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Helping small companies go green in order to remain afloat

By Xin Haiyuan (China Daily)
Updated: 2009-02-23 07:59

Two Beijing-based non-profit organizations are doing their bit to help enterprises with outdated and dirty technologies switch to a greener way of doing business.

China Association for Small and Medium Enterprises (CASME) and Guanghua Science and Technology Foundation jointly launched a special fund on Feb 14, aiming to help small- and medium-sized enterprises (SMEs) stay in business by seeking greener technologies.

Private SMEs with outdated equipment tend to dodge their responsibilities to treat pollution emissions properly in order to save costs, and are thus considered a major threat to the environment.

In recent years, the Chinese government has got increasingly tough on small and outdated iron and steel plants, paper mills, cement kilns and power plants, in a bid to upgrade the country's industrial structure and reduce pollution.

However, the social implications of closing down these enterprises cannot be underestimated, warned Zhang Yuanda, vice-secretary-general of CASME.

"What do we do with the abandoned land and assets? And what about the laid-off workers? We have to think about this," said Zhang.

For instance, CASME figures show that 1,066 cement plants with vertical shaft kilns, the dirtiest production technique, had been closed down by the end of 2008, resulting in 320,000 workers losing their jobs.

With the special fund, CASME will soon start a thorough investigation in the first batch of 10 cities and counties around the country, trying to figure out how many SMEs will be closed down due to outdated technologies, as well as determining their emissions of sulfur dioxide (SO2) and chemical oxygen demand (COD).

With Tianjin as the first stop, the investigation will take around eight months to complete.

The special fund will also help to research and collect technologies, projects and products that can help these SMEs recover, Zhang said.

At the launch, the special fund received a 100,000 yuan donation from Beijing Tanbao Technology Development Co Ltd.

Organizers of the special fund also hope to set up a trading platform for carbon dioxide, SO2 and COD emission rights, as closing down enterprises with backward production capacity would cut emissions, which could be traded on the Tianjin Climate Exchange.

However, an industry insider who refused to be identified doubted the possibility of such trade, as the reduction of SO2 and COD generated by phasing out outdated technology is compulsory according to the country's emission control scheme.

China has set a target of cutting emissions of SO2 and COD, major indicators of air and water pollution, by 10 percent by 2010 on the 2005 level. Phasing out backward production capacities has proven to be an effective way of doing this.

The country will continue to close outdated iron and steel plants, paper mills and power plants this year, according to Zhou Shengxian, minister of environmental protection.

Ten million tons of iron smelting capacity, six million tons of steel making capacity, 500,000 tons of paper-making capacity, and power generating units with a total capacity of 15 million kW will be phased out in 2009, Zhou said at the national working conference on environmental protection in January.

Crucial role for SMEs

SMEs have played a vital role in China's economic and social development.

Figures show that there are now more than 40 million SMEs in China, accounting for 99.6 percent of all companies in the country.

They have account for 60 percent of the national gross domestic product (GDP), about half of the country's total tax revenues, and provide more than three-quarters of urban employment opportunities. Sizable industrial SMEs recorded 28 percent annual growth in asset value during the past five years, higher than the country's average GDP growth of 9.5 percent in the same period.

More than 80 percent of workers laid off from State-owned enterprises found employment in SMEs, which also constitute a key source of jobs for college graduates. SMEs file 65 percent of the country's patent applications and develop more than 80 percent of its new products.

(China Daily 02/23/2009 page3)