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Cablegate: A/S Mcmurray Visits Sites Implementing P2e2

VZCZCXRO5443
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #8065/01 2330427
ZNR UUUUU ZZH
R 210427Z AUG 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 1307
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAEPA/HQ EPA WASHDC

UNCLAS SECTION 01 OF 02 GUANGZHOU 028065

SIPDIS

SIPDIS

STATE FOR OES/PCI AND EAP/CM
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE
EPA FOR INTERNATIONAL - CHENG

E.O. 12958: N/A
TAGS: SENV ENRG CH
SUBJECT: A/S McMurray Visits Sites Implementing P2E2
Measures


1. (U) SUMMARY: OES A/S McMurray visited two sites in the
Pearl River Delta where measures such as those being
promoted by the Hong Kong-based pollution prevention and
energy efficiency (P2E2) initiative have been implemented --
the Huangpu power plant operated by Guangdong Yuehua Power
Company and the Zhujiang Brewery in Guangzhou. At each
site, company officials outlined their respective P2E2
efforts and the measurable positive impact these efforts
have had on the immediate environment. These companies'
efforts serve as a model for the industrial sector, where
much more needs to be done by the government and the private
sector to adopt pollution prevention and energy efficiency
measures. End Summary.

HUANGPU POWER PLANT
-------------------

2. (U) The Huangpu power plant, a state-owned enterprise
operated by Guangdong Yuehua Power Co. Ltd, was established
in 1975. The plant has four, 125MW oil-fired units and two,
300MW coal-fired units, making it one of the main power
generating stations in Guangdong Province with a total
generation capacity of 1100MW.

3. (U) The plant's General Manager, Mr. Hu Min, outlined the
company's efforts to reduce air, water, and solid waste
pollution generated by the power plant. According to the
"Guangdong Blue Sky Plan," by 2005, the plant was required
to install desulfurization equipment on the two coal-fired
units to reduce SO2 emissions by 16,770 tons annually.
To accomplish this goal, the plant first attempts to control
the sulfur content by purchasing low-sulfur content coal and
by using desulfurization additives in the oil (Note: the
"low-sulfur" sources he mentioned are from Shanxi Province,
not low by U.S. standards. End Note.) The plant also began
implementing a Wet Limestone/Gypsum Flue Gas Desulfurization
project this year. The solid waste (ash) is sold for use in
constructing drywall. With these methods, the company hopes
to reduce SO2 emissions by a total of 34,000 tons, or over
95% of its total SO2 emissions. The power plant also
recycles the waste water used to flush coal dust out of the
system. Company representatives stated that they have
invested RMB 367 million (USD 45.9 million) in these
pollution reduction projects.

4. (U) Hu said that the company plans to dismantle the oil-
fired generators by the end of the year and build two new
coal-fired generators to replace them. These new coal
generators would integrate P2E2 measures and have a larger
power generation capacity than the four oil-fired units they
will replace.

5. (U) When asked by the U.S. delegation where the plant
purchased its desulfurization equipment, Hu replied that the
company initially purchased equipment from the United
States, but implied that it now purchases the equipment from
German, Japanese, and Chinese companies.

ZHUJIANG (PEARL RIVER) BREWERY
------------------------------

6. (U) Zhujiang Brewery was set up in 1985, and since then,
production capacity has increased from 50,000 tons to 1.5
million tons. Zhujiang representatives claim that it is now
the largest brewery in the world in terms of production, and
that Zhujiang Beer is the second best selling beer in China.
Zhujiang Beer is known as a "Green Food" (the President of
Zhujiang Beer explained that the National Green Food
Certification Center sets standards on pesticides,
fertilizers, and GMO-free inputs in determining whether a
product is designated a "Green Food"). The brewery employs
5,300 workers and operates its own power plant on site. It
uses Oracle software throughout the manufacturing and
bottling process. The brewery has partnered with the
Belgian company Inbev, which provides Zhujiang with
technology, capital, equipment, and allows Zhujiang
increased access to the international market. In 2005, the
brewery realized RMB 300 million (USD 37.5 million) in
profits.

7. (U) The Zhujiang Brewery draws its water not from the
highly polluted Pearl River on whose banks it is situated,
but via a pipe from the East River (Dongjiang), the same
source tapped for Hong Kong's drinking water. The plant
invested RMB 12 million (USD 1.5 million) to develop cross-
flow membrane filtration technology that has reduced water

GUANGZHOU 00028065 002 OF 002


consumption by 25%. The spent steam recovery project that
was put in place in July has saved RMB 3 million (USD
375,000) in production costs. The company also recovers
CO2, spent grain, wasted yeast, and glass, saving RMB 15
million (USD 1.9 million) per year. The brewery has
installed desulfurization equipment at its power plant,
reducing sulfur emissions by 70%.

8. (U) The brewery President explained that the
environmental protection measures are not only required by
the government, but are also driven by its corporate social
responsibility, its strategy to reduce costs and increase
its competitiveness. In addition, for a growing enterprise
like the Zhujiang Brewery, it is critical to make sure that
local residents do not have environmental complaints.

9. (U) COMMENT: These companies' efforts serve as a model
for the industrial sector, where much more needs to be done
by the government and the private sector to adopt pollution
prevention and energy efficiency measures.

MARTIN

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