Best Practice on Low Carbon & Circular Economy ： case study Shandong Province

1. Best Practice on Low Carbon &Circular Economy：case study Shandong Province Mr. Liu Bing Director of Shandong Academy of Macroeconomic Research, Shandong Province

2. Contents • Low Carbon Orientation & High Carbon Pattern • Case study on Low Carbon Development of Shandong Province • Experiments and Best Practice

3. Low Carbon Orientation & High Carbon Syndrome • Two Key Things ◆ Smoky Contamination ◆ Government Transition

4. Low Carbon Orientation & High Carbon Syndrome • Smoky Contamination： • According to Beijing Observation station, 25 smoking days in January 2013, 13 days more than average. （source： www.qianlong.com）。 • Based on journalist report, 15 days were heavy-polluted and severe polluted in January 2013, due to weather condition not favorite to pollutants’ dispersion; air quality is in hazard cndition （source： www.qianlong.com）。

5. Low Carbon Orientation & High Carbon Syndrome • Smoky effect on traffic： • Since 8 Jan, smoke affected the high way in whole Hebei Province, and most were closed for 7 days until 14 Jan source：www.hebei.com.cn）。 • On third day of peak transportation period of spring festival, Smoke made 30 high ways closed or clogged in 8 provinces inncluding Tianjin and Hebei (source： www.zgjtb.com）。

6. Low Carbon Orientation & High Carbon Syndrome • “CPPCC and NPC ”report： • Conforming to people's expectations of a better living environment, promote the ecological civilization development and enhance the environmental protection. • Adhering to the principal state policy of conserving resources and protecting environment, promote green development, circular economy and low carbon development . • Focusing on energy saving in industrial, transportation, building, public sectors, control & reduce energy consumption, resources consumption and CO2 intensity. • Solving air, water, soil and other serious environmental pollution problems for the interest of public welfares, improving the quality of the environment

7. Low Carbon Orientation & High Carbon Syndrome • High Carbon Syndrome of Economy Development • Top 2 of worldd energy consumer?（CERS, 2012 China Energy Development Report） • Top 1 of world energy consumer ?（IEA: China became top1 over US since 2009）。 • In 2010, China GDP: 5.75 Trillion USD，US GDP 14.7Trillion USD（IMF）。

8. Low Carbon Orientation & High Carbon Syndrome • Energy Density in 2008（Unit：kg standard oil/USD GDP，World Energy Council） • Global Average：0.12 • Asian Average：0.13 • EU Average：0.08 • USA：0.106 • Japen：0.08 • South Korea：0.10 • China：0.18

9. Low Carbon Orientation & High Carbon Syndrome • Low Carbon Orientation in Economy Development • US 5 strategic industries: bio-medicine, new material, Space/aerovation, information and Financial services. Obama: New Energy Strategy • China Promises： 40%－45% reduction of CO2 intensity by 2020 • Targets of 12 Five Year Plan：by 2015 from 2010, 16% decrease of energy density; non fossil fuel: 11.4% 。

10. II、Measures for Shandong Low Carbon Economy Development • Pressure on high CO2 Emission • Keeping faster economic growth • GDP 2 Trilling RMB in 2006、3 Trilling in 2008, 4 Trilling in 2011, 5 Trilling in 2012 • Carbon Emission under high pressure • Energy Density is higher amony developed provinces：ShanDong（0.855）、GuangDong（0.563）、JiangSu（0.600）、ZheJiang（0.590）。

11. II、Measures for Shandong Low Carbon Economy Development • 1. Shandong Industrial Structure: Secondary Industry is highest, and heavy industry is higher among industrial structures（8.6∶51.4∶40.0）. • High energy intensive sectors: steel: 3 of top 10 in China, cement: 2 of top 10, non-ferrous metal: 4 of Top 10, Refinery: 8 of top 10. • Achievements on Energy Saving and Emission Reduction • Leading in ES/ER, first batch of Demo stration province on circular economy； • Leading in provincial competence, accessed by CASS.

12. II、Measures for Shandong Low Carbon Economy Development 2. Overall Rationale of Low Carbon Development in Shandong • Target：Energy Saving & Emission Reduction, Eco - Shandong（Blue Sky, Star Sparkling) • Key：Structural Adjustment、New Energy, Low Carbon City/industrail Zone, Low Carbon Life style • Measures: Circular Economy, Clean Production Green Consumption

13. II、Measures for Shandong Low Carbon Economy Development 3. Strategic priority in Shandong Low Carbon Economy • （1）Improve Industrial Structure • Adjust Industrial Structure Promote Service Sectors： • Open market to public; • Tax subsidizes; • Increase the fiscal, financial, price support; • Give priority to the supply of land; • Actively attract talents; • Deepening reform and open policy • Optimize the environment, standardize management system • Four big “carriers " ( key projects, service industry, key enterprises, key industrial park ) • To accelerate the development of producer service industry.

14. II、Measures for Shandong Low Carbon Economy Development • Cases：Qindao “Ten 10 million Square Meter Project” ，promoting high level service sectors • Strive to build the financial, business, trade, science and technology centers, logistics, software and service outsourcing, creative culture, tourism and leisure resort facilities, talent apartment, social and public facilities in Ten 10 million Square meters projects. By this project, create 1 Leading high-end Industries, to build 1 brand products, so as to further enhance the city roles of agglomeration, radiation, innovation and leading function, service industry development.

15. II、Measures for Shandong Low Carbon Economy Development • Measures ： • By predominating regional function, build assemble carrier ( a district dominating industry, industry aggregation, project aggregation, company aggregation, talent aggregation ); • Optimization of management, implementation of planning guidance and coordination (10 special promotion office, each project to ensure that " a development plan, a annual work plan, an capable team, a number of key projects, a number of key enterprises, a supporting policies, projects aggregation management localization); • Strengthen the supporting, to promote innovation and policy support ( on finance, land, environmental protection, seaside, the establishment of green protocols for "ten million square meters project" ; the establishment of major projects and promote the overall allocation and benefit compensation mechanism; "ten millions of square meters project " incorporated into the annual performance evaluation of local government and by greatly imcrease the assessment of the weight ).

16. II、Measures for Shandong Low Carbon Economy Development • Optimization of Industrial Structure (Two Wheel Driving） Transform Conventional Industry to Low Carbon Enhance Tech Transformation （over 1 trillion RMB investment ）； Termination of Low level Production Capacity e.g. ：Iron/steel industry cap: 50 million Tons; by 2015，terminate iron production capacity of 21.11 million tons, steel of 22. 57 million tons, investment was 520 million RMB in 2012；Shandong meets the tasks of the terminations allocated by central government in last three years. More than 1100 enterprises finished termination tasks, which is 3 times more than allocated tasks Promote low carbon & high added value industries (Blue Economy High end manufacturing, strategically new emerging sectors（“4 new & 1 Sea”））。

17. II、Measures for Shandong Low Carbon Economy Development • Cases：Qindao “Blue Silicon Valley”，promote and aggregate the blue industries • Overall Industrail Aggregates：“1 district, 1 area and 1 zone”。

18. II、Measures for Shandong Low Carbon Economy Development • Development Core of Blue Silicon Valley: China Blue Silicon Valley, Seaside Eco-city • Development Goals: a low carbon ecological coastal city with world high level standards, to create a first-class international marine science and technology R & D center, incubator center, talent agglomeration center and marine emerging industry training center • Core Zone Construction：speed up the Qingdao campus of Shandong University, Qingdao National Key Laboratory on marine science and technology, National Deep-sea Base, National Marine Equipment Quality Inspection Center and other 18 key projects; striving for National Marine Science and Technology Innovation Demonstration Zone

19. II、Measures for Shandong Low Carbon Economy Development • （2）Spped up the development of New energy • 4 Aggregations on Solar energy application, Solar PV, Wind power, Neclea Power etc; • 2 Solar Energy Bases:，extend the industrial chain of solar energy, setup 2 wind power industrial zones, expend biomass energy\geothermal\ocean energy • Shandong is leading in solar energy sectors with advanced high tech on solar water heating. Continue to support Himin Group\Linuo Group\Sang Le

20. II、Measures for Shandong Low Carbon Economy Development Solar Water Heating Investment PV and PV station Investment

21. II、Measures for Shandong Low Carbon Economy Development • Installed New Energy • By Dec 2012, operational installed capacity of new energy is 5.914Million KW, up to 8.05% of provincial installed power capacity； • Including, Wind power: 3.934 million KW，Biomass 0.79 million KW, PV 0.12 million KW，small hydro-power/ Pumped storage power 1.07 million KW • 66 ongoing New energy projects，with capacity of 2.0975million KW • Power Generation of New Energy • 2012, generated power 9.53 Giga KWH: including wind 6.32 Giga KWH，biomass 3.02 Giga KWH ，PV 70 Mega KWH，Hydro 120 Mega KWH 。

22. II、Measures for Shandong Low Carbon Economy Development • Cases: First National New Energy Demonstration City • Area for Solar heating is over 6 million m2, installed capacity of New Energy is 50MW, saving equivalent to standard coal of 800,000 Tons, CO2 emission reduction of 2 million tons. • Leading in Solar energy industrial. The industrial chain is mainly of 形solar water heating, together with vacuum heat tube, solar battery component, PV power generation components, solar cooling and lighting system, energy saving glass, solar energy integrated buildings. Over 120 companies are in the business; proviiddng 10% of revenue in China, same amount as whole EU, and twice as many as North American。

23. II、Measures for Shandong Low Carbon Economy Development • Innovation：strengthen its world leading role in R/D of solar energy application, especially in solar water heating. • Application Promotion: with years campaign on Solar energy application, it leads in China and in the world. Over 95% of new buildings are installed with solar water heating facilities.

24. II、Measures for Shandong Low Carbon Economy Development • Main Actions： • Support Leading companies, create aggregation effects (tailored policy, investment, subsidizes, support on land/environment/IPO, enhancing their competence; by external/internal cooperation, integrating resources, the targeted company investment etc, promoting solar energy industry, sectors expansion, accelerate industrial scale up and upgrading) • Mastering the core, breakthrough innovation (actively encourage enterprises to establish a sound technology R/D center, increase investment in R/D on key strategic, forward-looking technology; strengthen cooperation in scientific research institutes, universities signed a long-term agreement on cooperation in science and technology, and achieved a series of achievements in scientific research; to improve the tech. innovation platform for technology transfer; Setup National Enterprise Engineering Research Center and laboratory, public technical service platform )

25. II、Measures for Shandong Low Carbon Economy Development • Market Incubation and Demonstration Promotion (PV Demo projects, 62 main city crosses, 50 city roads, 15 个 scenic sites and residential zones, over 10 thousand PV lights and over 100 KM road lights; “Million PV Roof” & “Thousand Villdge Bathrooms”）。 • Improve Governance for whole services to support solar energy (Land, Finance, Tax, Industrial park setup, Administration management, public service). • Open Cooperation and Scale-up Promotion (Integrating Solar energy into Urban development, public society : commercial building, residential building, city road network, production, public facilities, and energy applications).

26. II、Measures for Shandong Low Carbon Economy Development • （3）Promotinng Circular economy. • Circular Economy Demonstration Cities, Zones and Companies • Explore the circular economy development Mode in 10 Key sectors • 10 Key Circular Economy Projects

27. II、Measures for Shandong Low Carbon Economy Development • 3 Phase for Circular Economy development • Phase 1： “small cycle” promoted by clean production (based on companies, promoting clean production, setup small internal cycle） • Company Clean Production, from up-stream to down-stream, minimize the needs for resources, less wastes and harmless processes, cycling resources and wastes, strive to zero emission and zero-discharge.

28. II、Measures for Shandong Low Carbon Economy Development • Cases: Waste application program in Yao Wang Brewery Factory • Using waste lees, wine mud to produce organic fertilizer, it can, reuse waste lees 40000 tons, produced 15000 tons of organic fertilizers, profits more than 10 million RMB —— EU-China EST project • 3 million was invested in fermentation process, two 3000 cubic meter anaerobic tanks was constructed, producing bio-gas of 15000 cubic meters per day. Biogas is used for boiler, fertilizer drying & power generation, saving coal 10 Tons per day, power generated of 5000 KWH

29. II、Measures for Shandong Low Carbon Economy Development • Phase 2 ：Demo project to promote “middle cycle”(using sectorial demo projects, setup standards/models, building sectorial “middle cycle” • According to the circular economy, eco-industrial model, and cleaner production, so that wastes from upstream enterprises become raw materials for downstream businesses, continuing to extend the production chain, to achieving waste minimization in regional or enterprise levels. Establish standards through demonstration projects, to achieve a win-win economic and environmental protection.

30. II、Measures for Shandong Low Carbon Economy Development • Cases: Circular Economy model of LuBei Chemistry Industry • Including 12 industries such as Chemistry, Building materials, Light industry, power sectors and non-ferrous metal industry. • “Combined Phosphate Ammonium sulfate cement production”, Sea Water “multi application ”, “combined clean power and Salt/alkaline production”, “combined oil, salt and chemical production” and “titanium pigment clean production” etc., integration of 5 production chains, for a eco-clean production

31. II、Measures for Shandong Low Carbon Economy Development

32. II、Measures for Shandong Low Carbon Economy Development • Using innovative technologies, link different production chains, according to product characteristics, combine scientifically industries; Put enterprises into every recycling nodes via its by-products and wastes for a fully utilization of raw materials. • All chains are interconnected to form a complete industrial ecosystem; Such as sulfuric acid/salt combined production from seawater as a material flow system. • Steam, power combined as energy flow for a stepwise utilization； • Phosphorus gypsum, gypsum, slag recycling of Waste Logistics • To realize sharing of material flow, energy flow for a sufficient multi-level integrated utilization and exchange of information, realize the friendly co-existence of industrial production and the natural environment

33. II、Measures for Shandong Low Carbon Economy Development • Combined Phosphate Ammonium sulfate cement production

34. II、Measures for Shandong Low Carbon Economy Development • Sea Water “multi application ”

35. II、Measures for Shandong Low Carbon Economy Development • combined clean power and Salt/alkaline production

36. II、Measures for Shandong Low Carbon Economy Development • combined oil, salt and chemical production

37. II、Measures for Shandong Low Carbon Economy Development • titanium pigment clean production

38. II、Measures for Shandong Low Carbon Economy Development • Phase 3：Setup Society “Big Cycle” （Setup resources flow inside industrial parks and city, maximize the resources application rate. • promote circular economy development at the level of industrial parks and city combining industries and agriculture, production and consumption, Urban and Rural areas, sectors and sectors.

39. II、Measures for Shandong Low Carbon Economy Development • Cases：Yantai City developing Eco-parks • Setup regional water recycling system in industrial enterprises and service sector, to promote circular economy at social level. • Transform regional energy structure, promoting green energy； • Promote regional infrastructure construction and public service sharing integration, developing regional ‘big cycle’ ； • Implementation of development strategy on “setup special policies for investment attraction to eco- industrial park ”，IT Park, 、 Renewable resources processing zone, automotive industrial park, a level high jumping from single chain to multiple chains; • Providing special convenient services to enterprises on industrial park's infrastructure, material distribution and resource requirements, improving their core competitiveness

40. II、Measures for Shandong Low Carbon Economy Development • Explore the development mode of circular economy in key sectors • Iron-Steel industry • “wastes reclamation management, closed cycling”（Jinan Steel Group）； • “Zero wastewater discharge”（Laiwu Steel Group）； • Four closed-circuit: Blast furnace gas, industrial water, solid waste and waste heat （Qindao Steel）

41. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in power sector • “clean production, desulfurization, de-dusting, turning waste to resources” and “Zero wastewater discharge, 100% comprehensive utilization of fly ash” (Shandong Hangdao Power Station）； • “Integration of Coal & Power operation, Resources recycling utilization ”（Shandong Lineng Group）； • “fly ash recovery by green tech”（Dindao Power station, Chian Huadian Cooperation）

42. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in Chemistry Industry • “green eco-sectorial clusters by 6 use of 1 water”（Shandong Haihua Group）； • 3 chains of combined phosphate ammonium sulfate cement production, sea water “multi application, combined clean power and salt/alkaline production, organically integrated eco-symbiosis (Shandong Lubei Chemistry Group); • “Internal waste reclamation, recycling utilization & external Big Cycl”(Yantai Wanhua Synthetic Leather Group) • “Green Coolant R/D”（Shandong Chemical Federation）。

43. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in Coal industry • “Based on coal production, setup four industrial clusters of coal, power, coal chemistry and building materials”（Shandong Energy Xinwen Mining Group）； • “coal chemistry ”（Yankuang Group）

44. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in paper industry • “forest, plasma, paper integration & water recycling utilization”（shandong Quanlin Paper Group）； • “Zero Discharge”（Sun Paper Group）

45. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in Gold Industry • “Refinery of gold, silver, Sulfur, Copper, Arsenic, iron oxide red” (Shandong Guodar Gold）； • “Waste water Zero Discharge”（China National Gold Group）； • “Cyanide waste recycling”（Benglai Gold Group）。

46. II、Measures for Shandong Low Carbon Economy Development • Development mode of circular economy in non-ferric metal industry • “Extracting rare metal gallium, production of a variety of new building materials and catalyst production from red mud waste”(Shandong Aluminum Industry co.,ltd.）； • “Combined power & Heat, Combined Aluminum & Power、Comprehensive development, Sustainable development”（Shandong Xinfa Group）

47. II、Measures for Shandong Low Carbon Economy Development • 10 projects on circular economy • Focusing on building material, textile etc., high energy consuming industries, strive to technologies on energy saving, coal saving, oil-saving, maximization of energy system, heat recovery。 • Water saving projects. Focusing water saving projects on power, paper, metallurgy, chemistry, textile sectors.Use of reclaimed water; water saving facilities; Demo projects, and complementary projects;

48. II、Measures for Shandong Low Carbon Economy Development • Comprehensive utilization of resources • The symbioses &, co-mineral resources comprehensive utilization, industrial " 3 wastes ", city garbage, waste recycling, forestry and fisheries waste, implementation of a number of major comprehensive resource utilization project • Clean Production • cleaner production auditing on key polluted enterprises; implementation of a number of demonstration projects, publishing a number of demonstration enterprises, promoting clean production development; • Geo-thermo application projects, Coast wind power projects, Biomass power generation projects;

49. II、Measures for Shandong Low Carbon Economy Development • Eco-agriculture • Demo projects on eco-county, harmless agro-product base; bio-pesticides & high effect fertilizer; demo on straw, manure utilization projects; • Rural energy project • straw gasification, straw power generation, biogas, solar energy • Conservation-oriented community • Energy saving design, dual water supply network design, water saving facilities, solar energy integration, reclaimed water utilization, and rain collection;

50. II、Measures for Shandong Low Carbon Economy Development • Automobile engines and parts manufacturing. • Taking technological advantage of enterprise manufacturing, remanufacturing capabilities to seize opportunities, and build manufacturing machinery and electronic products recycling industry chain • Renewable resources recycling. • trash classification for recycling of metal, plastics, waste, household electronics, paper, forming a network of distributed resources recovery, centralized processing system