Supported by an IBRD loan of US$50 million, the project aims to help reduce SO2 emissions in the heat and power sector in Shandong Province.

Shandong Province ranks the second among all Chinese provinces in coal consumption and produces the highest amount of SO2 emissions. Coal accounted for 82 percent of the primary energy consumption in the province, compared to the national average of about 67 percent. Furthermore, Shandong has limited resources of low-sulfur coal and can not obtain sufficient low-sulfur coal from other sources. Coal-fired power plants, which account for almost 100 percent of Shandong’s total power capacity and consume over 50 percent of its total coal consumption, are the main sources of SO2 emissions. More than 50 percent of SO2 emissions in Shandong were contributed by the power and heat industry.

The project will finance the installation of flue gas desulfurization and SO2 control facilities in four coal-fired heat and power plants that are currently operating or under construction or preparation in Shandong Province to reduce SO2 emissions. Support will also be given to enhance the capacity of regulatory authorities to monitor and enforce compliance with their SO2 emissions reduction program, through capacity building and enhancement in emission monitoring and regulation enforcement, including installation of on-line monitoring equipment and information system; technical and managerial training; and development of related regulations, procedures and policies.

(China Development Gateway May 28, 2008)