China Boqi Environmental Solutions Technology President Bai Yunfeng, left, shakes hands with Atsushi Saito, President and CEO of the Tokyo Stock Exchange, on Aug. 8 last year.

On Aug. 8, 2007, China Boqi Environmental Solutions Technology President Bai Yunfeng was seen shaking hands with Atsushi Saito, President and CEO of the Tokyo Stock Exchange. It was the day when China Boqi became the first company headquartered in mainland China to gain a listing on the First Section of the TSE. The growth of this company was sustained by Japan's environmental technologies.
"Japan is at the leading edge when it comes to environmental protection," President Bai noted. "We are hoping to expand our exchange with Japan's many high-tech firms on the occasion of our initial public offering."
China Boqi was established in June 2002 as an affiliate of Guohua Power, one of the five leading electric power companies in China. Its main operations are to manufacture and market exhaust gas desulfurization equipment used at China's electric power plants.
The technology is licensed from Kawasaki Heavy Industries, Ltd (KHI). "There was a match between China Boqi's desire to introduce new technology and our desire to expand our business," comments Toshiro Mazaki of Kawasaki Plant Systems, a KHI subsidiary. This led to the signing of a licensing agreement between the two companies in 2003.
KHI entered China's desulfurization market in 1995, but sought a local partner owing to the huge size of the Chinese market. China Boqi was conducting an international tender, and KHI decided to make a bid.
The sulfur produced when petroleum and coal are burned is a major cause of atmospheric pollution and acid rain. After air pollution became a major social issue during Japan's high-growth years, desulfurization equipment has been required at all domestic power plants. Such apparatuses are also used at facilities other than power plants, and the technology has been honed and refined over the past three decades.
The economic boom in China has pushed up demand for energy, and power plants are being built at a frantic pace. Most thermal electric power plants, which meet more than 70% of the country's energy needs, use coal because of its abundance and low cost. This has resulted in mass emissions of sulfur oxides.
The Beijing government has made desulfurization equipment mandatory at all new power plants with the 1998 State Council statement and the 2000 air pollution prevention law. It has also required all existing plants to introduce such equipment by 2010.
Riding on the regulatory wave, China Boqi has received orders for around 40 desulfurizing installations in the five years since its founding. About half of them use technology that it has licensed from KHI. It claims the top share of equipment for mainstream 600-MW-class coal thermal plants, and it projects sales of 32.7 billion yen for the term ended December 2007, a year-on-year increase of 60%.
Explaining the reasons for the company's decision to make an IPO in Tokyo, rather than New York, China Boqi Vice-President Hiroaki Miyanaga said that the company hopes to forge alliances with Japanese companies with leading-edge technologies. The capital raised with the IPO will be used, Miyanaga says, to introduce new technologies. "The funds will be applied to import technologies from Japan," he explains. "If we can reduce pollution in China, then the problem of cross-border smog can also be mitigated."
* Japan's private-sector environmental technologies at work in China
Chiyoda Corporation's propriety technology that eliminates the use of mercury as a catalyst is being used at an acetic acid production plant under construction in the city of Guiyang, the provincial capital of Guizhou in southwestern China.
The use of mercury as a catalyst has declined in most industrial countries. In Guiyang, however, mercury had continued to be used at older factories and was discharged, along with other factory effluent, into the local river, which also served as drinking water for local residents. Pollution problems became very serious in the 1990s as the country's economic development took off.
American and European chemical companies that monopolize patents for mercury-free technology had a policy of sharing their know-how only with their subsidiaries. In the mid-1990s Chiyoda independently developed technology that uses resin-coated rhodium - a rare metal - as a catalyst instead. This technology was introduced to factories in Guiyang in the wake of an ODA loan of 14.5 billion yen from Japan to the city in 1999. Chiyoda hopes to disseminate this technology to companies around the world.
A new wastewater treatment plant in Changchun, Jilin Province, was built in September 2007 by Chisso Corporation through a subsidiary, Chisso Environmental Engineering. While Chisso was one of the companies responsible for Minamata disease, it is now active in the environmental field. The company sees China's wastewater treatment technologies as being at about the same level as those in Japan in the 1970s.
The company started building processing facilities for water discharged by food processors and households in 1986. It has now been commissioned by the city of Minamata in Kumamoto Prefecture to recycle the wastewater and create agricultural fertilizer.
It entered the Chinese market following an environmental exposition held in the city of Changchun, where its display of processing technology was noticed by a provincial environmental protection official. Even in urban areas, only about half of sewage is treated in China, and in most other areas, household wastewater simply flows untreated into river systems. The Changchun plant will treat waste from public toilets, and Chisso is already building a second plant in Jilin Province.
Mitsubishi Heavy Industries, which claims the world's top share of desulfurizing equipment for the prevention of air pollution, sold its first installations to China in 1991. It now provides technology to three Chinese firms, including two affiliates of the five major Chinese electric power companies.
The company's next step will be to market carbon-absorbing technology. China still relies heavily on fossil fuels, particularly coal, for thermal power generation. Mitsubishi's will enable the power companies to reduce carbon dioxide emissions even at coal-burning plants, where the carbon content of smoke exhaust tends to be erratic.
While China has ratified the Kyoto Protocol, it is not required to slash CO2 emissions owing to its status as a developing country. But because of burgeoning energy demand to fuel economic growth, China is likely to come under increasing pressure to reduce emissions.
Mitsubishi believes that demand for its carbon-absorbing technologies will grow as regulations on emissions are beefed up and when emission trading schemes become more widespread.

source-mainichi