China - PCB Management and Disposal Demonstration Project

Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB259 Project Name China -- PCB Management and Disposal Region EAST ASIA AND PACIFIC Sector Other industry (100%) Project ID P082993 Borrower PEOPLE'S REPUBLIC OF CHINA Implementing Agency State Environmental Protection Administration 115 Xizhimennei Nanxiaojie Beijing 100035, CHINA Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S 1 [X] S 2 [ ] S 3 [ ] S F [ ] TBD (to be determined) Date PID Prepared September 1, 2003 Estimated Date of Appraisal Authorization June 15, 2005 Estimated Date of Board Approval September 15, 2005 I. Key development issues and rationale for Bank involvement a. Background. Polychlorinated Biphenyls (PCBs) are one of the twelve persistent organic pollutants (POPs) to be eliminated under the 2001 Stockholm Convention. PCBs are toxic to fish, killing them at higher doses and causing spawning failures at lower doses. Research also links PCBs to reproductive failure and suppression of the immune system in various wild animals, such as seals and mink. Human exposure to PCBs through the polluted foods appears to cause some health problems. These problems include developmental and behavioral disorders in children, disruption in the endocrine and immune systems and recently, PCBs are deemed to be carcinogen, and potentially accelerate cancer growth. b. In China, PCBs were mainly used in electric appliances and as an additive in paint. China began to produce PCBs in 1965 and stopped in early 1974. The total production amounted to about 10,000 tons, including 9,000 tons of trichlorobiphenyl (PCB3) and 1,000 tons of pentachlorobiphenyl (PCB5). c. PCB5 oils were mostly used in a wide variety of open systems, such as in oil paints and exterior dopes. While some wastes may remain at production or formulation facilities, it is reasonable to assume that most of this material has been released into the environment. d. PCB3 was principally used in manufacturing capacitors that were used in the electrical supply industry. An estimated 12 kg of PCB3 was used in each capacitor and, based on a production of 9,000 tonnes, it is estimated that about 750,000 PCB-containing capacitors were produced in China. However, estimates based on the installed transmission capacity in China in 1975 indicate that 1.15 million capacitors would have been required, suggesting that as many as 400,000 PCB-containing capacitors were imported into China. If this estimate were correct, then an estimated 4,000-4,500 tonnes of PCB3 oils would have been imported with this Page 2 equipment so that a total of 13,000-13,500 tonnes of PCB3 would have been introduced into China as a result of the manufacture and import of capacitors. Transformers containing PCB oils were never produced in China but an unknown number were imported. While 30 PCB-containing transformers have so far been found and disposed of, there is no basis to estimate how many PCB-containing transformers may remain in China, either in service or in storage for disposal. e. Since the lifetime of capacitors made in China is estimated to be 15 years, it follows that most of the 1.15 million PCB-containing capacitors have now been retired from service. Some specialized transformers were imported into China in the 1970s and 1980s and their lifetime is expected to be 25-40 years. Therefore approximately 1 million capacitors and an unknown number of transformers are in storage and disposal sites throughout China. f. During the 1980s, pieces of electrical equipment taken out of service were collected at temporary storage sites prior to disposal in accordance with the requirements proposed by relevant Ministries. A maximum storage time of 3 years was set, after which obsolete equipment was to be placed in caves or dedicated concrete-lined landfill facilities. g. Surveys and investigations conducted in recent years indicate that discarded PCB- containing equipment remain in some temporary storage facilities. Few of the sites were recorded on files and many of those for which file details have been found are no longer marked on the ground. Identification of these sites will, therefore, be a time-consuming and costly task. h. In addition, there are a large number of disposal sites that have exceeded or are approaching their design lifetime of 20 years. Investigations at some of these sites indicate that they are leaking PCBs into the surrounding environment. Thus, measures to address such problems must be taken as soon as possible. i. In order to effectively dispose of PCBs in China, and based on the UNEP guidance on unit disposal cost for PCB destruction (US$4000/ton), it is estimated that the amount of PCB contaminated oil to be disposed totals 108,000 MT, with a total disposal cost of US$432 million. j. Main Challenges. China is a country with vast territory and a population of over 1.3 billion. Because of differences in economic development and different PCB disposal processes in different regions, China will face the following PCB management and disposal challenges. a. Lack of PCB basic data. The inventory investigation will be difficult and complicated because most records and data on PCBs containing equipment location and storage sites have been lost. The unknown amounts of PCBs in transformers with the imported large-scale equipment will require comprehensive survey and sites investigation. b. Weak management. The treatment of PCBs involves PCB collection, transport, secure sealed-up storage, and environmental sound disposal. PCB management and disposal requires substantive coordination and management at different levels of Government and the strategy must be integrated into local Government programs. Management ministries and agencies include environmental protection and electric Page 3 power sectors. Therefore, harmonization and cooperation among ministries and agencies, industries and end users is a key issue to be resolved. c. Lack of effective policy/rules/standards. There are no policies and regulations for effective PCB management. Enforcement and execution of current polices and regulations are restricted due to non-existing monitoring and evaluation measures. d. Lack of disposal capacity and affordable technologies. PCB combustion equipment was set up in Shenyang in 1996, as an experimental/trial, with capacity of 300 tons per year. Its current utilization is about 20%. But its PCB combustion technology and its potential of dioxin emissions need to be further evaluated. The high cost of PCBs management and disposal is believed to be far beyond the present capability in China. e. Public awareness and education. Most people do not know what health risks PCBs pose. So public awareness needs to be promoted. This will be a great task due to the vast territory and large population. k. In summary, to eliminate PCB safely will require disposal technologies, education and training, public awareness of the adverse effects of these chemicals on human health, effective monitoring and enforcement of regulatory measures. l. Rationale for Bank involvement. China has expressed its strong commitment to the Stockholm Convention on Persistent Organic Pollutants (POPs) through its active participation in all preparatory meetings. It signed the Convention on the date of 23 May, 2001 when it opened for signature and expects to complete the ratification procedures in 2003. As outlined in the May 2003 Country Assistance Strategy (CAS), the Bank will deliver large program of environmental cooperation in China including assistance in POPs phase-out. This proposed demonstration project on PCB management and disposal would directly contribute to the achievement of the envisaged CAS environment sector goal, which is