the china environmental challenge: opportunities for eu...

A project funded by the European Union

Implementing Partners

The China environmental challenge:

opportunities for EU SMEs

Gianluca Ghiara – December 1, 2015

© EU SME Centre 2015

Get Ready for China!

The EU SME Centre is an EU Commission funded project which helps EU SMEs prepare to do business in China by

providing them with a range of information, advice, training and support services.

The Centre is implemented by a consortium of six partners and was established in October 2010. It successfully

completed its first phase in July 2014 and has now entered its second phase which will run until July 2018.

2

Speaker biography

• Gianluca Ghiara is managing director of Geapower, an engineering consulting

company, based in Beijing

• Since 2005, he has been consulting European and Chinese companies active in

the environmental protection and renewable energy fields

• He has been involved in the development of almost 50 projects in the renewable

energy, waste water treatment and industrial pollution control sectors

• In EUCCC, Chair of the Renewable Energy Working Group

• In EU SME Centre, senior expert for the Green Tech Sector

• He holds an MBA from Peking University

For further information:

mail: [email protected]

Agenda

• Introduction

• Chinese economy status

• Chinese environmental status

• Market Analysis

• Water Sector

• Renewable Energy Sector

• Waste to energy/heating Sector

• Industrial pollution Sector

• How to develop a successful business

• Chinese market background

• How to avoid mistakes

• Different market approachs

• Conclusion


Introduction


Chinese Economy Status

• China steadily became the second largest economy in the wold

• In recent years Chinese GDP growth declined to 6.9%, but it is expected to raise

again starting from 2018

• Chinese economy is living a fundamental transition, the overall intent is to: • control local government expenditure

• move from an energy intensive economy to an energy efficient one

• promote, mostly through the environmental protection, a sustainable and

stable society

• support the introduction and local development of high quality technologies

• support a stronger dialogue between Chinese and foreign enterprises

• support a stronger role of Chinese SMEs

Chinese Environmental Status

• Worldwide China is the country that is investing the most in the environmental and

renewable energy sectors

• Both sectors are very much unbalanced and need strong technology introduction to

cope with Central Government expectations

• So far, due to the pressure received from both central government and populations,

most of projects have been developed too quickly and without a proper coordination

• Both environmental and RE sectors are very much diversified sectors with multiple

active players: SOEs, local public companies, local agencies and SMEs

• Every year, many new laws and regulations are approved, and governmental funds

are provided, in order to sustain this development

Market Analysis


Water Sector

Legislative Framework • State Council (2015) – Action Plan on Water Prevention and Control

Market Analysis • 60% of groundwater in China is unfit for human consumption

• China achieved MWWT ratios of 80% in cities and 65% in counties

• More than 50% of MWWTP are running at lost as water focus in China has been

focused on meeting demand by simply increasing supply

• Rural and Industrial WW Sectors need the introduction of better technology and

equipment

• NDRC is promoting market base mechanism to overall improve the sector’s

development

Water Sector

Business Opportunities

• Water saving technologies • special sealing product, dynamic and static seals

• Water extraction • well-drilling and high pressure pumps

• Water distribution • network leakage detection and repair technologies

• high efficiency pumps

• advanced water measurements technologies

• integrated monitoring systems

• Water treatment • biological denitrification and phosphorus removal technologies

• membrane manufacturing technologies

• sludge treatment technologies

• disposal equipment and automatic control equipment

• immobilized microbe technologies

Renewable Energy Sector

Legislative Framework • NEA (2014) – National Action Plan for Energy Strategy development (2015 – 2020)

• State Council (2015) – Document N. 09

Market Analysis • China's RE power generation will reach 200GW wind – 100GW solar – 30GW

bioenergy within 2020

• Lack of coordinated development between grid expansion and RE capacity

• Most of plants are facing huge management and operational costs

• Governmental founds will be introduced to support the biogas and biomass sectors

• The actual feed in tariff system will be revisited, obliging Chinese plant to install long

lasting technology and equipment

Renewable Energy Sector


• Solution to ensure effective plant’s management and operation

• Wind sector • wind to heat technologies

• inverter/converter technology, generators, gearboxes

• cooling and filter systems; pitch control systems

• Solar sector • effective solutions for the management of distributed generation networks

• high quality solar roof top solutions

• concentrated solar power

• thin film technology

• Bio-energy sector • steam turbines for biomass combustion

• auxiliary equipment: generator; condenser system; monitoring and control

systems

• process control technologies: totally integrated automation and totally

integrated power solutions; modular DCS, SCADA and MES solutions

Waste to energy/heating Sector

Legislative Framework • MEP (2014) – New Environmental Protection Law

• State Council (2012) - China Energy White Paper

Market Analysis • The number of WTE Plants will increase at a range of 100 plants YoY

• MSW in China has low caloric value (5MJ/kg), specific measures will be in place to

valorize the energy content from municipal solid waste

• In many cases, it is still missing the clear understanding of how control and properly

manage MSW

• Strong local concern as local environment doesn’t always support the introduction of

the Best Available Technique (BAT)

Waste to energy/heating Sector


• Municipal solid waste management and collection • Equipment for sorting, washing mineral substances, magnetic pulley

• Combustion process technologies: where the waste is not sorted or RDF

combustion

• Boiler and gasifiers • cofiring-pulverized coal boiler, fluidized bed boiler

• circulating fluidized bed boiler, vertical boilers

• Biomass boiler systems, biomass boiler parts & services

• Gasification processes • anaerobic digestion

• syngas solution

• pyrolysis

• Solid waste disposal equipment manufacturing • landfill leakage-proof geo-membrane,

• hazardous waste treatment equipment

• landfill gas power equipment and large-scale livestock farm waste

Industrial pollution Sector

Legislative Framework • MEP (2015) - Soil Pollution and Prevention Action Plan

• NPC (2015) – Air Pollution Prevention and Control Law

• MEP (2014) – New Environmental Protection Law

Market Analysis • MEP survey (2014):19.4% of China’s total arable land was badly contaminated by

heavy metals

• In 2014, out of 161 monitored cities, only 16 reached the national standards of urban

air quality; the sector will grow into a multi-trillion market in 2016-2020

• Heavy industry accounts 70% of Chinese industrial production; in most cases the

technology used is very basic and very polluting

Industrial pollution Sector


• The whole Chinese industrial market is looking for technologies that directly

minimize emissions or indirectly reduce them in most industrial sectors: iron and

steel manufacturing, foundry operations, metals finishing, cement manufacture,

paper and pulp, glass manufacture, food processing, tanning and chemical

industries.

• Chinese industries are looking for processing and control methods to inhibit

better pollution controls, such as: • treatment techniques and disposal methods for hazardous waste

• direct steelmaking processes that reduce pollution

• modified glass making furnace

• non-chlorine pulp bleaching sequences to control toxic substances as dioxin

• environmental equipment - oil skimmers

• soil investigation and remediation technologies

• VOC control technologies

• catalytic materials and catalytic combustion

• industrial organic exhaust gas purification

How to develop a successful business


Chinese market Background

• Market Access

• China is a very huge and differentiated country

• Financial barriers

• Chinese government just started to provided specific support to SMEs

• Cost oriented market

• many Chinese companies push to maintain a cost oriented market

• Technical barriers

• no clear understanding of the introduced technical solutions

• Institutional barrier

• multiple minsters and local agencies are involved in same sectors

• strong relationship between Chinese local governments and enterprises


How to avoid mistakes

• Analyzing your business within the Chinese environment

• understand if the local market is ready for your solution

• be flexible to the local market needs

• Prepare the necessary documentation

• brochures and technology description need to be customized to Chinese

market

• Prepare a specific negotiation strategy

• Select the right people for your business

• it’s not just a matter of how controlling your HR costs

• Develop an effective budget control

• be open to cooperate with other EU SMEs

• Develop detailed market and customer research

• define with who and how to develop your business


Different market approaches

• Advantages

• More control on

your operations

• More control on IP

• Indipendent

market analysis

• Dis-advantages

• Higher unit costs

• Less brand

awaress

• Limited knowledge

of Chinese context

• Insufficient after

sales support

• Advantages

• Benefits from local

partner knowledge

• Shared cost/risks

• Quick access to

local market

• Dis-advantages

• Lack of market

control

• Long term validity

is in question

• Hard control on IP

• Hard to integrate

cultures

WFOE Joint Venture


Local Partnership

• Advantages

• Benefits from local

foreign partner

• Controlled costs

• Good access to

local market

• Dis-advantages

• No total control of

market

• Long term validity

could be in question

• No total control on

your IP

Conclusion


Conclusion

• Chinese economy is living a fundamental economic transition

• Chinese environment is under stress; major national regulations have been

approved to sustain the market

• China needs to start to introduce best available techniques in multiple

sectors

• The whole environmental sector is not entirely mature yet: rules are not

clear, market not yet stable, local governments lack of experience

• EU SMEs can play a fundamental role in supporting the sustainable

development of the Chinese environmental and energy sectors

• Chinese market is very competitive; it’s up to us not to make it impossible

to be approached thanks to a correct business planning


www.eusmecentre.org.cn

Get Ready for China

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