94×10-5cm/s on average, and the permeability performance is relatively bad. Therefore, the thickness of the aeration zone under the existing conditions constitutes the natural protective layer of preventing the ground water pollution.

Air Quality

33. Monitoring of Ambient Air Quality Actuality i. Monitoring Factors: SO2, NO2, PM10, TSP, NH3 ii. Monitoring Stationing: According to the atmospheric environment assessment work grade and the distribution of the functional zone, as well as giving consideration to the regional geological features of the plant site and the local perennial predominant wind direction and uniform distribution principle, 6 monitoring points are laid within the assessment range. See the following table for the position of various monitoring points and the monitoring factors.

Table 8 : List for Monitoring Point of Ambient Air Quality Actuality

No. Monitoring Point Monitoring Factors Functional Zone

1 Xincun Village

2 DongchenXinghua Community Residential Quarter

3 WulaoerFangzi Village SO2, NO2, PM10, TSP, NH3 Village

4 Wangjiawan Village Village Scientific Research Agricultural Scientific Research Institute 5 Work

6 Plant Site SO2, NO2, PM10, TSP, NH3 Plant Area iii. Monitoring Time and Frequency: Phase I monitoring is conducted for 7 days in succession from Oct. 16, 2012 to Oct. 22, 2012.One- hour average concentration

of SO2, NO2, and NH3 is monitored. For one- hour mean concentration, there is at least 45 minutes of sampling time per hour, with 4 times of monitoring per day, involving 2:00, 8:00, 14:00, and 20:00.Daily average concentration of SO2, NO2, PM10, and TSP is monitored. The sampling time of SO2, NO2, and PM10 is not less than 20 hours per day, and the sampling time of TSP is 24 hours per day. iv. Monitoring Method: The sampling method is conducted in accordance with Environmental Monitoring Technical Code (part of atmospheric air). The monitoring method is conducted in accordance with the pertinent provisions of Ambient Air Quality Standard (GB3095－2012) and Monitoring and Analytical Method of Air and Waste Gas. See Table 9 for the analytical method of the ambient air quality monitoring.

Table 9 : Analytical Method of Ambient Air Quality Monitoring

No. Items Analytical Method and Source of Method Detection Limit

1 TSP Gravimetric Method -

2 PM10 Gravimetric Method -

3 SO2 Colorimetric Method of Spectrophotometer -

4 NO2 Colorimetric Method of Spectrophotometer -

5 NH3 - -

34. Assessment of Ambient Air Quality Actuality i. Assessment Factors: The monitoring factors ditto. ii. Assessment Standard: The assessment standard adopts the secondary standard in Ambient Air Quality Standard (3095-2012). iii. Assessment Method: The assessment method adopts the single standard index method, and the calculation mode is as follows.

Pi＝Ci/C0i In the formula, Pi—— standard index of i pollutant; Ci—— measured concentration of i pollutant, mg/m3; 3 C0i—— assessment standard value of i pollutant, mg/m . iv. Assessment Result: According to the assessment method and assessment standard, the actuality monitoring results are assessed, and the assessment results are analyzed. See Table 10 and Table 11 for the monitoring and assessment results.

Table 10 : Assessment Results of Daily Average Concentration of SO2, NO2, PM10, and TSP

Monitoring Monitoring Concentration Over Standard Maximum Over No. Standard Index Range Point Items Range Rate (%) Standard Multiple

SO2 0.005 ~ 0.01 0 0 0.033 ~ 0.067

NO2 0.005 ~ 0.032 0 0 0.063 ~ 0.4 1 Xincun PM10 0.021 ~ 0.057 0 0 0.14 ~ 0.38

TSP 0.050 ~ 0.080 0 0 0.167 ~ 0.267

Dongchen SO2 0.006 ~ 0.02 0 0 0.04 ~ 0.133 2 Xinghua NO2 0.006 ~ 0.033 0 0 0.075 ~ 0.413

Community PM10 0.024 ~ 0.047 0 0 0.16 ~ 0.313

TSP 0.060 ~ 0.080 0 0 0.2 ~ 0.267

SO2 0.005 ~ 0.03 0 0 0.033 ~ 0.2

WulaoerFang NO2 0.005 ~ 0.035 0 0 0.063 ~ 0.438 3 zi Village PM10 0.022 ~ 0.041 0 0 0.147 ~ 0.273

TSP 0.060 ~ 0.080 0 0 0.2 ~ 0.267

SO2 0.006 ~ 0.031 0 0 0.04 ~ 0.207

Wangjiawan NO2 0.006 ~ 0.029 0 0 0.075 ~ 0.363 4 Village PM10 0.025 ~ 0.037 0 0 0.167 ~ 0.247

TSP 0.050 ~ 0.080 0 0 0.167 ~ 0.267

Agricultural SO2 0.007 ~ 0.021 0 0 0.047 ~ 0.14

Scientific NO2 0.005 ~ 0.024 0 0 0.063 ~ 0.3 5 Research PM10 0.022 ~ 0.034 0 0 0.147 ~ 0.227

Institute TSP 0.060 ~ 0.070 0 0 0.2 ~ 0.233

SO2 0.009 ~ 0.022 0 0 0.06 ~ 0.147

NO2 0.007 ~ 0.020 0 0 0.088 ~ 0.25 6 Plant Site PM10 0.025 ~ 0.038 0 0 0.167 ~ 0.53

TSP 0.060 ~ 0.080 0 0 0.2 ~ 0.267

35. From the actuality monitoring results, the hour average concentration of SO2 in every monitoring point ranges from 0.002 to 0.026 mg/m3, and the daily average concentration ranges from 0.005 to 0.031 mg/m3. The hour average concentration of NO2 ranges from 0.003 to 0.058 mg/m3, and the daily average concentration ranges from 0.005 to 0.035 mg/m3. The daily average concentration of PM10 ranges from 0.021 to 0.057 mg/m3. The daily average concentration of TSP ranges from 0.050 to 0.080 mg/m3. All meet the secondary standard requirements of Ambient Air Quality Standard (GB3095-2012).

36. In conclusion, all monitoring factors can meet the requirements of the corresponding standards, and the ambient air quality is preferable.

Table 11 : Assessment Results of Hour Concentration of SO2, NO2, and NH3

Monitoring Monitoring Concentration Over Standard Maximum Over No. Standard Index Range Point Items Range Rate (%) Standard Multiple

SO2 0.002 ~ 0.024 0 0 0.004 ~ 0.048

1 Xincun NO2 0.003 ~ 0.057 0 0 0.015 ~ 0.285

NH3 Not detected 0 0 --

Dongchen SO2 0.003 ~ 0.023 0 0 0.006 ~ 0.046

2 Xinghua NO2 0.003 ~ 0.058 0 0 0.015 ~ 0.29

Community NH3 Not detected 0 0 --

SO2 0.004 ~ 0.026 0 0 0.008 ~ 0.052 WulaoerFan 3 NO2 0.003 ~ 0.058 0 0 0.015 ~ 0.29 gzi Village NH3 Not detected 0 0 --

SO2 0.004 ~ 0.017 0 0 0.008 ~ 0.034 Wangjiawan 4 NO2 0.004 ~ 0.035 0 0 0.02 ~ 0.175 Village NH3 Not detected 0 0 --

Agricultural SO2 0.005 ~ 0.015 0 0 0.01 ~ 0.03

Scientific NO2 0.005 ~ 0.026 0 0 0.025 ~ 0.13 5 Research NH3 Not detected 0 0 -- Institute

SO2 0.005 ~ 0.017 0 0 0.01 ~ 0.034

6 Plant Site NO2 0.005 ~ 0.024 0 0 0.025 ~ 0.12

NH3 Not detected 0 0 --

Noise

37. Monitoring of Acoustic Environmental Quality Actuality i. Monitoring Points: One monitoring point is set respectively from 1 m outside the east, south, west and north plant boundary in the plant area. ii. Monitoring Factors: Equivalent continuous A-weighted sound level. iii. Monitoring Time and Frequency: October 11, 2012 ~ October 12, 2012, monitoring continuously for 2 days, each time respectively for day and night. iv. Monitoring Method: Carry out in accordance with the pertinent provisions in Standard for Environmental Noise Discharge in Industrial Enterprise Plant Area (GB12348－2008). During the noise monitoring, the rain and snow do not occur, which meets the requirements of Volume III of Environmental Monitoring Technical Code (part of noise). v. Monitoring Results: See Table 4-5 for the monitoring results.

38. Assessment of Acoustic Environmental Quality Actuality i. Assessment Method: Adopt the method of comparing with the standard value for the assessment. ii. Assessment Standard: Class 2 standard in Acoustic Environment Quality Standard (GB3096-2008) iii. Assessment Results: According to the assessment method and assessment standard, the actuality monitoring results are assessed. The assessment results are also listed in Table 12.

Table 12 : Monitoring and Assessment Results of Noise Actuality Unit: dB（A）

Monitoring 1# East Plant Boundary 2# South Plant Boundary 3# West Plant Boundary 4# North Plant Boundary Point 10.11 10.12 10.11 10.12 10.11 10.12 10.11 10.12

Daytime 47.4 48.4 49.3 49.2 48.8 49.8 46.3 47.3

Nighttime 42.6 41.6 41.6 43.6 40.7 42.7 40.9 40.9 Assessment Standard Daytime 60, Nighttime 50

Daytime Standard Standard Standard Standard Standard Standard Standard Standard

Nighttime Standard Standard Standard Standard Standard Standard Standard Standard

39. From Table 12, the sound level value of each plant boundary in the plant area in the daytime ranges from 46.3 to 49.8 dB(A), and the sound level value in the night time ranges from 40.7 to 43.6 dB(A), which meet the Class 2 standard requirements in Acoustic Environment Quality Standard. The actuality of the acoustic environment is good.

40. Physical Cultural Resources. The implementation activities of proposed component is not placed at or not near by the areas of physical cultural resources assigned by PRC legal.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Expected Positive Impact

41. Environmental and climate change impact. When the proposed three subprojects switch to more energy efficient centralized heating system from heating supply of inefficient small coal-fired boilers and household stoves, it will reduce raw coal, carbon dioxide, sulphur dioxide, nitrogen oxides, and particulate matters.

B. Potential Impacts

42. The potential environmental impacts were identified and screened during the IEE preparation. The relative significance of potential impacts from the activities of the new subproject was identified. More detailed further assessments were performed for major, critical, and specific impacts. Applicable and specific requirements by the PRC EIA regulations and ADB SPS were considered carefully in assessing the environmental impacts from the project activities.

43. The screening process showed that during the construction phase, the major negative environmental impacts are associated with potential soil erosion, construction noise and dust during construction of HSPs, HESs and pipelines. During the operation phase, the major negative environmental impact is pollutant emission from the HSPs and the noise impacts from the HESs in the urban areas.

44. The impacts were grouped under three general categories: physical, biological and socioeconomic. Impacts before construction and during construction and operation phases were considered separately. Potential impacts from the project were considered under the following categories: (i) direct impacts – directly due to the subprojects themselves; (ii) induced impacts – resulting from activities arising from the subprojects, but not directly attributable to them; and (iii) cumulative impacts – which in combination would exert significant additional influences.

C. Potential Impacts before Construction

45. Loss of cultural heritage and protected species. No cultural heritage or archaeological sites are recorded on lands in all the project cities that will temporarily or permanently be lost. No rare and endangered species will be directly impacted by the subprojects because all the subprojects are located in the urban areas. The heating supply pipeline routes will be along existing roads, sidewalks or bicycle ways, and will not be located in forests and grasslands of ecological significance, nature reserves, or scenic areas.

46. However, construction activities may have the potential disturbance of unknown underground cultural relics, although none have been identified in the project cities yet. In such case, special attention should be paid and strict procedures should be established so that underground cultural sites can be identified and protected if they are discovered during constructions. The mitigation measures will be immediate suspension of construction activities if any archaeological or other cultural relics are encountered. The IA will promptly notify local relic management authorities, as well as HPMO. The construction activities will resume only after thorough investigation and with the permission of the appropriate authorities.

47. Mitigation measures during detailed engineering design. Mitigation measures during detailed engineering designs to minimize the direct and induced impacts are as follows:

(i) All HSP sites and the heating supply pipeline routes will be carefully reconfirmed to avoid or minimize potential adverse impacts on the surrounding environments and communities; (ii) Environmental mitigation measures indicated in this IEE, the EMP and the domestic EIAs will form part of the design documents and bidding documents for all subprojects, and will be included in contract documents for civil constructions and equipment installations. All contractors will be required to strictly comply with the EMP; (iii) The environmental monitoring program will be incorporated into the designs to ensure that environmental impacts are closely monitored and construction and operating activities are closely supervised against the approved EIAs; and (iv) The locations of the proposed HESs, based on the preliminary selection during the feasibility study, will be reconfirmed and designed as far as possible from sensitive environmental areas, such as schools, hospitals, residential buildings, among others.

D. Impacts and Mitigation Measures during Construction

48. Impacts on soil. The newly proposed subproject could affect the soil in the construction areas (HSPs, HESs and along pipeline ditches) through erosion and contamination. Soil erosion will occur during construction when surface soil and vegetation are disturbed. The primary areas of potentially increased soil erosion include foundation construction of the boiler houses and other structures in the HSPs, as well as construction of HESs and excavation of pipe trenches, stockpiles and spoils from earthwork during the constructions, as well as demolition of existing small boiler houses and site preparation for HESs. Soil contamination may result from the inappropriate transfer, storage, and disposal of petroleum products, chemicals, hazardous materials, liquids, and solid waste during the constructions.

49. Construction of HSPs will generate surplus spoil after maximizing reuse of spoil on-site. Spoil from the subproject can be used off-site by coordinating constructions; for example, spoil produced from the heating pipeline construction can be used for building foundation filling and earthworks for the boiler houses. The remaining surplus spoil should be transported to suitable spoil disposal sites, which have been approved by local EPBs. All spoil disposal sites must be identified, designed, and operated to minimize impacts and maximize land stability. Approved spoil disposal sites will be identified during detailed designs for each subproject and defined in the construction contractors’ tender documents. The spoil disposal site shall be restored and re- vegetated at the conclusion of disposal activity. The final height and shape of each disposal area will be determined by survey during the detailed design and will be based upon the resting stability of local spoil material and the surrounding topography.

50. Major mitigation measures for control of soil erosion, soil contamination, and other geologic hazards due to construction activities are as follows: (i) Minimize active open excavation areas during pipeline trenching activities and some foundation works, and use appropriate compaction techniques for those constructions; (ii) Construct intercepting ditches and drains to prevent runoff entering construction sites, and divert runoff from sites to existing drainage; (iii) Limit construction and material handling during periods of rains and high winds; (iv) Stabilize all earthwork disturbance areas within maximum 14 days after earthworks have ceased at the sites; (v) Plant grass in the HSPs to protect ground, especially on sandy soil areas;

(vi) Properly slope or re-vegetate disturbed surfaces, such as compacted pipeline trenches; (vii) Appropriately set up temporary construction camps and storage areas to minimize land area required and impact on soil erosion; (viii) Properly store petroleum products, hazardous materials and wastes on impermeable surfaces in secured and covered areas, and exercise the best management practice to avoid soil contamination; (ix) Remove all construction wastes from the site and transport them to approved spoil disposal sites; and (x) Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures. 51. Surface and ground water pollution. Pipeline laying and site preparation for the HSPs and HESs near surface water bodies, may disturb surface soils and affect surface water through increased turbidity and sedimentation of rivers, lakes and ponds. Inappropriate storage and handling of petroleum products and hazardous materials, or accidental spills, disposal of domestic wastewater from construction camps, and wash-down water from construction equipment and vehicles may contaminate adjacent surface water or groundwater resources. Contractors will be required to store all toxic, hazardous or harmful construction materials including petroleum products in a place with impermeable surfaces and to manage them in such a way to prevent spillage or leakage.

52. Construction wastewater. Wastewater produced during construction may come from washing aggregates (including machines and pipe washing), pouring and curing concrete, and oil- containing wastewater from machinery repairs. Measures for managing construction wastewater include the following: (i) All areas where construction equipment is being washed shall be equipped with water collection basins and sediment traps; and (ii) Septic treatment and disposal systems shall be installed at construction camps along with proper maintenance protocols. 53. Water quality parameters, such as suspended solid (SS), COD, oil, and grease, in rivers in each subproject city will be monitored by local environmental monitoring stations (EMS) during construction in accordance with the monitoring program specified in Appendix 2 to identify and confirm results of the impact assessment and effectiveness of adopted mitigation measures.

54. Noise. A significant increase in noise will be expected during construction due to various construction and transport activities. Construction activities may involve excavators, bulldozers, graders, stabilizers, concrete-mixing plants, drills, stone crushing and screening plants, rollers, and other heavy machineries. The trench excavator, roller, and other compaction machinery will generate noise during laying heating pipeline. The noise levels can be very high on occasion but the operation will be temporary and localized. Thus, proper mitigation measures to minimize the impact will be in place. The major construction machinery noise testing values are shown in Table 13.

Table 13: Testing Values of Construction Machinery Noise

Distance between Measuring Maximum Sound Level No. Machine Type Site and Machinery (m) L max (B) 1 Wheel Loader 5 90 2 Grader 5 90

Distance between Measuring Maximum Sound Level No. Machine Type Site and Machinery (m) L max (B) 3 Vibrating Roller 5 86 4 Two-wheeled Two-Vibrating Roller 5 81 5 Tire Roller 5 76 6 Bulldozer 5 86 7 Tire Hydraulic Excavator 5 84 8 Paver (Germany) 5 87 9 Generating Set (two sets) 1 98 Source: PRC Ministry of Communications (2006).

55. Methodology for prediction of noise values during construction. Construction equipment noise source is considered as a point sound source, and the predictive mode is as follows: R L = L − 20 lg i − ΔL i 0 R0

Where, Li and L0 are equipment noise sound levels at Ri and R0 respectively, ΔL is additional decrement produced by barriers, vegetation and air.

56. As for the impact of multiple construction machineries on a certain location, sound level superposition is needed using the following formula:

0 .1× L i L = 10 lg Σ 10

57. Prediction results. According to the model, noise levels at different distances are gained after calculating the impact scope of equipment noise during construction, as shown in Table 14. The impact scope of different equipment is indicated in Table 15.

Table 14: Noise Values of Construction Machineries at Different Distances dB(A)

Distance to Machinery Machinery Name 5 m 10 m 20 m 40 m 60 m 80 m 100 m 150 m 200 m 300 m Loader 90 84 78 72 68.5 66 64 60.5 58 54.5 Vibratory Road 86 80 74 68 64.5 62 60 56.5 54 50.5 Roller Bulldozer 86 80 74 68 64.5 62 60 56.5 54 50.5 Land Scraper 90 84 78 72 68.5 66 64 60.5 58 54.5 Excavator 84 78 72 66 62.5 60 58 54.5 52 48.8 Roller 87 81 75 69 65.5 63 61 57.5 55 51.5 Mixing Equipment 87 81 75 69 65.5 63 61 57.5 55 51.5 Source: U.S. Federal Highway Administration (FHWA)

Table 15: Construction Equipment Noise Impact Scope

Limit Standard (dB) Impact Scope (m) Construction Stage Construction Machinery Daytime Nighttime Daytime Nighttime Excavator 75 55 14.1 118.6 Bulldozer 75 55 17.7 177.4 Loader 75 55 28.1 210.8 Earth and Stone Work Scraper 75 55 39.7 281.2 Land Scraper 75 55 28.1 210.8 Tamper 75 55 84.4 474.3 Piling Pile Driver 85 Forbidden 126.2 / Road Roller 70 55 31.5 177.4 Truck 70 55 66.8 266.1 Vibrator 70 55 53.2 224.4 Structure Dump Truck 70 55 19.9 111.9 Blender 70 55 20.0 112.5 Mixing Machine 70 55 35.4 167.5 Source: U.S. Federal Highway Administration (FHWA)

58. The noise of most construction machineries will meet the PRC standard of Noise Standards for Construction Sites (GB12524-2011) of up to 40-60 m away from the construction site during the day and 200-300 m at night. So the construction noise will have little impact on the sensitive receptors according to the domestic EIA reports. The construction of HES and pipeline will have impact on the ambient sensitive receptors. The excavator is used for the pipeline construction with longest time. So its noise will reflect the noise impact situation of the pipeline construction, whose noise sound level is 70 dB(A) up to 30 m away from the site, which meet the PRC standard during the day at construction stage. The pipeline laying activities will move as the project progresses. Thus, the noise impact to a particulate location will be not significant.

59. Mitigation measures for noise impact. These mitigation measures are essential for construction activities to meet the domestic construction site noise standards and to protect people at sensitive receptors: (i) Properly maintain machinery to minimize noise and ensure that noise levels from equipment and machinery conform to the national standards, and; (ii) Apply noise reduction devices or methods where piling equipment is operating within 500 m of sensitive sites such as schools, hospitals, and residential areas; (iii) Locate sites for rock crushing, concrete-mixing, and similar activities at least 1 km away from sensitive areas; (iv) To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and the movement of heavy vehicles along urban roads between 8 pm and 7 am the next day based on international best practices and common construction procedures; (v) Public notification of construction operations will incorporate noise considerations; procedure of handling complaints through the Grievance Redress Mechanism will be disseminated;

(vi) Place temporary signs or noise barriers around noise sources during construction, if necessary; (vii) Monitor noise at sensitive areas at regular intervals by local environmental monitoring station. If noise standards are exceeded, equipment and construction conditions shall be checked, and implement mitigation measures to rectify the situation; and (viii) Conduct interviews with residents living adjacent to the construction sites to identify community complaints about noise, and seek suggestions from community members to reduce noise annoyance. Community suggestions will be used to adjust work hours of noise- generating machinery.

60. Vibration impact and mitigation measures. Significant vibrations are expected during structure piling to construct the HSPs’ foundation and pipeline trench compaction. On the construction site, different degrees of mechanical vibration will occur during the project construction procedures. Such vibration is sudden, impassive, and discontinuous, and is likely to create annoyance. Main construction machinery includes vibrating rollers, earth rammer and loader, of which the impact of the vibrating roller is significantly high. The construction machinery vibration will affect people close to the construction site. Major mitigation measures include prohibition of piling and compaction operations at night.

61. Impact on air quality and mitigation measures. The subproject could have the following impacts on air quality during construction: (i) dust from excavation, concrete mixing, transportation of the construction materials and excavation spoil, and dust soil from disturbed and uncovered construction areas and other construction activities, especially on dry and windy days and (ii) vehicle emissions from construction machineries and vehicles, especially heavy diesel machineries, and equipment. Fugitive dust may be caused by excavation, demolition, vehicular movement, and materials handling, particularly downwind from the construction sites. The dust and emissions caused by pipeline ditch excavation, backfill, and vehicular movement could affect nearby residential areas, hospitals, and schools. Mitigation measures are: (i) Spraying water on construction sites and material handling routes where fugitive dust is generated; (ii) Paying particular attention to dust suppression near sensitive receptors such as schools, hospitals, or residential communities, if pipeline installation will be near these areas; (iii) Setting up the guardrail around the construction site with more than 1.8m high; (iv) Discontinuing the construction when the heavy windy day; (v) Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission; (vi) Covering materials during truck transportation, in particular, the fine material, to avoid spillage or fugitive dust generation; (vii) Ensuring vehicle emissions are in compliance with PRC standards of GB18352-2005, GB17691-2005, GB11340-2005, GB2847-2005, and GB18285-2005; and (viii) Maintaining vehicles and construction machineries to a high standard to ensure efficient running and fuel-burning and compliance with the PRC emission standards.

62. Solid waste and mitigation measures. The solid wastes generated by construction activities are mainly the following four categories: (i) waste earth in the pipeline construction; (ii)

34 domestic waste of the constructors; (iii) waste asphalt; and (iv) solid waste from the construction sites of HESs and HSPs. Construction waste could have adverse impacts on the surroundings. Work forces of contractors may generate solid wastes of 0.1-0.5 ton per day in each camp. Inappropriate waste storage and disposal could affect soil, groundwater, and surface water resources, and hence, public health and sanitation. Mitigation measures are as follows: (i) Establish temporary storage for solid wastes away from water bodies or other environmentally sensitive areas, and regularly haul waste to an landfill or designated dumping site, which have been identified and approved by local authorities; (ii) Provide appropriate waste storage containers and reach agreement with local villages or residential communities for disposal of worker’s camp domestic waste through appropriate local facilities. These arrangements will be made prior to commencing construction; (iii) Hire contractors with proper credentials to remove all wastes from sites to approved waste disposal sites, according to appropriate domestic standards; (iv) Hold contractors responsible for proper removal and disposal of any significant residual materials, wastes, and contaminated soils that remain on the ground after construction. Any planned paving or vegetating of the area shall be done as soon as the materials are removed to protect and stabilize the soil; and (v) Prohibit waste burning at any construction site.

63. Other hazardous and polluting materials: A construction material handling and disposal protocol that includes spill emergency response plan to be prepared and implemented by certified contractors, which have been identified. The following measures will be taken to prevent pollution of soil and surface and groundwater: (i) Storage facilities for fuels, oil, and other hazardous materials will be within secured areas on impermeable surfaces, and provided with bunds and cleanup installations; (ii) Vehicles and equipment will be properly staged in designated areas to prevent contamination of soil and surface water; vehicle, machinery and equipment maintenance and refueling will be properly carried out so that spilled materials will not seep into the soil; (iii) Oil traps will be provided for service areas and parking areas; and fuel storage and refilling areas will be located at least 300 m from drainage structures and important water bodies; and (iv) Contractors’ fuel suppliers will be properly licensed. They will follow proper protocol for transferring fuel and the Operation Procedures for Transportation, Loading and Unloading of Dangerous Goods (standard JT 3145-91).

64. Potential impacts on flora and fauna. Since construction activities will be mainly within the urban areas, there are no rare, threatened, or endangered species within the construction boundaries. But special precautions will be taken during and after construction for the protection of small animals, reptiles, and birds of common species that live in vegetated HSPs and roadside areas where the heating supply pipelines will be embedded. The potential impacts on flora and fauna include the removal of vegetation and disruption of the ecosystem during construction. In particular, the construction activities will alter the original landscape and vegetation of limited area. Mitigation measures will include the following activities: (i) Preserve existing vegetation where no construction activity is planned, or temporarily preserve vegetation where activity is planned for a later date; (ii) Properly backfill, compact, and re-vegetate pipeline trenches after heating pipeline installation;

(iii) Protect existing trees and grassland during constructions; when a tree has to be removed or an area of grassland disturbed, replant trees and re-vegetate the area after construction; (iv) Remove trees or shrubs only as a last resort if they impinge directly on permanent structures; and (v) Undertake compensatory planting of an equivalent or larger area of affected trees and vegetation in compliance with the PRC’s forestry law and regulations.

65. Community disturbance and safety. The potential impacts to the local communities include traffic congestion, public safety from construction activities and heavy vehicles and machinery traffic, and unexpected interruptions in other municipal services and utilities because of damage to pipelines for water supply, drainage, heating supply, and gas, as well as to underground power cables and communication cables (including optical fiber cables). Any of these disruptions in service can affect the economy, industries, businesses and residents’ daily life. Traffic congestion may worsen as construction traffic in urban areas increases during rush hours; roads may be fully or partially closed during pipeline construction, causing temporary inconvenience to traffic, residents, commercial operations, and institutions. Construction may require relocation of municipal utilities such as sewer, gas, water supplies, communication and power cables, and hence the temporary suspension of services to adjacent communities. Mitigation measures are as follows: (i) Require contractors to consider the impact on traffic in construction scheduling. A traffic control and operation plan will be prepared and it shall be approved by each local traffic management administration before construction. The plan shall include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings, building interim roads, selecting transport routes to reduce disturbance to regular traffic, reinstating roads, and opening them to traffic as soon as the construction is completed; (ii) Plan construction activities so as to minimize disturbances to utility services. Public notices will be placed to inform construction and any disturbances to utility services to the affected people. Temporary land occupation will be planned well ahead of construction to minimize its impact. Land will be reinstated to its original condition after construction; and (iii) Implement safety measures around the construction sites to protect the public, including warning signs to alert the public to potential safety hazards, and barriers to prevent public access to construction sites.

66. Occupational health and safety. Contractors will be required by PMO and the IAs to ensure that their workers and other staff work on the proposed constructions are in a safe environment. Contractors shall ensure that: (i) all reasonable steps are taken to protect any person on the site from health and safety risks; (ii) the construction site is a safe and healthy workplace; (iii) machineries and equipment are safe; (iv) adequate training or instruction for occupational health and safety is provided; (v) adequate supervision of safe work systems is implemented; (vi) means of access to and egress from the site are without risk to health and safety; (v) appropriate personal protective equipment (PPE), including ear protection, hard hats and safety boots shall be provided to worker to minimize exposure and risks; (vi) adequate safety protection equipment including firefighting systems is provided; (vii) adequate signage in risk areas must be posted; (viii) procedures for limiting exposure to high noise or heat working environments shall be in compliance with the PRC noise standards for construction sites (GB12523-2011) and relevant international

36 guidelines; and (ix) training will be provided to workers to comply with health and safety procedures and PPEs shall be provided to them.

67. All contractors will be required to implement effective occupational health and safety measures for their workers within all construction sites, including safe drinking water, efficient sanitation, adequate health services, protective clothing and equipment, if necessary. The contractors’ performance and activities for occupational health and safety shall be incorporated in their monthly progress reports.

E. Impacts and Mitigation Measures during Operation

68. There are some environmental impacts from the subprojects during operation. The potential impacts may include air pollution from flue gas emissions, noise from the pumps and blowers, water pollution, and solid waste pollution (mainly fly ash and bottom ash). The HSP will not use any polychlorinated biphenyls or asbestos according to the requirements of the PRC’s standards and regulations.

69. Pollutant emissions. Coal combustion produces emissions of some pollutants such as

SO2, NOx, flue dust including PM10 that are referred to as respirable particulate matter (RPM), and CO2, which is a major greenhouse gas. The project will minimize the emission of these pollutants by using advanced boiler technology and control measures, including installing fabric filter and electrostatic precipitator (ESP) to control PM emissions from CFB boilers and wet scrubbers for small chain stoker boiler; using desulfurization within the CFB boiler that is about 80% efficient; and using CFB with a total de-nitrification rate of about 60%, with which the emission concentration will meet the national Emission Standard of Air Pollutants for Coal-Burning Boilers (GB13271- 2001).

70. Sulfur dioxide (SO2). SO2 is an irritating gas that is absorbed in the nose and aqueous surfaces of the upper respiratory tract and is associated with reduced lung function and increased risk of mortality and morbidity. Adverse health effects of SO2 include coughing, phlegm, chest discomfort, and bronchitis.

71. Nitrogen oxides (NOx). NOx is one of the primary pollutants emitted during coal combustion. NO2 is formed through oxidation of these oxides once released in the air. NO2 is an irritating gas that is absorbed into the mucous membrane of the respiratory tract. The most adverse health effect occurs at the junction of the conducting airway and the gas exchange region of the lungs. The upper airways are less affected because NO2 is not very soluble in aqueous surfaces. Exposure to NO2 is linked with increased susceptibility to respiratory infection, increased airway resistance in asthmatics and decreased pulmonary function.

72. Total suspended particulate (TSP). The impact of particles on human health largely depends on (i) particle characteristics, particularly particle size and chemical composition and (ii) the duration, frequency, and magnitude of exposure. The potential of particles to be inhaled and deposited in the lung is a function of the aerodynamic characteristics of particles in flow streams. The aerodynamic properties of particles are related to their size, shape, and density. The deposition of particles in different regions of the respiratory system depends on their size.

73. The nasal openings allow dust particles to enter the nasal region, along with much finer airborne particulates. Larger particles are deposited in the nasal region by impaction on the hairs of the nose or at the bends of the nasal passages. Smaller particles (PM10) pass through the nasal region and are deposited in the tracheobronchial and pulmonary regions. Particles are removed by

37 impacting with the wall of the bronchi when they are unable to follow the gaseous streamline flow. As the airflow decreases near the terminal bronchi, the smallest particles are removed by Brownian motion, which pushes them to the alveolar membrane.

74. Air quality guidelines for particulates are given for various particle size fractions, including TSP, and inhalable particulates or PM10. Although TSP is defined as all particulates with an aerodynamic diameter of less than 100 μm, an effective upper limit of 30 μm aerodynamic diameters is frequently assigned. PM10 is of concern due to their health impact potentials. As indicated previously, such fine particles are able to be deposited in, and damaging to, the lower airways and gas-exchanging portions of the lung.

75. Wastewater from the HSP during operation. There will be wastewater generated from the subproject with HSP, including domestic wastewater, site drainage, wastewater from scrubbers and fly-ash storage, and wastewater from coal and slag dust suppression spraying. Inappropriate management of wastewater will have the potential to negatively impact local surface and groundwater quality. To mitigate potential impacts, the following measures will be taken: (i) All HSPs’ sanitation facilities will discharge to septic systems and municipal sewer networks that meet relevant PRC standards; (ii) Runoffs from HSPs will be directed to sedimentation basins, and wastewater will be reused if possible, for dust suppression. Solid waste residue in the basins will be cleared as required and transported to local EPB approved landfills; (iii) For areas with oily wastewater discharges, oil-water separators will be installed before discharging to the sedimentation basins; and (iv) Leachate and drainage from the coal storage yard will be collected and drained into the storage pond for reuse in spraying the coal storage yard and treated to remove the particles before reuse. (v) Backwash effluent from HESs. The HES, depending on its size, is expected to generate 30~45 m3/d of backwash effluent with relatively low pH. Mitigation measures include: (vi) An equalization and sedimentation tank of about 20-50 m3 will be built in each HES for pH adjustment and sedimentation (SS ≤ 400 mg/L) before the backwash effluent is discharged into the municipal sewer; (vii) Regularly cleaning the sedimentation tank and disposing accumulated sludge and sediments in the municipal landfill; and (viii) Conducting internal and compliance monitoring for the backwash effluent based on the EMP before discharging into the sewer.

76. Noise. The noise levels expected from various noise generating sources in the HSP vary from 80-100 dB(A). Acoustic enclosures will be provided wherever required to control the noise level to below 85 dB(A). Personal protective equipment shall be provided to the workers if it is not possible to technically meet the required noise levels. The proposed greening area in the HSPs around the plant will work as green mufflers to attenuate the noise level dissemination outside the plant boundaries.

77. To mitigate the noise impact, the following soundproof equipment will be installed in the HSP.

Table 16: Noise Mitigation Measures for Major Equipment dB(A)

No. Equipment Noise Mitigation Measure 1 Coal crusher 75 Factory workshop sound insulation 2 Draft fan 80 Muffler 3 Primary air fan 80 Muffler 4 Air compressor 85 Sound-proof shield 5 Water feed pump 75 Factory workshop sound insulation 6 Heat exchanger 70 Sound-proof shield and double window Source: Subproject EIA reports.

78. Noise from HES. This HES will use low-noise water circulating pumps with noise levels controlled to within 55 dB(A) at a distance of 1 m from the pump house; hence there will be no operational noise impact from these HESs. The IAs and operators will be required to build or improve soundproof covers and walls to reduce noise, if required, and to regularly maintain the circulating pumps and keep the equipment in good condition.

79. Wastewater and solid waste from HESs. Most of HESs will be unattended operation. Only a few workers will be sent to HESs for supervision and maintenance. There will be no canteen on the premises. The quantities of wastewater and solid waste generated by the workers will be very small, and wastewater will be discharged into the local municipal sewer.

80. Occupational health and safety. Since district heating systems, including boilers, pipelines, and HESs, are operating at relatively low temperature and pressure compared to some industrial processes, it is safe to operate these systems under normal conditions. During the operation phase of the project, the implementing agencies shall: (i) conduct regular inspections of the district heating network and repair defects promptly; and (ii) comply with applicable occupational health and safety regulations.

81. Coal ash storage and transportation. Proper storage and disposal of coal ash from the HSPs under the project is an important environmental problem, but coal ash and slag can be used as raw materials for construction material industry and highway construction.2Each proposed HSP has a closed-type coal ash storage silo, which is designed to store about 10-15 days ash under normal operation. The ash is often mixed with modest amounts of water (conditioned) during loading into a truck to prevent dusting and make handling easier. In some situations, the fly ash is not mixed with water, but instead loaded directly into covered trucks or pneumatic tank trucks for transport. The ash storage facilities in the HSPs are only temporary holding locations, from which the material is later transported to local manufacturers or road construction sites or local EPB approved final disposal sites by covered trucks.

2 Since the early 1950s, the PRC has promoted research and development activities in and supported a policy around ash utilization technology. The utilization rate of the ash remained at a low level of around 10% until the 1980s. However, during the 1990s, the utilization rate grew rapidly and reached more than 53%. The main utilization fields of coal ash in the PRC include road construction, cement admixtures, ceramic production, filling material in mine, and building industries, such as slab foundation, hollow block, frame and wall wallboard. According to government statistics, total ash production in China in 2009 was 375 million tons, of which nearly 70% was utilized.

C. Impacts from Small Boiler Demolition and Mitigation Measures

82. Waste from demolition of small boilers and stoves. Demolition of the existing small boilers and many single-family heating stoves will generate solid wastes including ferrous waste, waste concrete, bricks, glass, rubble, and roofing materials. Inappropriate disposal and storage of deconstruction waste could impact soil, groundwater and surface water resources, and consequently public health. Mitigation measures are as follow: (i) All demolition waste will be routinely collected by appropriately licensed waste management companies for reuse, recycling (e.g. equipment; steel, iron and other metals; salvageable wood and building materials; etc.) or final disposal in a licensed waste facility (e.g. for non- recyclable materials). Waste management will be undertaken in consultation with local authorities. (ii) No on-site landfills will be permitted at any demolition site. (iii) No burning of waste will be permitted at any demolition site. (iv) A site contamination investigation will be undertaken in consultation with the local EPB, and if necessary a site specific plan will be developed to address any site contamination. Contaminated spoil will be transported to suitable spoil disposal sites, which have been identified and approved by the local EPB, and clean fill provided. The site will be rehabilitated to a level suitable for its proposed future use; the local EPB will approve the rehabilitation, and will require additional rehabilitation actions if necessary.

83. If households that choose to decommission their stoves themselves, they should be given access to the services of the waste management companies noted above.

84. After the final engineering design and a month before demolishing the small boilers, a survey and investigation for the small boiler sites will be conducted by the IAs and the local EMSs under supervision of the local EPBs. The assessment will include contamination status of soil, groundwater, structures and surface water bodies if nearby. Based on the survey and investigation, if the environments are contaminated, the site restoration plan shall be developed taking into account the World Bank’s Group General EHS Guidelines on Construction and Decommissioning and follow up activities will be conducted by the IAs under the supervision of the local EPBs. The IAs will be fully responsible for small boilers demolition and site restoration.

85. Asbestos was banned to be used in the boiler and heating sectors in the PRC in 1990. The domestic EIA institutes and local EPBs confirmed that all the small boilers to be demolished were installed after 2000 and there will be no asbestos impact during the small boiler demolition. Due diligence was conducted during site visits and it was observed that the small boilers serve buildings near the boiler houses. Due to short distance between the small boilers and surrounding buildings they serve, no insulation is used on the hot water pipes to these buildings.

86. Mitigation measures for disposal of non-hazardous wastes during deconstructions of the small boilers include the following: (i) Maximize reuse/recycling of deconstruction wastes generated during demolition (e.g. iron, bricks, windows, doors, steel bars etc.) and sell them to local waste recycling stations; (ii) Dispose other demolition debris in municipal solid waste landfills or special construction and demolition debris landfills, which are pre-approved by local EPBs; and (iii) It is strictly prohibited to throw waste into the river or other water bodies.

F. Unanticipated Impacts during Construction and Operation

87. If any unanticipated impacts become apparent during project implementation, the EA and IAs will (i) assess the significance of such unanticipated impacts; (ii) evaluate the options available to address them; and (iii) select the best option to mitigate these impacts; (iv) assign responsibilities to implement the mitigation measures; and (v) inform ADB and seek advice from ADB when necessary. ADB will help the EA mobilize the resources required to mitigate any adverse unanticipated impacts or damages if there is such a need.

VI. ANALYSIS OF ALTERNATIVES

A. Environmental Considerations

88. The primary objective of alternative analysis with respect to the environmental criteria was to identify and adopt options with the least adverse environmental and social impacts and maximum benefits. The following key environmental factors were used in comparing alternatives (i) energy efficiency; (ii) emission reduction rates; (iii) land occupation; (iv) degree of community disturbance; and (v) resettlement and economic displacement. The alternative analysis also includes the no project alternative.

B. With-Project and Without-Project Scenarios

89. Heating for residential and office spaces is a necessity in Zhangbei. Without the project, urban residents in the subproject city and towns would still have to rely on inefficient and polluting small boilers and individual family coal-fired heating stoves, which do not have dust removal and flue gas cleaning equipment. Family heating stoves cause indoor and outdoor air pollution, and contribute to respiratory diseases from inhaling coal dust and smoke. Carbon monoxide poisoning could also occur. Without the project, the subproject city and towns’ environmental conditions would deteriorate further along with rapid urbanization, economic development and population growth in the subproject cities. The project will improve both indoor and outdoor air quality and significantly reduce coal consumption, which will have a significant positive impact on the residents’ health, as well as on GHG emission reduction, and global climate change mitigation.

C. Heat Source Alternatives

90. Location. Heating source plant needs to be near the heat load center it serves. Long distance transport of hot water is not economical. The proposed locations of heat source plants for the subproject is located just outside the urban population centers and they can provide adequate hot water to server urban areas without being surrounded by the residential buildings (see Figures 3-3, 3-6 and 3-8). Thus, this location minimizes the environmental and social impacts and is suitable for the subprojects.

91. The component proposes to construct HSP. The optional heat sources for the subproject include combined heat and power (CHP), large- and small-sized heat-only coal-fired boiler plants. The alternative analysis has been conducted based on these options in terms of pollutants emission, technical suitability, energy efficiency, socio-economic impact, and cost.

92. CHP plant. CHP is defined as the simultaneous production of electrical power and heat in a single plant. It is based on the principle that, in a plant dedicated to electricity production alone, only a portion of the primary fuel energy is actually converted into electrical power, averaging around 33% 3 . The remaining part is lost in the form of heat dissipated to the environment. Cogeneration allows increasing the conversion efficiency of the primary fuel energy by means of heat recovery for district heating purpose. In other words, CHP technology provides significant energy saving in comparison with separate production of electricity (in a traditional

3 Overall energy efficiency from coal to electricity in conventional power plant.

42 power plant) and heat (in a traditional district heating boiler house). Because the CHP makes extensive use of the heat to produce both electricity and steam/hot water for space heating, it can achieve overall maximum efficiencies of 87%.

93. Conventional thermal power plants (including those that burn coal, petroleum, or natural gas), and heat engines in general, do not convert all of their thermal energy into electricity. The average thermal efficiency is below 35% while maximum thermal efficiency is 46% for combined cycle systems. By capturing the excess heat, CHP uses heat that would be wasted in a conventional power plant, potentially reaching thermal efficiency of up to 80% or higher. This means that less fuel needs to be consumed to produce the same amount of useful energy. CHP is regarded as the cheapest method of cutting carbon, and has one of the lowest carbon footprints of all fossil generation plants.

94. Large-size heat-only boiler plant. Large-size centralized coal-fired boilers have been widely used in the northern provinces of the PRC and it is the preferred heating source after CHP, the disadvantages of which, in comparison with the CHP, are lower efficiency and more urban land acquisition. The advantages include (i) shorter primary hot water pipelines, and (ii) shorter construction period.

95. Small-size heat-only coal-fired boiler plants are no longer constructed in most cities in the PRC because they are energy-intensive (about 65% efficiency) and cause heavy pollutant emissions (no emission control device). Many PRC cities have started to demolish small boilers due to significant negative impacts on ambient air quality.

96. In comparison with other alternatives, CHP is the best option there is stable heat and electricity demand. Since there is electricity surplus capacity in the three subproject areas, additional electrical power capacity is strictly controlled by the provincial and central governments. The PRC Government approves only large high efficiency power generating stations. The heating demand in these subproject areas is too small to justify building a CHP facility large enough to gain approval from the National Development and Reform Committee (NDRC).Thus, CHP is not viable option for these three subprojects.

97. The next best option is the centralized boiler plant, which has the following advantages: (i) high efficiency resulting in significant coal saving and GHG reductions; (ii) less emission from the boilers due to efficient pollutant control equipment, resulting in positive contributions to local air quality improvement; and (iii) reliable district heating supply due to professional operation and continuous monitoring of heat production and distribution. All three subprojects have chosen this option for HSPs.

D. Alternative Fuels

98. A number of fuels can be used for producing hot water for spacing heating in urban areas, including (i) natural gas, (ii) solar, (iii) wind, (iv) geothermal, (v) biomass, (vi) shallow ground geothermal, (vii) nuclear, (viii) coal bed methane, and (ix) coal.

99. Natural gas. There are some natural gas resources in western part of IMAR but no natural gas is available in or near the subproject cities. The development and utilization of natural gas for district heating have been limited in major cities such as Beijing and Tianjin mainly due to high cost. Typically the cost of using natural gas for heating is much higher than that of coal for heating. For example, the heating price in Beijing is CNY30/m2 using natural gas compared to

CNY18.5/m2 using coal. IMAR is still one of the most underdeveloped provinces in the PRC, therefore it is not economical to use natural gas for district heating in the project cities where natural gas resources are not readily available.

100. Solar. Three technologies exist in solar power, photovoltaic (PV), concentrated solar thermal (CST), and solar heat collector. To use PV forspace heating, the generated electricity has to be converted to the heat under the current heating system or switch to use electric air conditioning. Cost for heat generation by electricity is high and solar PV alone cannot guarantee to provide reliable heat supply due to output fluctuation associated with solar. Thus back up heat sources, such as coal, natural gas, heat pump, or electricity storage system is required and this does not make the district heating business economical. Electric air conditioning for space heating could be applicable only area where winter cold is moderate. However it is not feasible in Northern provinces such as IMAR where temperature drops to -30 C and long winter (more than 6 months of heating season).

101. CST can convert solar energy directly to heat directly by heating water. However it is not guaranteed to provide reliable heat supply during non-sunshine period in a day and at night when the customers need heat the most. Reliability of output can be mitigated by installing heat storage system and/or gas fired heating system for a back-up. CST plant requires relatively large size of land to install all required facilities. Finding such land where desirable solar irradiation is available near by the urban cities could be very challenging. In addition, CST plants need to be built in the areas with intensive solar recourses. Eastern part of IMAR does not have the best solar resource in IMAR.

102. As for solar heat collector, it is commonly used for hot water (below 50 C) supply for household use. Solar heating plant using a solar collector has been operating in small rural communities in northern European counties where peak load is around 2 megawatt (MW) and relatively large size of land is available to install solar collectors. Similar to other solar technologies, heating supply cannot be guaranteed by the system alone due to output fluctuation. Thus hybrid use with existing coal or gas fired heating system is required. This system is not suitable for providing large heating space areas in IMAR.

103. Wind. To utilize the wind energy for space heating, the generated electricity has to be converted to the heat under the current heating system or switch to use electric air conditioning. Cost of heat generation by electricity is high and wind power alone cannot guarantee to provide reliable heat supply due to output fluctuation associated with wind. Therefore, the heat source requires additional base load or back up heat sources such as coal, natural gas, heat pump, or electricity storage system, which does not make the district heating business economical. Wind power can be used to heat hot water and send it to district heating system. However, due to high cost of electricity, such a system is not economical unless there is subsidy to heating company to use surplus wind power. Inner Mongolia has rich wind resource and using wind power for district heating during peaking hours are under consideration. It’s expected that pilot projects will be developed to demonstrate the viability of this approach.

104. Geothermal. Geothermal heat can be utilized for space heating where geothermal heat is available near by the urban areas. Though IMAR has some geothermal resources, but it is not widely used for space heating purposes. Aershan has some hot springs but the water quantity is limited and it is used mostly for tourism. There is no adequate proven geothermal resource to support space heating in relative large scale.

105. Biomass. Heat-only boilers with biomass as the primary fuel is still at pilot stage and there are barriers in promoting biomass-based heating or CHP system: (i) lack of formal system in biomass feedstock production, collection, and distribution, (ii) relatively higher investment cost due to custom-made boiler, (iii) still higher fuel cost compared to coal, and (iv) unreliable fuel supply, especially during the non-harvest season. IMAR has rather limited biomass fuel resources and thus it is not feasible to use biomass fuel for district heating purpose for the proposed subprojects.

106. Shallow ground geothermal. The initial investment of heat pump is about CNY300– 480/m2, much higher than CNY150–200/m2 of large scale coal-fired boilers and CNY200/m2 of CHP plant system. Although the initial investment of heat pump is comparatively higher, the operation cost of heat pump is lower. It also has a function not only for heating but also for cooling and domestic hot water supply. The heat pump pilot projects in Beijing indicated that seven out of eleven projects had lower operational cost than the heating price of coal-fired district heating system (CNY18.5/m2), and all projects had lower operation cost than the price of the system with oil, natural gas and electricity as the fuel.4

107. However, heat pump also has its application limitations. Firstly, the heating system with heat pumps normally has a low temperature, and is suitable for a direct and low temperature heating system, such as that with 55/45°C or lower feed and return water temperature. Secondly, large size heat pump system requires placing lots of underground boreholes, which will occupy substantial underground space and may cause conflicts with other underground facilities. Therefore, it is not suitable to install a heat pump in the existing urban area. The subprojects are to make expansion on the existing system, so heat pump is not suitable.

108. Nuclear. Nuclear energy can be used for district heating. Countries such as Russia, Ukraine, the Czech Republic, Slovakia, Hungary, Bulgaria, and Switzerland have cogeneration nuclear plants. However the PRC do not have any nuclear cogeneration plant yet. Since technology has associated higher environment cost, nuclear for space heating in highly populated urban area is not recommended.

109. Coal bed methane. Coal reserves in IMAR are not considered as high methane coals and thus coal bed methane is not widely used for commercial purposes. None of the subproject cities are close to a major coal reserve, therefore using coal bed methane for district heating is not feasible.

110. Coal. Zhangbei is closed to the coal rich province, IMAR which has a potential coal reserve of 1,200 billion tons, representing 24% of PRC’s total potential reserve. The confirmed reserve 740 billion tons and total coal production in 2011 was 979 million tons, ranked first in the PRC.5 Due to rich resources and affordability, coal has been the dominant fuel for space heating in IMAR for decades. Although environment impacts associated with coal is generally higher than natural gas and renewable sources, appropriate environment technologies have been developed to mitigate pollutants such as SO2 and NOx. Thus, coal has been selected as the fuel for the proposed HSP for the subproject.

4 Series Research on the PRC Renewable Energy Development Strategy – Comprehensive Volume. 2008 5 China Trade News, page N2, 17 May 2012/11/24

E. Alternative Boiler Technologies

111. Extensive alternative analysis was conducted to select technically feasible and operationally reliable boilers for each of the proposed subproject. Three types of commonly used hot water boiler technologies were assessed including (i) stoker-fired boiler; (ii) pulverized coal (PC); and (iii) fluidized-bed combustion (FBC).

112. Stoker-fired boiler. The stoker coal-fired furnace has a limited capacity and application. These furnaces can only be used to drive small heating supply system and industrial processes and not fit for large power plants, CHPs and large-sized district heating systems. In a stoker furnace, coal is introduced on a grate, and then it is burned on a stationary coal bed. There is ventilation below the burning bed from which the air comes in. The primary air initiates the process of combustion and at the same time cools the grate. A secondary airflow is maintained over the burning bed to complete the combustion process.

113. Pulverized coal boiler (PC). The pulverized coal boiler has a widespread use as it has the ability to burn all kinds of coal from anthracite to lignite. The coal is pulverized by crusting and attrition to convert it into particles smaller than 0.3 mm in diameter before it is burned in the furnace. One advantage of a pulverized coal furnace is that it permits combination firing. However, this furnace produces large amounts of fly ash because of pulverizing. The maintenance of the furnace is difficult. Moreover, the pulverizer requires a lot of power for pulverization of coal, which makes the process complicated and energy intensive.

114. Circulating fluidized-bed (CFB) boiler. The CFB works on a process wherein the velocity of air is maintained in such a way that coal and limestone particles are suspended as if a boiling liquid. The main advantage of the CFB is that it produces a higher rate of heat transfer. This reduces the furnace area and size. The combustion temperature is also lower than a conventional furnace. This furnace can also use high sulfur and nitrogen coal because of its low SO2 and NOx emission. Because the combustion temperature of a CFB boiler (800~900°C) is significantly lower than the stoker-fired boiler (1,000-1,200℃) and the PC boiler (1,300~1,500°C), these results in lower NOx formation and the ability to capture SO2 with limestone injection in the furnace.

115. The comparison of the three boiler technologies is summarized in Table 17. Table 17: Comparison of Boiler Technologies

Boiler Advantage Disadvantage Cheaper than CFB and PC boilers; • High cost for desulfurization; Stable combustion, and convenient for operation and • Low quality of ash; and Stoker-fire maintenance; Commonly used for small or boiler • Less auxiliary equipment; and medium sized boilers. small installation space • High Efficiency (overall efficiency of over 85%); • Higher investment; • Fuel Flexibility (ability to burn low grade fuel) ; • Higher power consumption; • Low cost for desulfurization inside the furnace • Higher operation cost; and (SO2 can be greatly reduced by adding limestone • Need more auxiliary CFB Boiler into the furnace); equipment. • Low NOx emission due to low combustion temperature; • Fast response and adjustment to load fluctuations (30-110%);

Boiler Advantage Disadvantage • Easier ash removal (ash removal is easier as the ash flows like liquid from the combustion chamber, hence less manpower is required for ash handling); • Small furnace area and size; and • Ash and slag are easy to be utilized • Higher coal combustion efficiency; • Frequent maintenance for • Long continuous operation time; pulverizers; • Lower operation and maintenance costs; • Higher capital costs; • Limited for using low quality PC boiler • high automation; • Stable combustion; and coal; • Less abrasion and long service life. • Narrow adjustment for load fluctuations (70-110%); and • Higher cost for desulfurization.

Source: Subproject feasibility study reports and TA consultants.

116. Based on the above analysis, the stoker-fired boiler technology is selected for the HSP as its boilers are much smaller.

F. Alternatives of SO2 Emission Reduction Process

117. There are many technologies for SO2 emission control from coal-fired boilers including desulfurization inside the bed of CFB, wet, semi-dry, and dry FGD processes. New generations of desulfurization technologies have overcome many early disadvantages. They are more efficient, clean, and cost-effective. These technologies are commercially mature and are offered by a number of suppliers in the PRC and other countries.

118. Limestone desulfurization inside CFB. An outstanding advantage of a CFB boiler is that desulfurization inside the boiler uses limestone. Generally, the combustion temperature of a CFB boiler stays between 800°C-900°C, the temperature range at which limestone decomposes into lime and desulfurization efficiency is high. Therefore, with appropriate Ca/S ratio and particle sizes of limestone, the desulfurization efficiency of 80% can to be reached when Ca/S ratio is about 2.2:1.

119. Ammonia scrubbing. The ammonia/ammonium sulfate or ammonium scrubbing process works in a similar way to the limestone gypsum process except that aqueous ammonia is used as the scrubbing agent. SO2 is removed from the flue gas by reaction with ammonia, and the final product is ammonium sulfate.

120. The aqueous solution leaving the absorber is processed to produce ammonium sulfate, which is a relatively high-value product that can be used in fertilizers. The high value of this by- product is the principal advantage of this process. A potential risk arises from the need to store ammonia onsite, either in anhydrous form, or as a concentrated aqueous solution.

121. Spray-dry process. In the spray-dry process, concentrated lime (calcium hydroxide) slurry is injected into the flue gas to react with and remove acidic compounds such as SO2, SO3, and HCl. The final product is a dry powdered mixture of calcium compounds. The spray-dry

47 process is supplied by several vendors whose designs vary significantly – although the process chemistries are the same.

122. The flue gas from the air heater is carried into the spray-dryer vessel, where it comes into contact with a finely atomized spray of lime and slurry by-product delivered from a single high- speed rotary atomizer. This removes up to ~95% of the SO2 and most if not all of the SO3 and HCl from the flue gas.

123. The normal sorbent fed to this process is quicklime. This is slaked on-site, with excess water, to produce calcium hydroxide slurry (slaked lime). This is mixed with the recycled by- product before being pumped to the rotary atomizer. The water in the slurry will humidify the flue gas and so improve both SO2 and particulate removal.

124. The spray-dry process is relatively cheap to install, typically being ~70% of the cost of the equivalent limestone gypsum system. However, the variable operating costs are among the highest of the major FGD processes, due to both the high lime usage and the costs of by-product disposal. The lower sorbent utilization of the spray-dry process is lower than that of CFB. Approximately 85-90% SO2 removal with moderately high-sulfur fuels can be achieved by employing the process.

125. The HSP with the small boiler size selected spray-dry technology to control SO2 emission as CFB technology is not typically used for small boilers.

G. Alternatives for Flue Gas Dust Removal

126. Three commonly used PM removal alternatives were considered, including electrostatic precipitator (ESP), fabric filter (baghouse) and wet scrubbers.

127. ESP. ESP relies on the transfer of an electric charge to particles suspended in a gas stream and their subsequent removal via an electric field to a suitable collecting electrode. They are widely applied in power plants and are capable of achieving collection efficiencies of more than 99.5%. Dry ESPs can achieve low pollutant concentrations with low power requirements but are limited by the temperature of flue gases within which they operate. The wet precipitator can achieve the same levels of pollution control and generate process waste water. ESP is typically used for controlling PM emissions from large size coal-fired boilers.

128. Fabric filters. With bag filters, particles carried in a gas stream are retained as the stream passes through multiple filter bags manufactured from high-temperature synthetic fibers, usually at temperatures of up to 300°C. The bag filter can achieve higher levels of particulate stripping but has high energy consumption (compared to ESP). Baghouse is also typically used for controlling PM emissions from large size coal-fired boilers.

129. Wet particles scrubbers. A large number of variants (foam, film, spray columns, etc.) are available for scrubbers, most based on the use of a liquid medium to collect flue gas particulates. They are used widely for industrial coal-fired applications, but have also been used in high-temperature and pressure applications, as in IGCC and pressurized fluidized bed combustion (PFBC) plant. In some cases, particulate control may be combined with the removal of other species such as SO2, hydrogen fluoride (HF), and hydrochloric acid (HCl). The control efficiencies of wet scrubber technologies are less than that of ESP or bag filter technologies. Scrubbers are more commonly used to control PM emissions of small boilers.

130. ESP and baghouse combination. The combination of ESP and baghouse is typically used in coal-fired power plants to control PM emissions. In this combination, ESP is used as the first stage of PM control to collect large size PM and the baghouse is the final stage of control to collect and remove fine PM. The ESP will protect the fabric filter in the baghouse as some large PM may have high temperature and damage the fabric filter. This ESP-baghouse combination increases the lifespan of fabric filters and reduces maintenance and operating costs. The ESP- baghouse combination has high PM control efficiency and can comply with the national emission standards.

131. It is concluded based on above analysis that bag filter and ESP are preferred technologies for PM control while wet scrubbers are more commonly used for small boilers. It was decided to select baghouse technology for the HSP. Both PM control technologies can achieve similar high control efficiencies.

VII. ENVIRONMENTAL MANAGEMENT PLAN

132. The EMP is prepared as Appendix 1.

VIII. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

A. Public Consultation

133. During the feasibility study and domestic EIA study of the subproject, the public participation survey was made in two forms involving posting the information publicity and issuing the public opinion questionnaire. The construction unit posted the publicity materials in all sensitive points within the assessment range respectively in September 26, 2012 ~ October 15, 2012 and November 11, 2012 ~ November 14, 2012. The feedback information had not been received during the publicity period. The public opinion questionnaires totaling to 400 copies were issued in all sensitive points within the assessment range, and the effective questionnaires of 400 copies were recovered, with the recovery rate of 100%. The survey results indicated that 99.75% of respondents supported the project construction. 0.25% of respondents were indifferent, without the dissenting opinions. The waste gas problem was the environmental protection problem that the public was relatively concerned about in the public participation survey. Therefore, the construction unit should fully consider the opinions proposed by the public, strengthen the environmental management, and seriously implement “Three Synchronism” system of the environmental protection, so as to ensure that the environmental protection measures proposed by the environmental impact assessment are implemented, and to exert the due economic benefits and social benefits of this project on basis of guaranteeing the public interests.

B. Grievance Redress Mechanism

Environmental Complaints Form

134. The Project should establish a sound environmental complaint and response mechanisms, to encourage the public to report the Project's environmental violations, in order to avoid environmental disputes.

135. The PMO, IAs and construction contractors will designate a person or set up complaint handling team to deal with the public environmental complaints. ThePMO, IAs and construction contractors should strengthen environmental complaint and response mechanisms for the proposed road alignments. Through the relevant agencies, residential communities and other administrative departments, the environmental complaints will be collected and then reported to the IAs or construction contractor's environmental complaint handling team. In addition, the identity of the complainants will be kept strictly confidential. Complaints and responses will be documented, and timely notify to the environmental protection departments on the response to the complaints and the implementation. Complainants will be notified in writing and in a timely manner about the response to their complaints. Complained units are mainly responsible for the implementation of complaints. Environmental protection bureau is responsible for supervision.

Grievance Redress Procedure

136. Public participation, consultation and information disclosure undertaken as part of the local EIA process,and consultations undertaken by the Project consultants have addressed major community concerns. Continued public participation and consultation is emphasized as a key component of successful project implementation. As a result of this public participation and safeguard assessment during the initial stages of the Project, major issues of grievance are not

51 expected. However, unforeseen issues may occur. In order to settle such issues effectively, an effective and transparent channel for lodging complaints and grievances has been established.

137. In the event of a grievance issue, the basic stages established for redress are:

(i) Stage 1: The affected person should submit an oral or written petition/complaint to the village committee or neighbourhood committee. For an oral complaint, the village committee or neighbourhood committee must make written records properly and give a clear reply within 2 weeks and convey the petition/complaint to the IAs or construction contractors. The IAs and/or construction contractors should give appropriate response to the affected person and convey the response to the relevant village committee or neighbourhood.

(ii) Stage 2: If the complainant is not satisfied with the reply in Stage 1, he/she can appeal to the township government/sub-district office after receiving the reply in Stage 1 and the township government/sub-district office will deal with the complaint within 2 weeks and convey the petition/complaint to the IAs or construction contractors. The IAs and/or construction contractors should give appropriate response to the affected person and convey the response to the relevant township government/sub-district office. (iii) (iv) Stage 3: If the affected person is still not satisfied with the reply in Stage 2, he or she can appeal to County/District EPBs. The District EPBs must give a reply within 30 days and convey the petition/complaint to the IAs or construction contractors. The IAs and/or construction contractors should give appropriate response to the affected person and convey the response to the relevant District EPBs. (v) (vi) Stage 4: If the affected person is still not satisfied with the reply of county/District EPBs, he/she can appeal to PMO or Municipal EPD after receiving the reply of Stage 3. They also have the right to appeal to the civil court within 3 months of receiving the reply.

IX. CONCLUSION

138. The risks can be adequately mitigated through the implementation and enforcement of the EMP and the mitigation measures, including the organizational and legal mechanisms specified in the EIA and the EMP.

139. The major potential adverse environmental impact of the proposed component during construction and operation include the disturbance of soil and vegetation; water pollution from runoff; high-sediment-load runoff infiltrating rivers and tributaries; noise impact on residential areas; and solid waste disposal. The EMP contains comprehensive environmental mitigation measures. The estimated costs of the environmental protection and mitigation measures account for around 20% of the total budget.

140. Any adverse environmental impacts associated with the project will be prevented, reduced, minimized, or otherwise compensated. The EMP has been established to ensure the environmental performance of the project and it includes (i) environmental management and supervision structure, (ii) environmental mitigation and monitoring plans, (iii) institutional strengthening and personnel training. With the implementation of the mitigation measures defined in the EMP, the adverse impacts will be reduced to acceptable levels.

APPENDIX 1: ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives

1. The objectives of the EMP are to (i) ensure implementation of identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts, and (ii) monitor and report against the performance indicators, while ensuring that the project complies with the PRC’s environmental laws, standards and regulations and to ADB’s Safeguard Policy Statement (SPS 2009). Organizational responsibilities and budgets are clearly identified for execution, monitoring and reporting.

B. Implementation Arrangements

This project is the scope change to the ADB financed Hebei Small Cities and Towns Development Demonstration Sector Project, which has several infrastructure services subprojects. Hebei Government is the executing agency for the project. A project leading group was established and is responsible for directing the project and providing policy guidance during project implementation. The HPMO was established years ago and is responsible for coordinating the implementation of project activities on behalf of the Hebei Government.

HPMO is overall responsible for implementing EMP. HPMO will nominate a qualified environment officer to undertake effective environmental management activities specified in the EMP. Environmental engineers of a construction supervision company (CSC) contracted by each IA will be responsible for the daily inspection, monitoring, and evaluation of mitigation measures at each construction site.

Each IA as Zhangbei will form an environmental management unit (EMU), which consists of a leader and an appropriate number of staff to coordinate environmental issues with the contractor, CSC and HPMO. The EMU will be supported by the loan implementation environment consultant and supervised by the local EPBs. Contractors are responsible for implementing relevant mitigation measures and EMP monitoring during construction specified in the EMP supported by the CSC. Each IA is responsible for mitigation measures and EMP monitoring during project operation.

The local EPBs and Environment Monitoring Stations (EMS) under EPB in Zhangbei will ensure in compliance with the PRC’s environmental standards and regulations through regular and random environmental compliance monitoring and inspection during construction and operation. The EPB/EMS will conduct the PRC’s environmental compliance monitoring and inspection and local ambient air quality monitoring according to PRC regulations on behalf of each municipal EPB.

ADB is responsible for monitoring and supervising the overall environmental performance of the project. ADB will also disclose the project monitoring reports on its website. ADB will review the semiannual environment performance reports submitted by HEBEI PMO, and conduct due diligence of environment issues during the project review missions. If the EA and IAs fail to meet safeguards requirements described in the IEE and the EMP, ADB will seek corrective measures and advise the EA and HPMO on items in need of follow-up actions. The institutions and their responsibilities are summarized in Table A-1.

Table A-1: Summary of Institutions and Responsibilities for EMP

Name of Institution Responsibilities

Project Leading Direct the project and provide policy guidance during project Group implementation; Review project implementation progress and take additional measures if necessary.

ADB Monitor and supervise the overall environmental performance of the project; Review the semiannual environment reports and disclose the project monitoring reports on its website; conduct due diligence of environment issues during the project review missions.

HPMO Responsible for overall implementation of the EMP with the support from consultants and IAs; Coordinate with IM Finance Bureau, IAs, the tender companies, consultants, and other governmental agencies.

Zhangbei IAs Establish EMU; Provide supervision to CSCs and submit monthly reports to the PMO; Work with design institutes and the tender companies in preparing bidding documents to ensure environmental protection provisions are included in them.

Zhangbei EPB Conduct environmental monitoring according to the monitoring plan and inspect the facilities during construction and operation to ensure compliance; Enforce applicable environmental laws and regulations.

CSCs Responsible for the daily inspection, monitoring, and evaluation of mitigation measures at each construction site.

Environmental Provide technical assistance to PMO and IAs for consultant implementing the EMP; Provide training to the staff of the PMO, IAs and CSC. Prepare the semiannual environmental reports.

CSC – construction supervision company

Institutional Strengthening and Capacity Building. The provincial EPB and environment consultants will offer series of trainings to strengthen the capacity of HPMO and implementation agencies concerned for EMP implementation. Environmental consultants will be responsible for developing training materials and providing training.

C. Potential Impacts and Mitigation Measures

The potential impacts of the project during construction and operation have been identified and appropriate mitigation measures have been proposed (see Chapter V for details) and will be implemented during the project implementation. The effectiveness of mitigation measures will be evaluated through environmental inspections and monitoring. Detailed impacts mitigation measures are presented in Table A-5.

D. Environment Monitoring Plan

An environment monitoring plan has been developed which is included in Table A-6. The monitoring plan covers air quality, wastewater, and solid waste parameters during construction as well as operation of each subproject. Monitor frequencies, responsible parties and estimated costs are identified in the plan.

The contractors and CSCs will be responsible for onsite routine environmental monitoring during construction. The IAs will be responsible for supervising the contractors under the guidance from HPMO and the local EPBs and with the assistance from the loan implementation environment consultant. The IAs will be responsible for ensuring that the proposed environmental mitigation measures in the EMP to be properly implemented. The EMU under each IA will be responsible for their internal monitoring during operation.

The local EPB environmental monitoring stations will be responsible for monitoring the project to ensure that they comply with applicable regulations and requirements specified in the domestic EIA reports approved by the local EPBs.

Standard Monitoring Methods. The monitoring methods, detection limits, and the standard code for each monitoring parameter are shown in Table A-2. The data and results of environmental inspection and monitoring activities will be used to assess: (i) the extent and severity of actual environmental impacts against the predicted impacts and baseline data collected before the project implementation; (ii) performance or effectiveness of environmental mitigation measures or compliance with pertinent environmental rules and regulations; (iii) trends in impacts; (iv) overall effectiveness of EMP implementation; and (v) the need for additional mitigation measures and corrective actions if non-compliance is observed.

Table A-2: Monitoring Parameters and Methods

Detection Standard Media Monitoring Parameter Method (Standard No.) Limit Limit TSP (mg/m3) Gravimetric (GB/T15432-1995) 0.001 0.301 Gravimetric with specific sampler PM (mg/m3) 0.0002 0.15 10 (HJ/T93-2003) Air Spectrophotometry (GB/T15262- SO (mg/m3) 0.003 0.15 2 1994)

3 NOx (mg/m ) Saltzman Method (GB/T15435-1995) 0.002 0.12 Equivalent Continuous A 60 (day)/ Noise Acoustimeter Method (GB12524-90) 0.5 Sound (Leq) 50 (night)

1 All the air parameters are Grade II ambient air standard (daily average). 4

Detection Standard Media Monitoring Parameter Method (Standard No.) Limit Limit pH value Glass electrode method (GB6920-86) 0.02pH 6-92

CODMn (mg/L) Permanganate index (GB11914-89) 0.5 6 Surface Infrared spectra photograph Petroleum (mg/L) 0.04 0.05 water (GB/T16488-1996) SS (mg/L) Gravimetric method (GB11901-89) 4 250 Total coliforms (no./L) Membrane filter (GB/T575.12-2006) 10 10,000 Source: PRC standards

Quality assurance (QA) and quality control (QC) for compliance monitoring. To ensure monitoring accuracy and data integrity, the QA and QC procedures are established in accordance with the following regulations:

(i) Regulations of QA/AC Management for Environmental Monitoring (SEPA, July 2006); (ii) QA/QC Manual for Environmental Water Monitoring, the State Environmental Monitoring Centre in 2001; and (iii) QA/QC Manual for Environmental Air Monitoring, the State Environmental Monitoring Centre in 2001.

E. Reporting Requirements

The IAs supported by the CSCs will submit the monthly environment monitoring report to HPMO, who will prepare and submit environment monitoring reports to ADB semiannually during construction and annually during operation. The environmental specialists of the loan implementation consultants will provide technical assistance and training to the staff of the PMO, IAs and CSCs.

The local EPB’s EMS will conduct required measurements according the EMP environmental monitoring plan and submit the monitoring reports to HEBEI PMO. A consolidated monitoring report will be prepared by HPMO with the assistance from the implementation environment consultant.

No later than two months after completion of the construction work, the IAs shall collect data from all contractors and CSCs, and submit construction completion report to HPMO and the local EPBs in order to comply with the PRC regulations. Within two months after project completion, environmental acceptance monitoring and audit reports of project completions shall be (i) prepared by the local EMSs; (ii) reviewed for approval by the local EPBs, and (iii) submitted to HPMO. ADB can request to PMO a copy of the construction completion report for the project record.

The environmental reporting requirements during the implementation of the project are summarized in the Table A-3.

2 All the water parameters are Grade III standard. 5

Table A-3: Reporting Requirements

Report Prepared by Submitted to Frequency A. Construction Phase Monthly environment monitoring IAs supported by HEBEI PMO Monthly report Contractors, CSCs

HPMOsupported by loan EMP monitoring report ADB Semiannually consultants

B. Operation Phase Subproject EMP monitoring IAs HEBEI PMO Annually report

HPMOsupported by loan EMP monitoring report ADB Annually consultants CSC = construction supervision company, EMS = environment monitoring station Source: Domestic EIA Reports.

F. Performance Indicators

Performance indicators (Table A-4) have been developed to assess the implementation of the EMP. These indicators will be responsive to changes in project design, such as a major change in boilers and their auxiliary facilities, or in technology, unforeseen events, and monitoring results.

Table A-4: Performance Indicators

No. Description Indicators (i) Qualified environment officer was assigned in HPMObefore project implementation

1 Staffing (ii) Local EMS is hired by the IA before construction

(iii) EMU is established with appropriate number of staff in each IA before project implementation (i) Environment mitigation cost during construction and operation is timely allocated

2 Budgeting (ii) Environment monitoring cost is timely allocated

(iii) Budget for capacity building is timely allocated

(i) Internal environmental inspection and monitoring during 3 Monitoring construction period is included in the contracts between the IAs and CSCs 6

No. Description Indicators (ii) Compliance monitoring is conducted by the local EMS biannually

(iii) EMP monitoring is conducted by contractors, CSCs, IAs, and EMSs as scheduled. (i) HPMOsupervises environmental inspection and monitoring done by CSCs 4 Supervision (ii) ADB mission will review EMP implementation at least once a year during the project implementation period

(i) Monthly environment monitoring reports prepared by IAs and CMSs are submitted to HPMO (ii) Compliance environment monitoring reports prepared by EMS are submitted to local EPBs and IM PMO semiannually (iii) Semiannual and annual EMP monitoring reports prepared by 5 Reporting HPMOare submitted to ADB (iv) Construction completion report prepared by IAs is submitted to HPMO (v) Environment acceptance monitoring and audit report prepared by local EMS is submitted to HPMOand local EPBs within two months after project completion (i) Training on ADB safeguard policy is provided to HPMOand IAs at the beginning of project implementation Capacity (ii) Training on grievance redress mechanism (GRM) is provided at 6 building least once during the project implementation (iii) Training on EMP is provided at least once a year during the project implementation (i) Project public complaints unit (PPCU) is established in each IA before project implementation Grievance (ii) Contact persons of PPCU are assigned and disclosed to the 7 Redress public before construction Mechanism (iii) Complains are recorded and processed within the set time framework in the GRM of this CIEE. Compliance (i) All subprojects comply with the PRC’s environmental laws and 8 with the PRC regulations and meet all the required standards. standards

G. Mechanisms for Feedback and Adjustment

Based on environmental inspection and monitoring results, the local EPBs will decide whether (i) further mitigation measures are required as corrective actions, or (ii) some improvements are required for environmental management practices.

The effectiveness of mitigation measures and monitoring plans will be evaluated through a feedback reporting system. HPMO with assistance from EPBs and the loan consultants will 7 assess the results of environmental monitoring and then propose any changes to EMP monitoring and mitigation plan. If necessary, adjustments can be proposed to the EMP. However, any major adjustments will be subject to ADB review and approval.

If, during inspection, substantial deviation from the EMP is observed or any changes are made to the project that may cause substantial adverse environmental impacts or significant increase in the number of affected people, then HPMO should consult with the Hebei EPB, the local EPBs, and ADB and form an environmental assessment team to conduct additional environmental assessment and, if necessary, further public consultation. The EMP can be revised based on the changes of the project activities and the revised EMP will be passed to the contractor(s) and the IAs for implementation.

Any revised EMP should be sent to ADB’s review. The revised EMP with ADB confirmation is subject to reposting on the ADB’s website as the ADB public communications policy (PCP) requires. The mechanism for feedback and adjustment of the EMP is shown in Figure A-1.

Figure A-1: Mechanism for Feedback and Adjustment of EMP

Hebei PMO &Local EPBs ADB

Implementation Agencies Consultant

CSC

Contractor IA’ operation staff

Implementation Feedback Implementation of Mitigation Comments and Measures and Monitoring Suggestions Programs

Table A-5: Environment Impacts and Mitigation Measures

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds A. Pre-construction Phase Subproject’s sites Sites of heating plants and the heating supply DIs and IAs, HPMO Included and routes pipeline routes will be reconfirmed to avoid or in design selection minimize potential adverse impacts on the contracts surrounding environments and communities; The locations of the proposed heat exchange stations, based on the preliminary selection during the feasibility study, will be reconfirmed and designed as far as possible from environmentally sensitive receptors, such as schools, hospitals, residential buildings. Including mitigation Environmental mitigation measures identified DIs HPMO, IAs, Included Design measures and in the IEE and the domestic EIAs will be local EPBs in design Mitigation monitoring incorporated in the engineering design contracts facilities program in documents and bidding documents for all and engineering subprojects, and will be included in contract measures designs documents for civil constructions and equipment installations. All contractors shall be required to strictly comply with the EMP; Environmental monitoring program will be incorporated into the engineering designs to ensure that environmental impacts are closely monitored and construction and operating activities are closely supervised against the approved EIAs Included Wastes and spoil Appropriate spoil disposal sites will be Local EPB, DIs and IAs in design disposal sites considered in the engineering design. HPMO contracts Bidding Incorporate environmental mitigation Bidding and Included and measures indicated in the EMP and EIAs in HPMO, Local contract document DIs and IAs in design Contractin bidding documents and construction contracts EPBs preparation contracts g for all subprojects. 10

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Establish a Project Public Complaints Unit Grievance Included (PPCU) in each IA’s office; provide training for Redress Establishment of HPMO, Local in IAs’ PPCU members and GRM access points; IAs Mechanis operational GRM EPBs operation Disclose the PPCU’s phone number, fax, m budget address, and email to the public.

B. Construction Phase Minimize active open excavation areas during pipeline trenching activities and some foundation works, and use appropriate compaction techniques for constructions. Limit construction and material handling activities during periods of rains and high winds Stabilize all earthwork disturbance areas as soon as possible but no more than maximum Included Soil erosion due to 14 days after earthworks have been in Contractors, IAs, Local EPB, construction completed at the sites constructi CSCs HPMO activities on Plant grass and trees in the HSPs to minimize contract Soil soil erosion

Properly slope or re-vegetate disturbed surfaces, such as compacted pipeline trenches Appropriately set up temporary construction camps and storage areas to minimize land area required and impact on soil erosion Properly store petroleum products, chemicals, Included hazardous materials and wastes on in impermeable surfaces in secured and covered Contractors, IAs, Local EPB, Soil contamination constructi areas to avoid soil contamination. CSCs HPMO on Use best management practices to prevent contract spills of oil and chemicals and avoid contact 11

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds with soil directly. Remove all construction wastes from the site safety and dispose it to approved spoil disposal sites only. Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures.

Construct intercepting ditches and drains to prevent storm water runoff from entering construction sites, and divert runoff from sites to existing drainage. Equip with water collection basins and Surface and sediment traps at all construction equipment Included groundwater wash areas. in Wastewate contamination from Contractors, IAs, Local EPB, constructi r construction Install septic treatment and disposal systems CSCs HPMO on wastewater, and at construction camps and provide proper contracts domestic water maintenance protocols and training. Monitor water quality parameters (SS, COD, oil, and grease) in rivers in each subproject city by local environmental monitoring station (EMS) during construction in accordance with the monitoring program Ensure that noise levels from equipment and Noise from machinery conform to applicable national Included construction, standards, and properly maintain machinery to in machinery minimize noise. Contractors, IA, HPMO, local Noise constructi operation, and CSCs EPBs, Apply noise reduction devices or methods on transportation where piling equipment is operating within 500 contracts activities m of sensitive sites such as schools, hospitals, and residential areas. 12

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Locate sites for rock crushing, concrete- mixing, and similar activities at least 1 km away from sensitive areas. To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and movement of heavy vehicles along urban roads between 8 pm and 7 am the next day based on international best/common construction practice. Incorporate noise considerations in public notification of construction operations; disseminate information on procedure of handling complaints through the GRM. Reach an agreement with nearby schools and residents regarding heavy machinery work to avoid any unnecessary disturbances. Place temporary noise barriers around noise sources during construction, if necessary. Monitor noise at sensitive areas at regular intervals. If noise standards are exceeded, equipment and construction conditions will be checked, and mitigation measures will be implemented to rectify the situation. Conduct quarterly interviews with residents living adjacent to the construction sites to identify community complaints about noise, and seek suggestions from community members to reduce noise annoyance. Noise from HSP Include in Install acoustic enclosures, barriers, or shields Equipment Local EPB, (coal crusher, draft the to reduce noise levels; supply and HPMO, local Noise fan, air compressor equipmen installation EMSs, and water feed Plant green belt all along the HSP’s t supply contractors, IAs consultant pumps) boundaries as appropriate for further and 13

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds attenuation of noise; installatio n Install mufflers on vents of the boiler and air contracts blowers and sound-proof shields on the power generators to mitigate the noise impact. Installation of sound-proof shield and double window. Properly maintain pumps and other equipment to minimize noise.

Include in the Installation of sound-proof shield and double Equipment equipmen Noise from heat window. supply and Local EPB, t supply exchange stations Properly maintain pumps and other equipment installation HPMO and to minimize noise. contractors, IAs installatio n contracts Included Vibration Prohibit heavy vibration operations (i.e. in generating by Contractors, IAs, HPMO, Vibration pipeline trench compacting, pilling and road constructi compacting and CSCs local EPBs, roller operation, etc) at night. on rolling contracts Fugitive dust Spray water on construction sites and material generated by handling routes where fugitive dust is being construction generated. activities Pay particular attention to dust suppression Included in Ambient near sensitive receptors such as schools, Contractors, IAs, HPMO, constructi Air hospitals, or residential areas. CSCs local EPBs on contract Cover materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation. 14

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Store petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust emission. Included Air emission from Ensure vehicle emissions are in compliance in vehicles and Contractors, IAs, Local EPB, with relevant PRC standards. constructi construction CSCs HPMO on equipment Maintain vehicles and construction contract machineries to a high standard to ensure efficient running and fuel-burning and compliance with the PRC emission standards Solid waste from Establish temporary storage for solid wastes construction away from water bodies or other activities environmental sensitive areas, and regularly haul solid waste to an approved landfill or designated dumping site. Provide appropriate waste storage containers at construction sites. Hire a qualify contractor to remove all wastes Included from sites to approved waste disposal sites, in Contractors, IAs, Local EPB, according to appropriate domestic procedures. constructi CSCs HPMO on Hold contractors responsible for proper Solid contract Waste removal and disposal of any significant residual materials, wastes, and contaminated soils that remain on the site after construction. Any planned paving or vegetating of the area will be done as soon as the materials are removed to protect and stabilize the soil. Prohibit waste incineration near construction sites. Hazardous and Prepare and implement the protocol for the Included polluting materials handling and disposal of hazardous and Contractors, IAs, Local EPB, in from construction pollution construction materials including a CSCs HPMO constructi activities spill prevention and emergency plan. on 15

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Storage facilities for fuels, oil, and other contract hazardous materials will be within secured areas on impermeable surfaces, and provided with bunds and cleanup installations. Vehicles and equipment will be properly staged in designated areas to prevent contamination of soil and surface water; vehicle, machinery and equipment maintenance and refueling will be properly carried out so that spilled materials do not seep into the soil. Oil traps will be provided for service areas and parking areas; and fuel storage and refilling areas will be located at least 300 m from drainage structures and important water bodies. Contractors’ fuel suppliers shall be properly licensed. They shall follow proper protocol for transferring fuel and the Operation Procedures for Transportation, Loading and Unloading of Dangerous or Harmful Goods of JT 3145-91. Small boiler site Before demolishing small boilers, a survey and investigation for the small boiler sites will be conducted by the IA and/or the local EMS under supervision of the local EPBs. The assessment will include contamination status of soil, groundwater, structures and surface water bodies if nearby. If the environment is 300

contaminated, the site restoration plan shall be developed taking into account the World Bank’s Group General EHS Guidelines on Construction and Decommissioning and follow up activities will be conducted by the IA under the supervision of the local EPB. 16

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Dispose demolition debris in municipal solid waste landfills or special construction and demolition debris landfills subject to approval by the municipal EPBs. Dispose waste into the river or other water bodies will be strictly prohibited. Protection of Preserve existing vegetation where no vegetation, re- construction activity is planned, or temporarily vegetation of preserve vegetation where activity is planned disturbed areas; for a later date; planting and Properly backfill, compact, and re-vegetate compensatory pipeline trenches after heating pipeline planting trees and installation; grass Protect existing trees and grassland during Included construction; when a tree has to be removed in Flora and Contractors, IAs, Local EPB, or to an area of grassland disturbed, replant constructi Fauna CSCs HPMO trees and re-vegetate the area after on construction; contract Remove trees or shrubs only as a last resort if they impinge directly on permanent structures; and Undertake compensatory planting of an equivalent or larger area of affected trees and vegetation in compliance with the PRC’s forestry law and regulations. Contractors will consider the impact on traffic in construction scheduling. A traffic control and Communit Included Traffic congestion operation plan will be prepared and it shall be IAs, Local y in and accident, and approved by local traffic management Contractors, Public Disturbanc constructi interruption in administration before commencing CSCs Transportation e and on public utilities construction. The plan will include provisions Bureau, HPMO Safety contract for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic 17

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds hours, regulating traffic at road crossings, building temporary roads, selecting transport routes to reduce disturbance to regular traffic, reinstating roads, and opening them to traffic as soon as the construction is completed. The plan will also include coordination with other utility providers, when necessary, to ensure the construction activities will not interfere or interrupt with their services. Plan construction activities so as to minimize disturbances to utility services. Public notices will be placed to inform construction and any disturbances to utility services to the affected people. Temporary land occupation will be planned well ahead of construction to minimize its impact. Land will be reinstated to its original condition after construction. Implement safety measures around the construction sites to protect the public, including warning signs to alert the public to potential safety hazards, and barriers to prevent public access to construction sites. Health damage Identify and minimize the causes of potential and accidents hazards to workers. during construction Provide preventive and protective measures, activities including modification, substitution, or Included Occupatio elimination of hazardous conditions. in Contractors, IAs, Local EPB, nal health constructi Provide appropriate personal protective CSCs HPMO and safety equipment (PPE) to workers to minimize risks, on including ear protection, hard hats and safety contract boots. Provide adequate safety protection equipment including firefighting systems. 18

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Provide adequate signage in risk areas. Provide procedures for limiting exposure to high noise or heat working environments in compliance with PRC noise standards for construction sites (GB12523-2011) and relevant international guidelines. Provide training to workers, and establish appropriate incentives to use and comply with health and safety procedures and utilize PPE. Provide training to workers on the storage, handling and disposal of hazardous wastes. Provide procedures for documenting and reporting occupational accidents, diseases, and incidents. Provide emergency prevention, preparedness, and response arrangements. Hold safety meetings with staff before each shift. Establish and conduct chance-find procedures In case of for physical cultural resources cultural relic Relics destroying, damaging, defacing, discovere concealing or otherwise interfering shall strictly d, the prohibited in accordance with PRC direct cost regulations. Physical for Contractors, Cultural IAs, HPMO compens CSCs Resources If a new site is unearthed, work should be ation to stopped immediately and the IA and local contractor cultural relic bureau will be promptly notified; will be construction will resume only after a thorough covered investigation and with the permission of the by special appropriate authority. fund for cultural 19

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds relic protection Subtotal of Construction Phase C. Operation Phase Conduct emission testing for environmental Include in Emissions need to acceptance. IAs’ be monitored to Local EMS Local EPBs Calibrate continuous emission monitoring operation ensure compliance (CEM) system. budget Properly operate and maintain emission Air pollution from control devices (desulfurization, denitrification, heat source needs IAs Local EPBs dust removal equipment). to be controlled Properly operate and maintain CEM systems. Spray water on haul road to suppress dust during transporting and unloading coal; Air Quality Spray water on coal stockpiles, especially on windy days; Included in IAs’ Compact coal stockpiles as required to operation minimize air ingress and the potential for auto Dust from coal and budget ignition and loss of volatiles; IAs Local EPBs ash handling Spray water on ash storage piles to minimize fugitive dust emissions during temporary storage; and Use enclosed trucks or cover up the ash when transporting ash from HSP to ash users for construction material.

Noise from coal HSPs and HESs will have proper building crusher, draft fan, Include in insulation to avoid noise pollution; Implement air compressor and the IAs’ Noise restricted access, and provide PPEs such as IAs Local EPB water feed pumps operation earmuffs and earplugs to personnel who may impact budget works in high noise generating areas; workers’ hearing 20

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds All fly-ash and slag will be temporarily stored Fly ash and slag on site and then transported to the local could affect soil construction industry as a raw building and water quality if material or road construction material. not properly managed No permanent on site ash disposal will be allowed. All demolition wastes will be routinely collected by appropriately licensed waste management companies for reuse, recycling (e.g. equipment; steel, iron and other metals; salvageable wood and building materials; etc.) or final disposal in a licensed waste facility (e.g. for non-recyclable materials). Waste management will be undertaken in Included consultation with local authorities. in IAs’ No on-site landfills are permitted at any operation Solid demolition site. budget IAs Local EPBs Wastes Boiler No burning of wastes will be permitted at decommissioning demolition sites. could affect soil, air A site contamination investigation will be and water quality if undertaken in consultation with the local EPB, not managed and if necessary site specific plans will be properly. developed to address any site contamination. Contaminated spoil will be transported to approved disposal sites, and clean fill provided. The site will be rehabilitated to a level suitable for its proposed future use; the local EPB will approve the rehabilitation, and will require additional rehabilitation actions if necessary. Family stove owners who choose to dispose their stoves will be given access to the services of the waste management companies. 21

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds Wastewater from HSPs will be treated and recycled within the HSPs;

All HSPs’ sanitation facilities will discharge to municipal sewer networks that meet relevant PRC standards; Runoffs from HSPs will be directed to sedimentation basins, and wastewater will be reused if possible, for dust suppression. Solid waste residue in the basins will be cleared as Water pollution and required and transported to approved landfills; IAs Local EPBs reuse in HSP For areas with oily wastewater discharges, oil- IA’s water separators will be installed before operation discharging to the sedimentation basins; and budget Leachate and drainage from the coal storage yard will be collected and drained into the Wastewate storage pond for reuse in spraying the coal r storage yard. Any oil and grease sludge skimmed out from the treatment process will be collected and handed over to recycler as per PRC standards.

Wastewater from Regularly clean the sedimentation tank, Local EPBs, heat exchange dispose accumulated sludge and sediments in IAs local EMS stations the municipal landfill; and

Include in the Build an equalization and sedimentation tank Equipment equipmen Backwash effluent in each HES for pH adjustment and supply and Local EPB, t supply from heat sedimentation (SS≤400mg/L) before the installation HPMO and exchange stations backwash effluent is discharged into the contractors, IAs installatio municipal sewer. n contracts Communit Occupational and Conduct regular inspections of the district IAs Local EPBs, IA’s 22

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds y community health heating network, and repair defects promptly; local LB, operation Disturbanc and safety Minimize community disturbance during budget e and repairing of HES and heating pipelines; and Safety Comply with applicable workers safety laws and regulations. Implement the labor retrenchment plan (LRP) IA’s Boiler Economic and also comply with applicable PRC laws and IAs HEBEI PMO operation Demolition displacement regulations budget Subtotal of Part C (per year) D. Emissions Mitigation Technical Measures Build tall stacks to disperse pollutant emitted from HSPs and minimize the direct impact of emissions on adjacent areas; Install and operate electrostatic precipitation (ESP), fabric filter or other particulate control device to control particulate matter (PM) emissions; Include in the Use desulfurization technology inside the Equipment equipmen circulated fluidized bed (CFB) boiler. Wet Ambient Pollutants emission supply and Local EPB and t supply scrubber will be used for additional SO Air from heating plants 2 installation provincial EPB and reduction for bigger CFB boilers; contractors, IAs installatio Using CFB technology as denitrification n control technology due to low combustion contracts temperature and less thermal NOx formation; and Install CEMs on the smokestack of the HSPs to monitor SO2 and flue dust emissions. CEM data will be sent to local and provincial EPBs directly for monitoring purpose. Subtotal of Part D: Grand total (B+C+D) 10,000.00 23

Potential Impacts Responsibility Budget (CNY Source Category Mitigation Measures and/or Safeguards and Issues Implemented by Supervised by in 1,000) of Funds DI = design institute, EIA = environment impact assessment, EMP = environment monitoring plan, EMS = environment monitoring station, EPB = environment protection bureau, GRM = grievance redress mechanism, HES = heat exchange station, HSP = heat source plant, IA = implementing agency, km = kilometer, LB = labor bureau, m = meter, mg = milligram, m3 = square meter, HPMO= Hebei project management office, PRC = the People's Republic of China, SO2 = sulfur dioxide. Source: Domestic EIA reports and TA consultants estimate. 24

Table A-6: Environmental Monitoring Plan

Estimated Implemented Supervised Source of Subject Parameter Location Frequency Cost (CNY by by Fund 1,000) A. Construction Inspection of wastewater mitigation measures All construction Waste water effluent Contractors, Included in IAs, HPMO Wastewater (water collection sites sites, Monthly CSCs, CSC’s Contract generated from basins and sediment construction traps, etc.) One sampling each Included in All construction HPMO, pH, SS, oil day each time, Local EMSs construction sites Local EPBs monthly Contract Inspection of dust mitigation measures (water spraying, cover transport All construction IAs, Local vehicles, etc); and Contractors, Included in sites and nearby Monthly EPBs, Inspection of CSCs CSC’s contract areas HPMO maintenance and condition of vehicles and construction Ambient air equipment. Environmental Included in performance test equipment SO , NO and PM Stacks of HSPs EMS and IAs EPB 2 2 before commercial installation operation contract All construction Included in Local EPB, PM, PM sites and Monthly Local EMS construction 10 HPMO sensitive spots. contract Continuous Local and Included in IAs’ emission SO , NO , PM On-line IAs provincial operation 2 2 monitoring at EPBs budgets stack of HSPs 25

Subject Parameter Location Frequency Implemented Supervised Estimated Source of

Monthly: a day each time and two All sensitive Local Included in samples; once Noise Leq dB(A) receivers nearby Local EMS EPB, construction during daytime, construction sites HPMO contract once during nighttime.

Once a year; and Construction Included in Construction spoil once after Spoil waste wastes disposal Local EPBs HPMO construction disposal completion of spoil sites. Contract disposal Each time a small Small boiler Small boiler Solid waste boiler or boiler Local EPBs HPMO IAs demolition houses house is demolished Subtotal B. Operation Compliance Included in IAs’ monitoring Monthly during Emission from HSP SO , NO , PM Local EMS Local EPB operation 2 2 Sampling at heating season budgets stack of HSPs 1 m outside of Included in IAs’ Dust from storages Monthly during PM the HSPs’ Local EMS Local EPB operation of coal and ash heating season. boundary budgets Conduct regular Once before heating Heating network inspections of the Included in IAs’ Heating pipeline season starts and safety and district heating IAs HPMO operation network once after heating reliability network and repair budgets season is over. defects promptly. Twice a month Included in IAs’ 1m outside of the Local EPB, Noise from HSPs Leq dB(A) during heating Local EMS operation HSPs’ boundary HPMO season. budgets Twice a month Included in IAs’ Noise from heat 1m outside of the Local EPBs, Leq dB(A) during heating Local EMS operation exchange station HES buildings IAs, HPMO season budgets 26

Subject Parameter Location Frequency Implemented Supervised Estimated Source of Included in IAs’ Wastewater from Monthly during Local EPBs, SS, BOD Discharging point IAs operation HSPs heating season HPMO budgets Included in IAs’ Wastewater and Quantity generated Monthly during Local EPBs, HES IAs operation sludge from HES and discharged heating season HPMO budgets Subtotal (Annual cost) Total 300

CNY = Chinese Yuan, CSC = construction supervision company, dB = decibel, EMS = environment monitoring station, EPB = environment protection bureau, IA = implementing agency, Leq = equivalent continuous noise level, NO2 = nitrogen dioxide, pH = potential hydrogen, HPMO= Inner Mongolian Autonomous Region project management office, PM10 = particulate matter less than 10 micrometers, SO2 = sulfur dioxide. Source: Domestic environment assessment reports and TA consultants estimate.