China Shuts Dirty Factories & Encourages Green Buildings

China Shuts Dirty Factories & Encourages Green Buildings

China’s government has ordered 2,087 steel and cement mills and other factories with poor energy efficiency to close as it struggles to cut waste and improve the country’s battered environment.

The “backward” facilities produce steel, coke, aluminium, paper and other materials and must close by late September. Meanwhile, Australian companies in the sustainable design and building sectors can make a lot of headway in China when benefiting from the right connections, relationships and events, according to Nigel Haywood in China Connection from Beijing.

Business Week Reports from Beijing:

China’s government has ordered 2,087 steel and cement mills and other factories with poor energy efficiency to close as it struggles to cut waste and improve the country’s battered environment.

The “backward” facilities produce steel, coke, aluminum, paper and other materials in areas throughout China and must close by late September, the Ministry of Industry and Information Technology announced Sunday.

Authorities said last week that a five-year plan to improve energy efficiency suffered a setback this year as China’s economic rebound and a construction boom boosted demand for steel, cement and other energy-intensive products.

The plan calls for a 20 percent reduction in China’s energy consumption per unit of economic output, or energy intensity, by the end of this year. The government said in March it had cut energy intensity 14.4 percent by the end of 2009 but it said last week that energy intensity crept up 0.09 percent in the first half of this year.

China overtook the United States last year as the world’s biggest energy consumer, though with a larger population it still is well behind in consumption per person, according to the International Energy Agency.

China’s surging energy demands have alarmed communist leaders, who worry about dependence on imported oil and gas from volatile regions such as the Gulf and pollution damage to scarce water supplies and forests in a densely populated country.

The country’s growing presence in international energy markets has prompted complaints that it is pushing up crude prices and making supply deals with international pariahs such as Iran and Sudan.

China is the world’s biggest steel producer and a major producer of other industrial materials as well. Its newest facilities are equipped with the latest technology but there are thousands of small, outdated paper mills and other businesses that local authorities are reluctant to close for the sake of jobs and tax revenue.

In the latest crackdown, the facilities would lose their certification to emit pollutants at the end of September, utilities would cut off power supplies and banks would be ordered to stop dealing with them, the ministry said.

Its list included 762 cement factories, 279 paper mills, 175 steel mills, 192 coking plants and an unspecified number of aluminum mills.

Provinces with the biggest numbers of affected facilities are Henan in central China and Shaanxi in the north, both traditional centers for heavy industry, with more than 200 each.

Beijing warned in March that China was lagging on efficiency due to its stimulus, which was based in part on pumping money into the economy through massive spending on building new highways and other public works. Banks also were ordered to lend more to support private sector construction.

That set back government efforts to shift the economy away from heavy manufacturing and toward more technology-based businesses and cleaner service industries.

The economy grew by 11.9 percent in the first quarter over a year earlier and by 10.3 percent in the second quarter. Stimulus spending and a flood of lending by state banks helped to boost growth from a low of 6.1 percent in the first quarter of 2009.

Chinese industries use 20 to 100 percent more energy per unit of output than their U.S., Japanese and other counterparts, according to the World Bank. Chinese officials say energy use is 3.4 times the world average.


China Connections Magazine (July-August 2010):

Australian companies in the sustainable design and building sectors can make a lot of headway in China when benefiting from the right connections, relationships and events writes Nigel Haywood from Beijing.

Since launching its program of economic reform over 30 years ago, economic growth in China has been averaging 10 percent each year with the Chinese economy doubling in size every seven to eight years. Since 1978, China’s economy has increased 16 fold, leaving little doubt that at some point in the future it will surpass the United States as the world’s largest economy. 

Central to continued economic growth in a post global financial crisis world will be a further economic transformation based on sharply increased internal domestic demand, higher incomes and higher standards of living. This, in turn, will require significant social reforms and a massive mobilisation of the population from rural to urban settings.

To underscore this, the United Nations forecasts that by 2050, China’s population will be 75 percent urbanised, which equates to a movement of 500 million people into urban centres over the next 40 years – or roughly 23 times the entire current population of Australia. Comprehending the enormity of this challenge is difficult from many perspectives.

How do you meet the housing an infrastructure demands from such urbanisation and what does it mean in terms of additional floor space?

Interesting questions – and once again, the statistics are quite frankly mind boggling. By 2030, Chinese urban floor space is projected to double, expanding by some 40 billion metres² to a total of roughly 80 billion metres².  To put it in an Australian context, that equates to roughly 4,500 times the total square-metre capacity of Sydney. It is no surprise then to note that by 2030, China’s construction industry will account for around 20 percent of total global construction activity and be valued at about US$2.5 trillion.

It is fairly safe to say that this additional floor space will be significantly different to the existing building stock. The United Nations Environment Program estimated in 2007 that buildings in China accounted for 42 percent of total energy use. Although the carbon footprint of China’s buildings is considered to be about one-tenth that of the United States, it is clear that this is increasing as urbanisation and living standards increase. Impressive commitments in the international sphere with regards to climate action have been made by China, including a target of reducing its carbon emissions per unit of GDP (carbon intensity) by 40 percent to 45 percent before 2020 based on 2005 levels. 

To achieve this goal, a systematic approach to addressing the energy intensiveness of new construction in China will need to be adopted. Whilst this approach is likely to be multi-faceted and certainly challenging to achieve, there are already signs of action. 

Emergence of the China Green Building Council and China’s aspirations for ascension to membership of the World Green Building Council are clear signals that China is taking responsible and measured steps to address the energy efficiency of its massive construction sector. More, however, needs to be done and with this comes tremendous opportunities. Australia has already been active in influencing the development of China’s Green Building Council and also China’s “Green Star” building rating system.

Australian design and architectural practices were also well represented at a recent Beijing Institute of Architectural Design forum which examined the issue of sustainable building and design. This two-day forum, which was part of Australian Sustainable Building and Design week, covered significant ground and gave an opportunity for a sharing of experiences and approaches on the issues of sustainability and green building. Approximately 14 Australian organisations were represented at the forum.

In addition to the BIAD forum, May saw the opening of the ImagineArchitecture exhibition in Beijing. Showcasing the built works of Australian architectural and design practices in China, the photographic exhibition, organised by AustCham Beijing and sponsored by Austrade and the Australian Institute of Architects (with support from BIAD), brought the achievements of Australia’s architectural and design profession to the people of Beijing for the first time. Comprising the works of seven practices, the exhibition is a lasting impression of the ways in which Australian architects have influenced development of the built form in China and evidence of the strong linkages between the two countries from an architectural and design perspective.

Austrade, through the Wanwu initiative, is also encouraging exports and two-way investment between Australia and China in clean energy, green-building and the environment. Through this avenue, it is expected that opportunities for Australian businesses will be identified and pursued.

So what comes next?

The massive scale of China’s construction market presents opportunities for the country to make the quantum leap into eco-cities, potentially by-passing the “green building” phase of development. Much has been made of the opportunities here and there are many eco-city projects on the drawing boards. So what is an eco-city? Put simply, the term ‘eco-city’ applies to the application of principles of sustainable development, urban planning, design, and management in order to balance the economic and environmental needs of society. In other words, the eco-city concept takes a holistic approach to the issue of sustainability. In a country where some 40 billion square metres of floor space is being added over the next 20 years, maybe this is the solution that China needs. I guess only time will tell.

Nigel Haywood has recently completed an assignment for the Australian Chamber of Commerce in Beijing, compiling a position paper on behalf of Australian firms in the Green building sphere and how they can best maximise business opportunities – from consulting services to design and build – in China.


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