GUANGZHOU, CHINA — Specialty chemicals company Lanxess elaborated on its plans to build a red iron oxide pigment plant in Ningbo, at a news conference just before Chinaplas.

The company will invest 55 million euros (US$70.6 million) in the plant, which will have annual capacity of 25,000 metric tons. Construction will start in the second quarter, and the plant will employ 150.

The new plant, in the Ningbo Economic and Petrochemical Development Area, will add to the company’s current capacity of 40,000 metric tons of production in China at the company’s Shanghai facilities, said Wolfgang Oehlert, vice president for the inorganic pigments business unit for Asia Pacific.

Chien Ming Cheng, CEO of Lanxess Greater China said: “We have a very positive take on the Chinese market and will take great strides in this direction while exploring new opportunities.”

Products produced in Ningbo will be mostly for the China market.

“We see an increasing demand with the urbanization with the mobility with these mega trends for high quality products here in China and this is the market we want to serve in the future,” Oehlert said.

The products Lanxess is showing this year at Chinaplas are an introduction to some of the products that the Ningbo plant will produce, including high-temperature-stable red, yellow and black pigments.

Oehlert said that the sustainability factor of the new facility is of utmost importance to the company, claiming that it will be an almost zero-emission factory. “We will be spending more than 30 percent of our investment on environmental production facilities, including waste water treatment, waste gas treatment, and solid waste recovery,” he said.

He said the company hopes the factory can serve as a blueprint for future facilities around the world.

source http://www.plasticsnews.com/article/20130520/NEWS/130529991/lanxess-details-plans-for-pigment-plant-in-ningbo

Project Data Sheet (PDS): Details

Copyright © 2013 Asian Development Bank

Description

The proposed CDTA is a timely response to the government’s request for ADB’s assistance to support the Low-Carbon Pilot City Program in the PRC. The CDTA supports the PRC’s 12th plan objectives of decoupling the economic growth and greenhouse gas emissions through demonstration and deployment of innovative low-carbon technologies and urban environment improvement. This is also in line with ADB’s country partnership strategy for the PRC (2011-2015) with emphasis on promoting environmentally sustainable growth, PPPs, and SME development in low-carbon economic sectors. The TA concept paper is also aligned with MOF and NDRC’s priorities for developing innovative financing mechanism to further stimulate energy efficiency and renewable/clean energy investments through market-based mechanisms.

Project Rationale and Linkage to Country/Regional Strategy

Energy intensity reduction has been a major initiative by the Government of the PRC to address environmental and climate change impact from the rapidly growing fossil-fuel-based economy. During the Eleventh Five-Year Plan (2006-2010), it achieved a reduction of about 19.2% in its energy intensity. The Twelfth Five-Year Plan (2011-2015) mandates further 16% reduction in energy intensity. The government has backed up the target by well directed financial and policy incentives

to stimulate investments in energy efficiency improvement. Inspite of impressive progress during the 11th plan, the dominance of energy-intensive industries, such as iron and steel in the PRC pose tougher challenges to achieve the 12th plan targets. The concentration of these industries, in close proximity to population clusters, has also resulted in the deterioration of urban environment quality and poor air quality. Although the eastern coastal provinces, such as Jiangsu province, has recently and successfully promoted high-tech industries and service sector, greater challenges remain for low-carbon industrial and urban development strategies to weaken and delink the future economic growth from increased energy consumption and carbon emissions. Ningbo city, located in Zhejiang province with a population of 7.5 million, is one of the major coastal cities in the PRC with high-tech manufacturing industries and financial sector. Its manufacturing industry is dominated by petrochemical industry and high-tech industries, such as precision machinery and information technology equipment. Inspite of the presence of these advanced industries, Ningbo also has a large number of traditional industries, some of which are still using obsolete and inefficient technologies, in particular, the SMEs due to limited access to debt-financing which has inhibited their ability to invest in more efficient technologies. To enhance its low-carbon development efforts, Ningbo city has established the Office of Climate Change Mitigation, and commenced the preparation of Low-Carbon Development Action Plan in 2012. The Ningbo municipal government (NMG) is keen to incorporate market-based instruments to provide incentives to promote private sector investments to complement the public sector investments in the clean energy sector, and in particular, in industrial energy efficiency improvement under the proposed action plan. Given ADB’s extensive involvement in promoting industrial energy efficiency improvement through lending and nonlending operations as well as supporting the establishment of emission trading markets in Tianjin and Shanghai, NMG has sought ADB’s assistance in identifying key actions and policies to be initiated under the Low Carbon Development Action Plan to promote industrial energy efficiency and increasing the utilization of renewable energy in Ningbo city. As in other parts of the PRC, the efforts to promote energy conservation and renewable energy development in Ningbo city were driven primarily by administrative measures targeting large enterprises, such as the “Key Enterprise Program”, where enterprises having an energy consumption of more than 100,000 tons of coal equivalent (tce) were obliged to commit to a set of energy efficiency improvement measures. Under the 12th plan, NMG has decided to widen the target enterprises by lowering the threshold for targeting enterprises that consumes more than 3,000 tce. In addition, concerted efforts are also needed to promote energy conservation in commercial and residential buildings, public facilities, and in the provision of urban services, such as heating and water supply. This would require a large number of SMEs to undertake significant investments in energy efficiency improvement. In addition to the SME sector, there are opportunities for significant energy saving opportunities by optimizing the energy consumption in industrial parks in Ningbo city. There is a lack of understanding of the energy saving potential in different industrial sectors and especially in the SME sector. The proposed CDTA will assist the NMG in establishing a database of energy consumption per unit of industrial production for each industrial enterprise and establishing a benchmark on energy consumption for different types of industries based on national and international norms. This would enable NMG to introduce targeted incentives and market-based instruments, such as energy efficiency trading and emission trading to achieve the desired efficiency improvements. The CDTA would also identify technologies and industrial processes to achieve the benchmark energy efficiency levels and assist NMG in establishing a technology transfer mechanism through technology providers, such as energy service companies (ESCOs). The SMEs are further discouraged by restricted access to debt-financing for investing in energy efficiency. The ESCOs, which has the technical expertise to implement energy efficiency projects, are particularly suited to implement these projects in the SME sector without burdening the host companies in terms of procurement of equipment and mobilizing financing. However, ESCOs in the PRC are relatively small companies without large balance sheets and has faced difficulties in raising the requisite investment funds. As ESCOs are rewarded based on the energy savings achieved, the cash flows are subject to technical performance risk and credit worthiness of the host companies. As a result, the commercial banks are generally reluctant to provide debt-financing to ESCOs without recourse to credit guarantees or adequate collateral. The proposed CDTA will make recommendation to establish a dedicated financing platform to mobilize financing for energy efficiency projects implemented by ESCOs and SMEs. Moreover, Ningbo has excellent prospects for the utilization of renewable energy to meet the local energy needs and to de-carbonize its energy supply. The solar photovoltaic as well as the solar thermal technologies has the potential to make a significant contribution to meeting the electricity and thermal energy requirement of residential and public buildings. In addition, there is an untapped potential for further increasing the use of renewable energy sources, such as biomass and municipal solid waste for electricity generation and heat production in urban areas. The use of heat pumps to extract shallow-ground geothermal energy has the potential to replace coal boilers in urban heat supply systems. However, the integration of distributed energy sources based on a range of renewable energy technologies posses a number of technical, institutional, and financial challenges to the provincial authorities. The investment models to be adopted for mobilizing investments in large numbers of relatively small-scale renewable energy projects would be radically different from a state-owned enterprise led approach deployed in the past in developing large-scale power plants, including wind power in the PRC. It would also be necessary to create an enabling environment by introducing appropriate policy incentives through a transparent regulatory regime, feed-in tariffs, and tax incentives to attract investments from the private sector. The proposed CDTA will review the current policy incentives and institutional framework for promoting private sector investments in distributed renewable energy. The proposed CDTA is designed to address the critical capacity gaps of NMG in designing and implementing a low-carbon development strategy through targeted package of policy, regulations, and financial incentives for promoting industrial energy efficiency and accelerate distributed renewable energy generation. The policy makers in NMG lack expertise to design appropriate regulations and incentives to stimulate private sector investments in energy efficiency.

Impact

Reduced carbon emissions and energy consumption in Ningbo city

Project Outcome

Description of Outcome

NMG adopts a comprehensive strategy to mobilize investments in energy efficiency and distributed renewable energy

Implementation Progress

Description of Project Outputs

Assess market potential for industrial energy efficiency improvement and identify technologies and policy incentives to promote investments in industrial energy efficiency Recommend strategies and institutional structures to promote private investments in distributed renewable energy Develop innovative financial products that can overcome barriers for clean energy investments Strengthen capacity of government agencies, financial institutions, and potential investors in encouraging private sector investments in clean energy projects and in using innovative financial products developed under the CDTA

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.