Teng Jing highlighted that the policy framework governing the environmental protection industry is still insufficient to effectively regulate industry behavior. The desulfurization market, which is huge and once highly profitable, attracted a flood of companies. This led to intense competition, with prices dropping from 300-400 yuan per kilowatt-hour to as low as 90 yuan. As a result of this price war, product quality suffered, and many desulfurization systems failed to meet emission standards.
At a recent press conference held by the State Council Information Office, Li Xinmin, deputy director of the Department of Pollution Control at the State Environmental Protection Administration, stated that China's total sulfur dioxide emissions in 2005 ranked first globally. In that year, total SOâ‚‚ emissions reached 25.49 million tons, marking a 27% increase compared to 2000.
According to the "Eleventh Five-Year Plan" for national environmental protection, China aimed to reduce total sulfur dioxide emissions by 10% by 2010. The State Environmental Protection Administration noted that, under the provincial and major power company desulfurization plans, an additional 118 million kilowatts of desulfurization capacity would be added during the period, resulting in a total capacity of 4.44 million tons. Additionally, under the acid rain control plan, key projects in steel and non-ferrous metal industries were expected to reduce emissions by 500,000 tons. Together, these efforts could achieve a total reduction of 4.9 million tons, nearly meeting the target.
Despite these efforts, Teng Jing, vice secretary-general of the China Environmental Protection Industry Association, pointed out that there are still bottlenecks to overcome in achieving emission reductions.
One of the main challenges is the high cost of equipment. Although China began accelerating its efforts to control sulfur dioxide emissions from thermal power plants in 2003, the domestic desulfurization equipment industry has lagged due to late development and an incomplete product system. Currently, the low level of local production severely hinders the progress of desulfurization in China.
The widely used limestone-gypsum wet desulfurization technology in large power plants is mostly imported or relies on foreign key components. Each project requires paying high patent fees, making it difficult for power plants to move forward. “We have been comparing and selecting desulfurization facilities, but most of the current technology is imported and very expensive,†said Ma Yongfeng, assistant to the president of Ordos Power Company in Inner Mongolia. According to regulations, their desulfurization facilities should have been operational by March, but high costs made it unaffordable.
Experts suggest that the low domestic production rate of desulfurization equipment leads to high prices. Large and medium-sized thermal power plants need over 100 million yuan for desulfurization equipment. Domestic equipment is only half or two-thirds the price of imported ones, but there are few models available, and performance is not stable enough.
China’s reliance on foreign desulfurization technology is high, with many companies adopting foreign technologies. Nearly 100 desulfurization companies exist in China, and large units typically use foreign technology. A 200 MW unit often requires more than 3 million yuan in technical fees. About 60% of desulfurization facilities built in China are imported, with domestic companies handling only civil engineering and installation. On average, using imported equipment costs 30% more than domestic alternatives.
Teng Jing believes that the lack of independent intellectual property in domestic desulfurization equipment limits the development of the environmental protection industry and hinders technological progress in China’s machinery and electrical sectors. Companies lose profits by paying high technical fees.
In addition, the desulfurization market suffers from disorderly competition. With a large market and high profitability, many companies rushed in, leading to cutthroat price competition. Prices fell sharply, compromising quality and emission compliance.
Under the “polluter pays†policy, polluting companies can bid for themselves, turning into “Uncle†figures who drive down prices. The effectiveness of pollution control becomes questionable, creating a cycle that makes pollution harder to manage.
In 2003, China introduced new standards to increase sulfur dioxide charges. However, some power plants with idle desulfurization equipment were exempted from fees and even received subsidies. At Changshu Port Thermal Power Plant, officials revealed that inspections were announced in advance, allowing the plant to briefly operate desulfurization equipment before checks. Without online monitoring, the government couldn’t track real-time data, so the plant avoided charges and even received a 1.5-cent subsidy per unit of electricity generated.
While some regions strictly enforce regulations, others allow “stolen parking†due to weak online monitoring systems. This creates loopholes that undermine the effectiveness of desulfurization efforts.
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