Initial Environmental Examination Project No.: 44011 May 2012 PRC: Heilongjiang Energy Efficient District Heating Project Prepared by the Heilongjiang Provincial Government for Asian Development Bank CURRENCY EQUIVALENTS (as of 9 May 2012) Currency Unit – yuan (CNY) CNY1.00 = $0.1584 $1.00 = CNY6.309 ABBREVIATIONS ACM – asbestos-containing material ADB – Asian Development Bank ADSL – asymmetric digital subscriber line AP – affected person ASL – above sea level CFB – circulating fluidized-bed CHP – combined heat and power CNY – yuan CSC – construction supervision company DCS – distributed control system DI – design institute EA – executing agency EHS – environmental, health and safety EIA – environmental impact assessment EMP – environmental management plan EMS – environmental monitoring station EMU – environmental management unit EPB – Environmental Protection Bureau FGD – flue gas desulphurization FIRR – financial internal rate of return FSR – feasibility study report GDP – gross domestic product GHG – greenhouse gas GRM – grievance redress mechanism HES – heat exchange station HPG – Heilongjiang provincial government HSP – heat source plant IA – implementing agency IEE – initial environmental examination LAP – land acquisition plan LIEC – loan implementation environmental consultant MEP – Ministry of Environmental Protection NDRC – National Development and Reform Committee NGO – nongovernmental organization OHS – occupational health and safety PLG – provincial leading group PMO – project management office PPMO – Provincial Project Management Office PPTA – project preparatory technical assistance PRC – People’s Republic of China SCADA – supervisory control and data acquisition SPS – Safeguard Policy Statement TA – technical assistance TCE – total coal equivalent TEIAR – tabular environmental impact assessment report TOR – terms of reference US EPA – United States Environmental Protection Agency WEIGHTS AND MEASURES BOD5 – biochemical oxygen demand, five days cm – centimeter CO2 – carbon dioxide COD – chemical oxygen demand A-weighted sound pressure level in dB(A) – decibels DO – dissolved oxygen DOD – dissolved oxygen deficit GJ – gigajoule ha – hectare kcal – kilocalorie kg – kilogram km – kilometer kWh – kilowatt-hour M – meter m/s – meters per second m³ – cubic meter mg/l – milligrams per liter 3 mg/m – milligrams per cubic meter 3 mg/Nm – milligrams per standard cubic meter MW – megawatt NH3-N – ammonia nitrogen Nm3 – standard cubic meter NO2 – nitrogen dioxide NOx – nitrogen oxide oC – degrees celsius A measure of the acidity or alkalinity of a pH – solution person-month (an input equivalent to 1 pm – person working for 1 month) particulate matter smaller than 10 PM – 10 micrometers SO2 – sulfur dioxide TN – total nitrogen TSP – total suspended particulate The initial environmental examination report is a document of the borrower. The views expressed herein do not necessarily represent those of the ADB’s Board of Directors, management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. TABLE OF CONTENTS MAP I. EXECUTIVE SUMMARY 1 A. The Project 1 B. Expected Positive Impact 2 C. Potential Negative Impacts and Mitigation Measures 2 D. Cultural Heritage and Biodiversity 4 E. Grievance Redress Mechanism 4 F. Alternative Analysis 4 G. Public Consultation 5 H. Environment Management Plan 5 I. Project Risks and Assurances 7 J. Conclusion 8 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 9 A. Legal Framework of the PRC 9 B. Applicable ADB Policies, Regulations and Requirements 10 C. International Agreements 11 D. World Bank Environmental, Health and Safety Guidelines 11 E. Assessment Standards for Urban District Heating Sector 12 F. Administrative Framework 12 III. DESCRIPTION OF THE PROJECT 14 A. The Project 14 B. Implementation Arrangements 16 C. Project Implementation Plan 17 D. Key Technical Parameters of the Subprojects 19 E. Due Diligence of CHP Heat Source Plants 33 IV. DESCRIPTION OF THE ENVIRONMENT 35 A. Heilongjiang Province 35 B. Harbin City 36 C. Qitaihe City 38 D. Jiamusi City 40 E. Jiagedaqi City 41 F. Jidong County 43 G. Raohe County 44 H. Tongjiang City 46 I. Yichun City – Tangwanghe District 47 J. Yinchun City – Xinqing District 49 V. ANTICIPATED IMPACTS AND MITIGATION MEASURES 51 A. Expected Positive Impact 51 B. Screening of Potential Impacts 51 C. Potential Impacts before Construction 52 D. Potential Environment Impacts and Mitigation Measures during Construction 53 E. Environmental Impacts and Mitigation Measures during Operation 60 F. Environmental Impacts from Small Boiler Demolition and Mitigation Measures 68 G. Economic Displacement of Small Boiler Operators 71 VI. ALTERNATIVE ANALYSIS 73 A. Without-Project Alternative 73 B. Heating Source Alternatives 73 C. Alternative Fuels 74 D. Alternative Boiler Technologies 76 E. Alternatives of SO2 Emission Reduction Process 77 F. Alternatives for Flue Gas Dust Removal 79 G. Pipe-laying Alternatives 80 VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS 81 A. Information Disclosure 81 B. PRC and ADB Requirements for Public Consultation 81 C. Public Consultations during Project Preparation 81 D. Future Public Consultation Program 86 VIII. GRIEVANCE REDRESS MECHANISM 87 A. Current Practice 87 B. Proposed Grievance Redress Mechanism for the Project 87 C. Types of Grievances Expected and Eligibility Assessment 87 D. GRM Steps and Timeframe 88 IX. ENVIRONMENTAL MANAGEMENT PLAN 90 A. Objectives 90 B. Potential Impacts and Mitigation Measures 90 C. Environment Monitoring Plan 90 D. Reporting Requirements 90 E. Implementation Arrangements 91 F. EMP Performance Indicators 92 G. Mechanisms for Feedback and Adjustment 93 X. RISKS AND ASSURANCES 95 A. Risks 95 B. Assurances 95 XI. CONCLUSIONS 97 APPENDIXES 1. ENVIRONMENTAL MANAGEMENT PLAN 98 2. LABOR RETRENCHMENT AND REEMPLOYMENT PLAN 121 THE PROJECT LOCATIONS IN HEILONGJIANG PROVINCE OF THE PEOPLE’S REPUBLIC OF CHINA I. EXECUTIVE SUMMARY A. The Project 1. This Initial Environmental Examination (IEE) Report was prepared for the proposed Heilongjiang Energy Efficient District Heating Project (the project) in Heilongjiang Province of the People’s Republic of China (PRC). The proposed project will improve energy efficiency and reduce emission of greenhouse gases (GHGs) and other pollutants in Heilongjiang province by introducing energy efficient district heating systems in the nine urban areas. The project has two components: (i) Component A: upgrading primary district heating systems, and (iii) Component B: project management, monitoring, auditing, and knowledge dissemination. 2. Heating services in a cold climate region such as Heilongjiang, where temperatures can fall below -40°C and the heating season lasts up to six months or more, are essential to meet basic human needs and facilitate modern socioeconomic activities. The heating supplies in most cities of the province depend primarily on coal. Many of the existing heating systems in urban areas are using (i) small, inefficient, polluting boilers without any emission control equipment, and/or (ii) household coal-fired stoves. Air pollution impacts from the existing heating systems have serious health risks to local residents, particularly the poor. Inadequate coverage of centralized district heating in low-income urban areas compels the residents to rely on household coal-fired stoves for their heating during harsh winters. This in turn is a major factor in causing respiratory disease among the province’s populace. Urban pollution from the small boilers and household stoves also worsens urban air pollution and causes significant cumulative impact to the local environment and public health. 3. The proposed project will expand and upgrade existing district heating systems in eight cities and counties—Harbin, Jiagedaqi, Jiamsu, Jixi, Qitaihe, Raohe, Tongjiang, and Yichun—in Heilongjiang Province. It contains nine subprojects, which expand and upgrade existing primary heating networks to be more energy efficient district heating systems. Three of the nine subprojects—Harbin, Raohe, and Tongjiang—will also install additional heating sources to accommodate increased their district heating capacities. Secondary heating networks are not covered in the scope of the project. The implementation agencies (IAs) for six of the subprojects are local district heating companies while the remaining three IAs local forest bureaus,1 which are parts of the local municipal government. 4. The scope of the proposed project includes installation of (i) 321 heat exchangers— between primary and secondary heating networks, (ii) 271 km of insulated heat pipelines2 of primary heating networks, (iii) 3 high efficiency heating source plants, and (iv) 8 computerized Supervisory Control and Data Acquisition (SCADA) systems.3 Component A of the project is summarized in Table 1-1. The locations of the subprojects are shown in the map. 1 Daxing’anling Forest Bureau for Jiagedaqi subproject, Tangwanghe Forest Bureau for Yichun Tangwanghe subproject and Xinqing Forest Bureau for Yichun Xinqing subproject. 2 Pipelines to be installed will not cover the pipeline network inside the buildings and households (secondary heating systems). Regular dialogues and coordination with all project stakeholders will be undertaken