ChinaFAQs: China Adopts World-Class Pollutant Emissions Standards for Coal Power Plants

Key Points

  • China’s new emissions standards for power plants are comparable to standards in the developed world in important respects.
  • These standards are being phased in quickly. They apply to new plants starting Jan. 1, 2012, and existing plants have just 2½ years to meet the standards.
  • The standards include provisions for even greater stringency in highly polluted areas.
  • China has raised electricity rates to fund the $41 billion investment in new pollution abatement equipment as well as the operating costs needed to comply with the standards.
  • These measures also encourage greater energy efficiency and the use of renewables, as they raise the cost of coal-fired power.

China’s new state-of-the-art national air pollution standards for thermal power plants went into effect January 1, 2012, replacing standards that had been in effect since 2003.1 Not only are these standards much more stringent than the previous standards, but they bring Chinese power plant regulation generally in line with developed world standards in important respects. This is true for both new and existing power plants. The new Chinese law gives existing power plants a 2½ year grace period to meet the new standards, but then all existing plants will be subject to the new standard. Older plants will also see a tightened standard (and sometimes stricter than the US or the EU for existing plants.

There are separate standards for oil and natural gas-fired power plants, with the oil standards being at least as strict as coal and the natural gas standards much stricter. However, since most of China’s power generation comes from coal, the coal standards are the most relevant to addressing China’s air pollution challenges. The chart below compares China’s new standards to the US2 and EU3 standards for coal-fired power plants.4

Coal-fired power plants consume more than half of China’s annual coal production, and emit over 40% of China’s sulfur dioxide (SO2) and nitrogen oxides (NOx) pollutants.

Not only are the new standards strict, but they are even more stringent for new plants in large regions that have the most serious air pollution problems. In regions designated by China’s Ministry of Environmental Protection (MEP) as having severe air pollution problems, the limits will be 50 mg/m3 for SO2, 100 mg/m3 for NOX, and 20 mg/m3 for particulates.

These new regulations are a major commitment to environmental investment by China. The Chinese government estimates compliance with the new MEP standards will require power companies to invest about $41 billion to upgrade pollution abatement equipment, and the annual operating cost for NOX control equipment alone will be around $9.6 billion (61.2 billion RMB). To pay for the investment, on December 1, China’s National Development and Reform Commission raised electricity prices for industrial users by RMB 0.03 (or .47 US cents) per KWh.5 This increase includes RMB0.008 for NOX control. This both supports the costs of the environmental investments and operating costs, and it raises the price of coal-fired power, increasing the incentives for efficiency and making renewable energy more competitive.

During China’s 11th Five Year Plan (2006-2010) SO2 control equipment was installed on the vast majority of China’s coal-fired power plants. The new pollution abatement equipment combined with the closure of 76 GW of the most highly polluting old coal-fired power plants reduced China’s total sulfur emissions by over 14%.6 NOX control was added in March 2011 in the 12th Five Year Plan. According to the Chinese Electricity Council, by the end of 2010 (before the requirement came into force) 14% of coal-fired power plants (totally 90 GW) had already installed NOX control equipment. During the next five years this number will grow considerably, and additional equipment will be added to control mercury and to meet tighter standards for other pollutants.

For more information, please contact: Zhao Lijian, Program Officer, Environmental Management, China Sustainable Energy Program, the Energy Foundation, at zhaolijian@efchina.org Chris James, Senior Associate, Regulatory Assistance Project, at cjames@raponline.org Deborah Seligsohn, World Resources Institute, at dseligsohn@wri.org

Notes:
1. A summary (in English) and the full text of the new regulations (in Chinese) are available from the Chinese Ministry of Environmental Protection (http://english.mep.gov.cn/standards_reports/ standards/Air_Environment/Emission_standard1/201201/ t20120106_222242.htm)

2. The United States uses performance metrics (e.g., pounds/GWh, pounds/million Btu heat input), rather than concentration standards, in regulating power plants. To compare, we converted the US standards to concentrations. The full regulations are available at: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title40/40cfr60_main_02.tpl (see subpart D and Da) and http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title40/40cfr63e_main_02.tpl (see subpart UUUUU).

3. The European standards are based on power plant size. The values in the table are based on larger power plants (>500 MW) comparable to Chinese facilities (where no new small plants are allowed and most existing small plants have been decommissioned). New plants are those placed into service after 2003. The full regulations are here.

4. The chart is based on work by the US-based Energy Foundation and the Regulatory Assistance Project (RAP). RAP is “a global, non-profit team of experts focused on the long-term economic and environmental sustainability of the power and natural gas sectors, providing technical and policy assistance to policymakers and regulators on a broad range of energy and environmental issues.” We are grateful for the advice of Jeremy Schreifels in how to compare the different standards given different approaches to regulatory design.

5. Lu, Hui. “China hikes power tariffs, adjusts coal prices to ease power shortages.” Xinhua. 30 November 2011. Online at: http://news.xinhuanet.com/english2010/china/2011-11/30/c_131280061.htm

6. Deng, Shasha. “China meets pollution control targets for 2006-2010.” Xinhua. 29 August 2011. Online at: http://news.xinhuanet.com/english2010/china/2011-08/29/c_131081860.htm

7. The four provinces are Guangxi, Sichuan, Guizhou, and Chongqing.