Cover story
A woman wearing a protective mask walks in front of the China Central Television building on the morning of Dec. 1, 2015, as hazardous smog blankets Beijing.
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C&EN | CEN.ACS.ORG | JUNE 26, 2017
Restoring the blue skies Chinese efforts to improve air quality open business opportunities for many firms JEAN-FRANÇOIS TREMBLAY, C&EN HONG KONG
T
he bad news about air quality in China is well known. Almost every winter, as temperatures cool in the north of the country and homes need to be heated, China makes headlines around the world for the poor quality of its air. A particularly bad episode last December was dubbed Airpocalypse.
Air quality remains a serious problem in China, but authorities are starting to tackle it. Although still considered harmful to human health, the air in major cities in China has started to improve. For catalyst makers, suppliers of pollution abatement equipment, and manufacturers of instruments that analyze air quality, China is a major source of business. Given the air pollution problems that the country still faces, it should remain a good market for years to come.
CREDIT: DAMIR SAGOLJ/REUTERS/NEWSCOM
In brief
During Airpocalypse, several cities in northern China reported air pollution readings that were off the scale. Hundreds of flights out of the capital, Beijing, were canceled. Schools were closed. And municipal governments declared a red alert on the smog, which affected nearly 500 million people. More recently, in May, vehicular and industrial emissions combined with a sandstorm to again send pollution levels off the charts in Beijing. But the headlines and ominous pictures distract attention from a positive trend. Chinese authorities are doing more and more to control air pollution, and the effort is starting to pay off. Despite sustained economic growth, rising electricity generation, and increasing numbers of cars on the road, air quality in major Chinese cities—including Beijing—is slowly starting to improve. China’s determination to do something about its poisonous air has become a major source of business for companies from around the world. At catalyst suppliers, emission control system producers, and makers of instruments that analyze air
quality, managers are busy hiring and customizing products for the Chinese market. For them, air pollution is an opportunity. “Our sales have been growing at double digits in China for at least the past decade,” says Ben Zhou, the Beijing-based general manager of Thermo Fisher’s environmental and process monitoring business in China. The main buyer of Thermo Fisher products in China is the government, Zhou says. The China National Environmental Monitoring Center, in particular, operates more than 1,000 air-monitoring stations throughout the country. In addition, Zhou says, more than 600 Chinese cities measure their air quality, up from 100 as recently as 2012. For Thermo Fisher, this increase in local vigilance represents a lot more units sold, because some cities may have as many as 50 monitoring stations. The company typically supplies SO2, NOx, CO, O3, and particulate analyzers to fit the monitoring stations. Strong Chinese demand for technologies that monitor or improve air quality is motivating foreign firms to increase their JUNE 26, 2017 | CEN.ACS.ORG | C&EN
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Encouraging trend? In Beijing, particulate emissions are stable or declining … 110 100 90 80 70 60 50 40 30 20 10 0
na 2009
C&EN | CEN.ACS.ORG | JUNE 26, 2017
na 10
na
na 12
11
13
na 14
na 16
15
… despite the country’s increasing economic activity. 2009
Per capita GDP, $ U.S. Vehicles sold, millions
2013
2014
2015
3,838 4,524 5,583 6,329 7,081
7,719
8,141 8,261
23.5
24.6
13.6
2010
18.1
2011
18.5
2012
19.3
22.0
2016
28.0
Electricity production, terawatt-hours 3,696 4,208 4,715 4,937 5,398 5,583 5,666 5,920 PM2.5 = particles smaller than 2.5 µm. na = data not available. Sources: Fontes et al. (average PM2.5 levels in Beijing, independent researchers), International Monetary Fund (per capita GDP), Statista (sum of private cars and commercial vehicles sold in China), Wikipedia (electricity production)
is helping with air quality, particularly in Beijing, where Zhou and his family live. Data gathered by the Beijing government show a steady improvement in air quality in the capital over the past four years. Still, the average annual level of PM2.5 measured in 2016 remained more than seven times as high as what’s recommended by the World Health Organization. The improvement reported by the Beijing government is confirmed by independent scientific studies, which also warn
A BASF employee inspecting vehicle catalysts in Shanghai.
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◼ Beijing Bureau of Statistics ◼ Independent researchers
Average PM2.5 levels in Beijing, micrograms per cubic meter
that high fives are premature. In a paper published earlier this year in the Journal of Environmental Management, Tânia Fontes of Peking University and colleagues concluded that “although the global trends of PM2.5 concentration in all regions and seasons analyzed in China suggest a general decrease of the concentrations, the values observed are still very high compared with the guidelines proposed by the World Health Organization or even the more permissive limits adopted by China” (2017, DOI: 10.1016/j. jenvman.2017.03.074). “Environmental issues are more serious in China than anywhere else,” says NamHoon Kim, the Shanghai-based vice president and general manager for discovery and analytical solutions in Asia-Pacific at the instrument maker PerkinElmer. This makes the country a major market for his firm. China is making progress in its fight against pollution he says, though it still has a long way to go. “You can’t compare the air in the big cities to the air in the countryside, but at least it’s not getting worse in Shanghai.” China still needs to collect and analyze more data if it is to succeed in improving its air quality, Kim cautions. To get on top of the air pollution problem, he says, regulators need to measure ambient air quality in real time at specific locations, analyze how the data evolves over time and space, and combine the data with variables such as the season and weather. One PerkinElmer product selling well in China these days is an ozone precursor ana-
CREDIT: BASF
manufacturing and R&D footprint in China. Michael Baier, vice president of BASF’s mobile emissions catalyst business in Asia and the Pacific, says the German chemical company is sharply increasing local manufacturing for emissions catalysts as well as resources at its R&D center in Shanghai ahead of new vehicle emission regulations that are set to take effect in 2020. Likewise, Thermo Fisher produces in China most of the instruments it sells in China, according to Zhou. And increasingly, China is where the company designs new products. For example, Thermo Fisher entirely designed in China an instrument to measure chemical oxygen demand in water. This kind of tool is in high demand in China, he says. Air analysis devices and systems are increasingly being customized for China or designed with China in mind, he adds. Zhou, who joined Thermo Fisher in 1993, has seen Chinese air quality concerns evolve over the past 25 years. In the 1990s, he recalls, the main focus was sulfur dioxide emissions from coal-fired plants. The following decade, attention shifted to reducing sources of nitrogen oxide pollution. In recent years, small-particle emissions, particularly particles smaller than 2.5 µm (referred to as PM2.5) became the main concern. Nowadays, he says, ozone is also a target, especially in the southern city of Guangzhou. Over the years, Zhou has seen the color of Beijing smog change from yellowish to gray. Emissions by coal-fired plants, from which China derives most of its electricity, are subject to the strictest regulations in the world, he notes. The combination of better monitoring and stricter regulations
lyzer with the capability to sample air quality 40 times per hour, Kim says. Another instrument is a portable gas chromatograph and mass spectroscopy probe, the Torion T-9, that can detect pollutants such as benzene and provide reports on-site without going back to the lab. Ozone, formed when volatile organic compounds react in sunlight, is increasingly common in summer in China. According to Kim, ozone precursor analysis provides an example of the benefits of a comprehensive approach to air monitoring. “If you get readings for the concentrations of ozone precursors in the air, and then you combine that with the anticipated weather for that day, it gives you the chance to at least warn sensitive groups that they should stay home that day,” he says. Once Chinese regulators feel they have collected enough information about a problem, they take action very quickly, BASF’s Baier says. “In other countries, the government can be hesitant to introduce new regulations, but not in China.” Between 2020 and 2023, the country will implement the China VI vehicle emission regulations, which will be as strict as, or even stricter than, the ones that Europe is set to adopt around the same time, Baier says. Before the government announced the new rules, BASF collaborated with officials from government-funded environmental agencies to assist in making decisions on the regulations. The result is that by 2023, most new cars sold in both China and Europe will be fitted with so-called four-way catalytic converters. Baier calls it one of the significant changes in vehicle emission controls since the 1970s, when the three-way catalyst became standard equipment worldwide. Three-way catalytic converters remove
Energy snapshot, China versus the U.S. China
76
U.S.
19
Coal consumption in 2012, quadrillion Btu
11.9
19.6
Crude oil demand in 2016, million barrels per day
483
297
Fleet of electric cars in 2016, thousands Sources: U.S. Energy Information Administration (coal consumption, crude oil demand), International Energy Agency (fleet of electric cars)
hydrocarbons, nitrogen oxides, and carbon monoxide from vehicle exhaust. Four-way converters also remove particulate matter. Four-way catalysts, as well as the selective catalytic reduction catalysts that will be fitted on trucks, will have a major
impact on business, Baier says. Over the next five years, he predicts, volume demand for catalysts in China will double. Headcount at the R&D center in Shanghai will rise because BASF will increasingly cooperate with Chinese car manufacturers as well as foreign firms that are increasing the amount of development work they perform in the country. At competing catalyst producer Johnson Matthey, Phil Blakeman, managing director of emission control technologies for Asia, also expects business in China to double in the next five years. Like Baier, Blakeman says four-way catalysts will drive growth in the market. But continued growth in the size of China’s vehicular fleet, already the world’s largest, will also play a role, he says. In general, Chinese environmental protection agencies find it difficult to monitor emissions from tens of thousands of industrial sources in the vast country. But when it comes to vehicular emissions, the regulatory challenge is relatively simple, Blakeman points out. “For cars, it’s not an issue,” he says. All the government needs to do, he explains, is make sure manufacturers install compliant catalytic converters at the factory. China is now serious about environmental protection, Blakeman notes. “Since 2015, environmental protection has officially become as important as economic growth for government planners,” he says. The emphasis on the environment, he expects, will further encourage market growth in China for electric vehicles and fuel-cell-powered engines. Johnson Matthey is developing catalysts that support both technologies, he says. Beyond auto catalyst makers, suppliers of industrial emission abatement systems are also feeling China’s tightening of regulations. At the China subsidiary of the U.S.
CREDIT: JEAN-FRANÇOIS TREMBLAY/C&EN
Cleaning the air in the laboratory
E3 staffers Aaron Ruan, Ethan Tang, and Ming Tang in a showroom for chemistry hoods they designed.
Air pollution is not just a concern for people on the streets of China’s big cities. Scientists managing or working in Chinese labs are also worried about the quality of the indoor air to which they are being exposed. This rising level of concern is the idea behind E3 Green Technology, a Shanghai-based designer and supplier of safe and energy-efficient chemistry fume hoods. China allows 10 times as many potentially harmful fumes to float in the lab as the U.S. does, says Ming Tang, E3’s chairperson. As a result, Chinese-made hoods do not protect chemists against lab
fumes as well as U.S.-made hoods. By studying air flow dynamics, E3 designed a hood that meets U.S. safety standards and allows labs to offer employees a U.S. work environment with a locally made hood. The hood also extracts a minimum amount of air from inside the lab, making it cheaper to keep the room warm in winter and cool in summer. It is not uncommon to see chemists in Chinese labs sweating in the summer or wrapped in thick coats during the winter. So far, Tang says, E3 has sold about 300 fume hoods to six pharmaceutical research labs in the Shanghai area. JUNE 26, 2017 | CEN.ACS.ORG | C&EN
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business, Shen adds, is that One of the emissions in recent years done much to companies that fail to comply abatement systems stop environmental degradawith emission regulations, at that Anguil has tion and improve air quality in least in China’s major cities, installed in Taiwan. China. But it remains a work are now subject to prohibitive The company sets up in progress. fines. similar units in China. Just last month, Greenpeace Even outside major urban reported finding 16 banned hucenters, enforcement is improving, alman carcinogens and three persistent organthough unevenly. For instance, the central ic pollutants in the air, soil, and water around government sent thousands of inspectors the Lianyungang chemical industry park in to inspect factories and power plants in Jiangsu, one of China’s richest provinces. northern China earlier this year because The group noted that local authorities had the government doubted the diligence of fined the industrial park almost 200 times in provincial officials. According to Chinese recent years, with little to show for it. media reports, inspectors have so far found Examples such as this, and the stubborn violations at two-thirds of the facilities they persistence of pollution in cities such as visited. Increasing enforcement throughBeijing, show that authorities are far from out China means that Anguil has customers being able to declare victory in their war on all over the country, not just in a few cities, pollution. For suppliers of catalysts, emisShen says. sion abatement equipment, and air monStricter regulations, increased moniitoring instruments, China looks to be an toring, and crackdowns on polluters have expanding market for many more years. ◾
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CREDIT: ANGUIL
firm Anguil Environmental Systems, Chief Operating Officer Freda Shen says her staff is forced to use a form of triage to assess the flood of customer inquiries coming through. “We prioritize after a quick assessment of whether our technology is a good fit for the company that’s contacting us,” she says. Anguil specializes in custom-built thermal and catalytic oxidizers that control emissions of volatile organic compounds, nitrogen oxides, and hazardous air pollutants in industries including refining, chemicals, and rubber. Business in China is booming, Shen says, because authorities are increasingly enforcing regulations that were already on the books. “In the U.S., manufacturers comply with regulations because it’s the law,” she says. “In China, manufacturers comply once government officials order them to do so.” In many cases, Shen says, small manufacturers are surprised that a technology actually exists to reduce their emissions or eliminate the odor that their activities cause. Some customers, she says, had become immune to the awful smell that their facilities generated before they hired Anguil. “They greet us with a large smile now.” Anguil set up its first Asian base in Taiwan in 1992. As recently as 2008, the firm had only 10 employees in China, where it focused on supporting Taiwanese companies that opened plants in China. Today, Anguil has 70 employees in China, and its business there is far larger than in Taiwan. “It’s a huge market; we can’t even measure the size of it,” Shen says. She expects strong growth to continue for at least the next decade. One of the big drivers of
