Environmental Assessment Report

Project Number: 44011-013 May 2017

PRC: Energy Efficient District Heating Project

Addendum to the Initial Environmental Examination

Prepared by Project Management Office Hubei Province, PRC

This environmental assessment report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Director, 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.

ADDENDUM To the Initial Environmental Examination

Loan 2898-PRC May 2017

People’s Republic of : Heilongjiang Energy Efficient District Heating Project (Project Scope Change – Subproject)

Prepared by the Heilongjiang Project Management Office on behalf of the Heilongjiang Provincial Government for the Asian Development Bank

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

This addendum to the 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.

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.

i Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

CURRENCY EQUIVALENTS (Inter-bank average exchange rate as of 22 May 2016)

Currency Unit - Yuan (CNY) CNY 1.00 = US$ 0.145444 USD 1.00 = 6.8755 CNY (mid-rate)

NOTE

In this report, "$" refers to US dollars.

ii Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

ABBREVIATIONS

ACM asbestos-containing materials ADB Asian Development Bank AP affected person AQSIQ Administration of Quality Supervision, Inspection and Quarantine ASL above sea level CFB circulating fluidized bed CHP combined heat and power CSC construction supervision company DCS distributed control system DI design institute EA executing agency EHS environment, health and safety EIA environmental impact assessment EMP environmental management plan EMS environmental monitoring station EMU environmental management unit EPB Environmental Protection Bureau ESP electrostatic precipitator ETDZ Economic and Technology Development Zone FGD flue gas desulphurization FSR feasibility study report GHG greenhouse gas GRM grievance redress mechanism HES heat exchange station HHWDC Hazardous Waters Disposal Center HPG Heilongjiang Provincial Government HSP heat source plant IA implementing agency IEE initial environmental examination LIEC loan implementation environmental consultant MEP Ministry of Environmental Protection NDRC National Development and Reform Commission PLG provincial leading group PMO project management office PPCU project public complaints unit PPE personal protective equipment PPMO provincial project management office PRC People’s Republic of China SCADA supervisory control and data acquisition SCR selective catalytic reduction

iii Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

SPS Safeguard Policy Statement, ADB TA technical assistance TCE tons of coal equivalent US EPA United States Environmental Protection Agency WHO World Health Organization

WEIGHTS AND MEASURES

BOD5 biochemical oxygen demand, five days cm centimeter

CO2 carbon dioxide COD chemical oxygen demand dB(A) a-weighted sound pressure level in decibels DO dissolved oxygen DOD dissolved oxygen deficit GJ giga-joule ha hectare kcal kilo calories kg kilogram km kilometer kWh kilo watt hours M meter m/s meters per second m³ cubic meters mg/l milligrams per liter mg/m3 milligrams per cubic meter mg/Nm3 milligrams per standard cubic meter MW megawatt

NH3-N ammonia nitrogen Nm3 standard cubic meter

NO2 nitrogen dioxide

NOx nitrogen oxides oC degrees Celsius pH a measure of the acidity or alkalinity of a solution PM particulate matter

PM10 particulate matter smaller than 10 micrometers

PM2.5 particulate matter smaller than 2.5 micrometers

SO2 sulfur dioxide SS suspend solid TN total nitrogen TSP total suspended particulates

iv Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

TABLE OF CONTENTS MAPS I. INTRODUCTION ...... 1 A. PURPOSE OF THE ADDENDUM ...... 1 B. THE PROJECT AND ITS SCOPE CHANGE ...... 1 C. APPROACH TO ADDENDUM PREPARATION ...... 3 D. STRUCTURE OF THE ADDENDUM ...... 4

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 5 A. LEGAL FRAMEWORK OF THE PRC ...... 5 B. APPLICABLE ADB POLICIES, REGULATIONS AND REQUIREMENTS ...... 7 C. INTERNATIONAL AGREEMENTS ...... 8 D. OTHER RELEVANT GUIDELINES ...... 9 E. ASSESSMENT STANDARDS FOR URBAN DISTRICT HEATING SECTOR ...... 9 F. ADMINISTRATIVE FRAMEWORK ...... 9 G. EIA APPROVAL STATUS ...... 10

III. DESCRIPTION OF THE PROJECT ...... 11 A. PROPOSED PROJECT SCOPE ...... 11 B. BACKGROUND AND PRESENT HEATING SITUATION IN HAILIN ...... 12 C. HEATING HEAT INDEX AND HEAT LOAD ...... 14 D. SITE CONDITIONS AND THE GENERAL PLANT LAYOUT ...... 15 E. HEAT SOURCE ...... 19 F. BOILER FUEL ...... 19 G. AUTOMATIC CONTROL ...... 19 H. THERMAL SYSTEMS ...... 19 I. EMISSION CONTROL TECHNOLOGIES ...... 20 J. DISTRICT HEATING NETWORK ...... 20 K. SPECIAL FEATURES OF THE PROJECT ...... 21

IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE) ...... 23 A. LOCATION AND SETTING ...... 23 B. GEOGRAPHY AND TOPOGRAPHY ...... 23 C. METEOROLOGY AND CLIMATE ...... 24 D. HYDROLOGY ...... 24 E. NATURAL RESOURCES ...... 24 F. SOCIAL AND ECONOMIC CONDITIONS ...... 24 G. ENVIRONMENTAL QUALITY (BASELINE) ...... 25

V. ANTICIPATED IMPACTS AND MITIGATION MEASURES ...... 31 A. EXPECTED POSITIVE IMPACTS ...... 31 B. SCREENING OF POTENTIAL IMPACTS ...... 31 C. POTENTIAL IMPACTS BEFORE CONSTRUCTION ...... 31 D. POTENTIAL ENVIRONMENT IMPACTS AND MITIGATION MEASURES DURING CONSTRUCTION ...... 32 E. ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES DURING OPERATION ...... 40 F. ENVIRONMENTAL IMPACTS FROM SMALL BOILER DEMOLITION AND MITIGATION MEASURES ..... 53

VI. ANALYSIS OF ALTERNATIVES ...... 57 A. NO PROJECT ALTERNATIVE ...... 57

v Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

B. HEATING SOURCE ALTERNATIVES ...... 57 C. ALTERNATIVE FUELS ...... 58 D. ALTERNATIVE BOILER TECHNOLOGIES ...... 60

E. ALTERNATIVES OF SO2 EMISSION REDUCTION PROCESS ...... 61 F. ALTERNATIVES FOR FLUE GAS DUST REMOVAL ...... 63

VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS ...... 65 A. INFORMATION DISCLOSURE ...... 65 B. PRC AND ADB REQUIREMENTS FOR PUBLIC CONSULTATION ...... 65 C. PUBLIC CONSULTATION FOR HAILIN SUBPROJECT ...... 66 D. FUTURE INFORMATION DISCLOSURE AND PUBLIC CONSULTATION PROGRAM ...... 68

VIII. GRIEVANCE REDRESS MECHANISM ...... 69 A. INTRODUCTION ...... 69 B. ADB’S GRM REQUIREMENTS ...... 69 C. CURRENT PRACTICE ...... 69 D. PROPOSED GRIEVANCE REDRESS MECHANISM FOR THE SUBPROJECT ...... 70 E. TYPES OF GRIEVANCES EXPECTED AND ELIGIBILITY ASSESSMENT ...... 70 F. GRM STEPS AND TIMEFRAME ...... 70

IX. CONCLUSIONS AND RECOMMENDATIONS ...... 73 A. EXPECTED PROJECT BENEFITS ...... 73 B. ADVERSE IMPACTS AND MITIGATION MEASURES ...... 73 C. RISKS AND ASSURANCE ...... 74 D. OVERALL CONCLUSIONS ...... 74

APPENDIX 1: APPROVAL OF DOMESTIC ENVIRONMENTAL IMPACT ASSESSMENT ...... 75 APPENDIX 2: ENVIRONMENTAL MANAGEMENT PLAN ...... 79

vi Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Map: Hailin Subproject Location In Heilongjiang Province

Hailin

vii Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

MAP OF HAILIN CITY AND MUNICIPALITY

Hailin

Mudanjiang

viii Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

I. INTRODUCTION

A. Purpose of the Addendum

1. This addendum to the Initial Environmental Examination (IEE) for the Heilongjiang Energy Efficient District Heating Project (the Project) in Heilongjiang Province of the People’s Republic of China (PRC) summarizes the findings of the environment due diligence conducted for a change in project scope. 2. A change in scope of the project is required as four subprojects have dropped out the project and a replacement subproject, Hailin district heating subproject, is proposed to be added. Technical, social and environmental safeguards due diligence has been conducted for the new subproject. 3. This addendum to the IEE was prepared based on environment safeguards due diligence, which includes the following: (i) a review of the draft feasibility study report (FSR) for the Hailin subproject; (ii) a review of the domestic EIA report for the subproject; (iii) an assessment of the original IEE for the project which was disclosed on ADB website in May 2012; (iv) a site visit conducted by an ADB mission in October 2016; and (v) discussions with key project stakeholders, including amongst others, Hailin City Government, Hailin Environmental Protection Bureau and the Hailang Thermal Power Co. Ltd, the implementation agency (IA) of the proposed subproject. 4. ADB’s environmental safeguard requirements are specified in the Safeguard Policy Statement (SPS 2009). The Project was classified by ADB as Environment Category B. The proposed new subproject is the same as other subprojects in terms of the nature and seriousness of its environmental impacts. The overall environmental impact classification still remains as Category B. Thus, an addendum to the Initial Environmental Examination (IEE) including an environmental management plan (EMP) is required for the newly proposed subproject. This addendum to the IEE for the new subproject has been prepared in compliance with the ADB’s SPS requirements.

B. The Project and Its Scope Change

5. In 2012 the PRC received a US$150 million loan from the Asian Development Bank (ADB) to assist the implementation of the Project. The development objective of the Project is to support nine cities and towns in Heilongjiang Province to improve their district heating infrastructure and reduce air pollutions from small inefficient small heat-only boilers. 6. The original approved project consists of nine district heating subprojects in Heilongjiang Province. Four subprojects have been dropped out from ADB finance due to various reasons and they were constructed using domestic funds. Thus, the Heilongjiang Provincial Government (HPG) has requested to add a new subproject to fully utilize the remaining ADB loan. The four dropped out subprojects are as follows:

i) Yichun Xinqing District Heating Network Expansion Subproject. The subproject was planned to install 16.68 km of heating network, build 9 new HESs, rehabilitate 18 old HESs, and shutdown 48 scattered, low-efficiency small coal-fired

1 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

boilers.

ii) Jidong District Heating Network Expansion Subproject. The scope of the subproject is to install 6,980 m of pipeline network, build 11 new HESs, and rehabilitate 23 HESs.

iii) Raohe District Heating Expansion Subproject. The subproject was planned to construct a heat source plant with 3×14 MW CFB hot water boilers, install a primary heating network with a total length of 4,990 m, rehabilitate a heating network of 2,670 m, and remove 19 scattered, inefficient small coal-fired boilers.

iv) Jiagedaqi District Heating Subproject. The scope of the subproject is to install 21,000 m of the heating pipeline, build 30 new HESs and shutdown 68 inefficient small coal-fired boilers within the city.

7. The new subproject proposed to replace these four subprojects is located in Hailin city of Mudanjiang Municipality, a city in the southeast of Heilongjiang Province. The new subproject is to construct a new combined heat and power (CHP) plant with three 130 t/h circulated fluidized-bed (CFB) hot water boilers with two units of B25 backpressure steam turbine-generators. The maximum design heating capacity is 196 MW and the heat-supply area will be 3.16 million m2. Moreover, 56 scattered and low efficiency coal-fired small boilers and about 10,000 home heating stoves will be removed upon construction of the subproject. The IA for the project is Hailang Thermal Power Co. Ltd., a private company.

Table 1-1: Summary of Key Parameters of Subprojects

Heating New Number of Heating Small SCADA Area Category Subproject Heating Heat Pipeline Boiler System (million Source Exchanger (km) Closure 2 m ) Harbin Taiping 2 x 116 40 Yes 22 18 4.0 HSP & DH MW CFB West _ 111 Yes 68 218 14.8 DH Subprojects being DH _ 33 Yes 30 15 7.6 implemented Tongjiang City 3 x 58MW 24 Yes 17 36 2.7 HSP& DH CFB Tangwanghe _ 22 Yes 27 16 1.5 DH Jiagedaqi DH _ 30 Yes 21 68 6.0 _ 34 Yes 7 32 0.9 DH Raohe Town 3 x 14MW Subprojects 0 No 8 19 0.6 dropped HSP& DH CFB out Yichun City - Tangwanghe _ 27 Yes 17 48 2.7 DH 3 x 14MW Subtotal 91 - 53 167 10.2 CFB

2 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Proposed new Hailin City – 3 x130t/h 0 Yes 0 56 4.74 subproject CHP plant CFB CFB = circulated fluidized-bed, DH = district heating, HSP = heating source plant, CHP=combined heat and power, km = kilometer,m2 = square meter, MW = megawatt, SCADA = supervisory control and data acquisition, t/h = ton per hour. Sources: Subproject feasibility study reports.

C. Approach to Addendum Preparation

8. This addendum to the IEE report has been prepared based on domestic environmental impact assessment report (EIA) prepared for the subproject in compliance with the PRC’s environmental assessment requirements and regulatory framework at the national and local levels (see Chapter II for additional information on the domestic environmental assessment process). It was also supported by site visits, stakeholder consultations, and additional surveys undertaken by environmental consultants. Specifically, key data sources are summarized in the paragraphs below.

9. Project Description. Data sources include: i) subproject feasibility study report (FSR) prepared by a qualified domestic feasibility study institute; ii) domestic subproject EIA report prepared by the Heilongjiang Provincial Research Academy of Environmental Science; iii) Hailin Central Heating Plan (2014-2025) prepared by Heilongjiang Forestry Design & Research Institute; iv) due diligence undertaken by consultants, including environment and social specialists, and district heating technical specialist.

10. Climate. Data sources for local climate include data collected by the EIA institute from available databases.

11. Topography, Geology and Soil. Data sources include: i) subproject field surveys conducted by domestic EIA institute in 2012; and ii) subproject field surveys conducted by the environmental consultants from September to October 2016.

12. Terrestrial Ecological Resources. Data sources include: i) subproject ecological field surveys conducted by domestic EIA institute in 2012; and ii) subproject ecological field surveys conducted by the environmental consultants from September to October 2016.

13. Air Quality Baseline. Air quality data sources include: i) subproject specific air quality monitoring (PM10, SO2, and NO2) undertaken by Hailin Environmental Monitoring Station (EMS) on behalf of the subproject IA; and ii) data collected by the EIA institute from available existing databases.

14. Background Noise. Data sources for noise are from subproject specific noise monitoring undertaken by the EIA institute.

15. Water Resources. Samples were collected and analyzed during domestic EIA preparation process by the EIA institute. 16. Socioeconomic Status. Socioeconomic surveys and data were collected by the domestic EIA institute in 2012 and social specialist in September 2016. 17. Public Consultation and Information Disclosure. Public consultation was conducted through questionnaire surveys with community representatives, local village committees and local governmental divisions by domestic EIA institute in November 2012. Subproject information was disclosed on the local government’s website and newspaper in November and December 2012.

3 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

18. Energy Efficiency and Emissions Reduction. Coal saving data is calculated by the consultants based on the domestic FSRs and energy conservation assessment reports for the new subproject. The environmental consultants conducted analysis on air pollutant emission reduction.

D. Structure of the Addendum

19. This addendum to the IEE report consists of nine chapters and an appendix. The chapters of the main report are summarized below.

20. Chapter I is the Introduction, which briefly introduces the subprojects for the scope change, report purpose, approach to addendum preparation, and the structure of the addendum.

21. Chapter II describes the policy, legal, and administrative framework and it also discusses PRC’s and ADB’s environmental assessment legal and institutional frameworks.

22. Chapter III provides the description of the newly proposed Hailin subproject. Chapter IV provides is the description of the baseline environment including current environmental conditions in the newly proposed subproject.

23. Chapter V provides anticipated impacts and mitigation measures, expected positive and negative environmental impacts of the newly proposed subproject during construction and operation. It further covers the proposed mitigation measures.

24. Chapter VI presents the results of alternative analysis for heat source, boiler technology and emission control technologies. Chapter VII discusses information disclosure and public consultations. It covers the public consultation activities of each new subproject. A grievance redress mechanism is presented in Chapter VIII.

25. The last chapter of the addendum, Chapter IX, summarizes the conclusions of various analyses. The approval of domestic environmental impact assessment is attached as Appendix 1. The original environmental management plan (EMP) has been updated based on this newly added subproject and new EMP is presented in Appendix 2 including environmental monitoring plan.

4 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

26. This section of the addendum provides policy, legal and administrative framework applicable to the proposed Hailin subproject, which includes the PRC’s national and local environmental legal and institutional framework and environmental assessment requirements, as well as ADB safeguard policies, regulations, requirements, and procedures.

A. Legal Framework of the PRC

27. The environmental protection and management system in the PRC consists of a well-defined hierarchy of regulatory, administrative and technical institutions. At the top level the People’s Congress of the PRC has the authority to pass and revise national environmental laws; the Ministry of Environmental Protection (MEP) under the State Council promulgates national environmental regulations; the MEP either separately or jointly with the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) issues national environmental standards. The provincial and local governments can also issue provincial and local environmental regulations and guidelines in accordance with the national ones. In addition, national and local five-year environmental protection plans form an important part of the legal framework. 28. An EIA management procedure has been established in the PRC for over 20 years. Domestic EIA studies are required to be undertaken within the PRC national and local legal and institutional framework for new construction projects. The primary laws that govern the EIA study of the project are provided in Table 2-1. Table 2-1: Applicable Environmental Laws

No. Title of the Law Year Issued 1 Environmental Protection Law 1989 and last amended in 2014 2 Environmental Impact Assessment Law 2003 and amended in 2016 3 Water Law 1988 and last amended in 2016 4 Water Pollution Prevention and Control Law 1984 and amended in 2008 5 Air Pollution Prevention and Control Law 2000 and last amended in 2015 6 Noise Pollution Control Law 1996 7 Solid Waste Pollution Prevention and Control Law 2004 8 Water and Soil Conservation Law 1991 and last amended in 2010 9 Forest Law 1998 10 Wild Fauna Protection Law 2004 11 Cleaner Production Promotion Law 2002 12 Urban and Rural Planning Law 2008 13 Land Administration Law 1999 14 Energy Conservation Law 1997 and last amended in 2016 Management Provisions on the Reporting and 15 2005 Registration of Pollutant Discharges

5 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

No. Title of the Law Year Issued Measures for the Disclosure of Environmental 16 2007 Information Management Measures on Automatic Monitoring and 17 2005 Inspection of Pollution Sources Measures on Supervision and Management of Energy 18 Conservation of Specialized Equipment with High 2009 Energy Consumption 19 National Catalogue of Hazardous Wastes 2016 Regulations on Hazardous Chemical Safety 20 2011 Management Norms on Hearing Protection for Workers at Industrial 21 1999 Facilities Measures on Management of Pollution Sources 22 1999 Monitoring 23 Regulations on National Pollution Source Survey 2007

Source: Consultants. 29. The implementation of environmental laws and regulations is supported by a series of associated management and technical guidelines and some of them are listed in Table 2-2. Table 2-2: Applicable Environmental Assessment Guidelines

No. Guideline Code/Year 1 Guideline for Technical Review of EIA on Construction Projects HJ 616-2011 2 Management Guideline on EIA Categories of Construction Projects 2008 Further Enhance the Management of EIA and Preventing 3 2012 Environmental Risks Guideline on Jurisdictional Division of Review and Approval of EIAs for 4 2009 Construction Projects 5 Guideline on EIA Categories of Construction Projects 2008 6 Interim Guideline on Public Consultation for EIA 2006 7 Technical Guidelines for EIA – General Program HJ 2.1-2011 8 Technical Guideline for EIA – Atmospheric Environment HJ 2.2-2008 9 Technical Guideline for EIA – Surface Water HJ/T 2.3-1993 10 Technical Guideline for EIA – Acoustic Environment HJ 2.4-2009 11 Technical Guideline for EIA – Groundwater Environment HJ 610-2016 12 Technical Guideline for EIA – Ecological Impact HJ 19-2011 Technical Guidelines for Environmental Risk Assessment for 13 HJ/T 169-2004 Construction Projects 14 Technical Guidelines for Fugitive Emission Monitoring of Air Pollutants HJ/T 55-2000 15 Code of Practice for Selection of Personal Protective Equipment GB/T 11651-2008 16 Safety Signs and Guideline for the Use GB2894-2008 Guidelines for Enterprises to Develop Emergency Response Plan for 17 AQ/T 9002-2006 Work Place Accidents

Source: Consultants.

6 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

30. The environmental quality standard system that supports and evaluates the implementation of the environmental protection laws and regulations in the PRC is classified into two categories by function (i.e., pollutant emission/discharge standards and ambient environmental standards). The relevant main standards applicable to the project are shown in Table 2-3. Table 2-3: Applicable Environmental Standards

No. Standard Code 1 Surface Water Quality Standard GB 3838-2002 2 Urban Ambient Acoustic Quality Standard GB 3096-2008 3 Ambient Air Quality Standard GB 3095-2012 4 Integrated Emission Standard of Air Pollutants GB 16297-1996 5 Integrated Wastewater Discharge Standard GB 8978-1996 6 Underground Water Quality Standard GB/T 14848-93 7 Domestic Drinking Water Quality Standard GB 5749-2006 Emission standard of environment noise for boundary of construction 8 GB 12523-2011 site 9 Emisson standard for industrial enterprises noise at boundary GB 12348-2008 10 Emission standard of air pollutants for thermal power plants GB13223-2011 11 Emission standard of air pollutants for boiler GB 13271-2014 Standard for Pollution Control on the Storage and Disposal Site for 12 GB 18599-2001 General Industrial Solid Wastes 13 Standard for Pollution Control on Hazardous Waste Storage GB 18597-2001 14 Safety Regulation for Dust Explosion Prevention GB 15577-2007 15 Discharge Standard for Municipal Wastewater CJ 3082-1999 Discharge standard of pollutants for municipal wastewater treatment GB18918-2002 16 plant

Source: Consultants.

B. Applicable ADB Policies, Regulations and Requirements

31. The major applicable ADB policies, regulations, requirements and procedures for environmental impact assessment of projects are the Environmental Safeguards–A Good Practice Sourcebook (2012), and the Safeguard Policy Statement (SPS 2009), which provides the basis for this addendum. The SPS promotes good international practice as reflected in internationally recognized standards such as the World Bank Group’s Environmental, Health, and Safety Guidelines (EHS Guidelines)1. More stringent pollution prevention and abatement standards will be adopted in case there are differences between the PRC regulations and EHS Guidelines. 32. The domestic EIA is prepared initially for the PRC approval processes, which are required to adopt PRC standards for the quality of water, air, noise, etc. This addendum

New Version of the “World Bank Group Environmental, Health, and Safety Guidelines”, April 30, 2007, Washington, USA. http://www.ifc.org/ifcext/enviro.nsf/Content/EnvironmentalGuidelines

7 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

compares critical PRC impact standards (emissions from the new subproject) with both the PRC standards and the EHS Guidelines to provide a good international practice context. 33. All projects funded by ADB must comply with the SPS (2009), which establishes an environmental review process to ensure that projects undertaken as part of programs funded under ADB loans are environmentally sound, are designed to operate in line with applicable regulatory requirements, and are not likely to cause significant environment, health, social, or safety hazards. 34. The SPS (2009) requires a number of additional considerations, including: (i) project risk and respective mitigation measures and project assurances; (ii) project-level grievance redress mechanism (GRM), including documentation in the EMP; (iii) definition of the project area of influence; (iv) physical cultural resources damage prevention analysis; (v) climate change mitigation and adaptation; (vi) occupational and community health and safety requirements (including emergency preparedness and response); (vii) economic displacement that is not part of land acquisition; (viii) biodiversity conservation and natural resources management requirements; (ix) provision of sufficient justification if local standards are used; (x) assurance of adequate consultation and participation; and (xi) assurance that the EMP includes an implementation schedule and measurable performance indicators. These requirements, which are usually not covered in PRC’s EIAs, have been considered during the due diligence to the best knowledge and capacity of the consultants. All applicable SPS (2009) requirements are covered in the addendum to the IEE.

C. International Agreements

35. The PRC has signed a large number of international agreements regarding environmental and biological protection. Those with direct application to the project are listed in Table 2-4. Table 2-4: Applicable International Agreements

No. Agreement Year Purpose Ramsar Convention on Wetlands of Prevention of the progressive 1 International Importance Especially as 1975 encroachment on and loss of Waterfowl Habitat wetlands for now and the future Conservation and sustainable use of 2 Convention on Biological Diversity 1993 biological diversity United Nations Framework Convention on Stabilization of greenhouse gas 3 1994 Climate Change concentrations in the atmosphere Kyoto Protocol to the United Nations Further reduction of greenhouse gas 4 2005 Framework Convention on Climate Change emissions Montreal Protocol on Substances That 5 1989 Protection of the ozone layer Deplete the Ozone Layer United Nations Convention to Combat Desertification in Those Countries The combatting of desertification and 6 1996 Experiencing Serious Drought and/or mitigating of the effects of drought Desertification

Source: Consultants.

8 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

D. Other Relevant Guidelines

36. The World Bank Group’s Environmental, Health and Safety Guidelines is considered as recognized standards for pollution prevention and control technologies and practices in the ADB’s SPS. The general EHS guidelines, in conjunction with the Industry Sector Guidelines, provide the context of international best practice and will contribute to establishing targets for environmental performance. The relevant sector guidelines referenced include: General EHS Guidelines (covering occupational health and safety and community health and safety); Waste Management Facilities sector guidelines; and Water and Sanitation sector guidelines. The air, noise, and water quality standards in the WB’s EHS guidelines have also been referenced in the PRC. 37. The Hailin CHP plant to be financed by ADB will meet (i) the national standards for emission and air quality and (ii) the applicable requirements laid out in the World Bank Group's EHS Guidelines. Occupational and community health and safety, as laid out in the EHS guidelines, will be adopted and implemented.

E. Assessment Standards for Urban District Heating Sector

38. During construction of the CHP plant, noise assessment will follow the standards in “Emission standard of environment noise for boundary of construction site (GB12523-2011),” and during operation, the assessment standard will be Category-II Standard stated in “Emission standard for industrial enterprises noise at boundary (GB12348-2008).” The noise impact from the construction and operation of the CHP plant will be evaluated against the two standards mentioned above. 39. The area of influence for ambient air quality for the CHP plant within a few kilometers from the plant depending on the height of the stack. For point source air emissions during operation, “Emission standard of air pollutants for thermal power plants (GB13223-2011)” is the relevant standard and is measured at the smokestack. The concentration limits for uncontrolled discharge of new pollution sources covered “Comprehensive Discharge Standard of Atmospheric Pollutants (GB16297-96)” will be followed for dust emission from coal stockpiles and ash yards. 40. Category I standard of “Pollution Control Standard for Storage and Disposal Site of General Industrial Solid Waste (GB 18599-2001)” shall be followed for the handling and disposal of ash and extracted flue particulates. 41. The wastewater from the CHP plant during operation will be discharged to the Hailin municipal sewer system for treatment. The wastewater discharge from the CHP plant shall comply with the “Integrated Wastewater Discharge Standard (GB 8978-1996)”.

F. Administrative Framework

42. Chapter 3, Article 16 of the recently amended “PRC Law on Environmental Impact Assessment (2016)” stipulates that an EIA document is required for any capital construction project producing significant environmental impacts so as to provide a comprehensive assessment of these potential environmental impacts based on three different categories of

9 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

impact: (i) Category A: Projects with significant adverse environmental impacts, for which an EIA report is required; (ii) Category B: Projects with adverse environmental impacts which are of a lesser degree and/or significance than those of Category A, for which a tabular EIA report is required; and (iii) Category C: Projects unlikely to have adverse environmental impacts, for which an EIA registration form is required. 43. The PRC MEP’s “Guideline on Jurisdictional Division of Review and Approval of EIAs for Construction Projects (2003)” provides two prescribed lists of projects for which EIAs must be reviewed and approved. The guideline was amended in 2009 to include a list of construction projects for which EIAs require MEP review and approval, and a list of projects for which EIAs will be delegated to the provincial EPBs.

G. EIA Approval Status

44. The EIA report for the Hailin CHP subproject has been approved and relevant information is summarized in Table 2-5.

Table 2-5: Summary of EIA Status

Completion Approval No. Subproject EIA Institute Approval Status Date Authority Heilongjiang EIA report was Hailing CHP December Heilongjiang 1 Environment Protection approved on 1 April plant 2012 HPDEP Science Academy 2013

HPDEP = Heilong Provincial Department of Environmental Protection, Source: Domestic EIA report and EIA approval document

10 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

III. DESCRIPTION OF THE PROJECT

A. Proposed Project Scope

45. The proposed Hailing subproject will build a combined heat and power (CHP) plant to provide high-efficiency central heating service for central urban areas of Hailin, a city in Mudanjiang Prefecture City, Heilongjiang Province. The CHP plant is located just outside of the city in the northeast (Figure 3-1) and the property boundary is shown in Figure 3-2. The construction contents of the proposed Hailin subproject include construction of three 130 ton/hr. high temperature and high pressure circulating fluidized bed (CFB) boilers and two sets of B25 backpressure type turbine generators. The primary purpose of the CHP plant is to provide heating service to Hailin residents. Thus, it will operate during the heating season only. The CHP plant has the design heating capacity of 196 MW to provide heating services to 4.74 million m2 area while generating 50 MW of electric power.

Figure 3-1: City of Hailin and the location of the CHP Plant

CHP Plant

11 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 3-2: CHP Property Boundary

CHP

B. Background and Present Heating Situation in Hailin

46. Hailin City is located 280 km southeast of Harbin, 12 km from Mudanjiang, and 15 km from Mudanjiang Airport. There are 9 towns and 123 administrative villages within the jurisdiction of Hailin. The geographical coordinates of the project area is longitude 129 °36'21 "east and latitude 44°35'15" north. The central urban area of Hailin is located in the southeast of Hailin City, bordering Ning'an City in the south, connecting with Hainan Township in the east, neighboring with Xinan Korean town and Changting town in the west, adjacent to the Hengdaohezi town. The urban center area is 666.2 km2, accounting for 7.5% of the city, and the length from north to south and from east to west of Hailin is about 34.3km. The urban center area has the resident population of 0.16 million people, a registered population of 0.14 million people, of which agricultural population is 44,000, non-agricultural population is 96,000. There are Han, Man and Korean, etc. nationals living in Hailin with Korean population of 8,000. The city has developed an area of 23 km2, of which Hailin Economic and Technology Development Zone (ETDZ) is 12 km2. 47. As a county-level city, the urban planning area of Linhai is 24.21 km2 (length from the east to the west is 5km, and the width from the south to the north is 4.8 km). From the aspect of heating distance and range, one heat source can meet the heating needs of the central urban district. According to the survey, the existing heating floor area of Hailin city is 5.8 million m2, including regional boiler central heating area is 2.6 million m2, which can realize central heating by the CHP plant. The area of 1.23 million m2 still uses scattered small boiler for heating, of which area of 0.43 million m2 has central heating conditions and can be connected to the district heating system with the CHP plant as the heat source. After the completion of the CHP facility, it will provide district heating to the vast majority of central urban area of Hailin. 48. There are seven housing developing projects in Hailin City under construction or waiting for construction with approval, with a total construction area of 0.76 million m2. Five

12 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

of these seven projects are under construction, with a total construction area of 0.58 million m2, and two of them have been approved and are waiting for construction, with a total construction area is 0.18 million m2.

Figure 3-3: Buildings under Construction in Hailin City

49. From the view of building structure of Hailin City, there are about 1.9 million m2 cottage buildings with residential buildings of about 1.20 million m2, which not only take up a lot of urban land, but also cause serious air pollution due to a large number of home heating and cooking stoves with very poor dispersion characteristics. These households are very much depending these low efficiency and polluting home heating and cooking stoves as long as they still live in these buildings. In addition, the heating quality in these buildings is very poor as the heating systems are not well-designed and the building insulation is also very poor. The Hailin government has been systematically redeveloping and improving the shantytown areas in central areas of Hailin. It is planned to reconstruct and redevelop about 0.5 million m2 in the next 3-5 years with the goal of gradually eliminating the shantytown cottages in central urban areas of Hailin.

13 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 3-4: Hailin Shantytown Areas

C. Heating Heat Index and Heat Load

50. The planned new buildings in the heating area of this subproject are mainly residential apartments and public buildings. According to the standard recommended value for heat index in the “Design Specification of Urban Heat Supply Network” (GJJ34-2010) and provisions of “Hailin Urban Area District Heating Plan”2014-2015, the heat indexes are selected with various factors considered. 51. Existing buildings are considered according to the actual heat index; 50% of buildings under construction and waiting for construction with the approval are considered as buildings with energy-saving measures; and 100% of buildings under planning are considered as buildings with energy-saving measures. After weighted average calculation according to the

14 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

proportion of the various buildings, the approximate heating index is 55 W/m2. 52. The heating period of Hailin is 180 days and the design parameters are as follows: the outdoor design lowest temperature is -24°C, the average temperature is -9.1°C, and the indoor temperature is 18°C during the heating season. The estimated maximum, minimum and average heat loads during the heating season are 293.9 MW, 91.0 MW, and 189.6 MW, respectively.

D. Site Conditions and the General Plant Layout

53. There are two alternative sites for the proposed CHP plant location, Dongsheng Road site and Hailin Steel Plant site. After comprehensive comparison, the Dongsheng Road site is selected as the CHP plant site, which is located in the northeast direction of Hailin city and just outside the central urban areas (see Figure 3-5).

15 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 3-5: Hailin District Heating Plan and the Proposed CHP Plant Location

CHP Plant

54. The CHP plant site is 267m long from north to south and 542.95m long from east to west. The available area is 12.0 hectares, which meets the requirements of land use requirement for the CHP plant. The main entrance of the facility is from the urban road on the west side of the plant, which is directly connected to the urban road network. The plant area is relative flat with good construction conditions (see Figure 3-6). The site is now urban planning industrial land, which has completed the land acquisition and no demolition work is needed.

16 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 3-6: Proposed CHP Plant Site in Hailin

55. The general layout of the plant area is "Three Columns Type" (see Figure 3-7). From east to west, they are coals yards, main buildings, 110kV power distribution equipment and mechanical ventilation and cooling tower. The main buildings will construct from the north to the south, with a row faced to the west. At the north of the main buildings, from east to west, they are coal pusher warehouse, boiler water treatment area, integrated administration building, water pump room, mechanical ventilation and cooling tower. Behind the boilers, they are oil storage area, coal water treatment station and material warehouse. The CHP facility has two entrances/exits. The main entrance is located on the west side of the facility, which is the mainly for people; and the secondary entrance is located in the southwest of the facility, which is the entrance for goods. The ground elevation in the plant is about 295 ~ 320m,where the 50-year flood event of the site area is 255.24m, and the elevation of the main workshop area is 310.00m.

17 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 3-7: Proposed CHP Plant Site in Hailin

18 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

E. Heat Source

56. The Hailin subproject proposes to construct 2×B25 back-pressure thermal power cogeneration units. The steam parameter of the boiler is 9.81MPa and 540 ℃, and the corresponding steam turbine inlet parameters are 8.83MPa and 535 ℃. According to the nature of fuel, air pollutants emission requirements, mode of operation, comprehensive utilization of ashes, the 130 ton/hr circulating fluidized bed (CFB) boiler will be used.

F. Boiler Fuel

57. According to the coal quality analysis data, the project is designed to use screen coals provided by alkali mine of Shenglong Mining Co., Ltd. under Coal Industry (Group). The coal mine is about 170 km away from the proposed power plant. The CHP plant has annual coal burning capacity of 137,909 tons of standard coal, among which about 120,000 tons are for district heating purpose. The coal mine production capacity fully meets the needs of the project coal, and coals will be delivered by highway.

G. Automatic Control

58. The boiler and the steam turbine generator units will use a central control system. Three boilers and two generators will share a centralized control room. Thermal control system uses a set of distributed control system (DCS) to monitor the boilers and turbine generator units. Auxiliary systems such as ash removal system, chemical water treatment system establish local control room respectively. 59. The DCS can be used to achieve the monitoring function, man-machine interface is composed by the operator station (the host, LCD, keyboard, mouse and several emergency shutdown with hard-wired buttons and other items), and is used as monitoring and control center. The operation of the unit is mainly based on LCD and keyboard monitoring. 60. Instrument and control laboratory configure workplace according to commitment to maintenance tasks, including computer maintenance room, boiler control and maintenance room, turbine control and maintenance room, instrument calibration and inspection room, thermal field maintenance rooms, and spare parts storage room.

H. Thermal Systems

61. The heating method used in this subproject is a back-pressure steam turbine system. The thermal system consists of three-stage non-regulated extraction steam and after-cylinder exhaust steam (for heating steam). The principle thermal power system of the CHP plant is explained below. 62. In order to ensure the reliability of winter heating supply, set two 130 ton/hr with temperature and pressure reducer (with parameters of 9.81/0.294MPa, 540℃/180℃). Use residual steam for heating and backup heating in case of steam turbine failure. 63. The CHP plant will set up a central heat station and the heating network will use designed 130/70℃ high temperature water, after exchanging with the heat exchange

19 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

stations outside the plant. , return to the heating network heat booster in the central station. The auxiliary equipment of the central station is as following: 3 horizontal heater (without backup); 3 heating network circulating water pumps (1 for backup); 2 sets of hot water supply pump (1 as backup); 2 heating network water supply pumps (1 for backup); 3 heating network drainage pumps (without backup). The heating distribution network system is not within the scope of this project.

I. Emission Control Technologies

64. CFB boilers will be used at the CHP plant. Due to low combustion temperatures inside the CFB furnace, it is low NOx technology. In addition, SCR will be used to further reduce NOx emissions to atmosphere. In order to meet more stringent SO2 emission standard, wet scrubber technology will be used to control SO2 emission to comply with the national standard for SO2. Particulate matter (PM) including PM10 will be controlled using fabric filter (baghouse), which has a PM control efficiency over 99.9%.

J. District Heating Network

65. The Hailin city already has its heat distribution network, which is connected to existing small HOBs. In order to connect the CHP plant to the existing network to meet the heat demand of existing customers and new heating network to the newly added heat load, the IA is implemented a heating network update project2, which include the following: (i) installing 19,276 m of new primary heating network; (ii) upgrading 300 m of existing primary heating network; (iii) constructing a primary heat exchange station; (iv) installing 23 heat exchange stations; and (v) upgrading 15 heat exchange stations. The total investment of this project CNY319.16 million. The project was implemented in 2016 and is about 70% completed as of the end of April 2017. The project is expected to be completed by October 2017.

Figure 3-8: Hailin District Heating Network

2 Feasibility Study Report of Hailin District Heating Pipeline Network Project, October 2015.

20 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

K. Special Features of the Project

66. Energy efficiency improvement. Since CHP plant will have much higher energy efficiency than that of small coal-fired heat-only boilers (HOBs) and family heating stoves, the Hailin subproject will result in significant energy efficiency improvement and emission reductions. It is estimated that the total number of small coal-fired HOBs and family heating stoves to be removed will be 56 and 10,000, respectively. The estimated net annual coal 3 savings are 34,000 tons of standard coal per year.

67. Benefits to the poor. Heilongjiang Province is one of the poorest provinces in the PRC and is the poorest province in the northeast provinces of the country. Hailin city is reconstructing shantytowns according to the urban plans, and the poor households in these areas will be moved to new areas where the centralized district heating service will be provided. Thus the social benefits of the project are significant.

68. CFB boiler technology. There are three main technologies for coal combustion to generate hot water or steam: chain grade stoker boiler, pulverized coal boiler and CFB boiler. CFB technology is an advanced but mature technology and it has over 30 years of commercial operation history. It is an environmental-friendly technology since it has lower

SO2 and NOx emissions as well as higher combustion efficiencies (87% or higher) than small and low combustion efficiency boilers (55%). Traditionally, chain grade stoker boiler technology has been the technology of choice when it comes to HOBs used for district heating purposes in the northern PRC. As energy efficiency and environmental protection become more and more important in the PRC, more projects are considering CFB technology for power generation and district heating.

69. State-of-the-art PM control technology. PM emissions have been a serious problem in Hailin during winter heating season. Less efficient PM control technologies such as cycle and wet-scrubber have been widely used to control PM emissions from the HOBs for decades, and more advanced PM control technologies such as fabric filter (baghouse) systems and electrostatic precipitators (ESPs) are rarely used in the district heating sector, especially in the northeast PRC. From the PM control efficiency point of view, baghouse has the highest control efficiency (>99.9%) while ESP also has a very high control efficiency (>99.5%). In comparison, the PM control efficiency of a wet-scrubber is only approximately 80%. Baghouse technology is proposed for the Hailin subproject.

70. Computerized control system. Hailin subproject will install supervisory control and data acquisition (SCADA) system to control the demand and supply of heat and thus improve energy efficiency.

71. Environmental benefits. Once the Hailin subproject is fully implemented, 56 small boilers will be closed and approximately 10,000 family heating stoves will be demolished. The net annual emission reductions from eliminating combustion of raw coal of 34,000 tons per year are: 89,000 tons of CO2; 227 tons of SO2; 793 tons of NOx. The local air quality in central urban areas of Hailin city will be significantly improved during the winter heating

3 Energy efficiency of small HOBs is between 63-72%; home heating stove energy efficiency is assumed at 45%; and the energy efficiency for CHP is assumed at 85%.

21 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

season.

72. Private Sector Participation. It has been demonstrated that private sector can effectively operate CHP plants and district heating systems and make contributions to heating sector reform. Typically they are more efficient in operating their facilities and more customer-oriented. They also can bring innovation to the district heating sector including automation and heating tariff collection. The Hailin subproject will be owned and operated a private enterprise to promote private sector participation.

22 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

IV. DESCRIPTION OF THE ENVIRONMENT (BASELINE)

A. Location and Setting

73. The proposed CHP site is located in the northeast part of the central urban area of Hailin city within the ETDZ. The State Council of the PRC approved the Hailin ETDZ on 26 June 2010 with a planned area of 15 km2. Fifty-nine (59) enterprises have established facilities in the ETDZ with a total investment of CNY4.1 billion. Main enterprises are in the following sectors: flooring material manufacturing, food processing, pharmaceuticals, machinery and new materials industries. 74. The proposed CHP site was farmland before it was acquired by the local government for the ETDZ. Since it is located at the lower right-hand corner of the Hailin ETDZ (see Figure 4-1), the CHP facility will be surrounded by other industrial facilities. For example, there is a cement manufacture plant across the road and the distance between the cement plant and the CHP site is approximately 100 m. The nearest resident is about 250 meters away from the CHP plant. The land surrounding the CHP site is relative flat and there is no ecologically and environmentally sensitive area within the area of influence of the CHP site (see Figure 3-2 and Figure 3-6).

Figure 4-1: Hailin Economic Development Zone Layout

B. Geography and Topography

75. Hailin is located in Changbai Mountain branch of Zhangguangcai Mountain, with 90% mountainous and hilly mountainous area. The terrain of Hailin area is sloping from the southwest to the northeast and slightly bent, shaped like a silkworm, with an average altitude of 400-500 m above sea level (ASL). The maximum length of the city is 204 km from northeast to southwest and the maximum width is 71 km from west to east. The principal geographic features of Hailin include Shen Mountain, Qian Mountain, Qiulingman Mound,

23 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Haigu Plain, Zhangguancai Ridge, and 140 streams or rivers of the Mudanjiang water system (74 belonging to the Hailang drainage basin and 66 belonging to the Mudanjiang drainage basin). The highest mountain in Hailin is Laotudingzi Mountain (elevation 1,687 m ASL).

C. Meteorology and Climate

76. Hailin City belongs to the continental monsoon climate of temperate zone with distinct four seasons. Spring is windy; summer is warm and humid with heavy precipitation; autumn temperature drops fast; and winter is cold and dry. The annual average precipitation is 600 mm and the annual average temperature is 1.9-3.6°C. The extreme low temperature in winter occurs in January with the temperature of -20°C while the extreme high temperature in summer occurs in July with the temperature of 36.3°C. The annual sunshine hours are 2,300-2,600. The maximum snow depth is 42 cm and frost free period is 85 - 130 days.

D. Hydrology

77. Hailin has more than 140 streams or rivers, with a total length of 2,930 km and the water levels are in the range of 200-500 mm. The main water body in Hailin is the Hailang River, flowing from west to east through the southern part of the city. Other main rivers are Toudao River, Erdao River and Sandao River. The total annual average water resource is 3,782.5 million m3, of which Hailang River system runoff is 185.244 million m3 and Mudanjiang River system is 0.193 million m3. The northern part is Mudanjiang River basin with an area of 4,677 km2 while the southern part is Hailang River basin with an area of 5225 km2. The frozen period lasts up to five months. There are abundant groundwater resources in Hailin area with very good quality, and most of them are soft and medium hard water with pH values ranging from 6.5-8.5. The closest water body is the Hailang River, which is about 2.5 km south of the proposed CHP site (see Figure 3-1).

E. Natural Resources

78. Main natural resources of Hailin include forest, minerals, water resource, and wild animals. It has 71.3% forest coverage, with 160 million m3 stumpage, including oak, birch, poplar, basswood, and some rare species such as ash, walnut and yellow pineapple. It also has a variety of mineral resources such as gold, iron, magnesium, zeolite, bentonite, and 36 kinds of non-metallic minerals. The mineral sources are shallow covering and easy exploitation, large reserves and high grade. The underground water resource, without being polluted, is abundant as well. There are six mineral water sources identified meeting the national standards. It has a number of wild animals including boar, sable, deer, and otters. There is a mineral water production facility at the north of the proposed CHP site. It utilizes deep groundwater (over 100 m) as its water source and it has a production capacity of 5 tones per hour. It typically only operates during summer months.

F. Social and Economic Conditions

79. Total population in Hailin city is 428,000 in 2009, including 249,000 nonagricultural

24 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

residents. There are 27 different ethnic minority groups such as Koreans, Manchu, Hui, Mongol, etc. Korean is the main ethnic minority with an estimated population of 30,000. There are 132,000 people in central Hailin in 2009, including 79,000 nonagricultural residents. Because of the rich natural resources, food and wood processing industry are the main industries in Hailin. Green and distinctive agriculture development is the main task for Hailin government in order to complete the transition from traditional agriculture to quality, efficient agriculture. Hailin ETDZ is located in the northern part of the city with an area of 12 km2. It was approved by the State Council to be national ETDZ on 26 June 2010.

G. Environmental Quality (Baseline)

1. Air quality. 80. Six sensitive receptors for ambient air quality are located within the project impact area and they were selected for air quality monitoring during 1-7 November 2012. Four air quality monitor results are recorded per day and the locations and distances to the CHP site are shown in Figure 4-1 and Table 4-2. Figure 4-2: Ambient Air Quality Sampling Locations

Table 4-1: Air Quality Monitoring Locations

Monitoring # Locations Direction Distance (m) 1 Lindong Village Southeast 250 2 Guangrong Village Southwest 1600 3 Liangzhong Village North 900 4 Hejia Village Southeast 2500

25 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

5 Yangzirong Martyrs' Cemetery South 2000 6 Zirong elementary school Northwest 1000

Source: domestic EIA report.

81. Main pollutants monitored include PM10, TSP, SO2 and NO2 and the monitored results are shown in Tables 4-2 and 4-3 along with the PRC standards as well as WHO guidelines. It 3 can be seen from the table that the maximum daily concentration of PM10 was 0.155 mg/m , which was slightly higher than PRC national ambient air quality standard for Class II of 0.15 3 mg/m . And all the other daily concentration values of PM10 were also very close to the standard, ranged from 88.67% to 103.33%. Daily concentrations of PM10 exceeded the standard in three monitoring locations. This was primarily due to uncontrolled emissions from many small coal-fired boilers in the city during heating season. Air quality was monitored at the early heating season in November, the air quality would get worse in December and January when the temperatures are much lower and small coal-fired boilers have to run harder. The daily concentrations of SO2 and NO2 at all monitor locations are in compliance with the Class II Standard of the PRC’s “Ambient Air Quality Standard” (GB 3095-2012).

Table 4-2: Hourly Average Concentrations of SO2 and NO2

Value of Class II WHO Monitoring Monitoring Concentration Compliance 3 standard Guidelines Parameter Location (mg/m ) 3 3 Status (mg/m ) (mg/m ) #1 0.012~0.137 0.5 N/A In compliance #2 0.010~0.113 0.5 N/A In compliance #3 0.012~0.135 0.5 N/A In compliance SO2 #4 0.010~0.123 0.5 N/A In compliance #5 0.013~0.132 0.5 N/A In compliance #6 0.013~0.135 0.5 N/A In compliance #1 0.007~0.060 0.2 0.2 In compliance #2 0.010~0.071 0.2 0.2 In compliance #3 0.008~0.066 0.2 0.2 In compliance NO2 #4 0.010~0.070 0.2 0.2 In compliance #5 0.010~0.075 0.2 0.2 In compliance #6 0.012~0.137 0.2 0.2 In compliance

Source: EIA report.

Table 4-3: Daily Average Concentrations of PM10, TSP, SO2 and NO2

Value of Class II WHO Monitoring Monitoring Concentration Compliance 3 standard Guidelines Parameter Location (mg/m ) 3 3 status (mg/m ) (mg/m ) #1 0.099~0.149 0.15 0.05 In compliance #2 0.101~0.142 0.15 0.05 In compliance PM10 0.05 One day is higher #3 0.098~0.153 0.15 than standard #4 0.098~0.133 0.15 0.05 In compliance

26 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Value of Class II WHO Monitoring Monitoring Concentration Compliance 3 standard Guidelines Parameter Location (mg/m ) 3 3 status (mg/m ) (mg/m ) 0.05 One day is higher #5 0.091~0.152 0.15 than standard 0.05 One day is higher #6 0.095~0.155 0.15 than standard #1 0.107~0.278 0.3 N/A In compliance #2 0.205~0.26 0.3 N/A In compliance #3 0.211~0.287 0.3 N/A In compliance TSP #4 0.173~0.284 0.3 N/A In compliance #5 0.189~0.286 0.3 N/A In compliance #6 0.195~0.292 0.3 N/A In compliance #1 0.017~0.049 0.15 0.02 In compliance #2 0.011~0.025 0.15 0.02 In compliance #3 0.014~0.021 0.15 0.02 In compliance SO2 #4 0.011~0.021 0.15 0.02 In compliance #5 0.013~0.031 0.15 0.02 In compliance #6 0.011~0.041 0.15 0.02 In compliance #1 0.017~0.019 0.08 N/A In compliance #2 0.009~0.019 0.08 N/A In compliance #3 0.007~0.012 0.08 N/A In compliance NO2 #4 0.008~0.012 0.08 N/A In compliance #5 0.008~0.012 0.08 N/A In compliance #6 0.011~0.015 0.08 N/A In compliance

Source: EIA report. 2. Surface water quality. 82. Surface water samples were collected at three points along Hailang River near proposed CHP plant site as shown in Figure 4-3 and Table 4-4. Three monitoring pointes were sampled once a day for three consecutive days during 25-27 October 2012 by Hailin

EMS. A total of 8 items including pH, BOD5, CODcr, ammonia nitrogen, total phosphorus, fluoride, sulfide, Petroleum were analyzed. The principles and methods for collection, storage and analysis of water samples were carried out in accordance with the relevant national surface water quality standards as specified in the Surface Water Standard (GB 3838-2002): Grade II standard for location #1 and Grade III for location #2 and #3. The Methods for Monitoring and Analysis of Water and Wastewater (Fourth Edition) under the State Environmental Protection Administration was applied. Sampling results are summarized in Table 4-5. It can be seen that surface water quality at all three select locations meets the standards.

27 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 4-3: Surface Water Quality Monitoring Locations of Hailang River

Table 4-4: Surface water Quality Monitoring Locations of Hailang River

Monitoring Direction and Water Monitoring location location # Distance Classification 1# 100m upstream from the CHP plant S, 2.5km Grade II 1000m Downstream from the point of 2# ESE, 2.5km Douyin River joining Hailang River Grade III 3# Hainan Bridge SE, 6.1km

Source: EIA report

Table 4-5: Surface Water Quality (mg/L, except pH)

GB3838-2002 Monitoring Locations Parameter Grade II Grade III #1 #2 #3 pH 6-9 6-9 6.95 7.02 7.02

CODCr 15 20 9.73 11.8 11.3 BOD5 3 4 0.88 1.22 1.17 Ammonia Nitrogen 0.5 1.0 0.284 0.374 0.342 Total Phosphorus 0.1 0.2 0.031 0.024 0.03 (TP) Fluoride 1 1.0 0.05 0.05 0.05 Petroleum 0.05 0.05 0.02 0.02 0.02 Sulfide (S) 0.1 0.2 0.074 0.069 0.071

Source: EIA report.

28 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

3. Groundwater quality 83. Groundwater quality near the CHP plant site. Groundwater samples were taken from five sampling locations based on the sensitive receptor locations and they are shown in Figure 4-4. Samples were taken for three days (25–27 October 2012). Five sampling sites are shown in Table 4-6. Eighteen water quality parameters were analyzed and the results are shown in Table 4-7. Water quality of the five select sites meets Grade III of the PRC Groundwater Quality Standard (GB/T14848-93).

Figure 4-4: Groundwater sampling locations

Table 4-6: Groundwater Quality Monitoring Locations

Monitoring Direction with the Distance to the Depth Locations location # proposed CHP proposed CHP (m) (m) 1 Tianqi mineral water source North 50 9 2 Lindong village East 250 12 3 Baoensi South 3000 23 4 Yangzirong Martyrs' Cemetery South 2000 10 5 Proposed CHP site - 1000 20

Source: EIA report.

29 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table 4-7: Groundwater Quality Sample Results (mg/L, except pH and total coliform)

Monitoring locations Parameter Standard #1 #2 #3 #4 #5 pH 6.92 6.64 6.84 7.17 7.06 6.5~8.5 Total Hardness 142.9 109.6 120.9 165.1 235.3 ≤450 (CaCO3) Sulfate 13.82 34.64 20.64 10.97 56.89 ≤250 Chloride 27.89 31.8 31.52 22.88 54.21 ≤250 Cu 0.01 0.01 0.01 0.01 0.01 ≤1.0 Zn 0.005 0.005 0.005 0.005 0.005 ≤1.0 Volatile phenols 0.001 0.001 0.001 0.001 0.001 ≤0.002

NO3-N 0.02 0.02 0.02 0.02 0.02 ≤20

NO2-N 0.003 0.003 0.003 0.003 0.003 ≤0.02

NH3-N 0.045 0.094 0.068 0.087 0.102 ≤0.2 Fluoride 0.41 0.43 0.37 0.39 0.37 ≤1.0 Cyanide 0.004 0.004 0.004 0.004 0.004 ≤0.05 Hg 0.0002 0.0002 0.0002 0.0002 0.0002 ≤0.001 As 0.007 0.007 0.007 0.007 0.007 ≤0.05 Cd 0.001 0.001 0.001 0.001 0.001 ≤0.01

Cr6 0.004 0.004 0.004 0.004 0.004 ≤0.05 Pb 0.01 0.01 0.01 0.01 0.01 ≤0.05 Total coliform 3 3 3 3 3 ≤3.0 (CFU/L) Source: EIA report. 4. Acoustic Environment. 84. Noise monitoring was conducted at 4 locations at the boundaries of the proposed CHP site. Noise measurements were conducted on two consecutive days from 8–9 November 2012. The monitoring results are shown in Table 4-8. In accordance with PRC Acoustic Environmental Quality Standard (GB3096-2008), assessment areas for proposed CHP plant are classified as Class II: 60 dB(A) in the day time and 50 dB(A) at night .

Table 4-8: Acoustic Environment [dB(A)]

8/11/12 9/11/12 Locations Day Night Day Night East of CHP site 49.3 40.9 48.6 38.5 South of CHP site 54.1 44.6 56.3 45.1 West of CHP site 46.5 42.1 47.1 37.8 North of CHP site 53.1 45.5 55.3 45.1

Source: Environment impact assessment report. 85. Special Protection. The proposed CHP area contains no scenic spots, historical sites, natural reserves, or special sensitive areas. The proposed CHP site is far from residential areas, schools, hospitals, and other sensitive sites.

30 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

V. ANTICIPATED IMPACTS AND MITIGATION MEASURES

A. Expected Positive Impacts

86. Environmental and climate change impact. When proposed Hailin subproject switches to more energy efficient centralized heating system from heating supply of inefficient small heat-only boilers (HOBs) and household stoves, it will save standard coal of

34,000 tons per year are: 89,000 tons of CO2; 227.7 tons of SO2; 793 tons of NOx.

87. Gender impact. The project will bring positive impacts on females in (i) access to cleaner, safer, and reliable heating system, (ii) reduction of domestic chore workload for space heating by one hour per day, (iii) reduction in incidence of respiratory diseases related to indoor air pollution, and (iv) reduction in carbon monoxide poisoning and fire accidents. The project also will safeguard the livelihood of poor, female-headed households by providing heating assistance from the local government.

B. Screening of Potential Impacts

88. The potential environmental impacts were identified and screened during the addendum to the IEE preparation. The relative significance of potential impacts from the activities of the new proposed subproject was identified. More detailed further assessments were performed for major, critical, and specific impacts. Applicable and specific requirements by the PRC EIA laws, regulations and ADB SPS 2009 were considered carefully in assessing the environmental impacts from the subproject activities. 89. The screening process showed that during the construction phase, the major negative environmental impacts are associated with potential soil erosion, construction noise and fugitive dust emissions during construction of the CHP plant. During the operation phase, the major negative environmental impact is pollutant emission from the CHP plant. There are also some noise impacts from the CHP plant as well as from coal trucks. 90. The impacts were grouped under three general categories: physical, biological and socio-economic. Impacts during the design, 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 subproject itself; (ii) induced impacts – resulting from activities arising from the subproject, but not directly attributable to it; and (iii) cumulative impacts – which in combination would exert significant additional influences.

C. Potential Impacts before Construction

91. Land acquisition. The land acquisition was started in 2012 by Hailin government for industry usage. A total of 140,000 m2 of farm land was acquired from 34 farmers through the official land acquisition procedures. Since the land acquisition was completed a few years ago, only land acquisition due diligence was conducted to confirm the relevant facts and resettlement plan implementation.

92. Loss of cultural heritage and protected species. Since the land was agriculture

31 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

land, no cultural heritage or archaeological sites are recorded on lands that will temporarily or permanently be lost. No rare and endangered species will be directly impacted by the proposed subproject. 93. However, construction activities may have the potential disturbance of unknown underground cultural relics, although none have been identified in the subproject city 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 construction. The mitigation measures will be immediate suspension of construction activities if any archaeological or other cultural relics are encountered. The local relic management authorities, as well as the PMO and IA will be promptly notified, and construction will resume only after thorough investigation and with the permission of the appropriate authority.

94. Mitigation measures during detailed engineering design. Mitigation measures during detailed engineering designs to minimize the direct and induced impacts are as follows: (i) The proposed CHP plant site will be carefully reconfirmed to avoid or minimize potential adverse impacts on the surrounding environments and communities; (ii) Environmental mitigation measures indicated in this addendum, the domestic EIA and the EMP shall form part of the design documents and bidding documents for the proposed subproject, and shall be included in contract documents for civil constructions and equipment installations. All contractors shall 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 EIA; and (iv) The location of the proposed CHP plant, based on the preliminary selection during the feasibility study, shall be reconfirmed and designed as far as possible from sensitive environmental areas, such as schools, hospitals, residential buildings, among others.

D. Potential Environment Impacts and Mitigation Measures during Construction

95. Climate change impact. The proposed project will have positive impact from climate change point of view as the project will contribute net greenhouse gas (GHG) emission reduction. Since the project will replace existing small HOBs and home heating stoves that are very low in terms of energy efficiency. To provide heat to the same floor area, CHP technology will provide significant energy savings. Specifically, it will save standard coal of

34,000 tons per annum which is equivalent of 89,000 tons of CO2.

96. Impacts on soil. The Hailin subproject could affect the soil in the proposed CHP plant construction area 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 proposed CHP plant, as well as

32 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

construction of CHP plant 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 CHP plant. Soil contamination may result from the inappropriate transfer, storage, and disposal of petroleum products, chemicals, hazardous materials, liquids, and solid waste during the constructions. 97. The construction of the CHP plant will generate surplus spoil after maximizing reuse of spoil on-site. Surplus spoil can be used off-site by coordinating construction; The remaining surplus spoil should be transported to suitable spoil disposal sites approved by Hailin local authorities. The spoil disposal site must be identified, designed, and operated to minimize impacts and maximize land stability. Approved spoil disposal site will be identified during detailed design for the subproject and defined in the construction contractors’ tender documents. The spoil disposal site will be restored and re-vegetated at the conclusion of disposal activity. The final height and shape of the 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. 98. Major mitigation measures for control of soil erosion, soil contamination, and other geologic hazards due to construction activities are as follows: (i) Construct intercepting ditches and drains to prevent runoff entering construction site, and divert runoff from site to existing drainage; (ii) Limit construction and material handling during periods of rains and high winds; (iii) Stabilize all earthwork disturbance areas within maximum 14 days after earthworks have ceased at the site; (iv) Plant grass in the CHP plant to protect ground and prevent soil erosion; (v) Appropriately set up temporary construction camps and storage areas to minimize land area required and impact on soil erosion; (vi) Properly store petroleum products, hazardous materials and wastes on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination; (vii) Remove all construction wastes from the site and transport them to approved waste disposal sites only; and (viii) Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures.

99. Surface and ground water pollution. Site preparation for the CHP plant near surface water bodies, will disturb surface soils and that could 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

33 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

such a way to prevent spillage or leakage.

100. Construction wastewater. Wastewater produced during construction will come from washing aggregates, 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 will be equipped with water collection basins and sediment traps; and (ii) Septic treatment and disposal systems will be installed at construction camps along with proper maintenance procedures. 101. Water quality parameters, such as suspended solid (SS), COD, oil, and grease in Hailang River in Hailin city will be monitored by Hailin EMS during construction in accordance with the EMP monitoring program to identify and confirm results of the impact assessment and effectiveness of adopted mitigation measures.

102. 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. Since noise levels may be severe, the operation will be temporary and localized. The major construction machinery noise testing values are shown in Table 5-2. Table 5-2: Testing Values of Construction Machinery Noise

Distance between Maximum Sound No. Machine Type Reference Model Measuring Site and Level Machinery (m) L max (B) 1 Wheel Loader Model XL40 5 90 2 Grader Model PY160A 5 90 3 Vibrating Roller Model YZJ10B 5 86 Two-wheeled 4 Model CC21 5 81 Two-Vibrating Roller 5 Tire Roller Model ZL16 5 76 6 Bulldozer Model T140 5 86 7 Tire Hydraulic Excavator Model W4-60C 5 84 8 Paver (Germany) VOGELE 5 87 Generating Set (two 9 FKV-75 1 98 sets)

Source: Ministry of Communications. 2006. Specifications for Environmental Impact Assessment 103. 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:

Ri Li  L  20 lg  L 0 R 0

Where, Li and L0 are equipment noise sound levels at Ri and R0, respectively, ΔL is additional

34 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

decrement produced by barriers, vegetation and air.

104. As for the impact of multiple construction machineries on a certain future position, sound level superposition is needed: L L  10 lg  10 1.0  i

105. 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 5-3. The impact scope of different equipment is indicated in Table 5-4. Table 5-3: Noise Values of Construction Machineries at Different Distances dB(A)

Machinery Distance to 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 87 81 75 69 65.5 63 61 57.5 55 51.5 Equipment

Source: U.S. Federal Highway Administration (FHWA) Table 5-4: 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) 106. It is estimated that noise intensity during construction will be in the range of 75–90 dB(A) near the source. In such cases, they will still meet the PRC standard of Noise Limits

35 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

for Construction Sites (GB12524-2011) of up to 50-60 m away from the source during the day and 200-300 m at night. In addition, construction materials and waste will be transported to and from the construction sites frequently during the average 10-hour workday for the construction season. As a result, urban residential areas and villages through which haul roads pass and are adjacent to construction sites will frequently experience noise at 80–85 dB(A). Transportation of the construction materials and waste will be restricted between 10 pm to 7 am. Activities with intensive noise levels will not only have an impact on the residents, but may also cause injury to construction workers operating the equipment if they do not use appropriate protection devices (PPE).

107. Mitigation measures for noise impact. These mitigation measures are essential for construction activities to meet the domestic construction site noise limits and to protect sensitive receptors: (i) Ensure that noise levels from equipment and machinery conform to the national standards, and properly maintain machinery to minimize noise; (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 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 (GRM) 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 or certified third-party organization. If noise standards are exceeded, equipment and construction conditions shall be checked, and implement mitigation measures to rectify the situation; and (viii) Conduct regular 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.

108. Vibration impact and mitigation measures. Significant vibrations are expected during structure piling construction for the CHP plant’s foundation. 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

36 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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, which will effectively reduce the vibration impact. 109. Impact on air quality and mitigation measures. The Hailin 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 areas; (iii) Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission; (iv) Covering materials during truck transportation, in particular, the fine material, to avoid spillage or fugitive dust generation; (v) Ensure vehicle emissions are in compliance with PRC standards of GB18352-2005, GB17691-2005, GB11340-2005, GB2847-2005, and GB18285-2005; and (vi) Maintaining vehicles and construction machineries to a high standard to ensure efficient running and fuel-burning and compliance with the PRC emission standards.

110. Solid waste and mitigation measures. Construction waste could have adverse impacts on the surroundings. Work forces of contractors will generate solid wastes of 0.2-0.5 ton per day. Inappropriate waste storage and disposal could affect soil, groundwater, and surface water resources, and hence, public health and sanitation. Mitigation measures are: (i) Establish temporary storage for solid wastes away from water bodies or other environmentally sensitive areas, and regularly haul waste to an approved landfill or designated dumping site; (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;

37 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

(iii) Hire a contractor 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 the construction site.

111. Other hazardous and polluting materials: A construction material handling and disposal protocol that includes spill emergency response will be prepared and implemented by contractors. 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 shall 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 shall be properly carried out so that spilled materials do 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 shall be properly licensed. They will follow proper protocol for transferring fuel and the standard of Transportation, Loading and Unloading of Dangerous or Harmful Goods of JT 3145-88.

112. 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 shall be taken during and after construction for the protection of small animals, reptiles, and birds of common species that live in vegetated CHP plant and roadside area. The potential impacts of the subproject 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 as much as possible where no construction activity is planned, or temporarily preserve vegetation where activity is planned for a later date; (ii) 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; (iii) Remove trees or shrubs only as a last resort; and

38 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

(iv) In compliance with the PRC’s forestry law, undertake compensatory planting of an equivalent or larger area of affected trees and vegetation.

113. Community disturbance and safety. The potential impacts include traffic congestion, public safety from construction activities and heavy vehicles and machinery traffic, and unexpected interruptions in 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. 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) Requiring 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 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) Planning construction activities so as to minimize disturbances to utility services. Land will be reinstated to its original condition after construction; and (iii) Implementing 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.

114. Occupational health and safety. Contractors shall be required by the provincial PMO and the IA 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 will be provided; (v) adequate supervision of safe work systems will be 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 fire-fighting systems will be 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 guidelines; and (ix) training for workers and appropriate incentives to use and comply with health and safety procedures and utilizing PPE shall be provided. 115. All contractors shall be required to implement effective occupational health and safety measures for their workers, including safe drinking water, efficient sanitation,

39 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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. Environmental Impacts and Mitigation Measures during Operation

116. There are some environmental impacts from the Hailin CHP plant during operation. The potential impacts may include emissions from coal storage and handing, 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 CHP plant will not use any polychlorinated biphenyls4 or asbestos in compliance with the requirements of the PRC’s standards and regulations.

117. Emissions from Coal Storage and Handing. The proposed CHP plant has a closed-type coal stockpile on the west side of the plant, which is designed to store about 3.92×104t coal for 3 boilers under normal operation for 21 days. The proposed storage and handling of the coal would be potential sources of particulate emissions during operation:  Unloading of coal at the unloading facility, large drop height between the coal wagons and conveyor;  Conveyor system feeding the coal yard and the boilers. Releases at the loading and delivery ends of the conveyor. 118. In order to minimize dust and particulate matter from the handing and storage of coal, the following measures should be applied:

 Use of cleaning devices for conveyor belts to minimize the generation of fugitive dust;  Use of enclosed conveyors with well designed, robust extraction and filtration equipment on conveyor transfer points to prevent emission of dust;  The transfer stations, coal crusher room, coal bunkers and other local dust spots are equipped with dust removal unit;  Frequent utilization of water to suppress coal dust on coal yard, loading and delivery ends of the conveyor; 119. Integrated emission standard of air pollutants (GB16297-1996) will be followed for dust emission from coal stockpiles and ash yards. In addition to the mitigation measures described above, the IA will provide further assessment and monitoring required to ensure that the impacts from coal storage and handling are kept at an acceptable level. It recommended that a Dust Monitoring and Action Plan (DMAP) is developed and undertaken prior to the operation of the proposed Project. The purpose of the DMAP is to establish a monitoring protocol for deposited dust and atmospheric concentrations for PM10 and PM2.5. It is expected that the DMAP should identify the locations, type of equipment and duration to undertake dust, PM10 and PM2.5 monitoring and a set of trigger levels which, if exceeded will result in a review of existing mitigation measures followed by additional mitigation measures, or modification.

4 Standard for Pollution Control from polychlorinated biphenyls (GB 13015-91).

40 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

120. Pollutant emissions. Coal combustion produces emissions of some pollutants such as SO2, NOx, flue dust including total suspended particulate (TSP) and PM10, and CO2, which is a major greenhouse gas. The emissions of these pollutants from the Hailin CHP plant will be minimized by using advanced boiler technology and control measures, including using bag filters with a dust removal efficiency of more than 99.96%. The pollutant emission concentrations will comply with the emission standard of air pollutants for thermal power plants (GB13223-2011).

121. Sulfur dioxide (SO2) emissions. 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. Hailin CHP plant will utilize limestone injection inside the CFB boiler to control SO2 emission and the estimated control efficiency is about 80%. The SO2 emission will comply with GB 13223-2011.

122. Nitrogen oxides (NOx) emissions. NOx is one of the primary pollutants emitted during coal combustion. NOx emissions associated with combustion sources such as boilers will typically comprise approximately 90-95% NO and 5-10% NO2 at source. The NO oxidizes in the atmosphere in the presence of sunlight, ozone and volatile organic compounds to form NO2. 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. There are various techniques available for estimating the proportion of the NOx that is converted to NO2. A 50% conversion of NOx to

NO2 has been assumed for short term averaging periods (20 minute and 1 hour), and 70% conversion for long term averages (24 hour and annual). This approach is considered appropriate based on guidance from the United Kingdom’s Environment Agency (EA) and United States Environmental Protection Agency (USEPA). The Hailin CHP plant will utilize selective catalytic reduction (SCR) to minimize the emission of NOx pollutants and the NOx removal efficiency is more than 70%. The NOx emission will comply with GB 13223-2011.

123. Total suspended particulate (TSP) emissions. 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. 124. 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 impacting with the wall of the bronchi when they are unable to

41 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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. 125. 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. 126. Due to a rapid economic development, industrial expansion and urbanization during the last few decades in China, increasingly occurrence of haze or smog episodes characterized by the high fine particulate matter (i.e. with aerodynamic diameters not larger than 2.5 μm, or PM2.5) levels and reduced visibility has been reported in national-scale China.

PM2.5 concentrations are generally higher in the cities located in the North regions than those observed in the South regions in winter, where has the higher density of coal consumption (i.e. heating supply). High occurrence of extreme haze episodes in recent years not only leads to a global concern due to its adverse health effects, but also triggers the Chinese government to tackle the serious air quality problem especially PM2.5 pollution. In February 2012, the Chinese Ministry of Environmental Protection (MEP) released the third revision of the “the national ambient air quality standards” (NAAQS) (GB3095-2012), in which PM2.5 is included into the NAAQS for the first time. The new standards took effect on 1 January 2016.

127. Applicable ambient air quality guidelines and standards. The quality guidelines and standards are fundamental to effective air quality management, providing the link between the source of atmospheric emissions and the user of that air at the downstream receptor site. The ambient air quality limits are intended to indicate safe daily exposure levels for the majority of the population, including the very young and the elderly, throughout an individual’s lifetime. Such limits are given for one or more specific averaging periods, typically one-hour average, 24-hour average, and/or annual average. The standards stated in the PRC Ambient Air Quality Standard (GB3095-2012) are adopted for the subprojects’ environmental assessment (Table 5-5).

42 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table 5-5: PRC Ambient Air Quality Standard (GB3095-2012) and WHO Guidelines

WHO Ambient Air Quality Ambient Air Standard Pollutant Average Time Guidelines Class I Class II Yearly N/A 20 60 SO2 3 24-hour 20 50 150 (μg/m ) Hourly N/A 150 500 Yearly 40 40 40 NO2 3 24-hour N/A 80 80 (μg/m ) Hourly 200 200 200

CO 24-hour N/A 4 4 3 (mg/m ) Hourly N/A 10 10

O3 24-hour N/A 100 160 3 (μg/m ) Hourly N/A 160 200

PM10 Yearly 20 40 70 3 (μg/m ) 24-hour 50 50 150

PM2.5 Yearly 10 15 35 3 (μg/m ) 24-hour 25 35 75

TSP Yearly N/A 80 200 3 (μg/m ) 24-hour N/A 120 300 Yearly N/A 50 50 NOX 3 24-hour N/A 100 100 (μg/m ) Hourly N/A 250 250

128. Stack Height Determination. The purpose of a stack height determination is to calculate the height necessary to ensure that emissions from a stack do not result in excessive ground level concentrations of air pollutants as a result of atmospheric downwash eddies or wakes which may be created by nearby structures or terrain. Nearby structures are normally the dominant causes of any atmospheric downwash, eddies or wake effects. For proper dispersion to occur it is necessary for the emissions to be released well above the top of nearby structures. Dispersion of emissions from a stack is also determined by the emission characteristics of the source, particularly their temperature and speed when they exit the stack, and the local wind speed. The dispersion speed of emissions from the stack is 15.45 m/s for this project, higher than the wind speed 2.6m/s when the stack is 150 m high. The results of the stack height determination concluded that a stack height of 150 m was appropriate. 129. The most important meteorological parameters governing atmospheric dispersion of pollutants are wind direction, wind speed and atmospheric stability as described below: i) Wind direction determines the sector of the compass into which the plume is dispersed;

43 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

ii) Wind speed affects the distance which the plume travels over time and can affect plume dispersion by increasing the initial dilution of pollutants and inhibiting plume rise; and iii) Atmospheric stability is a measure of the turbulence of the air, and particularly of its vertical motion. It therefore affects the spread of the plume as it travels away from the source. 130. Expected emission concentration. Stack emissions from the CHP plant in Hailin city was calculated based on design parameters. After calculation, the estimated maximum emission concentrations at the stack for SO2, flue dust, and NOx from the CHP plant in Hailin subproject meet the PRC national standard of GB13223-2011 (Table 5-5). Table 5-5: Expected Pollutant Emissions Concentrations at Stack

Hailin CHP Plant WB EHS GB 13223 Pollutant 5 Emissions Guidelines Standard Flue dust (mg/m3) 29.18 50 30 3 SO2 (mg/m ) 87.6 900 100 3 NOx (mg/m ) 90 510 100

Source: Environmental impact assessment reports 131. Air dispersion modeling results. Air pollutants dispersion modeling was performed to predict ground level concentration increases due to the emissions from the CHP plant. The AERMOD atmospheric dispersion model was used for predicting air pollution impact on the local ambient air qualities. The AERMOD modeling was developed by American Meteorological Society (AMS) and United States Environmental Protection Agency (EPA) Regulatory Model Improvement Committee in early 1990s which was designed for short-range (up to 50 kilometers) dispersion of air pollutant emissions from stationary emission sources. It is a steady-state plume model incorporating dispersion based on planetary boundary layer turbulence structure and scaling, and it accommodates surface and elevated emission sources as well as simple or complex terrain. The AERMOD model was also recommended by the PRC’s Environmental Assessment Impact Assessment – Atmospheric Environment (HJ2.2-2008) and the EIApro2008 software was used for the dispersion modeling exercise.

132. The dispersion modeling predicted average hourly, 24-hour ground level concentrations (GLCs) of PM10, SO2 and NO2 over a 8 km ×8 km area around the CHP plant. The modeling covered a full heating season and used the estimated pollutant emission and worst case meteorological conditions for atmospheric dispersion. It was assumed that all

NOx were converted to NO2. 133. The modeling results main pollutants at different average periods are presented as concentration contour maps as shown in Figures 5-1 through 5-5. The maximum predicted average hourly, 24-hour GLCs of PM10, SO2 and NO2 are shown in Table 5-6. The results indicate that the GLCs of SO2, PM10 and NO2 within the impact area all meet the Class II of the PRC Ambient Air Quality Standards (GB3095-2012), the maximum predicted impacts

5 Emission standard of air pollutants for thermal power plants (GB13223-2011)

44 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

from the subproject are acceptable.

Figure 5-1: Hourly average SO2 concentrations around the CHP site

Figure 5-2: Daily average SO2 concentrations around the CHP site

45 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 5-3: Hourly average NO2 concentrations around the CHP site

Figure 5-4: Daily average NO2 concentrations around the CHP site

46 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 5-5: Daily average PM10 concentrations around the CHP site

47 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table 5-6: Predicted Maximum GLCs within Impact Area

Max Predicted Average Ambient Air Compliance Location Pollutant 3 Concentration Standard (mg/m ) 3 Time (mg/m ) Status Hourly 0.5 0.1285 In compliance SO2 Daily 0.15 0.04325 In compliance Lindong Hourly 0.2 0.07019 In compliance Village NO2 Daily 0.08 0.01642 In compliance

PM10 Daily 0.15 0.11929 In compliance Hourly 0.5 0.11329 In compliance SO2 Daily 0.15 0.02229 In compliance Guangrong Hourly 0.2 0.06136 In compliance Village NO2 Daily 0.08 0.01787 In compliance

PM10 Daily 0.15 0.12763 In compliance Hourly 0.5 0.13476 In compliance SO2 Daily 0.15 0.01946 In compliance Liangzhong Hourly 0.2 0.07285 In compliance Village NO2 Daily 0.08 0.01169 In compliance

PM10 Daily 0.15 0.14192 In compliance Hourly 0.5 0.10653 In compliance SO2 Daily 0.15 0.01723 In compliance Hejia Village Hourly 0.2 0.05886 In compliance NO2 Daily 0.08 0.01057 In compliance

PM10 Daily 0.15 0.11168 In compliance Hourly 0.5 0.12901 In compliance SO2 Daily 0.15 0.01944 In compliance Yangzirong Martyrs' Hourly 0.2 0.0707 In compliance Cemetery NO2 Daily 0.08 0.0063 In compliance

PM10 Daily 0.15 0.09192 In compliance Hourly 0.5 0.126 In compliance SO2 Daily 0.15 0.03704 In compliance Zirong elementary Hourly 0.2 0.07462 In compliance school NO2 Daily 0.08 0.01341 In compliance

PM10 Daily 0.15 0.13382 In compliance Note: Ambient Air Quality Standard (GB3095-2012) Source: Environmental impact assessment report

134. If the particulate matter removal system and the desulfurization system fail, the SO2 and PM10 results are shown in Table 5-7, both SO2 and PM10 will not meet the PRC national standard of GB13223-2011. Thus, it is critical that the pollution control systems must be maintained regularly to ensure they operate in good conditions.

48 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table 5-7: SO2 and PM10 Concentration When Control Systems Fail

Concentration Standard Maximum hourly Ambient Air System fails Pollutant 3 3 3 (mg/m ) (mg/m ) GLC (mg/m ) Standard (mg/m3) desulfurization SO 438 100 0.0731 0.5 system fails 2 dust removal PM 16,232 30 2.707 0.45 system fails 10

Source: Domestic EIA report 135. In addition to the monitoring required to assess the operation of the coal storage and handling above, WB Guidelines require that if impacts are greater than 25% of relevant short term ambient standards typically a minimum of two continuous ambient air quality monitoring, stations are required to be installed in the vicinity of the plant. The details of the monitoring station requirements can be confirmed at a later stage, however, it is recommended that, as a minimum, the station should:

i) Continuously monitor ambient concentrations of NOx and NO2 in accordance with internationally recognized approach;

ii) Continuously monitor ambient concentrations of SO2;

iii) Continuously monitor ambient concentrations of PM10 iv) Include a dispersion model ready meteorological station in accordance with internationally recognized guidance which can monitor wind speed, direction and temperature; v) Be subject to regular calibration procedures and audits to ensure proper function; vi) Be located offsite, at the point of maximum impacts predicted by the dispersion modelling where there is suitable population exposure. 136. Wastewater discharge from the CHP plant during operation. There will be wastewater generated from the Hailin CHP plant, including chemical water treatment system drainage, oily wastewater, the main plant flushing wastewater, coal handling system drainage, boiler cleaning wastewater and domestic sewage, etc. All waste water from the site will be collected and treated prior to being discharged to the city sewage system. Inappropriate management of wastewater has the potential to negatively impact surface and groundwater quality. To mitigate potential impacts, the following measures will be taken: (i) The CHP plant’s sanitation facilities will discharge to the municipal sewer networks that meet relevant PRC standards; (ii) Runoffs from the CHP plant 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 Hailin EPB approved landfills; (iii) Chemical wastewater will be sourced from the boiler chemical dosing and sampling system, the demineralized water treatment system and the boiler blow down drain. If needed this water will be treated with sodium hydroxide

49 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

(NaOH) and hydrochloric acid (HCl) to neutralize the water and after meeting the necessary quality,it will then be discharged to the water recycling pond or into the city sewerage system. (iv) For areas with oily wastewater discharges, oil-water separators will be installed before discharging to the sedimentation basins; (v) Storm water from the ash yard will be collected in the ash yard storm water point and then discharged to a sand filter by a pump. Water that has been clarified through the sand filter will be transferred to a pH regulating tank where HCl and NaOH will be used as treatment chemicals. The treated water will be discharged to the site boundary or ash yard for use as a dust suppressant. and (vi) 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.

137. Noise. Permanent operational noise impacts are expected to arise due to the project equipment as Table 5-8 shows. The noise levels expected from various noise generating sources in the CHP plant vary from 95-130 dB(A). Acoustic enclosures will be provided wherever required to control the noise level to below 85 dB(A). Personal protective equipment (PPE) shall be provided to the workers if it is not possible to technically meet the required noise levels. The buildings and proposed greening area in the CHP plant will work as green mufflers to attenuate the noise level dissemination outside the plant boundaries. 138. To mitigate the noise impact, the following soundproof equipment will be installed in the CHP plant.

Table 5-8: Noise Mitigation Measures for Major Equipment dB(A)

Original Lasting time 1 m from the Equipment Frequency Mitigation Measure Noise hours/day equipment Factory workshop sound Coal crusher 110 Continuous 24 85 insulation Draft fan 97 Continuous 24 Sound-proof shield 82 Primary air fan 110 Continuous 24 Sound-proof shield 90 Air Factory workshop sound 95 Continuous 24 80 compressor insulation Water feed Factory workshop sound 95 Continuous 24 80 pump insulation Desulfurization Factory workshop sound 95 Continuous 24 80 pump insulation Desulfurization Factory workshop sound 105 Continuous 24 85 fan insulation Boiler relief 130 Occasional 1 Muffler 100 valve

Source: Environment impact assessment report 139. Noise from the CHP plant. The CHP plant shall have a buffer distance of at least 20 m from the nearest household and will use low-noise water circulating pumps with noise

50 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

levels controlled to within 55 dB(A) at a distance of 1 m from the pump house; According to the model, noise levels at the boundaries of the CHP plant are gained after calculating the impact scope of equipment noise during operation. Noise levels at the boundary of CHP plant is estimated between 35.6dB(A)~42.1dB(A) as Table 5-9 shows, it meets the class II of the emission standard for industrial enterprises noise at boundary (GB12348-2008).

Table 5-9: Predicted plant boundary noise level [dB(A)]

dB(A) GB12348-2008 Standard Boundaries Ld Daytime Night East boundary 41.8 South boundary 42.1 60 50 West boundary 35.6 North boundary 38.9

Source: Environment impact assessment report 140. Noise from the boiler relief valve is a single point occasional noise, after installation of the muffler, the noise at the boundary can be controlled within 60 dB(A) when the boiler relief valve works as Table 5-10 shows. It meets the class II of the emission standard for industrial enterprises noise at boundary (GB12348-2008) as well. Hence there will be no operational noise impact from this CHP plant during operation. The operator 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.

Table 5-10: Predicted plant boundary noise level when boiler relief valve works [dB(A)]

dB(A) GB12348-2008 Standard Boundaries Ld Daytime Night East boundary 52.4 South boundary 54.0 75 65 West boundary 49.4 North boundary 53.7

Source: Environment impact assessment report

141. Occupational health and safety. Since the CHP plant is operating at relatively low temperature and pressure compared to industrial processes, it is safe to operate the system under normal conditions. The operator shall: (i) conduct regular inspections of the CHP system and repair defects promptly; (ii) provide occupational health and safety training to all workers; (iii) provide PPEs to workers depending on their job responsibilities and associated exposures; and (iv) comply with the PRC State Administration of Worker Safety Laws and Regulations.

142. Coal ash storage, transportation and disposal. The proposed CHP plant has a closed-type coal ash storage silo, which is designed to store about 10-15 days ash under

51 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

normal operation. The IA has signed a contract with Hailin Lvyou Co., Ltd, that will buy the ash from the CHP plant for production of construction raw material. The Hailin Lvyou Co. is only about 300 meters away from the CHP plant and it has two ash storage and one slag storehouse. The size of single ash storage is Φ = 50m, H = 60m, total volume of the two ash storage is 235.5 × 103 m3, and the storage capacity of pulverized coal ash is 282.6 × 103 t; slag storehouse occupies 20 × 103 m2 with 10m height, stored slag amount is 200 × 103 t. Ash produced by this CHP plant is estimated at 177.4 × 103 t annually. Therefore, the Hailin Lvyou Co. is fully capable of taking all ask generated from the CHP plant and storing the ash in its facility. 143. Dry ash is transported through positive pressure pneumatic ash conveying system. Slag is transported with mixed with modest amounts of water (conditioned) during loading into a truck to prevent dusting and make handling easier. In some situations, the slag is not mixed with water, but instead loaded directly into covered trucks or pneumatic tank trucks for transport. The ash storage facilities in the CHP plant are only temporary holding locations, from which the material is later transported to Hailin Lvyou Co., Ltd by covered trucks. 144. Abnormal / Emergency Conditions. During operation, the largest waste stream will be ash generated by the combustion process. If not handled and stored appropriately, ash will have the potential to impact air quality. Abnormal and emergency emission impacts from the ash storage are expected to include not wet rolling for the ash as required time manner or the original gray surface destroy due to inappropriate ash field management. Emissions associated with these events have not been obtained, the magnitude of emission impact from the ash storage is predicted as there is no covering or handing of the ash. The results are shown in Table 5-11:

Table 5-11: Predicted emissions from the ash storage (mg/m3)

Wind speed 5 m/s 6 m/s 10 m/s Distance 100m 9.684 23.66 289.17 200m 3.347 8.18 99.95 300m 3.023 7.39 90.28 400m 2.039 4.98 60.89 500m 1.084 2.65 32.36 600m 0.658 1.61 19.66 700m 0.554 1.35 16.54 800m 0.172 0.42 5.13 900m 0.128 0.31 3.83 1000m 0.111 0.27 3.32 1100m 0.166 0.41 4.97 1200m 0.085 0.21 2.53 1300m 0.075 0.18 2.24 1400m 0.068 0.17 2.03 1500m 0.058 0.14 1.73

52 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Wind speed 5 m/s 6 m/s 10 m/s Distance 1600m 0.068 0.17 2.03 1700m 0.073 0.18 2.19 1800m 0.069 0.17 2.07 1900m 0.042 0.10 1.25 2000m 0.055 0.13 1.63 2100m 0.035 0.085 1.04 2200m 0.032 0.079 0.97

Source: Environment impact assessment report 145. Therefore, to strengthen the management of ash field is the key to reduce the environmental impact of dusty dust field. The management personnel of ash field should strictly carry out the requirements of ash field water spray timely and dust reduction according to weather conditions, which can effectively prevent secondary dust.

F. Environmental Impacts from Small Boiler Demolition and Mitigation Measures

146. Waste from demolition of small boilers and stoves. Demolition of the existing 56 small boilers and 10,000 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 site specific plans will be developed to address any site contamination. Contaminated spoil will be transported to suitable spoil disposal sites 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. 147. If homeowners who choose to decommission their stoves themselves, they should be given access to the services of the waste management companies noted above. 148. Before demolishing the small boilers, a survey and investigation of the small boiler sites will be conducted by the IA under the supervision of Hailin EPB. The assessment will include contamination status of soil, groundwater, structures and surface water bodies if

53 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

nearby. Base 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 IA under the supervision of Hailin EPB.

149. Asbestos from demolition of small boilers. Asbestos has been banned to be used in the boiler and heating sectors in the PRC in 1990.e Thermight be asbestos impact during the small boiler demolishing because the earliest smallboiler was put in operation in 1984. Due diligence was conducted from September to October6 201and the results are summarized as follows: (i) The average rated service life for small boilers is about2-15 1years, depending on boiler quality, maintenance and soft water quality. According to the survey, most of the small boilers were installed after 2000 and average service life was less than 10 years due to poor boiler quality, poor soft quality, water lack of maintenance and discontinuous operation (operation during theeating h season only and rusting during the six months non-operation period).he oldestT small boilers surveyed were put in operation 32 years ago. (ii) Before the mid-1980s, asbestos and asbestos-containing erials mat (ACM) were used in the sectors of the boiler and chemical industries. Around 1990, the classification of asbestos as a human carcinogen was widely known in the PRC. Many local labor bureaus, EPBs and public health bureaus issued official documents to prohibit the use of asbestos in boiler and other industries. Meanwhile, several alternative cheap heat insulation materials, such as alumina silicate fiber, compoundsilicate insulation material,and polyurethane insulation materials, were produced and available in the PRC.ince S then the asbestos and ACMs were never used in the boiler industry6. (iii) The document of the World Bank Group, “Good Practice Note- Asbestos: Occupational and Community Health Issues” indicated in section3.2 of “International Standards and National Regulations” that “Thermal insulation containing asbestos and sprayed asbestos for insulation and usticaco damping were widely used through the 1970s and should be looked forany inproject involving boilers and insulated pipes. Insulation dating fromefore b 1980 should be presumed to contain asbestos unless analyzed and found o”.not7 t 150. To avoid the unexpected risk from asbestos, the followingmitigation measures will be conducted during the demolition works.

(i) Asbestos risk assessment. When ACMs are identified and before they are removed, detailed risk assessment will be conducted by HailinPB Eunder the supervision of Harbin Hazardous Wastes Disposal Center (HHWDC). HHDMC is a licensed professional unit in Heilongjiang Province forsposal di of dangerous and hazardous wastes, including asbestos. The assessment will

6 The asbestos for manufacturing auto brake pads was officially prohibited in 2003. 7 The World Bank Group’s document “Good Practice Note: Asbestos: Occupational and Community Health Issues” indicated in section 3.2. “International Standards and National Regulations” page 6 (May 2009)

54 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

identify the presence, absence and amount of asbestos and ACM in each of the small boilers, and define an action plan for all small boilers, including labeling requirements, control mechanism (from elimination, removal or isolation to safe working practices), health and safety requirements, as well as a plan of action and procedures for disposal of the asbestos and ACM. The plan will be based on the World Bank EHS standards (April 2007) and the Good Practice Note “Asbestos: Occupational and Community Health Issues (May 2009)”.

(ii) Removal, transport and disposal. HHWDC will be responsible for the removal, transport and disposal of the asbestos and ACM. HHWDC shall identify, properly label and pack asbestos as well as demolition debris contaminated with asbestos during the deconstruction. Asbestos and ACM will be transported by HHWDC in sealed vehicles to the hazardous waste landfill in Harbin. The costs for the deconstruction of all other small boilers will be paid by the property owners of the small boilers in accordance with Environment Protection Law of the PRC.

(iii) Licensed contractor. A licensed demolition will be selected and it will be required to conduct risk assessment and prepare an asbestos management plan, including mitigation measures, the environmental, health and safety requirements during disposal of asbestos. The removal and disposal of ACM will be under the supervision of HHWDC.

(iv) Supervision. The Hailin EPB will supervise the deconstruction and transport process, with the support of the environmental specialist of the loan implementation consultants and HHWDC. The applicable domestic and international law and regulation for the demolishing and disposal of asbestos and ACM are: (a) PRC “Law on Prevention of Solid Waste Pollution” (April 1996); (b) PRC “Regulations of Hazardous Waste Management Permit” (July 2004), (c) the World Bank EHS (Good Practice Note: Asbestos: Occupational and Community Health Issues); (d) WHO Policy and Guidelines; and (e) ISO/FDIS 16000-7: “Indoor air – Part Seven: Sampling strategy for determination of airborne asbestos fiber concentrations”.

(v) Occupational health and safety. Proper protective clothing and specific equipment shall be provided by HHWDC to the trained team of HHWDC and demolition contractors’ workers involved in demolishing and disposing of asbestos during removal of the small boilers.

(vi) Training. Training on handling and managing asbestos and ACM will be provided to Hailin EPB and deconstruction contractors. The training has been included in the training plan of the EMP, and budgeted accordingly.

(vii) Monitoring. Asbestos and ACM will be monitored after deconstruction of small boilers where asbestos has been identified during the risk assessment. The monitoring will consist of a visual inspection to confirm that all identified ACM have been removed, and a clearance monitoring of airborne asbestos to confirm safe working environment. HHWDC will conduct the visual inspection;

55 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

a licensed laboratory will be identified to conduct the clearance monitoring. The inspection and monitoring program for the asbestos and ACM has been included in the monitoring program of the EMP.

151. 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.), sell them to local waste recycling stations; (ii) Dispose of other demolition debris in municipal solid waste landfills or special construction and demolition debris landfills subject to approval by Hailin EPB; and (iii) It is strictly prohibited to throw waste into the river or other water bodies.

152. Unanticipated impacts during construction and operation. If any unanticipated impacts become apparent during project implementation, the executing agency will (i) inform and seek ADB’s advice; (ii) assess the significance of such unanticipated impacts; (iii) evaluate the options available to address them; and (iv) prepare or update the addendum to the IEE including EMP.

56 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

VI. ANALYSIS OF ALTERNATIVES

153. An analysis of project alternatives was undertaken during the feasibility stage. The primary objective of alternative analysis with respect to the environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental 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 included the no project alternative.

A. No Project Alternative

154. The “no project” alternative addresses the likely consequences of not undertaking the proposed project. The failure to develop the new CHP plant, urban residents in Hailin will still have to rely on dozens of inefficient and polluting small boilers and thousands of individual family coal-fired heating stoves due to lack of 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. Without the project, Hailin’s environmental conditions would deteriorate further along with rapid urbanization, economic development and population growth. 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. Therefore, the “no project” is not a reasonable option.

B. Heating Source Alternatives

155. Alternatives for heating source plants include 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.

156. CHP plant. CHP is defined as the simultaneous production of electrical power and heat in a single process. 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%. 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 recovery heat energy for space heating. In other terms, CHP grants significant energy saving in comparison with separate production of electricity (in a traditional power station) and heat (in a traditional district heating boiler house). Because the CHP makes extensive use of the heat produced during electricity generation, it can achieve overall maximum efficiencies of 87%.

157. Large-size heat-only coal-fired boilers have been widely used in the northern 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 shorter transmission pipelines and shorter construction period.

57 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

158. Small-size heat-only coal-fired boiler plants are no longer constructed in most medium-large cities in the PRC because they are energy-intensive (about 65% efficiency) and cause heavy pollutant emissions. Many PRC cities have started to demolish small boilers due to significant negative impacts on ambient air quality. 159. In comparison with other alternatives, the major advantages of the CHP include: (i) much higher efficiency resulting in significant coal saving; (ii) higher emission reduction efficiency, resulting in big contributions to local air quality improvement; (iii) reliable district heating supply due to professional operation and continuous monitoring of heat production and distribution; and (iv) lower investment and operation costs for the district heating systems. 160. The high efficiency achieved by using the CHP has significant environmental benefits, more specifically in terms of GHG reduction. In addition, due to efficient pollutant control equipment to be used in the CHP plant, the emissions of particulate matter (PM) including

PM10, NOx and SO2 from CHP plants are much less than other options. In addition, the CHP plant will reduce land use, capital investment and operation cost of the district heating system, which will minimize social and financial risks. The Hailin subproject will utilize CHP technology to produce steam that will be used to generated electricity first and then for district heating.

C. Alternative Fuels

161. A number of fuels can be used for producing hot water for spacing heating, 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.

162. Natural gas. Heilongjiang has abundant natural gas resources in oil field but no natural gas is available in or near Hailin for industrial use. The development and utilization of natural gas for district heating has been increasing in recent years but still limited in major cities in the PRC. 163. The cost of using natural gas for heating is much higher than that of coal for heating. Heilongjiang is still one of the under developed provinces in the PRC, therefore it is not economical to use natural gas for district heating in Hailin where natural gas resources are not readily available.

164. Solar. Three technologies exist in solar power (i) photovoltaic (PV), (ii) concentrated solar thermal (CST), and solar heat collector. To use PV for space heating, the generated electricity has to be converted to 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 energy. Thus the heat source requires back up heat sources such as coal, natural gas, heat pump, or electricity storage system, which does not make the district heating business economical. Electric air conditioning for space heating could be applicable only to area where winter cold is moderate. However it is not feasible in Northern provinces such as Heilongjiang where temperature drops to minus 40 and longer winter month for 6 months.

58 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

165. CST can convert energy from solar to heat directly. However it is not guaranteed to provide reliable heat supply during non-sunshine period in a day and night. Reliability of output can be mitigated by installing heat storage system and/or gas fired heating system for back-up. CST plant required 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. 166. As for solar heat collector, it is commonly used for hot water (below 50 degree Celsius) 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. Again, 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 can be applicable in cold climate region in Asia such as rural area in Mongolia where (i) existing coal fired heating system exists, (ii) peak load is less than 2 MW, and (iii) large abandoned land is available near by the urban town.

167. Wind. To utilize the wind energy for space heating, the generated electricity has to be converted to 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. Electric air conditioning for space heating could be applicable only to area where winter cold is moderate. However it is not feasible in Northern provinces such as Heilongjiang.

168. Geothermal. Geothermal heat can be utilized for space heating where geothermal heat is available near by the urban areas. Though Heilongjiang province has some geothermal resources, but Hailin does not have proven geothermal resources for space heating.

169. Biomass. Relatively large amount of biomass fuel is available in Heilongjiang as the province is the major agricultural production base in the PRC. However, there are some barriers in promoting biomass-based heating or cogeneration 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. It is not feasible to used biomass fuel in Hailin since there is no biomass fuel market available in local area.

170. Shallow ground geothermal. The initial investment of heat pump is much higher than CHP plant system. Heat pump also has other application limits. 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 agriculture and other underground facilities. Therefore, it is not suitable to install heat pump in

59 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

the existing urban area.

171. 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.

172. Coal bed methane. Coal reserves in Heilongjiang are not considered as high methane coals and thus coal bed methane and coal mine methane are not widely used for commercial purposes. Hailin is not close to a major coal reserve, therefore using coal bed methane for district heating is not feasible.

173. Coal. Heilongjiang province is coal rich province. Due to rich resources and affordability, coal has been the dominant fuel for space heating in the province 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 sulfur dioxide (SO2) and nitrogen oxide (NOx), and cleaner and efficient coal technologies such as CHP technology. 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 (maximum thermal efficiency of 46%). 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%. 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. The proposed Hailin subproject will utilize CHP technology.

D. Alternative Boiler Technologies

174. Three common types of hot water boiler technologies were assessed including (i) stoker-fired boiler; (ii) pulverized coal (PC); and (iii) fluidized-bed combustion (FBC).

175. 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 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.

176. 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 furnace uses finely powdered coal air in a gaseous torch. The coal is pulverized by crusting and attrition to convert it into particles smaller than 0.3 mm in diameter. Pulverized coal application permits combination firing. However, this furnace produces large amounts of fly ash because of pulverizing and the maintenance of the furnace is high. Moreover, the pulverizer requires a lot of power for pulverization of coal, which makes the process complicated and expensive.

177. Circulating fluidized-bed (CFB) boiler. The CFB works on a process wherein the

60 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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 an CFB boiler (800~900C) is significantly lower than both a stoker-fired boiler (1,000-1,200℃) and a

PC boiler (1,300~1,500C), this results in lower NOx formation and the ability to capture SO2 with limestone injection in the furnace.

178. The comparison of the three boiler technologies is in Table 6-1. Table 6-1: Comparison of the Three Boiler Technologies

Boiler Advantage Disadvantage  Cheaper than CFB and PC boilers;  Stable combustion, and convenient for  High cost for desulfurization; Stoker-fire operation and maintenance;  Low quality of ash (not boiler  Less auxiliary equipment; and suitable for utilization).  small installation space  High Efficiency (overall efficiency of over 85%);  Fuel Flexibility (ability to burn low grade fuel) ;  Low cost for desulfurization inside the furnace (SO2 can be greatly reduced by adding limestone into the furnace);  Higher investment;  Low NO emission due to low combustion x  Higher power consumption; temperature;  Higher operation cost; and CFB Boiler  Fast response and adjustment to load  Need more auxiliary fluctuations (30-110%); equipment.  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  Frequent maintenance for  Higher coal combustion efficiency; pulverizers;  Long continuous operation time;  Higher capital costs;  Lower operation and maintenance costs;  Limited for using low quality PC boiler  Low power consumption coal;  high automation;  Narrow adjustment for load  Stable combustion; and fluctuations (70-110%); and  Less abrasion and long service life.  Higher cost for desulfurization.

Source: Project preparatory technical assistance. 179. Based on the above analysis, the FBC boilers are proposed for the Hailin subproject mainly because of high efficiency and low costs for desulfurization and denitrization.

E. Alternatives of SO2 Emission Reduction Process

180. There are many technologies for SO2 emission control, which are classified as desulfurization inside the bed of CFB, wet, semi-dry, and dry FGD processes. New generations of desulfurization technologies have overcome many early disadvantages. They

61 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

are more efficient, clean, and cost-effective. These technologies are commercially mature and are offered by a number of suppliers in the PRC and the rest of the world.

181. Limestone desulfurization inside CFB. An outstanding advantage of a CFB boiler is that desulfurization in 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 desulphurization efficiency is high. Therefore, with appropriate Ca/S ratio and particle sizes of limestone, the desulphurization efficiency of 80% can to be reached when Ca/S ratio is about 2.2:1. Thus, a CFB boiler is comparatively fit for middle- and low-sulfur coals.

182. 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. 183. Flue gas is passed through a booster fan before entering the gas reheater. The gas then enters a pre-scrubber, where it comes into contact with recirculating ammonium sulfate slurry. The gas is cooled and becomes saturated with water vapor. The saturated gas leaves the pre-scrubber through a mist eliminator, and then enters the absorber, where it is scrubbed with sub saturated ammonium sulfate solution, which removes the required amount of SO2 from the flue gas. At the top of the absorber, the gas passes through two stages of de-misters to remove suspended water droplets. 184. 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. With high-sulfur fuels, the receipts from the sale of the sulfate can exceed the costs of operating the FGD plant. 185. However, there could be commercial risks associated with this process because the price of ammonium sulfate and ammonia are both very volatile. A potential risk arises from the need to store ammonia onsite, either in anhydrous form, or as a concentrated aqueous solution. This might cause serious difficulties in the planning stage at certain sites. These plants are expensive to build, and require a large “footprint” similar to a limestone gypsum plant. The process has the advantage that there is no wastewater discharge, and there are unlikely to be problems of scaling and blockage. At certain sites, particularly those burning high-sulfur fuels, or with the potential to do so, this process could be a very attractive one. However, it is unlikely to achieve widespread use because very few plants are needed to satisfy the market for ammonium sulfate fertilizer in a particular country or region.

186. 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 process is supplied by several vendors whose designs vary significantly – although the process chemistries are the same. 187. 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

62 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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. From here the gas is carried through the dust arrestor and the ID fan before being discharged through the stack. 188. 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. The water flow rate is controlled so as to achieve a temperature of approximately 20 ºC above the adiabatic saturation temperature of the gas. When firing bituminous coal, the humidified gas temperature would be ~70ºC. 189. The solid by-product from the process, including fly ash, is transported from the bottom of the ESP to a silo, prior to dispatch from site. As with other semi-dry systems producing a throw-away by-product, 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, compared with the CFB, means that additional costs are incurred twice: extra lime has to be bought and then a portion of this is disposed at a cost. 190. The process is very similar in many respects to the CFB process and the two are in competition. Approximately 85-90% SO2 removal with moderately high-sulfur fuels can be achieved by employing the process. 191. The spray-dry process is cheaper to install than a limestone gypsum plant, and similar to or slightly more expensive than a CFB-type plant. However, like the CFB, it can be relatively expensive to operate, depending on the relative costs of labor, power, lime, and limestone. The disposal cost of the residues produced also adds to the overall operating cost. 192. As a result, the spray-dry (wet scrubber) technology was selected for the Hailin CHP facility to control SO2 emissions.

F. Alternatives for Flue Gas Dust Removal

193. Three dust removal alternatives were considered in the FSRs including (i) ESP; (ii) bag filter; and (iii) wet particles scrubbers.

194. Electrostatic Precipitator (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.

195. Bag 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

63 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

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).

196. Wet particles scrubbers. A large number of variants (foam, film, spray columns, etc.) are available, 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, HF, and HCl. The control efficiencies of wet scrubber technologies are less than that of ESP or bag filter technologies. 197. It is concluded based on above analysis that bag filter and ESP are preferred technologies for particulate matter control. It was decided to select bag filter technology for the Hailin CHP facility.

64 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

VII. INFORMATION DISCLOSURE AND PUBLIC CONSULTATIONS

A. Information Disclosure

198. Information disclosure involves delivering information about a proposed project to the general public and to affected communities and other stakeholders, beginning early in the project cycle and continuing throughout the life of the project. Information disclosure is intended to facilitate constructive engagement with affected communities and stakeholders over the life of the subproject. It is also important to show how the concerns and comments from the stakeholders and affected persons (APs) have been addressed by the updated FSR, the project design, the EIA and EMP. 199. Information disclosure and public consultations were conducted in Hailin city during the course of domestic EIA preparations in accordance with the PRC Guideline on Public Consultation in EIA (2006). The information disclosure and consultations included: i) website information disclosures; ii) questionnaire surveys; and iii) informal visits to communities and households in Hailin by the EIA institute. Environmental information on the subproject is and will be disclosed as follows: (i) The domestic EIA Report of the subproject is available for review in the project city EPBs; (ii) This English addendum to the IEE will be available for review at ADB’s website (www.adb.org); (iii) Copies of the full EIA report will be made available upon request; and (iv) All semiannual environmental progress and performance reports will be available at www.adb.org during the implementation of the subproject.

B. PRC and ADB Requirements for Public Consultation

200. PRC Requirements. Relevant provisions in the PRC “Environmental Protection Law (2003)” and the “Regulations on the Administration of Construction Project Environmental Protection (No. 253 Order of the State Council)” require that an EIA study for a construction project shall solicit opinions from affected residents, as well as other organizations and stakeholders concerned. However, the requirements for public consultation are different from various sectors and projects. For a district heating supply project with an HSP construction, two rounds of public consultations are required.

201. ADB Requirements. ADB’s SPS has specific requirements for public consultation. In order to make key documents widely available to the general public, ADB’s SPS requires that borrowers take a proactive disclosure approach and provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders. The SPS also requires that the borrower carry out meaningful consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Meaningful consultation goes beyond information disclosure. It involves two-way communication between the borrower and the affected communities and stakeholders, and active participation of affected communities and stakeholders in project design and implementation.

65 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

C. Public Consultation for Hailin Subproject

202. Two rounds of public consultations for the Hailin subproject were conducted during the domestic EIA preparation process. The results of the consultations for the subproject are summarized below.

203. Web information disclosure. Two public consultation announcements were published on the official website of Hailin City Government. The first announcement was published on the website on 26 November 2012 and the second announcement was published on the Government’s website on 12 December 2012. The second announcement was also published in Mudanjiang Daily newspaper on 14 December 2012. The bulletins briefly introduced the purpose, scope, location, content, construction methods and implementation period of the subproject, as well as anticipated environmental impacts and suggested mitigation measures.

204. Survey questionnaire. In order to engage stakeholders and get their feedbacks on the project, questionnaire survey method was used to get public opinion on the Hailin subproject and its environmental impact. The public and stakeholders had a chance to express their opinions, concerns and suggestions regarding the subproject. The questionnaire focused on the public attitudes toward the CHP plant construction and site selections of CHP plant as well as impacts during both construction and operation, and the proposed mitigation measures. The multiple choice questionnaires were distributed to a random sample of 100 potentially affected persons from Hailin. 99% of the questionnaires were returned. The profiles of people participated the survey is summarized in Table 7-1 while the results of the survey is presented in Table 7-2. Table 7-1: Profile of Stakeholders Participated in the Survey in Hailin

Items Results Questionnaires distributed 100 Questionnaires responded 99 Age group distribution <30 12% 30-39 28% 40-49 32% >50 28% Gender ratio Male 56% Female 44% Occupation Civil servants 23% Village farmers 25% Workers 5% Others 46% Source: Hailin EIA report.

66 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table 7-2: Summary Results of the Survey for Hailin Subproject

Survey Questions Answers to Question # of people % Very good 9 9.1 What do you think of the current Good 18 18.2 environment quality? Acceptable 60 60.6 Bad 12 12.1 Air Quality 58 58.6 Surface Water 10 10.1 What do you think is the main problem with the current Noise 26 26.3 environment? Ecology 0 0 Other 5 5.0 Negative impact 7 7.1 What is the impact of the project to the environmental problems you were Positive impact 76 76.8 concerned No impact 17 17.2 Do you think the environmental Comprehensive 71 71.7 problems predicted in the EIA are comprehensive? Not comprehensive 28 28.3 Air Quality 53 53.5 Surface Water 7 7.1 Do you think this project will adversely Noise 29 29.3 affect the local environment? Land acquisition 9 9.1 Ecological balance 1 1 Positive impact 89 89.9 Do you think the project has positive Negative impact 5 5.05 impact on the local environment? No impact 5 5.05 Mitigation measures will be taken to Acceptable 99 100 minimize the environmental impact. Do you think the impact after Unacceptable 0 0 mitigation will be acceptable? Support 99 100 What do you think of the project? No opinion 0 0 Against 0 0 Reasonable 95 96 Do you think the environmental mitigation measures proposed in the Unreasonable 0 0 EIA are reasonable? No opinion 4 4 Any other comments and None suggestions?

Source: Hailin EIA report. 205. As Table 7-2 shows most survey participants (89%) think the project will bring benefits to the local environment while 5% of people think the project will bring negative but acceptable impact. Most participants (53%) concerned about air pollution while other participants concerned about noise (29%), water quality (7%) and land acquisition (9%).

67 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Most people (76%) believe that the project will have some positive impact on the environmental problems they were concerned before while 5% of people think the project will have negative impact and 17% think there was no impact. Overall, 100% of the respondents expressed support to the subproject.

D. Future Information Disclosure and Public Consultation Program

206. A dialogue channel will be maintained with the affected public and stakeholders throughout project implementation by continued information disclosure ad public consultation. Such dialogue will ensure that public concerns are understood and dealt with in a timely manner. A plan for future consultation during construction and operation has been developed, and is presented in the EMP. Future public consultation will be conducted via questionnaires surveys, household visits, workshops, and public consultation meetings when they are complaints or unanticipated negative environmental impacts. 207. Prior to construction, the Hailin subproject implementation agency (IA) will inform the affected people and the likely disturbances through information disclosure. The grievance redress mechanism (GRM) entry points will be briefed and it will in turn ensure that information is disseminated to project affected areas. During construction, affected people will be consulted at least once a year through questionnaire surveys and/or a public meeting. The surveys and the public meeting will be conducted by the implementing agency supported by a loan implementation environment consultant. On-site environmental engineers of the construction contractors or construction supervision companies (CSCs) will conduct informal interviews with affected people on regular basis during the construction period. Public consultation will focus on complaints about community disturbances from construction activities, such as construction noise, dust, solid waste and wastewater, as well as public concerns about soil erosion, air pollution and water pollution. 208. Additional public consultation will be based on inspection and monitoring the impacts and mitigation measures during the construction and operation phases and further evaluation of the environmental and economic benefits and social impact. Once the project is completed, the IA will survey key stakeholders on their opinions and comments on the project during operation phase. The IA will be responsible for organizing the public consultations with the support from the PMO and a loan implementation environment consultant. The contractors will be required to communicate and consult with the communities in the subprojects’ areas, especially those close to their construction sites. Eye-catching public notice boards shall be set at the construction site to proclaim the purpose of the construction, the duration of disturbance, the responsible entities on-site (contractor, CSCs, IA), and the project level GRM (see next Chapter for details). Contact information of all GRM entry points (including community leaders, neighborhood organizations, local authorities, local EPB, and contractors) and the Project Public Complaints Unit (PPCU) will be disclosed on the construction site information boards. The cost for GRM will be included in the IAs’ operation budget.

68 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

VIII. GRIEVANCE REDRESS MECHANISM

A. Introduction

209. Residents and/or organizations affected by the subproject activities were encouraged to participate in the preparation of the EIA. However, environmental issues and concerns usually develop during both construction and operation periods. Project-level grievance redress mechanism (GRM) in the subproject city of Hailin has been developed in order to solve problems effectively, as well as guaranteeing that the subproject will be implemented smoothly and successfully. Grievances and complaints of potentially affected people and organizations will be recorded, addressed and solved completely and quickly through the mechanism.

B. ADB’s GRM Requirements

210. The ADB’s SPS requires the IA to establish a GRM to receive and facilitate resolution of affected person’s concerns and complaints about the subproject’s environmental impact and performance during construction as well as operation phases. The GRM should be scaled to the risks and adverse impacts of the subproject; should address affected people’s concerns and complaints promptly, using an understandable and transparent process; should be readily accessible to all sections of the community at no cost and without retribution; and should not impede access to the PRC’s judicial or administrative remedies.

C. Current Practice

211. At the national level, a framework to address grievance has been established. The State Council issued Decree No. 431 Regulations on Letters and Visits in January 2005 and it codifies a complaint mechanism at all levels of government, and safeguards the complainants from any retaliation. In 2007 Ministry of Environment issued in Decree No. 34 Environmental Letters and Visits System which establish specific guidelines to establish a system and address environmental complaints. 212. Under current general practices in Hailin, as in other parts of PRC, when residents or organizations are negatively affected by project activities, such as noise, dust or safety issues caused by construction activities, they generally first report to the contractors and IAs directly, or through their community committees, or complain rectlydi to local EPBs. In the case of issues occurring during the construction period, theyan c complain to the contractors first if the construction is the source of the problem. If thecontractors' responses cannot resolve the issues or if the contractors do not respond to thecomplain, they may contact local and/or municipal EPB who will record the complaints andhen t visit the sites to investigate and obtain the contractors’ side of the story. Sometimes, the two sides might contradict, each defending its own argument. In such cases, the local EPB will need to consult with the contractor or the environmental supervision engineer to acquire relevant project information and collect data. This kind of fact-finding or site investigation is usually time-consuming, thus delaying the mediation process.

69 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

D. Proposed Grievance Redress Mechanism for the Subproject

213. In consultation with Heilongjiang Provincial DRC and the Hailin IA, it was agreed that the IA will, under the supervision of Hailin EPB, establish a Project Public Complaints Unit (PPCU). The PPCU will be coordinated by at least two staff. The contact persons for the different GRM entry points (residential community leaders, neighborhood organizations, local authorities, local EPB, and contractors) will be defined prior to construction. Organizational charts of the GRM, including the contact persons of the entry points and the PPCU, will be disclosed at the construction site. Phone numbers, addresses, and email addresses of all access points and the PPCU will be disclosed to the public through the project city’s website and on information boards at the construction site. Training will be provided to the members of the PPCU and the contact persons of the GRM entry points to ensure that responsibilities and procedures are clear. The concept of the proposed GRM is shown in Figure 8-1.

E. Types of Grievances Expected and Eligibility Assessment

214. Public grievances addressed by the GRM will most likely relate to environmental issues encountered during the construction phase, as comprehensive consultations with potentially affected people conducted during subproject preparation confirmed their basic support of the subproject. Grievances may include vehicle operation and transportation of heavy equipment (such as boilers) and materials; dust emissions and construction noise; soil erosion and disposal of waste materials in inappropriate places; safety measures for the protection of the general public and construction workers. Construction-related grievances can be numerous, and managing them is the contractor’s responsibility under its contract with the IA. 215. Once a complaint is received and filed, the PPCU will identify if the complaint is eligible. Eligible complaints include those where (i) the complaint pertains to the subproject; and (ii) the issues raised in the complaint fall within the scope of environmental issues that the GRM is authorized to address. Ineligible complaints include those where: (i) the complaint is clearly not subproject-related; (ii) the nature of the issue is outside the mandate of the environment GRM (such as issues related to resettlement, allegations of fraud or corruption); and (iii) other company or community procedures are more appropriate to address the issue. If the complaint is rejected, the complainant will be informed of the decision and the reasons for the rejection.

F. GRM Steps and Timeframe

216. Procedures and timeframes for the grievance redress process are described as follows (Figure 8-1): (i) Step 1: If a concern arises, the affected person tries to resolve the issue of concern directly with the contractor/operator and/or the project manager. If successful, no further follow-up is required;

(ii) Step 2: If no solution can be found, the affected person can submit an oral or written complaint to the PPCU or through GRM access points (community

70 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

leaders, neighborhood organizations, and local EPB). For an oral complaint, the PPCU must properly make written records, assess the eligibility of the complaint, identify a solution, give a clear reply within five working days, and timely convey to the complainant and to the Hailin implementing agency, or contractors the suggested solution. The contractors, during construction, and the implementing agency, during operation, will implement the redress solution and convey the outcome to the PPCU within seven working days;

(iii) Step 3: If no solution can be identified by the PPCU or if the complainant is not satisfied with suggested solution under step 2, the PPCU will organize, within two (2) weeks, a multi-stakeholder meeting where all relevant stakeholders, including the complainant, IA, contractor/operator, and local EPB will be invited. The LIEC will participate in the meeting as well. The meeting should result in a solution acceptable to all parties, and identify responsibilities and an action plan. The contractors during construction and the IA during operation will implement the agreed-upon redress solution and convey the outcome to the PPCU within seven working days;

(iv) Step 4: If the multi-stakeholder meeting is not successful, the PPCUs, through the IA, will inform the provincial PMO. The PMO in the consultation from the EPB can then provide alternative approaches to resolve the issues; and

(v) Step 5: If the affected people are still not satisfied with the solutions identified in Step 4, he or she can appeal to the next level according to local regulations. 217. The PPCU as well as the local EPB will accept the complaints and grievances lodged by the affected persons free of charge. Any costs incurred should be covered by the contingency of the project. Throughout the duration of project implementation and the first three years of operation, these grievance redress procedures remain valid so that any affected person may deal with relevant issues.

71 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Figure 8-1: Proposed GRM

Grievances/Complaints entry points (oral or written complaint)

Local EPB, PMO, Contractor/Operator community leaders

Forward Inform AP if solved; Forward if not solved

Project Public Complaint Unit (PPCU) under IA

Record complaint, assess eligibility

Consult LIEC, IA, Solution not found contractor, identify solution, get back to AP

Conduct stakeholder Solution meeting (contractor, found PMO/IA, AP, EPB, LIEC) to identify solution and action Solution found

Implement Solution

During During Construction Operation

Contractor Operator

Note: AP = affected person, EPB = environmental protection bureau, IA = implementation agency, LIEC = loan implementation environmental consultant; PMO = provincial project management office

72 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

IX. CONCLUSIONS AND RECOMMENDATIONS

A. Expected Project Benefits

218. The proposed subproject would directly benefit over 100,000 residents who will be connected to the district heating system and indirectly benefit 150,000 people currently living in the City of Hailin as the local air quality will improve. 219. General benefits of the subproject include (i) improved space heating quality and reliability in Hailin, (ii) increased energy efficiency by utilizing CHP technology to provide hot water to the district heating system, (iii) reduced air pollution in the city and solid waste in residential neighborhoods where the small boilers are currently located, and (vii) reduced coal truck traffics to residential areas and decreased potential safety risks.

B. Adverse Impacts and Mitigation Measures

220. During construction, potential impacts mainly relate to earthwork, soil erosion, air quality, noise, water quality, ecology, solid waste and occupational health and safety impacts. Potential air quality impact may occur due to fugitive dust generated on the construction site from stockpiles of uncovered earth materials and vehicles travelling in and out the site. Air pollutants will be emitted from the CHP plant during the operation stage of the facility. The use of powered mechanical equipment during construction activities will generate noise and vibration. Construction activities will generate process wastewater and construction workers will produce wastewater. 221. Earthworks and construction activities will remove vegetation and ecological habitats. Construction works will produce wastes. Workers will face occupational health and safety issues working on the construction site. Good housekeeping and effective mitigation measures will be implemented to reduce these impacts to acceptable levels. There is no critical or natural habitat within the project area of influence. There is no protected floral and faunal species in the project area of influence. 222. Operation of the CHP plant will emit air pollutants from coal combustion and solid waste (fly ash and bottom ash) will be generated as well. Mitigation measures including operating and maintaining the air pollution control equipment at the CHP plant and hauling the fly ash and bottom ash to construction material manufacture facilities for beneficial use as raw material. 223. Storm water runoff could pollute surface water near the CHP plant during construction. Mitigation measures consist of building a storm water retention pond. 224. Based on information gathered and assessments performed by the domestic environmental institute and environmental due diligence, it is concluded that environmental impacts during the construction and operational stages of the Hailin subproject would be acceptable and in compliance with PRC regulations and standards. The EMP defines mitigation measures and monitoring requirements for the design, construction, and operational stages of the subproject. ADB’s SPS (2009) requirements can be met if the proposed mitigation measures specified in the EMP are implemented effectively and

73 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

monitored diligently.

C. Risks and Assurance

225. The Hailin subproject will use mature CHP technology and there are no unusual technical risks. The pollution control technologies for PM10, SO2 and NOx at the CHP plant will also utilize mature and reliable technologies. However, there are still some risks associated with the project, namely: (i) the failure of the implementing agency to implement the EMP and monitor environmental impacts during construction and operational stages (ii) the failure to close 56 small boilers; and (iii) the failure of installing district heating network to connect the CHP plant to the existing and new buildings. 226. The first risk will be mitigated by (i) allocating adequate budget in the loan for specialist consulting services to support implementation of the EMP and environmental monitoring program; (ii) appointing qualified LIC and LIEC; (iii) ensuring Contractors develop SEMPs prior to commencing work; (iv) providing training in environmental management by the LIEC; (v) ADB conducting regular project reviews; and (vii) project assurances covenanted in the loan and project agreement. 227. The second risk will be mitigated by implemented the following measures: (i) updating the loan covenants to ensure that the small coal-fired boilers Hailin will be closed; (ii) provincial PMO will ensure Hailin government enforce the policy of closing small coal-fired boilers in the city; and (iii) local EPB will inspect the small boiler houses to ensure they are decommissioned after the CHP plant is operational. 228. The third risk is being mitigated by completing the district heating network construction project, which started implementation in 2016 and is about 70% completed by Q1 2017. This project is expected to be completed by October 2017.

D. Overall Conclusions

229. The domestic EIA report and this environmental due diligence conclude that all identified environmental impacts can be mitigated to acceptable levels if the measures defined in the EMP and assurances are carefully implemented and monitored. The project is feasible from an environmental safeguards point of view. The improved energy efficiency of CHP plant operation and closures of small coal-fired boilers and stoves will bring significant environmental benefits to the local communities.

74 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

APPENDIX 1: APPROVAL OF DOMESTIC ENVIRONMENTAL IMPACT ASSESSMENT

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

APPENDIX 2: ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives

1. The objective of the environmental management plan (EMP) is 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, to comply with PRC’s environmental laws, standards and regulations and to ADB’s Safeguard Policy Statement (SPS, June 2009). Organizational responsibilities are clearly identified for execution, monitoring and reporting.

B. Implementation Arrangements

2. This subproject is the scope change to the ADB financed Heilongjiang Efficient District Heating project, which has five district heating subprojects under implementation in addition to the newly proposed Hailin subproject. Heilongjiang Provincial Government (HPG) is the EA for the project. A project leading group was established and is responsible for directing the project and providing policy guidance during project implementation. The Heilongjiang PMO has been established and is responsible for coordinating the implementation of project activities on behalf of the HPG. 3. The Hailin implementation agency (IA) has the overall responsibility for implementing EMP under the guidance of provincial PMO. The IA will nominate an environment officer to undertake effective environmental management activities specified in the EMP. Environmental coordinator of a construction supervision company (CSC) contracted by the IA will be responsible for the daily inspection, monitoring, and evaluation of mitigation measures at the construction site. 4. Hailin IA will form an environmental management unit (EMU), which consists of a manager and an appropriate number of staff to coordinate environmental issues. The EMU will be in charge of (i) implementation of EMP at the subproject level; (ii) supervising the implementation of mitigation measures during construction; (iii) supervising contractors and CSCs’ internal monitoring and coordinating the compliance monitoring; (iv) implementation of training programs for contractors; (v) incorporating environmental management, monitoring, and mitigation measures into the construction and operation management plans; (vi) reporting on the EMP performance to the PMO semiannually; and (vii) arranging reviews of environmental monitoring and responding to any unanticipated impacts. The EMU will be technically supported by environment consultant and supervised by the Hailin Environment Protection Bureau (EPB). The IA is responsible for mitigation measures and EMP monitoring during project operation. 5. Hailin EPB is responsible for (i) ensuring compliance with relevant environmental regulations; (ii) coordinating with the IA on waste management and decommissioning of existing small boilers; and (iii) participating in the GRM as required. Hailin EPB will also participate in subproject environmental compliance monitoring inspections. 6. Hailin Environment Monitoring Station (EMS) will undertake the ambient monitoring program presented in EMP to ensure in compliance with the PRC’s environmental standards

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

and regulations through regular and random environmental compliance monitoring and inspection during construction and operation. The EMS will conduct the actual environmental compliance monitoring and inspection on behalf of Hailin EPB. 7. Contractors are responsible for implementing relevant mitigation measures and internal monitoring during construction as specified in EMP supported by the CSC and supervised by Hailin EPB. 8. Loan implementation environmental consultant (LIEC) will (i) assist the PMO to update the EMP and environmental monitoring program as necessary; (ii) verify the implementation of the environmental protection measures specified in the EMP; (iii) review internal and compliance monitoring reports and the semi-annual environment performance report; (iv) prepare the semi-annual environmental monitoring verification report; (v) provide training to the PMO, the IA, contractors and CSCs on environmental management implementation and monitoring; (vi) identify any environment-related implementation issues and suggest necessary corrective actions, and reflect these in a environment management plan; and (vii) undertake site visits as required. 9. ADB is responsible for monitoring 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 the PMO, and conduct due diligence of environment issues during the project review missions. If the EA and IA fail to meet safeguards requirements described in the addendum and the EMP, ADB will seek corrective measures and advise the EA and the PMO on items that need follow-up actions. The institutions associated with EMP implementation and their responsibilities are summarized in Table A-1.

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

Name of Institution Responsibilities Direct the project and provide policy guidance during project implementation; Project Leading Review project implementation progress and take additional measures if Group necessary. Monitor and supervise the overall environmental performance of the project; Review the semiannual environment reports and disclose the project ADB monitoring reports on its website; conduct due diligence of environment issues during the project review missions. Responsible for monitoring the implementation of the EMP with the support Heilongjiang PMO from LIEC; Coordinate with Heilongjiang Finance Bureau, IA, the tender company, consultants, and other governmental agencies. Responsible for overall implementation of the EMP; Provide supervision to CSC and submit reports to the PMO; Work with design institutes and the Hailin IA tender company in preparing bidding documents to ensure environmental protection provisions are included in them. Conduct environmental monitoring according to the monitoring plan and Hailin EPB inspect the facilities during construction and operation to ensure compliance; Enforce applicable environmental laws and regulations. Responsible for the daily inspection, monitoring, and evaluation of mitigation CSC measures at the construction site. Contractors Responsible for implementing mitigation measures specified in the EMP

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Name of Institution Responsibilities during construction Provide technical assistance to PMO and IA for implementing the EMP; Environmental Provide training to the staff of the PMO, IA and CSCs. Prepare the semiannual consultant environmental reports.

CSC – Construction Supervision Company Institutional Strengthening and Capacity Building. 10. The LIEC will offer series of trainings to strengthen the capacity of the IA concerned for EMP implementation. The planned training topics are listed in Table A-2. Environmental consultants will be responsible to develop training materials and provide training.

Table A-2: Institutional Strengthening and Training Program

Training Topic Contents ADB’s and PRC’s  ADB’s safeguard policy statement and other environmental regulations environmental laws,  Project applicable PRC’s environmental laws, policies, standards and regulations and regulations policies  International environmental management practice in civil constructions Grievance Redress  GRM structure, responsibilities, and timeframe Mechanism  Types of grievances and eligibility assessment  Impacts and mitigation measures during construction and operation Implementation of Monitoring and auditing mechanism environment  Reporting requirements monitoring plan  Corrective action of EMP International good  Technologies and equipment for desulfurization, denitrification and dust practices and removal technologies in  Cleaner heating technologies district heating

C. Potential Impacts and Mitigation Measures

11. The potential impacts of the project during project implementation as identified by the domestic EIA and the addendum to the IEE, corresponding mitigation measures are summarized in Table A-6. The mitigation measures will be incorporated in detailed design, bidding documents, construction contracts and operational management manuals and will be implemented by design institutes, contractors and the IA, and supported by the LIEC, provincial PMO, and Hailin EPB. The effectiveness of mitigation measures will be evaluated through environmental inspections and monitoring results.

D. Environment Monitoring Plan

12. Environment monitoring plan (Table A-7) includes (i) internal environment inspection and monitoring, and (ii) external compliance monitoring.

13. Internal environmental inspection and monitoring. The contractors and construction supervision companies (CSCs) shall assign dedicated staff for its internal environmental inspection and monitoring during construction; and Environmental Management Unit (EMU) under the IA shall be responsible for their internal inspection and monitoring during the operation. The PMO and Hailin EPB shall be responsible for

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

supervising the IA to ensure that environmental mitigation measures in the EMP are properly implemented. At the start of the project implementation, the PMO, IA, LIEC, and CSCs will prepare more detailed internal environmental monitoring programs to be implemented during construction and operation, if necessary.

14. Compliance monitoring. Wastewater, ambient air, noise, and construction waste disposal during the construction and air pollutants emissions, dust, and noise during the operational phase will be monitored by Hailin EMS. Compliance monitoring shall be conducted biannually during construction phase and annually during operation phase.

15. Quality assurance (QA) and quality control (QC) for compliance monitoring. To ensure monitoring accuracy, the QA and QC procedures are established in accordance with the following regulations: (i) Regulations of QA/AC Management for Environmental Monitoring issued by SEPA in July 2006; (ii) QA/QC Manual for Environmental Water Monitoring (Second edition), published by the State Environmental Monitoring Centre inand 2001; (iii) QA/QC Manual for Environmental Air Monitoring published by the State Environmental Monitoring Centre in 2001. 16. Standard Monitoring Methods. The standard monitoring methods, detection limits, and the standard code for each of the monitoring parameters shown are in Table A-3. The data and results of environmental inspection and monitoringivities act will be used to assess: (i) the extent and severity of actual environmental impactsinst agathe predicted impacts and baseline before the project implementation; (ii) performance effectiveness or of environmental mitigation measures or compliance with pertinentenvironmental standards and regulations; (iii) trends mpacts;in i (iv) overall effectiveness of EMP implementation; and (v) the need for additional mitigation measures and correctiveactions if non-compliance is observed.

Table A-3: Standard Monitoring Methods of Ambient Air, Noised Water an

Detection Standard Media Monitoring Parameter Method (Standard No.) Limit Limit TSP (mg/m3) Gravimetric (GB/T15432-1995) 0.001 0.308

3 Gravimetric with specific sampler PM (mg/m ) 0.0002 0.15 10 (HJ618-2011)

3 Gravimetric with specific sampler PM (mg/m ) 0.0002 0.075 Air 2.5 (HJ 618-2011)

3 Spectrophotometry SO (mg/m ) 0.003 0.15 2 (GB/T15262-1994)

3 Saltzman Method NO (mg/m ) 0.002 0.12 x (GB/T15435-1995) Equivalent Continuous Acoustimeter Method 60 (day)/ Noise 0.5 9 A Sound (Leq) (GB12524-90) 50 (night)

8 All the air parameters are Grade II ambient air standard (daily average). 9 Grade II standard.

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Detection Standard Media Monitoring Parameter Method (Standard No.) Limit Limit

Glass electrode method 10 pH value 0.02pH 6-9 (GB6920-86) Permanganate index COD (mg/L) 0.5 6 Mn (GB11914-89) Surface Infrared spectra photograph Petroleum (mg/L) 0.04 0.05 water (GB/T16488-1996) Gravimetric method SS (mg/L) 4 250 (GB11901-89) Membrane filter Total coliforms (no./L) 10 10,000 (GB/T575.12-2006)

Source: PRC standards

E. Reporting Requirements

17. The PMO, with the assistance from LIEC, will prepared and submit semi-annual environmental monitoring reports to ADB. If any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the project that were not considered in the EIA and IEE and EMP are discovered, the PMO shall promptly inform ADB of the occurrence of such risks or impacts, with detailed description of the event and proposed corrective action plan.

18. Monthly environment monitoring reports. The IA supported CSCs will submit the monthly environment monitoring report to the PMO. Information includes (i) project implementation status; (ii) environmental mitigation measures implemented; (iii) monitoring activities; (iv) monitoring data of air, noise and surface water; (v) analysis of monitoring data against relevant standards; (vi) violations of environmental regulations and standards; (vii) any additional mitigation measures and corrective actions required; (viii) environmental training conducted; (ix) occupational health and safety reporting (e.g. accidents during construction, etc.); (x) major events or issues that happened during the reporting period and follow-up actions needed; and (xi) complaints received from the public and how these were resolved through the GRM. The LIEC will be responsible to develop a template for monthly report and provide training to CSCs and IA. The CSCs will prepare such report while the IA will verify the information provided the report.

19. Compliance environment monitoring reports. The EMS will submit the compliance monitoring reports semiannually to PMO.

20. Semiannual environment monitoring reports. The PMO supported by LIEC under the loan supervision will submit environment monitoring reports to ADB semiannually during the construction and annually for the first two years of operation. The report should include information such as (i) project implementation status; (ii) environmental mitigation measures implemented; (iii) monitoring activities including compliance monitoring; (iv) monitoring data of air, noise and surface water; (v) analysis of monitoring data against relevant standards; (vi) violations of environmental regulations and standards; (vii) any additional mitigation

10 All the water parameters are Grade III standard.

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

measures and corrective actions required; (viii) environmental training conducted; (ix) occupational health and safety reporting (e.g. accidents during construction, etc.); (x) major events or issues that happened during the reporting period and follow-up actions needed; and (xi) complaints received from the public and how these were resolved through the GRM.

21. Environmental acceptance monitoring and audit report. Within two months after project completion, the environmental acceptance monitoring and audit report of project completions shall be (i) prepared by Hailin EMS/EPB in accordance with the PRC Regulation on Environmental Check-and-Acceptance of Project Completion (State Environmental Protection Agency, 2001); (ii) reviewed for approval by EPB,Hailin and (iii) reported to the PMO by Hailin EPB. The report will be submitted to ADBMO. by the P 22. The environmental reporting requirements during construction and operation phases of the Hailin subproject are summarized inTable the A-4. Table A-4: Reporting Requirements

Report Prepared by Submitted to Frequency A. Construction Phase Monthly environment IA supported by PMO Monthly monitoring report Contractors, CSCs Compliance monitoring report Hailin EMS, Hailin EPB PMO Semiannually Semiannual environment PMO ADB Semiannually monitoring report Environmental acceptance Within two month after Hailin EMS/EPB PMO monitoring and audit report project completion B. Operation Phase (first year of operation) Internal monitoring report IA PMO Quarterly Compliance monitoring report Hailin EMS/EPB PMO Semiannually

ADB = Asian Development Bank, CSC = construction supervision company, EMS = environment monitoring station, EPB = environment protection bureau, IA = implementing agency, PMO = project management office. Source: Domestic EIA and consultants.

F. Performance Indicators

23. Performance indicators have been developed to assess the implementation of the EMP and they are shown in Table A-5. 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-5: Performance Indicators

No. Description Indicators (i) Qualified environment officer was assigned in the PMO before project implementation 1 Staffing (ii) Hailin EMS is hired by the IA before construction (iii) EMU is established with dedicated staff in the IA before project implementation 2 Budgeting (i) Environment mitigation cost during construction and operation is

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

No. Description Indicators timely allocated (ii) Environment monitoring cost is timely allocated (iii) Budget for capacity building is timely allocated (i) Internal environmental inspection and monitoring during construction period is included in the contracts between the IA and CSCs

3 Monitoring (ii) Compliance monitoring is conducted by Hailin EMS biannually

(iii) EMP monitoring is conducted by contractors and checked by CSCs and IA regularly. (i) the PMO supervises 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 IA and CMSs are submitted to PMO (ii) Compliance environment monitoring reports prepared by EMS are submitted to PMO semiannually 5 Reporting (iii) Semiannual and annual EMP monitoring reports prepared by PMO are submitted to ADB (iv) Environment acceptance monitoring and audit report prepared by Hailin EMS is submitted to the PMO within two months after project completion (i) Training on ADB safeguard policy is provided to Hailin IA at the beginning of project implementation (ii) Training on grievance redress mechanism (GRM) is provided at 6 Capacity 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 the IA before project implementation Grievance (ii) Contact persons of PPCU are assigned and disclosed to the public 7 Redress before construction Mechanism (iii) Complains are recorded and processed within the set time framework in the GRM of this CIEE. Compliance with (i) The subproject complies with the PRC’s environmental laws and 8 the PRC regulations and meet all the required standards. standards

Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table A-6: Environment and Social Impacts and Mitigation Measures

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by Part A: Pre-construction Stage Site of the CHP plant will be carefully reconfirmed to avoid or minimize potential adverse impacts on the surrounding environments and communities; Hailin EPB, Included in design Subproject’ s site DIs, IA The location of the proposed CHP plant, based on the preliminary PMO contract selection during the feasibility study, shall be reconfirmed and designed as far as possible from environmentally sensitive receptors, such as schools, hospitals, residential buildings. Environmental mitigation measures indicated in this IEE, the Mitigation domestic EIA and the EMP shall form part of the bidding facilities and documents for the subproject, and shall be included in contract measures Including mitigation documents for civil constructions and equipment installations. All measures and Included in design contractors shall be required to strictly comply with the EMP; DIs PMO, IA monitoring program contract in designs 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 EIA Wastes and spoil Hailin EPB, Included in design Confirm approved spoil disposal sites locations. DIs, IA disposal sites PMO contract Incorporate environmental mitigation measures indicated in the Included in design Bidding and Bidding and contract PMO, Hailin EIA and the EMP in bidding documents and construction contracts IA and consultant Contracting documents EPB for all subcomponents. contracts Establishment of Establish a Project Public Complaints Unit (PPCU) in the IA’s Grievance operational office; provide training for PPCU members and GRM access PMO, Hailin Included in IA’s Redress IA grievance redress points; Disclose the PPCU’s phone number, fax, address, and EPB operation budget Mechanism mechanism (GRM) email to the public. Part B: Construction Stage Soil Soil erosion due to Minimize active open excavation areas during the foundation Contractors, IA, Hailin Included in

86 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by construction works, and use appropriate compaction techniques for those CSCs EPB, PMO construction activities constructions contract Construct intercepting ditches and drains to prevent runoff entering construction site, and divert runoff from site to existing drainage Limit construction and material handling during periods of rains and high winds Stabilize all earthwork disturbance areas within maximum 14 days after earthworks have ceased at the sites Plant grass in the CHP plant to protect ground, especially on sandy soil areas 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, hazardous materials and wastes on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination Included in Remove all construction wastes from the site to approved spoil Contractors, IA,Hailin EPB, Soil contamination construction disposal sites CSCs PMO contract Provide spill cleanup measures and equipment at the construction site and require contractors to conduct training in emergency spill response procedures Surface and All areas where construction equipment is being washed will be groundwater equipped with water collection basins and sediment traps Included in contamination from Contractors, IA, Hailin Wastewater Septic treatment and disposal systems will be installed at construction construction CSCs EPB, PMO construction camps along with proper maintenance protocols contract wastewater, and domestic water Water quality parameters (SS, COD, oil, and grease) in rivers near

87 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by the CHP plant site will be monitored by Hailin EMS during construction in accordance with the EMP monitoring program to identify and confirm results of the impact assessment and effectiveness of adopted mitigation measures Ensure that noise levels from equipment and machinery conform to the national standard, and properly maintain machinery to minimize noise Apply noise reduction devices or methods where piling equipment is operating within 500 m of sensitive receptors such as schools, hospitals, and residential areas Locate sites for rock crushing, concrete-mixing, and similar activities at least 1 km away from sensitive receptors To reduce noise at night, restrict the operation of machinery generating high levels of noise, such as piling, and movement of Noise from heavy vehicles along urban roads between 8 pm and 7 am the construction, next day based on international best/common construction Included in machinery practice Contractors, IA, PMO, Noise construction operation, and CSCs Hailin EPB, Public notification of construction operations will incorporate noise contract transportation considerations; information procedure of handling complaints activities through the GRM will be disseminated Reach an agreement with nearby schools and residents regarding heavy machinery work to avoid any unnecessary disturbances. If disturbance cannot be avoided, compensate the affected residents Place temporary hoardings or noise barriers around noise sources during construction, if necessary Monitor noise at sensitive areas at regular intervals by local EMS. If noise standards are exceeded, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation

88 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by Conduct interviews with residents affected by the noise at the CHP construction site 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 Vibration generating Included in Prohibition of, pipeline trench compacting, pilling and road roller Contractors, IA, PMO, Vibration by compacting and construction operation at night CSCs Hailin EPB rolling contract Spraying water on construction site and material handling routes where fugitive dust is being generated Paying particular attention to dust suppression near sensitive Dust generating by IA PMO, Included in receptors such as schools, hospitals, or residential areas Contractors, construction LIEC, Hailin construction CSCs activities Covering materials during truck transportation, in particular, the EPB contract fine material, to avoid spillage or dust generation; Pay particular attention to dust suppression near sensitive receptors such as schools, hospitals, or residential areas Ambient Air Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission Air emission from Ensure vehicle emissions are in compliance with PRC standards Included in vehicles and of GB18352-2005, GB17691-2005, GB11340-2005, Contractors, IA,Hailin EPB, construction construction GB2847-2005, and GB18285-2005 CSCs PMO contract equipment Maintain vehicles and construction machineries to a high standard to ensure efficient running and fuel-burning and compliance with the PRC emission standards Establish temporary storage for solid wastes away from water Solid waste from bodies or other environmental sensitive areas, and regularly haul Included in Contractors, IA, Hailin Solid Waste construction to an approved landfill or designated dumping site construction CSCs EPB, PMO activities Provide appropriate waste storage containers and reach contract agreement with local villages or residential communities for

89 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by disposal of worker’s camp domestic waste through appropriate local facilities. These arrangements will be made prior to commencing construction Hire a contractor with proper credentials to remove all wastes from sites to approved waste disposal sites, according to appropriate domestic standards 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 Prohibit waste burning or incineration at construction site Prepare and implement the protocol for the handling and disposal of hazardous and pollution construction materials including a spill prevention and emergency plan Storage facilities for fuels, oil, and other hazardous materials shall be within secured areas on impermeable surfaces, and provided with bunds and cleanup installations Vehicles and equipment will be properly staged in designated Hazardous and areas to prevent contamination of soil and surface water; vehicle, Included in Polluting Materials machinery and equipment maintenance and refueling shall be Contractors, IA, Hailin construction from construction properly carried out so that spilled materials do not seep into the CSCs EPB, PMO contract activities soil Oil traps shall 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 standard of Transportation, Loading and Unloading of Dangerous or Harmful Goods of JT 3145-88

90 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by A month before demolishing the small boilers, a survey and investigation for the small boiler sites will be conducted by the IA and Hailin EMS under supervision of the Hailin EPB. The assessment will include contamination status of soil, groundwater, structures and surface water bodies if nearby. Base on the survey IA and Small boiler site and investigation, if the environments are contaminated, the site Hailin EPB Hailin EMS 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 Hailin EPB.

Identify, properly label and pack asbestos as well as demolishing debris contaminated with asbestos during demolishing small boilers, and transport them in specific closed vehicles to the secured landfill of HHWDC in Hailin in accordance with the World In case of asbestos Bank’s EHS Guideline In case of asbestos Demolition impact during presence, the cost Proper protective clothing and specific equipment shall be Contractor, Hailin EPB, demolishing small will be borne by provided by HHWDC to its trained team and demolishing HHWDC boilers houses small boiler owners contractors’ workers involving demolishing and disposal of asbestos during deconstruction of the small boilers Provide adequate training to workers on the hazards, danger and procedures of working in areas contaminated with asbestos Maximize reuse/recycling of deconstruction wastes generated during demolition (e.g. iron, bricks, windows, doors, steel bars Non-hazardous etc.), sell them to local waste recycling stations) solid waste Demolition Covered by the Dispose other demolition debris in municipal solid waste landfills IA,Hailin EPB, generated by Contractors, subproject and or special construction and demolition debris landfills subject to PMO demolishing small CSCs small boiler owners approval by Hailin EPB boilers houses Dispose waste into rivers or other surface water bodies will be strictly prohibited Flora and Fauna Protection of Preserve existing vegetation where no construction activity is Contractors, IA, Hailin Included in

91 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by vegetation, planned, or temporarily preserve vegetation where activity is CSCs EPB, PMO construction re-vegetation of planned for a later date contract disturbed areas; planting and Protect existing trees and grassland during construction; when a compensatory tree has to be removed or an area of grassland disturbed, replant planting trees and trees and re-vegetate the area after construction grass Remove trees or shrubs only as a last resort if they impinge directly on permanent structures; and In compliance with the PRC’s forestry law, undertake compensatory planting of an equivalent or larger area of affected trees and vegetation Requiring contractors to consider the impact on traffic in construction scheduling when transporting large size of equipment or machineries. A traffic control and operation plan will be prepared and it shall be approved by 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 Traffic congestion Community opening them to traffic as soon as possible. Included in and accident, and Contractors, IA, Hailin Disturbance and The plan shall also include coordination with other utility providers construction interruption in public CSCs EPB, PMO Safety to ensure the construction activities will not interfere or interrupt contracts utilities with their services. Planning construction activities so as to minimize disturbances to utility services, especially when connecting the CHP facility to the grid. Implementing 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

92 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by Identify and minimize, so far as reasonably practicable, the causes of potential hazards to workers. Provide preventive and protective measures, including modification, substitution, or elimination of hazardous conditions. Provide for the provision of appropriate personal protective equipment (PPE) to minimize risks, including ear protection, hard hats and safety boots. Provide for adequate safety protection equipment including firefighting systems. Provide adequate signage in risk areas. Health damage and Provide procedures for limiting exposure to high noise or heat Included in Occupational accidents during working environments in compliance with PRC noise standards Contractors, IA, Hailin construction health and safety construction for construction sites (GB12523-1990) and relevant international CSCs EPB, PMO contract activities guidelines. Provide training for workers, and establish appropriate incentives to use and comply with health and safety procedures and utilize PPE. Provide training for 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 Daily reminder on specific safety issues before operation Establish and conduct chance-find procedures for physical specific fund for Physical Cultural cultural resources Contractors, IA, Hailin cultural relic Resources CSCs EPB, PMO Cultural heritage sites will be preserved where identified. Strictly in protection accordance with PRC regulations, no person shall destroy,

93 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by damage, deface, conceal or otherwise interfere with the relic If a new site is unearthed, work should be stopped immediately and the IA and local cultural relic bureau promptly notified, and construction will resume only after a thorough investigation and with the permission of the appropriate authority. Air pollution from the Proper operation and maintenance of desulfurization, CHP plant during denitrification, dust removal equipment and online monitoring IA Hailin EPB operation instruments Water will be sprayed to suppress dust during transporting and unloading coal Included in IA’s’ Air Quality Coal stockpiles will be covered to minimize fugitive dust emission operation budget Dust from coal and IA Hailin EPB ash handling Enclosed trucks will be used for transportation of ash from heating plants to secondary user industry Water spraying on top layer of ash in the ash dykes will be conducted. Install acoustic enclosures, barriers, or shields to reduce noise; Plant green belt all along the CHP plant's boundary for further Noise from coal Equipment attenuation of noise; Hailin EPB, Include in the crusher, draft fan, air supply and PMO, Hailin equipment supply Noise compressor and Implement restricted access, and provide PPE such as earmuffs installation EMS, and installation water feed pumps in and earplugs for personnel working in high noise areas; contractors, consultant contracts heat source Mufflers will be installed on vents of the boiler and air blowers and IA sound-proof shields will be installed on the power generators to mitigate the noise impact. Fly ash and slag All fly-ash and slag will be stored on site of the CHP plant and sold could affect soil and to the local construction industry as a raw building material. Included in IA’s Solid Wastes water quality if not IA Hailin EPB properly managed No permanent ash disposal will be allowed at the CHP plant. operation budget Boiler All demolition wastes will be routinely collected by licensed waste

94 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by decommissioning management companies for reuse, recycling (e.g. equipment; could affect soil, air steel, iron and other metals; salvageable wood and building and water quality if materials; etc.) or final disposal in a licensed waste facility (e.g. for not managed non-recyclable materials). Waste management will be undertaken properly. in consultation with Hailin authorities. No on-site landfills will be permitted at any demolition site. No burning of wastes will be permitted at any demolition site. A site contamination investigation will be undertaken in consultation with the Hailin EPB, and if necessary site specific plans will be developed to address any site contamination. Contaminated spoil will be transported to suitable spoil disposal sites approved by the Hailin EPB, and clean fill provided. The site will be rehabilitated to a level suitable for its proposed future use; the Hailin EPB will approve the rehabilitation, and will require additional rehabilitation actions if necessary. Homeowners who choose to dispose their household stoves should be given access to the services of the waste management

companies noted above. Wastewater will be treated to achieve maximum reuse and recycling; 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 solids before reuse for Water pollution and horticulture; IA’s operation Wastewater reuse in heat source IA Hailin EPB All the CHP plant’s sanitation facilities will discharge to septic budget plant systems and municipal sewer networks that meet relevant PRC standards; Runoffs from the CHP plant 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 Hailin EPB approved landfills;

95 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by For areas with oily wastewater discharges, oil-water separators will be installed before discharging to the sedimentation basins; and 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. Wastewater will be treated for removal of oil and grease and it will be re-used on-site for horticulture. Any oil and grease sludge skimmed out from the treatment process will be collected and handed over to recycler as per PRC standards. Regularly clean the sedimentation tank, dispose of accumulated Wastewater from sludge and sediments in the municipal landfill; and IA Hailin EPB the CHP plant Conduct internal and compliance monitoring for the backwash effluent based on the EMP before discharging into the sewer. Include in the Build an equalization and sedimentation tank in the CHP plant for Backwash effluent Equipment equipment supply pH adjustment and sedimentation (SS≤400mg/L) before the Hailin EPB from the CHP plant supplier, IA and installation backwash effluent is discharged into the municipal sewer; contracts Conduct regular inspections of the district heating network, and Community Occupational and repair defects promptly; and IA’s operation Disturbance and community health IA Hailin EPB budget Safety and safety Comply with the PRC State Administration of Worker Safety Laws and Regulations. Economic Labor Retrenchment Plan (LRP) developed and implemented in IA’s operation Boiler Demolition IA PMO displacement accordance with PRC applicable laws budget Part C: Operation Stage Pollutants emission Building high boiler stack to disperse and minimize the direct Equipment Hailin EPB, Include in the Ambient Air from the CHP plant impact of emissions on adjacent areas; supply and PMO, Hailin equipment supply

96 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Responsibility Potential Impacts Item Mitigation Measures and/or Safeguards Implemented Source of Funds and Issues Supervised by by Using bag filter with a dust removal efficiency of at least 99%; installation EMS, and installation contractors, consultant contracts (not Using Desulfurization inside the circulated fluidized bed (CFB) IA include boiler that is about 70% efficient; construction costs Using CFB with a total denitrification rate of about 60%, and for stacks, which reaching emission concentration lower than 300 mg/m3; and will be included in construction Installing an online automatic monitor on the main stack of the contracts) CHP plant to monitor SO and flue dust concentrations. 2

IA Local EPB IA’s operating Preparing an emergency response plan in case of malfunction of budget air pollution control equipment and submit such a plan to the local EPB

97 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Table A-7: Environmental Monitoring Plan

Implemented Supervised Source of Subject Parameter Location Frequency by by Fund

Inspection of wastewater mitigation measures (water CHP plant Wastewater effluent sites, at Contractors, Included in IA, PMO Wastewater collection basins and sediment construction site least four times per year CSCs, CSC contract Generated from traps, etc.) construction Included in CHP plant One sampling each day each pH, SS, oil Hailin EMS Hailin EPB construction construction site time, twice per year Contract Inspection of dust mitigation measures and Inspection of Around CHP plant Contractors, Included in maintenance and condition of At least four times per year. IA, PMO construction site CSCs CSC contract vehicles and construction Ambient air equipment. Included in Around CHP plant TSP, PM PM At least twice per year Hailin EMS Hailin EPB construction 10 2.5 construction site. Contract Twice a year: a day each All sensitive Included in time and two samples each Hailin EPB, Noise Leq dB(A) receivers nearby Hailin EMS construction day, once during daytime, PMO construction site Contract once during nighttime. Included in Construction spoil Construction wastes Once a year; and once after Hailin EPB PMO construction disposal disposal sites. completion of spoil disposal Contract Operation Phase: Included in IA’s sampling at stack of Online continuous emission SO , NO , PM IA Hailin EPB operation 2 2 10 CHP plant monitoring Emission from the budget CHP plant at stack outlet of the Hailin EPB, Included in IA’s SO , NO , TSP, PM Twice per heating season. Hailin EMS 2 2 10 CHP plant IA, PMO operation

98 Heilongjiang Energy Efficient District Heating Project Addendum to the IEE

Implemented Supervised Source of Subject Parameter Location Frequency by by Fund budget Dust from Included in IA’s at 1m outside of the storages of coal TSP, PM10 Twice per heating season. Hailin EMS operation CHP plant’s boundary and ash budget Included in IA’s Noise from the at 1m outside of the Hailin EPB, Twice per heating season. Hailin EMS operation CHP plant CHP plant’s boundary IA, PPMO budget Leq dB(A) Included in IA’s Noise from heat at 1m outside of the Hailin EPB, Once per heating season Hailin EMS operation exchange station CHP plant IA, PMO budget

Source: Domestic EIA and consultants.

99