Smog economics

By Cong Mu Source:Global Times Published: 2013-2-6 0:08:01

 
A heat exchanger on the roof of Corning Display's factory in Beijing is still working after 12 am Friday. Photo: Cong Mu/GT
A heat exchanger on the roof of Corning Display's factory in Beijing is still working after 12 am Friday. Photo: Cong Mu/GT





At midnight on Thursday, a heavy haze settled on Beijing, reducing ground visibility to less than 500 meters.

It was the second time within two weeks that Beijing, along with most of northern China, was hit by a prolonged period of smoggy skies.

Meanwhile, at Corning Display Technologies (China) Co on South Tongji Road, Tongzhou district in Beijing, it was business as usual. The US-based company is the world's largest maker of glass substrates for electronic displays.

In the backyard, a big heat exchanger on the roof was working continuously, spewing out exhaust fumes that quickly vanished into the dense smog.

Corning Display was not alone. Three out of six heat exchangers on the roof of its neighbor, LG Chem Display Materials (Beijing) Co, were also emitting clouds of fumes.

LG Chem is a subsidiary of the South Korean industrial conglomerate LG Corp, and specializes in producing liquid crystal display (LCD) polarizers, thin chemical films applied on display glass to make the images on phones, tablets and computers clearer and brighter.

Both Corning Display and LG Chem are situated in the Beijing Economic-Technological Development Area (BETDA) in the southeastern part of the city, where the smog was particularly intense. Both are also suppliers to electronics makers such as Apple Inc and Nokia Corp, which also have assembly lines in the development zone.

Corning Inc's media relations department in Shanghai told the Global Times Friday that its Beijing factory workers finish work at 5 pm every day, but declined to comment on the exhaust fumes produced by the factory. Calls to LG Chem went unanswered Friday.

A corporate social responsibility report released on January 29 by the Institute of Public and Environmental Affairs, a Beijing-based non-profit organization, has listed LG Electronics, LG Chem's sister company, as one of the most opaque IT multinational companies (MNCs) in China in terms of its environmental records.

The NGO accused LG Electronics of having been passive in responding to and correcting its suppliers' environmentally harmful behavior since April 2010.

Global profits, local pollution

The Beijing Municipal Environmental Protection Bureau listed MNCs - including Apple supplier Foxconn Electronics Inc, Nokia Corp, German chemical and pharmaceutical maker Bayer AG and US detergent producer Procter & Gamble, all of which have branches in the BETDA - as sources of severe pollution in 2012, BusinessWeek magazine's Chinese edition reported in January.

According to Beijing Municipal Environmental Monitoring Center, the density of particulate matter with a diameter of less than 2.5 micrometers (PM2.5) in the BETDA reached 268 micrograms per cubic meter at night on January 26, the highest figure recorded among all of the 35 monitoring stations in the city, the Beijing News reported on January 27.

In a bid to improve air quality during the previous sharp rise in pollution from January 10 to 14 this year, Li Hong, deputy director of Beijing Municipal Commission of Economy and Information Technology, negotiated with nearly 100 heavy polluters in the urban area for a one-day temporary shutdown, but only 58 factories agreed, the magazine said.

In 2012, Beijing produced goods for export worth $59.6 billion, up by 1.1 percent year-on-year and ranking seventh nationwide, according to the Beijing customs.

Exports of high-tech products were particularly strong. Beijing exported 150 million mobile phones in 2012, with a total value of $10.1 billion, 18.8 percent higher than in 2011, customs figures released on January 24 showed.

It also exported 6.2 million tons of oil products and 3 million tons of steel, up by 7.4 percent and 1.9 percent year-on-year, respectively.

In 2010, Corning Inc invested $800 million to build its second LCD glass substrate facility in Beijing, and the new plant began production in the first half of 2012.

"These investments will position Corning to capture significant new sales opportunities from rapidly increasing demand" for its glass products, Wendell Weeks, the company's chairman, said in a press release.

"China is … poised to become a major producer of LCD panels for TV applications within the next several years. We are excited to be a part of this emerging market," James Clappin, president of Corning Glass Technologies, said back in 2010.

The pollutants emitted from the new glass factory include sulfur dioxide and nitrogen oxides, although its emissions have been designed to meet the national standards, according to an environmental impact report submitted to the Ministry of Environmental Protection (MEP) by China Electronics Engineering Design Institute in 2010.

Corning Display was a consultant to the MEP in setting the pollutant emissions standard for flat panel glass makers in 2008, according to a document on the ministry's website.

Cash in on filters

Prodded by public concerns about air pollution, Beijing instituted a higher standard for control of auto exhaust emissions, equivalent to the Euro 5 standard, on Friday.

New vehicles must meet the new standard before going on sale, and this will create opportunities for filter makers, such as Faurecia, the world's largest exhaust system supplier, and Corning Inc.

In a 2012 full-year financial estimate released January 15, Faurecia said the group's Asian product sales grew by 24.3 percent to 1.4 billion euros ($1.9 billion).

The company declined to reveal the figures for its China emission control system sales, but told the Global Times that it made very healthy profits last year and is positive about the Chinese market.

Corning Inc initiated a third expansion of capacity in its automotive substrate facility in Shanghai in May 2012.

This expansion, slated to be completed in the third quarter this year, "will provide Corning with additional manufacturing capabilities that will help us meet increased customer demand in China," which is the world's fastest-growing automotive substrate market, Corning said in an e-mail sent to the Global Times Friday.

"Corning's ceramic flow-through substrates are used in catalytic converters to clean gaseous emissions from gasoline and diesel engines," it said.

Air pollution in China has been accompanying its rapid economic growth for the past three decades.

Owing to the maxim "first development, then environment" espoused during the 1980s and much of the 1990s, "air quality has diminished as emissions from dirty fossil fuels have risen, increasing particulates in the local atmosphere," the United Nations Development Program (UNDP) China said in a report sent to the Global Times Thursday.

"By investing in a green economy and in green growth that is underpinned by emerging green technologies, China has an opportunity to leapfrog decades of traditional development that is based on high polluting fuels," the UNDP urged.

 



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