The VOCs control industry faces both opportunities and challenges.
VOCs control has become an important task in current air pollution prevention and control. The VOCs control industry has entered a stage of rapid development, and it is expected to usher in a market of over 100 billion yuan in the future.
Author: Zhang Jianni, Huang Haomin, Fu Yan
Editor: Zhao Ze
(This article was published in China Economic Weekly, Issue 18, 2017)
VCs control has become an important task in current air pollution prevention and control. With the introduction of a series of policies, the VOCs control industry has entered a stage of rapid development, and it is expected to usher in a market of over 100 billion yuan in the future.
This column recently visited some representative enterprises in China's VOCs monitoring and control field, such as Zhongsheng Guoen Environmental Technology Co., Ltd., Beijing Xiedirong Science and Technology Co., Ltd., and Qingdao Huashijie Environmental Protection Technology Co., Ltd. Through visits, we aimed to gain a deeper understanding of the opportunities and challenges in China's current VOCs control industry.
VOCs control gives rise to a market of over 100 billion yuan
VOCs pollution prevention and control has become an important task in China's ecological civilization construction and is highly valued by the state. Documents such as the "13th Five-Year Plan" have clearly proposed to promote the total control of volatile organic compound emissions in key regions and key industries, and to reduce the national VOCs emissions by more than 10% compared to 2015 by 2020.
It is understood that the national standards related to VOCs emissions have expanded to 14 items. Many regions such as Beijing, Shanghai, Guangdong, Chongqing, Tianjin, and Hebei have promulgated relevant local standards. 17 provinces have issued detailed regulations on VOCs charging, and more than 40 cities have implemented relevant整治plans for VOCs. Enterprises across the country have fully initiated VOCs reduction work， vigorously promoting the development of VOCs control， monitoring， and third-party service markets.
From the perspective of the 40-plus cities that have already released VOCs control and整治plans， the number of key enterprises for VOCs control in each city ranges from 100 to 1，000. Calculated at an average of 300 enterprises， the average control cost per enterprise is 3 million yuan (in fact， the control costs of large enterprises may reach several hundred million yuan or even over 100 million yuan， while the control costs of small enterprises may be around 10 million yuan). The average control cost per city is around 900 million yuan. There are more than 200 cities and regions across the country. Roughly estimated， the VOCs control market size in the past three years will reach 180 billion yuan， with an average annual size of 60 billion yuan. In fact， the number of VOCs control key enterprises in many cities is far more than 300， and the end-of-pipe treatment market is more than this estimated data.
Enterprises are actively entering the VOCs control field
Last October， the China VOCs Monitoring and Control Market Development Seminar was held in Beijing. This seminar was jointly initiated by the VOCs National Engineering Laboratory and Zhongsheng Guoen Environmental Technology Co.， Ltd. (hereinafter referred to as Zhongsheng Guoen).
Zhongsheng Guoen signed a strategic cooperation agreement with the VOCs National Engineering Laboratory， relying on the technical support of the laboratory， and committed to building China's most professional comprehensive solution provider for VOCs monitoring and control.
In the monitoring field， the company has developed a continuous monitoring and regulatory system platform for VOCs emissions from fixed pollution sources in cities， assisting local governments in implementing online monitoring and remote supervision of pollution-emitting enterprises within their jurisdictions. Its systematic products include monitoring and regulatory system platforms， networking mid-end data acquisition instruments， and VOCs online monitoring equipment for pollution sources. In the control field， the company relies on the technology and market research of the VOCs National Engineering Laboratory to carry out control for key pollution industries of VOCs in cities， providing technologically advanced control equipment and breakthrough solutions.
Qingdao Huashijie Environmental Protection Technology Co., Ltd. (hereinafter referred to as "Huashijie") is also a representative enterprise in the field of VOCs treatment. The company ranks among the top three in the market share of the vehicle coating industry. Currently, its VOCs treatment in the vehicle coating field covers various vehicle series, including passenger cars, commercial vehicles, new energy vehicles, agricultural machinery, bicycles, motorcycles, etc. Its business scope will gradually expand to other key industries such as packaging printing, petrochemicals, coal chemical industry, coatings, rubber, etc. At the same time, the VOCs national engineering laboratory established by the company - the comprehensive test platform for industrial application of VOCs purification technology, has promoted the research and development of VOCs adsorption materials and the exploration of new VOCs technologies, driving the technological and equipment level of the VOCs treatment industry.
In the long run, the market demand for VOCs monitoring (testing) is huge, possibly approaching or reaching the market for end-of-pipe VOCs treatment. Beijing Xiedirong Science and Technology Co., Ltd. (hereinafter referred to as "Xiedirong") is one of the earliest enterprises engaged in the research and development of VOCs monitoring technology. In 2013, the company, as the leading unit, obtained the national major scientific instrument development project. Based on chromatography technology and Fourier transform infrared spectroscopy technology, it developed online and portable monitoring equipment for VOCs in fixed pollution sources. Xiedirong Company has also successively acquired the British KORE Company and the Belgian ORTHODYNE Company, further reserving VOCs monitoring-related technologies. The company's business has been promoted to application fields such as key pollution sources of VOCs in chemical parks, unorganized emissions, boundary monitoring of factory and district boundaries, and emergency monitoring.
Challenges in the VOCs control industry
While seeing the development opportunities in the VOCs control field, we also see the bottlenecks it faces. Currently, the lack of understanding of VOCs treatment monitoring technology by polluting enterprises, the incomplete industry standardization and professionalization, seriously restrict the prevention and control of VOCs pollution and the development of enterprises in China.
Firstly, polluting enterprises have insufficient understanding of VOCs treatment monitoring technology. Huashijie Company stated that they often encounter customers (polluting enterprises) who do not understand VOCs treatment technology and the relevant departments do not have technical assessment and standard regulations, resulting in the lack of scientific reference for the selection of control technologies by polluting enterprises, making the projects difficult to proceed.
Secondly, the current entry threshold for the VOCs treatment market is low, and a large number of companies have entered this industry. The equipment produced by various manufacturers varies greatly and is even mixed, with quality unable to be guaranteed. Compared with imported similar equipment, there is a significant gap. After installation, most of the equipment becomes a decoration, unable to operate normally. Xiedirong Company believes that the current implementation of laboratory standards for VOCs monitoring is difficult to meet the needs of real-time monitoring.
Thirdly, the implementation of VOCs control in the mid-to-low-end market is difficult. There are many small and medium-sized enterprises in industries such as furniture and printing, and these enterprises have insufficient asset capacity to bear the costs of regular and effective VOCs treatment projects and monitoring systems, resulting in high difficulty in government supervision and control. VOCs treatment and monitoring enterprises need to broaden their thinking and seek a governance/monitoring model that can adapt to the mid-to-low-end market. In this regard, Huashijie Company has launched containerized modular waste gas adsorption treatment equipment for small and medium-sized enterprises, which can be put into use immediately, reducing the investment cost of small and medium-sized enterprises and setting up an online monitoring platform to achieve pollutant discharge compliance, while sharing data with the government.
Finally, the industry's financing capacity is insufficient. Environmental service enterprises need to have corresponding financial strength and financing capabilities. Currently, most companies in the industry adopt self-financing, and the financing channels are relatively narrow and the methods are single. Although the government and financial institutions have introduced relevant green credit business, for small companies with lower creditworthiness and those that have difficulty providing collateral assets, the financing pressure is generally quite high. Therefore, the financing channels and financing volume have to some extent restricted the development of the environmental protection industry.
