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1. Project Summary and Relationship to China's Agenda 21

This project will select the Guizhou Organic Chemical General Plant "36,000 t/a Acetic Acid by Methanol Oxo-reaction", the Hubei Yichang Phosphorous Plant "Air Pollution Treatment Relocation Project", and the Hunan Zhuzhou Chemical Plant "40,000 t/a Ion Membrane Alkali Project" as demonstration projects of cleaner production in chemical industry. The implementation of these demonstration projects is intended to improve technical modernisation and comprehensive utilisation of energy and resources in these enterprises, and lead to cleaner production in the chemical industry.

This project is based on programme areas 12B, and 12C of China's Agenda 21, and is related to programme areas 13B, 18A, 19A and 14C.

2. Background

The Chemical Industry is an important sector of commercial activity in the national economy. Its average annual growth rate of gross output is 13.9% and this sector has played an important role in supporting the development of industry and agriculture, and in improving the quality of life. Meanwhile, the chemical industry is one of the sectors which discharges a great amount of pollutants. Its annual discharge of waste water, gas and solid waste are 20%, 5%, and 8% respectively of industrial wastes in the country. This sector exceeds all others in the discharge of harmful and toxic materials such as mercury, phenol, chrome, cyanide and ammonia, with much of these discharges polluting the main rivers, lakes and harbours.

Guizhou Organic Chemical General Plant, for example, is a large chemical enterprise which produces acetic acid by using acetylene as raw material and mercury sulphate as catalyst. Mercury discharged by the plant causes serious pollution to the environment. From the first run in 1971 to the end of 1989, the total amount of mercury discharged was 54.704 tons of which about 5 tons drained into water. Additionally, around 50 tons were deposited in the soil around the plant, which was removed and sent to the mercury mine to be recovered. The waste water containing mercury, although treated before emission, still contaminates arable lands with an area of 270 hectares. The mercury content in the rice produced in these fields is approximately 15.2 times that of standard rice. Furthermore, discharged mercury also pollutes the atmosphere of the contaminated areas and the vicinity. Therefore, the Guizhou Organic Chemical General Plant has determined to carry out the 36,000t/a Acetic Acid Project by Methanol Oxo-reaction, currently the most advanced technique in the world, to replace the old mercury method and thus eliminate mercury pollution completely. The adoption of the advanced technology can also provide reliable materials for the downstream products of methanol and acetic acid, further improving and extending the productions of the two-series products. In addition, this will facilitate technical innovation, improve the commercial benefit for the enterprise, and also fit into the policy of technological modernisation for the old plant.

The chemical industry is also a major source of pollution for technical waste gas and dusts. There are currently more than 300 phosphorous fertiliser plants operating throughout the country, which discharge Fluorine up to fifty thousand tons per year. The data obtained by the Yichang environmental monitoring station of Hubei province indicate that because of overdue emission of HF and SO2 by the Yichang Phosphorous Fertiliser Plant, the annual average density of fluorine in the atmosphere of this region reaches 0.11 mg/Nm3. This represents 1.57 times of the allowed value according to "Designing Health Standards Suitable for Industrial Enterprises"; average density of SO2 is 0.264 kg/Nm3, representing 1.4 times the grade II standards of air quality issued by the central government. For this reason, following the Master Plan of the Yichang city and environmental protection requirements, the Yichang Municipal Government and Yichang Phosphorous Fertiliser Plant decided to implement "Air Pollution Treatment Relocation Project" in the Ninth Five-Year Plan. This will move the Yichang Phosphorous Fertiliser Plant out of the city to the Yangjiazui area located in Zhijiang county. The renovation and modernisation of technology and technique, and the products upgrading will be carried out during the relocation and reconstruction process. A new plant with more efficient production scale, good commercial benefits and improved waste treatment will be established as a result.

Shortage of energy is also a big obstacle to sustainable development of the Chinese chemical industry, and obsolete and inferior quality equipment is the main cause of high energy consumption and environmental pollution. Currently, in Zhuzhou Chemical Plant, Zhuzhou city of Hunan province, 40 percent graphite anode diaphragm electrolyser is still used in the production of 100,000 t/a alkali production, which consumes more power, graphite and asbestos and causes pollution. Ion membrane alkali production, a new processing and manufacturing technique developed in the 1980's and characterised by less energy consumption, high production purity, non-pollution, convenient operation and safety, is the trend of the choler-alkali industry. This new production is recommended, substituting ion membrane electrolyser for the graphite anode diaphragm to save energy and reduce pollution. Zhuzhou Chemical Plant is one of the largest enterprises the state supports. This project has been included in the Ninth Five-Year Plan of the Ministry of Chemical Industry and Hunan province respectively.

3. Objectives

3.1 Long-term Objective

To modernise the technology and promote the use of equipment and operations for the purpose of eliminating solid wastewater and air pollution to the minimum during the entire production process. To facilitate the implementation of cleaner production in the whole chemical industry and strive towards discarding the epithet "big pollution resource" directed at Chinaís chemical industry by the end of the century.

3.2 Immediate Objectives

• To conduct technological modernisation of plants located in important cities, water systems and important harbours to reduce pollution, save energy and realise cleaner production;
• To disseminate and implement cleaner production for the whole chemical industry by means of demonstrations.

4. Outputs and Activities

4.1 "36,000 t/a Acetic Acid by Methanol Oxo-reaction" of Guizhou Organic Chemical General Plant.

• Importing, installing and test running key equipment and materials of coal gas purifying units, which apply the water coal pulp gasification method of the Texaco gasifier;
• Importing, installing and test running key equipment and materials of carbon monoxide purifying units. Unlike the existing gas making technologies, complex agent absorption, low temperature methanol scrubbing, and cold-box separation will be applied in the technique;
• Importing, installing and test running key equipment and materials of the methanol reaction unit. Low pressure and three-tower distillation flow will be applied;
• Importing, installing and test running key equipment and materials of acetic acid production units. High pressure oxo reaction will be used.

Monitoring Indicators: To establish a 36,000t/a acetic acid plant by methanol oxo synthesis and eliminate the mercury unit production in order to bring mercury emissions under permanent control.

Implementing Agencies: The Ministry of Chemical Industry, the Guizhou Provincial Government and Guizhou Organic General Chemical Plant.

Time Schedule: October 1996 - October 2001

4.2 Yichang Phosphorous Fertiliser Plant "Air Pollution Treatment Relocation Project"

• To build a new plant with advanced technology, good commercial benefits and waste treatment at Yangjiazui (within Zhijiang county) by importing equipment as follows: sulphuric acid equipment with production capacity of 80,000t/a, phosphorous acid equipment with capacity of 30,000t/a, ammonia phosphate equipment with capacity of 60,000t/a, and cement equipment with capacity of 120,000t/a;
• To train technical workers, technicians, managers and decision makers to meet the requirements of operating the imported equipment and managing the new plant;
• To dismantle the old plant after the new plant has been established.

Monitoring Indicators: To build a new plant with advanced technology and significantly reduced SO2 by 2021 t/a, dust by 104 t/a and fluorine emissions.

Implementation Agencies: The Ministry of Chemical Industry, Yichang Municipal Government, Yichang Phosphorous Fertilizer Plant.

Time Schedule: October 1996 - October 2000

4.3 40,000t/a ion membrane alkali project in Zhuzhou Chemical Plant of Hunan province

• To finish the feasibility study report;
• To conduct investment promotion activities for fund raising as well as technology import decisions and foreign co-operation;
• To import key equipment for ion membrane alkali production and automatic instrumentation;
• To organise site visits to the equipment importing country and train the relative personnel of the plant.

Monitoring Indicators: 40,000 t/a graphite anode plant will be replaced by ion membrane and reduce asbestos pollutant by 12 tons, and save power of 1.2 million kW/h.

Implementing Agencies: The Ministry of Chemical Industry, Hunan Provincial Planning Commission, Hunan Petrochemical Industry Bureau, Zhuzhou Chemical Plant.

Time Schedule: October 1996 - October 2000

4.4 Capacity building and dissemination of cleaner production

• To combine demonstration pilots, to convene technology seminars on cleaner production techniques in the chemical industry and to disseminate advanced experiences to the entire industry;
• To train relevant personnel of the demonstration plants on advanced technology and management;
• To organise decision makers and technicians of other related plants to conduct site-visits to the demonstration plants and study abroad.

Monitoring Indicators: Three seminars for CP technology dissemination; 200 persons trained.

Implementation Agencies: The Ministry of Chemical Industry and related plants

Time Schedule: October 1996 - October 2000

5. Inputs

5.1 Chinese Inputs

Chinese inputs will be used for the recruitment of national experts, personnel training, pilot demonstrations and technology dissemination.

5.2 International Inputs

International inputs will be used for the importation of some key equipment, the recruitment of international experts, and overseas visits.

5.3 Budget

A total of about US$ 122 million will be needed to implement this project, of which domestic input will be 65.7 million and international input will be 56.3 million.

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Table 1. Budget by Item (in million US dollars)

Table 2. Budget by Output (in million US dollars)

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6. Benefits

Regarding the Guizhou Organic Chemical General Plant project, the internal rates of return before and after income tax are 15.96% and 14.47% respectively, which are higher than 12%, the basic internal rate of return. This shows that the project provides an acceptable financial return. The payback period of RMB and foreign currency loans are 13.34 years and 10 years, which indicates the projectís ability to pay off the loans.

Upon the accomplishment of the Yichang Phosphorous Fertiliser Plant relocation project, expected sales income is 131.29 million yuan, with sales profit of 32.55 million yuan, and internal return rate of 13.41%. The investment payback period is expected to be 9 years ( including 3 years construction).

When the Zhuzhou Chemical Plant project is completed, the sales income will be RMB 134.51 million yuan per year, profit and tax will be 35.28 million yuan and the return on the fixed investment will be 21.73 %.

The implementation of this project will greatly improve the natural environment and the atmospheric quality of Guiyang, Yichang and Zhuzhou and the vicinity, improve the water quality of Wujiang River and Yangtze River pass through. While facilitating the cleaner production of Acetic Acid, Phosphorous Fertiliser and the alkali industry, it will also improve the cleaner production in other chemical industries.

7. Risks

There are two obstacles to the implementation of this project. One is the lack of assurance of financial support and another is the lag in technology. For the sake of overcoming these two factors, the implementation agencies will actively seek international co-operation, import advanced technologies. Meanwhile they will also combine these with technical modernisation to strive for support from the Ministry of Chemical Industry and the State Economic and Trade Commission.

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