China Water sector Market : Opportunities and Challenges Simon Spooner, Atkins, Water & Environment EUCCC Water Working Group China Europe Water Platform (CEWP), Business Opportunities Pillar

WSSTP Water Innovation Europe 2014, Brussels 25th June 2014

[email protected]

Main Points 

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Water scarcity, increasing demand and higher standards drive water infrastructure investment. China Water Sector Programmes worth €60 to €100 Billion each year from 2013-2020. EU Companies can help in parts of this

But China Water Sector not Easy!

Water Resources 水资源

Water Treatment 水处理

Agriculture 农业

Industry 行业

Some assistance available from EUD and Chinese Government 3 Examples of SMEs in China Ecological restoration 生态修复

Flooding 洪水

Monitoring 监控 Pollution 水污染

Investment Programmes 

Water Resources

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Pollution control and water resources protection

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Urban Water Infrastructure

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Industrial Water efficiency and clean technology

After GWI 2013

Market opportunities: Urban Water

After GWI 2013

Market opportunities: Urban Water 13 Sep 2013, MEP announce RMB3.7 trillion (USD607 billion) has been set aside to tackle air and water pollution; RMB2 trillion (USD330 billion) of this to water pollution. A war chest equivalent to almost the size of Hong Kong’s GDP 

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PPP: Water and Wastewater BOT and concessions – New Build Transfer PPP model Sludge Management Water recycling: Centralised / Decentralised wastewater treatment and reuse, advanced treatment membranes Energy efficiency Networks: 

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pressure and leakage management, modelling distribution Sewerage: modelling, urban flood management and SUDS.

Combine with Urban Development ecological restoration and liveable cities – Ecological Civilisation

Urban Water Recycling 冷却系统 Cooling water system

降雨 Rainfall

新鲜水 Fresh water

降雨 Rainfall

岸上植物滞洪截流 Plant for rainfall prevention and storage

冲洗 Flushing

蒸发 Evaporation

Recovered from Groundwater

Green space

Residential district 灰水 Grey water

供水系统 Water supply

屋顶雨水截流 Rainfall prevention

灰水处理系统 Grey water treatment system

建筑内部用水管理 Water management in building

雨水收集处理 Rainfall water collection system

景观绿化 Irrigation

道路冲洗 Road washing 渗入地下水 Infiltrate to Groundwater

景观补充 Landscape supplement

硬化路面辅助径 流渗透材料 Permeable pavers

雨洪管理及循环利用系统 Stormwater management and recycling system

渗入地下 Infiltrated into the ground

Market opportunities: Water Resources 13 Feb 2014, MEP, MWR, NDRC, Ministry of Finance and other 6 departments, jointly issued Work Plan on Implementing Assessment of the Most Stringent Water Management System 

Dams, dykes and flood safety

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Small hydropower schemes

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Water flow and quality monitoring

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Modelling and strategic planning 

River basin Resources, Flooding, Quality, Eutrophication / Nutrients

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SCADA Control systems

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Agriculture: Water saving irrigation, Diffuse pollution

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Recycling / Desalination

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Ecological Restoration

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Groundwater protection / Artificial recharge

Active Groundwater recharge

After BGS report CR/02/108N

Market opportunities: Industrial Water Revised Environmental protection law 24 April 2014 encourages officials to punish environmental violations. Enters full force on 1 January 2015 

EPC contracting for treatment processes

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Water and energy efficiency – clean production

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Desalination / Membranes

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Tariff rises now making feasible

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Possible restrictions on foreign content of projects

Water for Energy production 

Cooling water – Dry cooling and water saving

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Mining water management

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Unconventional Oil and Gas – massive water demand and disposal issues.

December 17 2013 – Coal for water plan issued - Applies 3 Red lines to coal

Market opportunities: Soil Remediation and River restoration 3rd March, 2014, MEP announced that the Soil Pollution Prevention & Remediation Action Plan would be issued by the end of 2014. 17th April, 2014, MEP & MLR published the First Nationwide Soil Pollution Survey report (2005-13). 

16% of the country’s soil exceeds national standards.

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For arable land, the figure rises to 19.4%.

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Acute pollution in industrial Areas and cities

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Heavy Metals, esp Mercury

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Polluted irrigation water and sludge

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Groundwater contamination 70%

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Weak Regulatory regime – Still immature market

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Want EPC Contractors with the toys!

London 2012, Olympic Park

The Opportunity

To regenerate 250 hectares of mainly derelict and contaminated land in order to both host the Olympic and Paralympic Games and create a lasting Legacy

Chemical Stabilisation

49,000 m3 of soil was chemically stabilised Locks-up contamination within the soil matrix Additives tailored to contaminant type Long term leaching of contaminants was assessed

Soil Washing

Over 700,000m3 of soil was treated by this separation process which produces sand and gravel fractions for re-use. Contamination concentrated in fine grained filter cake

Groundwater Treatment CZ5a Perched water cut-off wall & GWTP

CZ3a Hydraulic Containment

CZ6a/d Pump & Treat

CZ6d Perched water cut-off wall

CZ3a ISCO Round 1

CZ1a DPVE ORS injection NAPL recovery

CZ3a ISCO Round 2 CZ3a DNAPL removal EVO Injection CZ8a EHCM injection

Free product removal: 2,500 litres Pump and treat schemes: 235,000 cubic metres Diluted Chemical reagents injected: 1,260 tonnes

After

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After

上游 生态社区段

Eco-community and River Restoration

Challenges For EU Companies  

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Identify Niche. adapt products to the specific needs of the local market protect IPR work out the financing find the right partners identify the project opportunities including at what point in procurement processes to engage with partners and clients.

Assistance for EU Companies 

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EU-SME Centre and EU IPR Helpdesk can provide information and advice on issues facing SMEs in China EUCCC – European Chamber – Water Working Group, links with China Water Enterprises Confederation. Produces Position Paper and Lobbies on member’s interests. China Europe Water Platform has business pillar to build links between EU and Chinese Enterprises and exchange information on project opportunities, Links with Ministry of Water Resources, and Science and Technology Promotion Centre Horizon 2020 has specific component for innovation promotion in China and/or India. A CEWP consortium has applied to this. EU Partnership Instrument is supposed to help build policy dialogue and innovation promotion links with China.

Examples 1 

MicroLan, Netherlands - Monitoring  Produce

iTox and other Water Quality monitoring systems based on luminescent Bacteria  Operated in China about 5 years, with local representative, Made in EU  Sell mainly to Water Utility & EPBs  Charge premium over EU prices which covers additional marketing  Local competitors now “Learning” so market grows but share shrinks

Examples and SME case Studies  1.

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3 Case studies Microlan – EU SME following export model through Local representatives Mixel – EU Company exporting technology with local manufacture CleanTech – EU-China joint venture with entire operation in China based on EU Technologies

Examples 2 

Mixel, France – Specialist mixing elements  Have

set up manufacturing in Beijing Development Zone  All design stays in EU  Market growing, share has room to grow  Customers in many sectors  Growth limit – no local finance  Key relationships with suppliers  Meet Chinese standards (different)

Examples 3 

GreenTech– Membrane Solutions for Water Treatment  

EU-China JV company, Manufacture China, Sales China EPC, PPP, PSP Performance Security Programmes (Analyse, upgrade, finance, equip, train)

Long-term financial relationship with customer  Working Capital Gaps, Advnc Pay Bond  Chinese Guarantee Companies as Intermediaries to Banks  Secured on project accounts receivable and patents valued directly Now Growing steadily 

Summary 

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Water Security is critical to sustainable growth, China is greatly increasing investment China wants to access best international practice, but many knowledge, language, culture, IPR and financial barriers to overcome There are complex planning and procurement procedures for foreign companies to negotiate Urban water utility markets are mature and hard to enter

Next Steps 

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The EU has many innovative technologies and services of value to China European Governments, Academia and Enterprises need to work together to promote European Innovation and expertise and develop sustainable business partnerships in China Through Horizon 2020 and EU Partnership initiative as well as the actions by Member states and Companies there is the potential for a structured approach to bringing these to market in China. Propose establishment of an EU innovation promotion centre in China

Thank You 谢谢 More information available in EU-SME Centre Water Sector Market Report – www.eusmecentre.org.cn Also Soon to be available at www.cewp.org or from myself [email protected]