Environmental Monitoring Report Reporting Period: January–June 2021 Project Number: 52007–001 Date: August 2021 People’s Republic of China: Air Quality Improvement in the Greater Beijing–Tianjin–Hebei Region— Henan Cleaner Fuel Switch Investment Program The views expressed herein are those of the consultant and do not necessarily represent those of ADB’s members, Board of Directors, Management, or staff, and may be preliminary in nature. Prepared by Yu-Tian New Energy Co. Ltd for the Asian Development Bank. This environmental monitoring report 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. CURRENCY EQUIVALENTS Currency unit - yuan (CNY) CNY1.00 = US$ 0.16 US$1.00 = CNY 6.5 ABBREVIATIONS ADB Asian Development Bank AP Affected Person AQI Air Quality Index EA Executing Agency EHS Environment, Health and Safety EIA Environmental Impact Assessment EMA Environmental Monitoring Agency EMoP Environmental Monitoring Plan EMP Environmental Management Plan EPB Environmental Protection Bureau EPL Environmental Protection Law FSR Feasibility Study Report GDP Gross Domestic Product GHG Greenhouse Gas GIP Good International Practice GIIP Good International Industrial Practice GRM Grievance Redress Mechanism IA Implementing Agency IEE Initial Environmental Examination IT Interim Target MAC Maximum Acceptable Concentration MEE Ministry of Ecology and Environment MEP Ministry of Environmental Protection PCR Physical Cultural Resources PIU Project implementation unit PPE Personnel Protective Equipment PRC People’s Republic of China PSSA Program Safeguard Systems Assessment SPS Safeguard Policy Statement 2009, ADB WB World Bank WHO World Health Organization WWTP Wastewater treatment plant YTNE Yu-Tian New Energy Co. Ltd ZYIG Zhongyuan Yuzi Investment Holding Group WEIGHTS AND MEASURES BOD5 Biochemical Oxygen Demand, five days CaCO3 Calcium Carbonate cm Centimeter CO2 Carbon Dioxide COD Chemical Oxygen Demand dB(A) A-weighted sound pressure level in decibels DO Dissolved Oxygen kg Kilogram km Kilometer kWh Kilowatt Hour Leq Equivalent Continuous Noise Level m Meter m/s Meters per Second m2 Square Meters m³ Cubic Meters mg/l Milligrams per Liter mg/m3 Milligrams per Cubic Meter µg/m3 Micrograms per Cubic Meter NOx Nitrogen Oxides oC Degrees Celsius O3 Ozone pH A measure of the acidity or alkalinity of a solution PM Particulate Matter PM10 Particulate Matter smaller than 10 micrometers PM2.5 Particulate Matter smaller than 2.5 micrometers SO2 Sulfur Dioxide t/h Tons per Hour TSP Total Suspended Particulates NOTES (i) In this report, "$" refers to US dollars and "€" refers to Euro. (ii) This document has been prepared following ADB’s Safeguard Policy Statement 2009. Table of Contents I. INTRODUCTION 1 A. Report Purpose and Rationale 1 B. Project Objective and Components 1 C. Project Implementation Progress 3 II. INSTITUTIONAL SETUP AND RESPONSIBILITIES FOR EMP IMPLEMENTATION AND SUPERVISION 12 III. ENVIRONMENTAL MITIGATION AND COMPENSATION MEASURES IMPLEMENTED IN THE REPORTING PERIOD 15 IV. SUMMARY OF ENVIRONMENTAL MONITORING 39 A. Environmental Monitoring plan and responsibilities 39 B. Training and Capacity Building 46 C. Public Consultation and Awareness Raising 51 D. Performance Indicators 53 E. Monitoring Results and Assessment 55 V. GRIEVANCE REDRESS MECHANISM 56 VI. KEY ENVIRONMENTAL ISSUES AND NEXT-STEP ACTION PLAN 60 A. Key Issues Identified and Actions Recommended 60 B. Action Plan of Environmental Monitoring 60 VII. CONCLUSION 61 A. Overall Progress of Implementation of Environmental Management Measures 61 Appendix: APPENDIX 1 Domestic EIA Approval of Skid mounted high and medium pressure regulating station in Taiqian County 62 APPENDIX 2 Scanned copy of test report by 3rd party 67 I. INTRODUCTION A. Report Purpose and Rationale 1. As defined in the domestic environmental impact assessments (EIAs) and Program Safeguard Systems Assessment (PSSA) for Air Quality Improvement in the Greater Beijing– Tianjin–Hebei Region—Henan Cleaner Fuel Switch Investment Program (the Project) and Project Administration Manual, semi-annual environmental monitoring reports (EMRs) should be prepared by the borrower in order to evaluate and assess project activities and to review progress and ensure the effective implementation of the environmental management plan (EMP) prepared for the subprojects under the Project. 2. The purpose of this 2nd EMR is to document the project and environmental management activities and compliance with the PSSA for this Project from 1 January to 30 June 2021. As the 2nd EMR, it mainly covers the project preparation, implementation and operation phases. In line with targets aimed at reducing the negative environmental impacts of the Project and in accordance with all the relevant specifications and standards of the PRC, as well as the policies of the Asian Development Bank (ADB), this report emphasizes: (i) progress made in implementing the EMP, (ii) implementation of mitigation measures, (iii) environmental compliance, (iv) institutional strengthening and training, (v) public consultation, and (vi) problems that have occurred and corrective actions taken. 3. This report is prepared by the YTNE (Yu-Tian New Energy Co. Ltd) with the assistance from the independent external consultant. B. Project Objective and Components 4. The Project will support the transition from coal to cleaner fuel for residential, commercial, and industrial users in selected less-developed counties of Henan Province, thereby reducing a major source of air pollution in the greater Beijing–Tianjin–Hebei region. The outcomes of the program include: (1) 1.2 million customers connected to cleaner fuel; (2) 316.63 million normal cubic meters (Nm3) of gas consumed annually; and (3) private and public funding mobilized after 2022. The program will have four outputs: (i) Output 1: Gas network system expanded. The program will construct natural gas network systems, including 26,880 kilometers of medium and low-pressure small diameter distribution pipelines and 12 gas stations, together supplying 316.63 million Nm3 of gas to 1.2 million customers by 2023. (ii) Output 2: Alternative clean fuel developed. The program will develop 1.7 million cubic meters of annual biogas production capacity using the first utility- scale dry fermentation process plant that makes use of agricultural waste, which is readily available in the target counties. (iii) Output 3: Cleaner fuel use awareness enhanced. The program will help change end-user’s use of traditional energy, and enhance awareness about cleaner fuel use and gas safety. It will give special attention to gender impacts, including improved health outcomes and reduced time spent preparing household energy among women. (iv) Output 4: Institutional and organizational capacity enhancement. The program will support institutional and organizational capacity enhancement by (i) upgrading the information and management system; (ii) strengthening financial and risk management; (iii) unlocking access to commercial financing; and (iv) increasing implementing agency staffing with gender targets, for sustainable overall program implementation towards 2030. 5. The program considers adopting ADB’s result-based lending (RBL) modality. ADB’s RBL program supports the financing of the program for the time- slice of 2019–2023 in the overall investment program for 2019–2030. The Project supports the Government’s objectives as outlined in the Three-Year Action Plan to Win Blue Sky War (2018–2020), issued in June 2018. The Action Plan includes policy actions to accelerate (i) closing of heavily polluting industries; (ii) reduce surplus production capacity in industries; (iii) shift to less air polluting transportation modes; and (iv) build cleaner and less air polluting energy systems to reduce air pollutant emissions by more than 15% for NOx and SO2, and more than 18% for PM2.5 by 2020 as compared with the emissions level in 2015. In 2018 the provincial government also issued the Three-Year Action Plan for Henan Province to Combat Blue Sky War (2018–2020), which targeted to (i) reduce annual average PM2.5 to 58 μg/m3 by 2020; and, (ii) achieve the annual average national air quality category II standard of 35 μg/m3 by 2023. 6. The program scope during 2019–2023 covers (i) expanding gas network systems including distribution pipelines (26,880 km) and gas stations, thereby replacing the old coal burning facilities; (ii) developing 17 million Nm3 annual production capacity of pilot biogas plant facilities, which can be sourced from wastes from agricultural crops; (iii) strengthening the institutional capacity of Zhongyuan Yuzi Investment Holding Group (ZYIG) and China Tian Lun Gas Holding Limited (CTLG) to raise the additional funding needed to complete the cleaner fuel switch investment program by 2030; and (iv) enhancing awareness about safety of cleaner fuel use and indoor air pollution reduction among the gas end users, with special attention to gender impacts. The project is aligned with national and provincial development plans and the Asian Development Bank’s (ADB) country partnership strategy for the PRC, 2016–2020.