Initial Environmental Examination (DRAFT) February 2012 PRC: Shanxi Energy Efficiency and Environment Improvement Project Prepared by the Shanxi Provincial Government for the Asian Development Bank This environmental impact assessment 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. ii CURRENCY EQUIVALENTS (Inter-bank average exchange rate as of September 2011) Currency Unit - Yuan (CNY) CNY 1.00 = US$ 0.1566 US$ 1.00 = 6.384 CNY (mid-rate) For the purpose of calculations in this report, an exchange rate of $1.00 = 6.4 CNY has been used. ABBREVIATIONS ADB Asian Development Bank AF Associated Facility AP Affected Person CBM Coal Bed Methane CFB Circulating Fluidized Bed CGS Chain Grate Stoker (Boiler) CHP Combined Heat and Power CHSP Community Health and Safety Plan CMM Coal Mine Methane CNY Chinese Yuan DHS District Heating System EA Executing Agency EHS Environment, Health and Safety EHS World Bank Group’s Environment, Health and Safety Guidelines EIA Environmental Impact Assessment EIAS Environmental Impact Assessment Statement (PRC) EIRF Environmental Impact Registration Form EMoP Environmental Monitoring Plan EMP Environmental Management Plan EPB Environmental Protection Bureau EPC Engineering, Procurement and Construction FGD Flue Gas Desulphurization FIRR Financial Internal Rate of Return FSR Feasibility Study Report GDP Gross Domestic Product GHG Green House Gas GIP Good International Practice GLC Ground Level Concentration GRM Grievance Redress Mechanism GWP Global Warming Potential iii HES Heat Exchange Station HGS Heat Generating Station (e.g. boiler house) IA Implementing Agency IEE Initial Environmental Examination IGCC Integrated Gasification Combined Cycle Combustion IGP International Good Practice LAP Land Acquisition Plan LRP Labor Retrenchment Plan MEP Ministry of Environmental Protection MSDS Materials Safety Data Sheet NDRC National Development and Reform Committee NGO Non-Governmental Organization OHS Occupational Health and Safety OHSP Occupational Health and Safety Plan OSE On Site Engineer (Contractor) PMO Project Management Office PMO GO Project Management Office Grievance Officer PMU Project Management Unit PPE Personal Protective Equipment PPTA Project Preparatory Technical Assistance PRC People’s Republic of China PRS Pressure Regulation Station (CMM) REA Rapid Environmental Assessment RTU Remote Terminal Unit SCADA Supervisory Control and Data Acquisition SFB Shanxi Provincial Finance Bureau SPDRC Shanxi Provincial Development and Reform Commission SPG Shanxi Provincial Government SPPC Subproject Public Complaints Center SPS Safeguard Policy Statement, ADB SR1 Environmental Safeguard Requirements 1, ADB SPS TA Technical Assistance TEIAR Tabular Environmental Impact Assessment Report (PRC) TOR Terms Of Reference US EPA United States Environmental Protection Agency WACC Weighted Average Cost of Capital WHO World Health Organization iv WEIGHTS AND MEASURES BOD5 Biochemical Oxygen Demand, five days CH4 Methane 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 3 mg/m Milligrams per Cubic Meter 3 mg/Nm Milligrams per Standard Cubic Meter MW Megawatt NH3-N Ammonia Nitrogen Nm3 Standard Cubic Meter NO2 Nitrogen Dioxide NOx Nitrogen Oxides o C Degrees Celsius pH A measure of the acidity or alkalinity of a solution pm person-month (an input equivalent to 1 person working for 1 month) PM10 Particulate Matter smaller than 10 micrometers SO2 Sulfur Dioxide tce Total Coal Equivalent TN Total Nitrogen TSP Total Suspended Particulates Disclaimer: This environmental impact assessment 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. v CONTENTS EXECUTIVE SUMMARY .......................................................................................................... XIV I. INTRODUCTION ............................................................................................................... 1 A. The Proposed Project ................................................................................... 1 B. Report Purpose ............................................................................................. 1 C. Structure of IEE ............................................................................................. 1 D. Approach to IEE Preparation........................................................................ 3 II. POLICY, LEGAL AND INSTITUTIONAL FRAMEWORK ................................................ 6 A. ADB Environmental Assessment Requirements ........................................ 6 1. Safeguard Policy Statement (SPS) ...................................................... 6 2. Project Environmental Categorization ................................................. 8 B. PRC’s Environmental Assessment Requirements ..................................... 8 1. PRC Environmental Legal and Regulatory Framework ....................... 8 2. PRC Environmental Assessment Process ........................................... 9 3. Project Environmental Assessment Process ..................................... 10 C. Environmental Standards ....................................................................................... 11 1. Relevant PRC Environmental Standards ........................................... 11 2. ADB Policy on Environmental Standards .......................................... 11 3. Key Guidelines and Standards Utilized ............................................. 12 a. Ambient Air Quality ................................................................ 12 b. Surface Water Quality ............................................................ 12 c. Noise ...................................................................................... 12 d. Boiler Plant Emissions ........................................................... 12 e. Industrial Noise Emissions ..................................................... 15 III. DESCRIPTION OF THE PROJECT 16 A. Overview 16 1. Goals and Components ..................................................................... 16 2. Heat Sources and Boiler Type ........................................................... 17 3. Emission Control Systems ................................................................. 18 4. Pipelines ............................................................................................ 19 5. HESs ................................................................................................. 19 6. Pressure Regulating Stations ............................................................ 20 7. SCADA and EMC .............................................................................. 20 8. System Safety.................................................................................... 21 9. Occupational Health and Safety ........................................................ 21 B. Implementation Arrangements................................................................... 21 C. Location 23 D. Impact and Outcome ................................................................................... 23 E. Outputs 24 F. Rationale 24 G. Special Elements ......................................................................................... 25 1. Energy Efficiency ............................................................................... 25 2. Environmental Benefits ...................................................................... 25 vi 3. Coal-Mine Methane ........................................................................... 25 4. Private Sector Development .............................................................. 26 5. Social Support for Low-income Consumers ...................................... 26 H. Cost and Financing ..................................................................................... 26 I. Implementation Schedule ........................................................................... 27 J. Detailed Subproject Descriptions .............................................................. 30 1. Jinzhong Subproject .......................................................................... 30 2. Licheng Subproject ............................................................................ 32 3. Qin Subproject ................................................................................... 37 4. Zhongyang Subproject ....................................................................... 42 5. Liulin Subproject ................................................................................ 47 K. Associated and Existing Facilities............................................................. 51 1. Secondary Heating Systems ............................................................. 51 2. Jinzhong Subproject .........................................................................