The water business in China

1. The water business in China - Chinese challenges – Danish opportunities

2. Agenda • Highlights on China and water • The 12. Five-Year Plan • Implications for Danish water companies in China • Chongqing. Water clusterorcleantechcluster? • Chongqing’s 12. Five-Year Plan onwater • Denmark – Chongqing Water Days 2011 • Environmental Audit Reports

3. Highlights on China and water (1:2) • Approx. 20% of the world’s population lives in China • China has 7% of the water resources • Only 20% of the water resources are in the North of China were 46% of the population lives • In a normal demand year the annual water gap in China is 30-40 billion m3 • Approx. 400 out of the 600 largest cities in China are hit by severe water scarcity* • Beijing is sinking with approx. 1 meter annually and is named “the driest city in the world” (The South-North Water Division Project leading Yangtze and other rivers northwards demanding 600 billion DKK in investments and keeping 70-80.000 people occupied for approx. 40 years) * OECD

4. Highlights on China and water (2:2) • The scarcity of water is enhanced by serious water pollution with a total of 75 billion m3 wastewater discharged* • Only approx half of the wastewater is treated • 70% of Chinas drinking water is groundwater • Pollution from industries, households and farming has resulted in 90% of China’s cities are hit by contaminated water and only half of the cities live up the national standards for drinking water quality • In the countryside the rivers are the main source of drinking water. However, 40% of the rivers are polluted and not suitable for drinking • China is amongst the countries using most fertilizer and pesticides per m3 farming land • Flooding is now seen upon as a source of water * 2007 figure

5. Segmentation of the water pollution market Size of the water pollution control industry: 600 million USD in 2010. Source: IBISWorld Inc., All China Marketing Research Co., Ltd., 2010

6. Topography of a Chinese Five-Year Plan All policy levels are involved Incorporation of lower level plans Central policy goals Source:1.APCO Worldwide and China Greentech Initiative analysis

7. Key areas and targets in the 12. Five-Year Plan • China is committing to a green economy development • Key point in the 12th 5-year plan in the Energy & Environmentsector • 7 new strategic industies issued by the State Council (Energy savings and environmental protection as one implicating an emphasis on the construction of urban waste water as key) • Create more mandatory “green” targets • Set green development indicators to hold local officials accountable • Expand new energy – wind, solar, intelligent grid and biomass

8. Implications for the water business • RMB 4 trillion investment in infrastructure • A binding target for decrease in water consumption per unit of value-added industrial output by 30% from 2010 to 2015 • 40 billion m3 urban water supply capacity • Improvement of large irrigation districts • Urban waste water plants and treatment systems for rural areas • Integrated solutions • Pricing mechanisms and management systems • Recycling and monitoring systems • Upgrading of existing plants

9. Introduction to Chongqing

10. Water Cluster or Clean Tech Cluster Why a cluster? Low cost solution Plug-and- play solution Easy access to network & info

11. Chongqing’s 12th Five-Year Plan on Water (2011-15) • Investment on 18.9 billion RMB in waste water treatment • 215 waste water treatment plants • 34 sludge treatment projects • 7 water recycling projects • Water supply: Three projects for water abstraction and pumping stations will be finished; furthermore, one of the projects also includes water treatment and water distribution systems. • Opportunities: Industrial and rural waste water treatment facilities • Recovering materials • Fulfil local discharge standards • Easy to install and low cost for operation and maintaining

12. Discover the huge potential! • Get updated on Chongqing’s new 5-year water plan! • Access to important equipment promoters • Presentation of environmental Audit from COWI and resulting opportunities • Customised B2B match-making workshops! • Meet your customers along the Liang Tan River!

13. Background for Environmental Audit Report from COWI • Under the MOU between the Royal Danish Embassy of Denmark and The Municipal People's Government of Chongqing, COWI China has conducted Liangtan River Phase I project and identified 5 factories to conduct Liangtan Phase II project (Environmental Audit). • The five factories include: • one textile dyeing factory (F1) • three electroplating industrial zones (F2, F3, F4) • one lead acid battery factory (F5) • In addition the audit of the shared wastewater treatment plants (WWTPs) of the three electroplating zones is described in a separate report. (F6)

14. Recommended equipment – alternative no. 1 F5 - Chongqing Huafeng Battery (Group) Company Ltd • Sand filter for final separation of sludge particles in wastewater • Activated carbon filter for COD removal in wastewater. • New plate washing line including conveyer system and ion-exchanger • Investigation of extraction system for the formation process including improvement • of the extraction by using a capture rate of 0.5 m/sec for the acid mist - also when one or more covers are open • Coating of the floor in the slag storage to prevent leakage of slag components through the floor and into the ground. F1, F2, F3 and F4 - Textile dyeing factory and three electroplating industrial zones • Accumulating water meters • Water flow meter • Reverse osmosis for production of DI-water (De-ionized water) and for water recycling • Air-lift pumps for counter current flow systems • Ion-exchangers for water recycling • Carbon filters for removal of organic compounds in process baths and recycled water • Conductivity meters for control of rinse water quality • Evaporators for chrome baths • Metal recovery equipment (Electrolysis) • Dialysis equipment or for purification of pickling baths • Passivation chemicals without Cr(VI) • Process tanks with cover and extraction F6 - Wastewater treatment for industrial zones with metal plating workshops • Better control of pH • Separate collection system for spent concentrated process baths • Reduction of chrome(VI) • Reduction of consumption of ferrous sulphate • Improved sludge separation • Water reuse • Automation and monitoring • Line sensors to measure: • Oxygen concentration • Sludge concentration • Levels in the tanks. Aeration from Textile dyeing factory

15. Recommended equipment – Alternative no. 2 Mixingtank for wastewater and Fe2SO4 as reducing agent and someNaOH for neutralization from the Textile dyeing factory • Water meters and Water flow meters • Water recycling • Carbon and sand filters • Conductivity meters for control of rinse water quality • Metal recovery equipment (Electrolysis) • Passivation chemicals without Cr(VI) • Process tanks with cover and extraction • Investigation of extraction system • Coating of the floor in the slag storage • Differentkinds of on line sensors to measure: • Oxygen concentration • Sludgeconcentration • Levels in the tanks Tank formation system with the covers for acid fog collection being open due to malfunction of exhaust system in one lead acid battery factory   Alkali zinc plating tank from electroplating zone

16. SUSANNE NORS / SUSHEB@UM.DK COMMERCIAL COUNSELLOR (ENERGY & ENVIRONMENT), LL.M, EMBA DIRECT +86 (10) 85329981 MOBILE +86 139 1187 0373 HANS HALSKOV  /林汉祥 /HANHAL@UM.DK CONSUL / TRADE COMMISSIONER DIRECT +86 23 6372 5280 MOBILE + 86 135 946 365 99