New Chinese Focus on Environmental Remediation & Compliance Could Open Doors for US Companies

May 24, 2018

China has furthered its commitments on environmental protection. In March, the State Council of China announced major reforms were being made to its environmental governance. The decision was made to consolidate the former Ministry of Environmental Protection with several other agencies to form the new Ministry of Ecological and Environmental. This new agency will certainly play an integral role in not only achieving the goal to lower the pollution levels, but also to achieve the strategic objective of maintaining long term economic growth.

Although China has improved its legal framework related to the environment, enforcement of the laws has not kept up due to a lack of staff with technical expertise. The lack of knowledgeable enforcement agents will certainly stimulate the demand for foreign technological products and services despite the fear of a trade war.

China has made major legislative reforms in domestic environmental policies in the past three years in three key sectors: air, water and soil.

The amended Air Law (Daqishitiao), published by the National People’s Congress in 2013, established various legal mechanisms to improve ambient air quality. The law has expanded the list of pollutants to include particulate matter, volatile organic compounds, and greenhouse gases in addition to NOx and SOx. The law further emphasized the importance of source control, requiring facilities that discharge industrial gases or hazardous air pollutants to apply for a pollutant discharge permit from the State Council. This permit system could eventually lead to more stringent oversight of emissions and environmental impact assessments, if properly implemented, will increase the demand in ambient air monitoring, industrial air pollutant control and emission reduction technologies.

In the water sector, the introduction of Water Pollution Prevention and Control Act (Shuishitiao) in 2015 has targeted on nationwide polluted watershed. The plan is to achieve the highest level of water quality for major watershed with immediate goal eliminating the “black and odorous water” and much improve water quality level in urban areas. The market has seen surges in technology sales and demand will continue to grow in following areas: wastewater and industrial wastewater treatment and management, monitoring, sludge treatment, black odorous water clean-up technology and technical expertise related to permit system.

Soil and groundwater are relatively new sectors for Chinese environmental businesses but they have seen rapid growth in market size in recent years. The new Soil Pollution Control and Prevention Act (Tushitiao) published in 2016 has shown China’s determination to tackle the hidden issues in its agricultural land and industrial development zones nationwide. The new policy has stimulated the market and is changing the misconceptions many Chinese regulators had before. This will create room for US expertise to take part in this growing sector of the Chinese economy.

Changes are taking shape where Chinese regulators are starting to enforce required treatment levels for both soil hot zones and groundwater plumes. With this better understanding, Chinese regulators will work with site owners and contractors to designate more realistic goals with good cost performance ratios on remediation. This will in turn will benefit in situ remediation technology and microbial remediation methods. Remediation of chemical agents, thermal remediation and pollutant physical removal methods are all on the list of areas in high demand for remediation. This will also give rise to the need for dedicated tools for site characterization because high levels of clean-up and cost performances have become very important factors in project bidding.

Rapid urbanization in China and the growth of the GDP have resulted in an increased demand for sound environmental management of municipal solid waste (MSW) and hazardous waste. China has seen an increase in municipal solid waste generation in recent years. With strong policy support, many technology sectors will see a greater demand for their products and services which will include both waste management and waste recycling.

Because of the potential opportunities in the coming future and the environment becoming a national priority, Chinese enterprises from other sectors have tapped into the environmental market. Their business transformations have brought new opportunities for US companies who would like to partner with large capital Chinese enterprises to help them gain a foothold in the environmental industry by supplying environmental technology and consulting services. Just as the Belt Road initiative has opened doorways for Chinese companies to take part in the international environment market, it is now possible for US companies to join forces with Chinese companies to compete in this new market by assisting them in compliance with international standards.

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