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August, 2006:

Gradual Reduction Approach For Emission Caps

Good caps & a good penalty to get the blue sky back

The Environmental Protection Department (EPD) is going to renew the process license for the Lamma Island power plants of Hongkong Electric Company (HEC) very soon. It will also be the first time for the EPD to include emissions caps for the 3 air pollutants in the license. Greenpeace and Clear The Air urge the EPD to make good use of this renewal process to hold HEC accountable for their major role in Hong Kong’s air pollution, by setting yearly emission caps from now till 2010, and raise the penalty of excess emissions to a level that can deter non-compliance.

HEC is the second largest air polluter in Hong Kong. HEC supplies electricity to only 20% of Hong Kong’s population, but it emits 40% of SO2 in the power sector. (Note: appendix 1) Gloria Chang, Greenpeace campaigner, emphasized that, “It is high time for our government to set more stringent emission caps and raise penalty so as to push HEC to clean up our sky.”

Greenpeace and Clear The Air propose a gradual reduction approach for emission caps. The license for power companies should include a set of yearly emission caps that can ensure a decrease in emissions from now up to 2010. This approach can enable Hong Kong people’s ‘right to know’ the progress of planned reductions, whether the power companies are successfully approaching the overall 2010 reduction target and make sure that power companies cannot delay their actions to reduce emissions at the expense of society.

Furthermore, Greenpeace and Clear The Air demand that the EPD raise the penalty of excessive emissions to a level that is high enough to impact shareholder profits, not only to pressure the power companies to reduce air pollutants at a faster pace, but also to cover the social and health costs brought by air pollution.

Greenpeace and Clear The Air support the financial penalty as proposed in the “Future Development of the Electricity Market in Hong Kong: Stage II Consultation”, in which the permitted rate of return of power companies would be reduced if they fail to meet the statutory emission caps. This measure will be much more effective than the existing penalty as stated in “Air Pollution Control Ordinance” which is [a fixed fine of] HKD 100,000. (Chapter 311, Section 10, Claust 7b)

Also, Greenpeace and Clear The Air suggest that the EPD consider the penalty imposed on power companies under the US government’s “Clean Air Act”, where HEC would be fined US $2,000 per tonne of SO2 emission that exceeds the cap. If we use this level of penalty together with our gradual reduction approach, the penalty of HEC last year is estimated to be HKD 70 million. (Note: Appendix 2). Even this penalty would only amount to less than 2% of the total profit of HEC last year.

From 1997 to 2004, SO2 emissions in Hong Kong did not show the slightest decrease, but actually increased hugely – by 50%. (Note: Appendix 3) Only if the government is taking real action to tighten up the emission caps and penalty of power companies, can we have a chance to get the blue sky back.

Appendix 1: HK air pollutants emissions (1997- 2005) – HEC and CLP
Appendix 2: Gradual reduction approach and penalty
Appendix 3: HK air pollutants reduction progress, impacts of air pollution to health

Greens Urge Tougher Caps On Emissions

Cheung Chi-fai, SCMP – Thursday August 17 2006

Environmentalists have called on the government to impose a tighter emissions cap on Hongkong Electric after dismissing last year’s cap on CLP Power as toothless.

Greenpeace and Clear the Air also urged the government to release its guidelines on emissions reduction to honour the 2010 Pearl River Delta reduction goals agreed with Guangdong.

The calls come as the Environmental Protection Department is poised to impose an emissions cap on Hongkong Electric’s eight coal-fired generation units on Lamma Island when the licence for the units comes up for renewal next month.

Environmentalists expect Hongkong Electric will be able to satisfy the as yet undecided cap, as its new, gas-fired, 335-megawatt generation units are due to come into operation soon, thereby minimising reliance on coal, which is more polluting. The company said that last year it emitted 31,000 tonnes of sulfur dioxide (SO2).

A 54,000-tonne annual cap regulating each of three types of pollutants, including SO2, over a two-year period was imposed on CLP Power’s Castle Peak coal-fired generators in July last year. But environmentalists pointed out that the allowance was higher than the actual emissions of SO2 in 2003 and 2004 – the worst years on record.

The department yesterday said CLP’s cap for the second of the two years would be lowered to 44,000 tonnes. CLP Power said its SO2 emissions from July last year until March were about 34,000 tonnes.

The department has not said what levels the plants have to achieve by 2010, but Greenpeace campaigner Gloria Chang Wan-ki said the public had a right to know.

Annelise Connell, chairwoman of the Clear the Air, said penalties for breaching caps should increase.