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Datang Duolun Coal Chemical Project, Inner Mongolia, China


Description:

The Datang Duolun coal chemical project was established in Duolun County, Xilin Gol League, Inner Mongolia, in 2006. The project is owned by Inner Mongolia Duolun Coal Chemical (内蒙古多伦煤化工), a joint venture between Datang Energy Chemical Company Limited (大唐能源化工有限公司, 60%) and China Datang Corporation (大唐集团, 40%).[1] The estimated total investment of the project is CNY 27 billion (USD 3.98 billion).[2] The Datang Duolun coal chemical plant has an area of 168.5 hectare and was set up to produce 1.38 million tons of coal-based olefins (5 million tons of methanol as an intermediate product).[3] The first phase was expected to produce 460,000 tons/year of olefins (1.68 million tons of methanol as intermediate product).[4] The project uses lignite, which is considered the lowest rank of coal due to its relatively low heat content, from the Shengli Coalfield East #2 coal mine (内蒙古东胜利2号煤矿).[5] It was considered a "star project” as it is both a demonstration project for methanol to polypropylene (MTP) projects domestically and the first of its kind large-scale lignite based polypropylene production project in the world.[5] The project also involves the construction of a special coal transportation line to send coal from Shengli Coalfield in Inner Mongolia to Fengning in Hebei Province, with an annual transportation volume of 30 million tons. Besides, the project would develop part of the Shengli Coalfield East #2 open-pit mine and build an open-pit coal mine with an annual output of 30 million tons of raw coal (10 million tons in the first phase). In parallel to the coal chemical project, a 4x135MW self-use power plant was constructed.[4]

Since the beginning of the project, the residents nearby suffered from land dispossession and environmental pollution issues such as wastewater discharge, air and noise pollution and coal ashes. This led to the attention and report from NGOs and media starting from 2012, while different pollution and safety issues continued to emerge between 2012 and 2016, which led to both public concerns and financial punishment by the Environmental Protection Authorities  at local and central government level.

In July 2012, an environmental NGO in Tianjin, China, Green Collar (天津绿领), received complaints from local residents in Duolun regarding the pollution issues of the Datang Duolun coal chemical plant and went for a site investigation. During the site visit, the volunteers heard from local residents that black-colored dusts floated in the air and also fell on the crops and homes of local residents. Some residents had nausea and vomiting reactions after inhaling the odorous waste gas for a long time (later found to be hydrogen sulfide gas that smells like rotten egg), which could potentially increase the risk of lung diseases.[6] The volunteers also collected water sample from the sewage points near the Duolun plant and sent it for independent testing at Beijing Zhonghuan Putian Environmental Test Center (北京中环谱天环境监测中心). Based on the site visit in late July 2012 by four volunteers from Green Collar, it was found that the water sample from the sewage complied with the national standard for industrial wastewater (煤炭工业污染物排放标准(GB 20426—2006)). However, since the wastewater was directly discharged into the upper stream of Luan River, which is the water source for major cities such as Beijing and Tianjin, it raised concerns among the volunteers of Green Collar.[6]

The Green Collar team published the investigation report on the Chinese social media Sina Weibo. Representatives from Datang Duolun Coal Chemical reached out to Green collar, indicating that there were inaccuracies in the investigation report which they requested to be deleted, while also inviting the team members for another guided site visit at the plant.[7] It was indicated that the local environmental bureau of Xilin Gol League and Inner Mongolia also went to investigate the sewage of the Duolun plant after the investigation report was published on Weibo, however, the results were not disclosed publicly. [6]

On 15 September 2012, representatives from three NGOS, including Green Collar, Green Beagle Environmental Institute (达尔问自然求知社) and China Listed Company Environmental Responsibility Investigation Committee (中国上市公司环境责任调查组委会), went for another site visit with Duolun Coal Chemical staff. The investigation team got to visit the environmental management facilities at the Datang Duolun coal chemical plant and met with the management team of Duolun Coal Chemical, along with experts in the corporate social responsibility field, with the aim to help the company implement its environmental and social responsibility. Representatives from Duolun Coal Chemical provided explanations in response to the observations that were disclosed by Green Collar. It was mentioned that the company is building a new water treatment facility due to the lack of treatment capacity of the old one and the new facility would be ready in November 2012, which is why there was the discharge of wastewater. It was also mentioned that the air pollution issue was due to the renovation of its tail gas emission chimney, the height of which would be increased in order to reduce the impact on local residents. On 16 September, the volunteers also requested to revisit the sewage outlet point, which was agreed by the staff. It could be seen that the wastewater looked clearer than when they visited in July, and the temperature and smell situation also improved. At the end of the site visit, the NGO representatives indicated that they would continue to monitor the situation and request Datang to solve the pollution issues thoroughly and effectively as soon as possible.[7]

In September 2012, a representative from the Green Beagle Environmental Institute, Dr. He Xiaoxia, who also investigated the environmental issues in Inner Mongolia for a long time, went to Duolun county for a site visit. Through the introduction of local villagers, she accidentally discovered a dumping site of coal ashes, where trucks would transport the coal ashes over and dump onto the ground without any protection of the grasslands. On 30 October, Dr. He sent a private letter to Datang to inquire about the situation and requested for feedback. Datang responded briefly that they would follow up and investigate. After not hearing any update from Datang after 2 weeks, five NGOS sent a joint public letter to Datang on 14 November to request for an explanation and corresponding measures within 10 days. The five NGOs included the three NGOs that went for site visit in September, plus Nature University (自然大学) and the Environmental Research Institute by Source Enthusiasts in Fengtai District of Beijing (北京市丰台源头爱好者环境研究所). The public letter was retweeted and commented for almost 2,000 times on China’s social media, Weibo. In one of the comments, it was noted that Duolun County is located only 180 km from Beijing and close to the major water supply source for Beijing and Tianjin, which makes its ecological environment extremely important.[7] On 23 November 2012, the Green Beagle Environmental Institute received the response from Datang via mail, after which both parties agreed to meet at the Green Beagle Institute office on 27 November 2012. Based on the response from Datang, the company had appropriate measures in place in compliance with legal requirements, including anti-seepage treatment facilities and anti-dust sprinkler vehicles at the coal ash dump site.[8] In the interview with journalists on 24 November 2012, Datang’s representative showed the environmental impact assessment report of the Datang coal to olefine project to journalists as part of their response to the NGOs’ accusations.[9] While the environmental NGO representatives considered the response from Datang reasonable, they still expressed their concerns that Datang’s work in public information disclosure and communication is far from enough and that they would continue to monitor the situation at the Duolun site. [9]

In April 2013, journalists from Minsheng Weekly (民生周刊) revisited the Duolun Coal Chemical site 28 days after Datang International published its 2012 corporate social responsibility (CSR) report, where the company published its commitment and efforts towards environmental protection. During the site visit, the journalists heard complaints from local residents about the air and water pollution issues caused by the coal chemical plant. While there was no visible wastewater discharge during their visit, they received a call from the local residents one day after they left, where the residents indicated that there was dark color wastewater discharge visible again, which is next to a river branch that leads to Luan River. On the other hand, some local people also disclosed that after the NGOs’ letter was published online, the parent company of Duolun Coal Chemical organized experts to conduct environmental investigation at the coal chemical plant between November 7-9 and issued an investigation report afterwards. The investigation report covered 41 specific environmental protection issues under 6 categories, such as desulfurization device not meeting efficiency requirements and wastewater not reaching “zero discharge” requirement. According to the head of the Environmental Protection Bureau (Ecology and Environment Bureau as of 2018) in Duolun County, Li Wanmin, the bureau had sent several notices requesting rectification as soon as possible. Li also indicated that the Environmental Protection Ministry requested coal chemical industry to reach “zero discharge”, which is impossible to reach by Duolun Coal Chemical. This is also the reason that Datang only indicated that it has the “zero discharge” capacity (v.s. “zero discharge” in reality) in order to receive operation approval as early as possible.[10]

On 11 June 2014, the Ministry of Environmental Protection (Ministry of Ecology and Environment, MEE, as of 2018) issued an announcement to punish companies that have outstanding problems with desulfurization facilities, where Duolun Coal Chemical was listed as one of the target companies. According to the investigation that led to the announcement, Duolun Coal Chemical’s desulfurization facilities were shut down for 174 days throughout the year, which led to the excess emission of sulfur dioxide for a long time.[11][12] In addition, the audit report from the National Audit Bureau published on 20 June 2014 disclosed multiple issues such as the investment in the project exceeding the budget, illegal appropriation of land before receiving approval for construction, as well as violation of regulations in the tendering process. According to the audit report, the 3962.7 mu (264.18 hectare) of land occupied by Duolun Coal Chemical had not received the official land use approval for construction, including 1736.4 mu (115.76 hectare) of cultivated land, the majority of which belonged to the residents of Penyao Village at Dolon Nor Town in Duolun County (多伦淖尔镇盆窑村). During the site visit, journalists also heard from local farmers that the wastewater discharged by the coal chemical plant destroyed some of their crops. The farmer representative, Gu Yugui, indicated that he had requested for compensation to Duolun Coal Chemical as well as the local government in 2010. As a result, the affected villagers received a compensation of 500 CNY/mu (1100 USD/hectare), but only in the year of 2010. Besides, local residents also suffered from significant noise pollution and could not open their windows since the beginning of the project.[12]

In August 2014, Duolun Coal Chemical was faced with another environmental incident, as local residents found dead fish in the Luan River. Famer representative Gu Yugui was concerned that the wastewater from Duolun Coal Chemical may have polluted the drinking water, and prepared water sample from the well at his home to send for water quality test. According to him and as shown by local villagers, there was yellow-colored unknown substance in the water extracted from the 30-40 meter deep well.[13] According to the vice director of the Environmental Protection Bureau of Duolun County, Shi Junfeng, the dead fish incident was related to the water pollution caused by Duolun Coal Chemical on 4 August 2014. Shi disclosed that the inner tube of the MTP facility’s condensate heat exchange machine broke on 1 August, after which the untreated wastewater was transported to the buffer tank of the sewage treatment system for storage. As there was a heavy rain in Duolun County on 4 August, the overflowing wastewater in the buffer tank entered the river through the rainwater pipe network. The emitted pollutants in the wastewater included alcohols, hydrocarbons and petroleum. According to a document that explained the cause of the accident, the plant did not adopt the accident pool as required by the environmental assessment, and confused the concept between accident pool and buffer pool.[13] It was disclosed that Duolun Coal Chemical received fines from the Ministry of Environmental Protection that added up to CNY 37.24 million (~USD 5.48 million) in 2014.[14]

In April 2016, a water gushing accident occurred at the evaporation pond of Datang Duolun Coal Chemical plant, which turned into a massive chemical leak. The satellite image indicated that the area on the ground suffering from floods in the region covered more than 90,000 square meters, including grassland, farmland and forested areas.[15] [16] Even until June 2016, local residents had to rely on water provided by the government that were transported from outside the area for their daily use. Some villagers also complained about the impact on their livestock, that had health issues after drinking the water from the well. It was unknown how long such a situation would continue[17] In response to this accident, the vice director from Duolun Coal Chemical, Liu Xiao, indicated that the water that overflew from the evaporation pond were treated with the environmental management facility and would not cause soil or underground water pollution. The director responsible for safety and environmental protection at Datang Energy Chemical Company Limited even had a drink of the remaining sample of the liquid to prove that it is not harmful but only a bit salty. However, this contradicted with the conclusion from the Environmental Protection Bureau of Duolun County. The bureau’s environmental monitoring station director, Luo Qingjun, indicated that they considered the liquid that overflew from the evaporation pond as salt intensive industrial wastewater, which had already caused contamination of some shallow wells at nearby villages, based on the results from continuous monitoring.[17]

Not long after the water gushing accident, on 25 May 2016, local residents found that three tankers from Duolun Coal Chemical were dumping unknown liquid with a pungent smell on the road towards the coal ash dumping site. Some villagers blocked the tankers on 26 May. The company representative from Duolun Coal Chemical, Zhang Zhiming, explained that the liquid dumped by these three vehicles was qualified reclaimed water that had been treated by the company and was used to spray and suppress dust. However, he indicated that the rented vehicles were not cleaned properly, which led to the abnormal color and smell of the liquid, which would still not cause environmental pollution. This again contradicted with the discovery of the environmental monitoring station of Duolun County, which found that the liquid sample from the vehicle exceeded the standard for wastewater discharge (污水综合排放标准) (COD≤60). In particular, it was found that the level of sulfate and chloride have high values. As a result, the Duolun County Environmental Protection Bureau determined that Duolun Coal Chemical was suspected of illegally using vehicles to discharge pollutant and detained both the relevant vehicles and staff.[17] It was disclosed that the relevant Environmental Protection Bureaus had conducted 12 environmental inspections at Duolun Coal Chemical, in particular targeting the hidden risks of evaporation ponds, and notified the company to rectify and repair. However, the outcome was not satisfying as most of the issues were not resolved. On the other hand, the company representative denied receiving such notifications for renovation and rectification, and indicated they had their own difficulty as a demonstration, yet also an experimental project.[14] [17]

In addition to its negative ecological impacts, Duolun Coal Chemical also suffered from operational and financial difficulties. In July 2014, Datang announced in its filing to the Hong Kong Stock Exchange that it would sell the operations of its coal-to-gas and coal-to-chemical divisions, including the Datang Duolun coal chemical project, to China Reform Corp., an asset management company backed by the State-owned Assets Supervision and Administration Commission (SASAC).[18] Two years later, in March 2016, China Reform Corp. terminated the transaction agreement after two years’ negotiations over how the assets would be transferred.[19] In July 2016, it was announced that Zhongxin Nenghua Science and Technology Co., Ltd., a whollly owned subsidiary of China Datang Corporation, which is the parent company of Datang International that owns Datang Energy Chemical, would acquire the assets of the coal-chemical related operations for a token of 1 yuan (EUR 0.1).[20] 

In January 2016, Greenpeace published a report named "Pipe Dreams" that used Datang as an example to illustrate the development of China's coal-to-chemical industry and the industry's environmental issues. It also drew on the lessons learnt from Datang's failure and called on the companies, the financial industry and the policymaker to pay attention to the associated environmental and operational risks. [21]

In late 2019, it was reported that Duolun Coal Chemical had achieved satisfying production outcome after two years of reform and restructuring, where the company went through detailed checking of environmental and safety issues, and learnt from the experience of other companies.[3] On the other hand, an environmental NGO,  China Biodiversity Conservation and Green Development Foundation (CBCGDF), filed a public interest litigation against Duolun Coal Chemical in 2019, but did not hear back regarding any follow-up from the court. [22] Prior to this, CBCGDF also requested for the disclosure of the government response to the environmental impact assessment of the Duolun Coal Chemical project in October 2016. [23]

Basic Data

Name of conflict:Datang Duolun Coal Chemical Project, Inner Mongolia, China
Country:China
State or province:Inner Mongolia
Location of conflict:Dolon Nor, Duolun County, Xilin Gol League (锡林郭勒盟多伦县淖尔镇盆窑村)
Accuracy of locationHIGH (Local level)

Source of Conflict

Type of conflict. 1st level:Fossil Fuels and Climate Justice/Energy
Type of conflict. 2nd level:Land acquisition conflicts
Coal extraction and processing
Chemical industries
Water treatment and access to sanitation (access to sewage)
Specific commodities:Coal
Chemical products

Project Details and Actors

Project details

The Datang Duolun coal chemical project was established in Duolun County, Xilin Gol League, Inner Mongolia, in 2006. The Datang Duolun coal chemical plant was set up to produce 1.38 million tons of coal-based olefins (5 million tons of methanol as an intermediate product).[3] The first phase was expected to produce 460,000 tons/year of olefins (1.68 million tons of methanol as an intermediate product).[4] The project uses lignite, which is considered the lowest rank of coal due to its relatively low heat content, from the Shengli Coalfield East #2 coal mine (内蒙古东胜利2号煤矿).[5]

The project also involves the construction of a special coal transportation line to send coal from Shengli Coalfield in Inner Mongolia to Fengning in Hebei Province, with an annual transportation volume of 30 million tons. Besides, the project would develop part of the Shengli Coalfield East #2 open-pit mine and build an open-pit coal mine with an annual output of 30 million tons of raw coal (10 million tons in the first phase). In parallel to the coal chemical project, a 4x135MW self-use power plant was constructed.[4]

Project area:168.5
Level of Investment:USD 3,980,000,000 (CNY 27 billion)
Type of populationRural
Affected Population:43,000 (estimated based on population of Dolon Nor Town, Duolun County)
Start of the conflict:01/07/2012
Company names or state enterprises:Datang Energy Chemical Company Limited (大唐能源化工集团有限公司) (Datang Energy Chemical) from China - Major shareholder of the company that directly led to the pollutions
China Datang Corporation (CDT) from China - Parent company and shareholder (40%) of the company that directly led to the pollutions
Datang Intl Power Generational Co.,Ltd (大唐国际发电股份有限公司) (Datang Power) from China - The listed entity behind the controling company of the Datang Duolun coal chemical project
Datang Inner Mongolia Duolun Coal Chemical Co. Ltd. (Duolun Coal Chemical Company) from China - Owner of the coal to olefin project
Zhongxin Nenghua Science and Technology Co.,Ltd. (中新能化科技有限公司) (Zhongxin Nenghua) from China - Acquired the coal to olefin project that led to the pollutions starting from 2016.
Relevant government actors:Ministry of Environmental Protection (Ministry of Ecology and Environment, MEE, as of 2018) 环保部
Xilin Gol League Environmental Protection Bureau (Ecology and Environment Bureau as of 2018) 锡林郭勒盟环保局
Duolun County Environmental Protection Bureau (Ecology and Environment Bureau as of 2018) 多伦县环保局
Environmental justice organizations (and other supporters) and their websites, if available:- China Biodiversity Conservation and Green Development Foundation (CBCGDF), http://www.cbcgdf.org
- Green Collar (绿领) https://weibo.com/1824425283/about
- Green Beagle Environmental Institute (达尔问自然求知社) http://www.bjep.org.cn/
- Greenpeace https://www.greenpeace.org/eastasia/publication/1800/pipe-dreams/
- China Listed Company Environmental Responsibility Investigation Committee (中国上市公司环境责任调查组委会)
- Nature University (自然大学)
- Environmental Research Institute by Source Enthusiasts in Fengtai District of Beijing (北京市丰台源头爱好者环境研究所)

Conflict & Mobilization

IntensityMEDIUM (street protests, visible mobilization)
Reaction stageIn REACTION to the implementation (during construction or operation)
Groups mobilizing:Farmers
International ejos
Local ejos
Neighbours/citizens/communities
Pastoralists
Local scientists/professionals
Forms of mobilization:Blockades
Creation of alternative reports/knowledge
Development of alternative proposals
Involvement of national and international NGOs
Official complaint letters and petitions
Public campaigns

Impacts

Environmental ImpactsVisible: Air pollution, Loss of landscape/aesthetic degradation, Noise pollution, Soil contamination, Soil erosion, Waste overflow, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion
Potential: Global warming
Other Health impactsVomiting actions, nausea, and potential exposure to lung diseases
Socio-economical ImpactsVisible: Loss of livelihood, Land dispossession, Loss of landscape/sense of place, Other socio-economic impacts
Other socio-economic impactsThe health of livestock was affected, which has impact on the livelihood of local residents.

Outcome

Project StatusIn operation
Conflict outcome / response:Compensation
Environmental improvements, rehabilitation/restoration of area
Technical solutions to improve resource supply/quality/distribution
Application of existing regulations
Proposal and development of alternatives:1. The NGO representatives from the 5 NGOs that issued the public letter to China Datang Corporation to request for its response on environmental pollution accusations (including Green Collar, Green Beagle Environmental Institute, China Listed Company Environmental Responsibility Investigation Committee, Nature University and Environmental Research Institute by Source Enthusiasts in Fengtai District of Beijing) urged Datang to enhance their efforts in public information disclosure.
2. Greenpeace also published reports with an overview of Datang's development in the coal chemical industry. In the report, Greenpeace called on the companies, the financial sector and the policymaker to take into consideration the environmental and operational risks of the industry and reconsider the support for further development of the coal chemical industry in China.
Do you consider this an environmental justice success? Was environmental justice served?:Not Sure
Briefly explain:The environmental impact had caused a significant impact on local residents since the beginning of the project in 2006, which lasted at least until 2014. The NGOs’ involvement raised public and government attention, while also requesting the company to be more transparent in its communication. However, it was unclear whether the affected populations received financial or other forms of compensation, as some farmers indicated that they only received some one-off compensation for the loss of land. Besides, the impact on groundwater and health can lead to long-term damage to the local communities.

Sources & Materials

Juridical relevant texts related to the conflict (laws, legislations, EIAs, etc)

Environmental quality standards for surface water (《地表水环境质量标准(GB 3838-2002)》)
http://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/shjbh/shjzlbz/200206/t20020601_66497.shtml

Integrated wastewater discharge standard (《污水综合排放标准》(GB8978-1996) )
http://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/shjbh/swrwpfbz/199801/t19980101_66568.htm

Emission Standard for Pollutants from Coal Industry (《煤炭工业污染物排放标准(GB 20426—2006)》)
https://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/shjbh/swrwpfbz/200609/t20060908_92561.shtml

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[18]S. Y. Ling, “China’s Datang sells coal-to-gas, coal-to-chemical operations,” S&P Global, 08-Jul-2014. [Online]. Available: https://www.spglobal.com/platts/en/market-insights/latest-news/coal/070814-chinas-datang-sells-coal-to-gas-coal-to-chemical-operations. [Accessed: 01-Sep-2020].
https://www.spglobal.com/platts/en/market-insights/latest-news/coal/070814-chinas-datang-sells-coal-to-gas-coal-to-chemical-operations

[19] Y. Zhao, “大唐1元甩卖煤化工资产 去年巨亏43亿,” 新京报, 02-Jul-2016. [Online]. Available: http://finance.china.com.cn/industry/energy/mtdl/20160702/3794526.shtml. [Accessed: 24-Sep-2020].
http://finance.china.com.cn/industry/energy/mtdl/20160702/3794526.shtml

[20] E. Ng, “Datang Group takes control of subsidiary’s loss-making coal and chemical assets,” South China Morning Post, 01-Jul-2016. [Online]. Available: https://www.scmp.com/business/companies/article/1983997/datang-group-takes-control-subsidiarys-loss-making-coal-and. [Accessed: 24-Sep-2020].
http://finance.china.com.cn/industry/energy/mtdl/20160702/3794526.shtml

[21]“Pipe Dreams - Datang’s failed coal chemical initiative, and the story of China’s coal chemical sector,” 21-Jan-2016. [Online]. Available: https://www.greenpeace.org/eastasia/publication/1800/pipe-dreams/. [Accessed: 21-Sep-2020].
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[22] "啮噬我们草原的不只是资本!草原保护公益诉讼也是举步维艰!", CBCGDF, 18-Mar-2021. [Accessed: 10 June 2021]
http://www.cbcgdf.org/NewsShow/4854/15520.html

[23] "绿会就大唐多伦煤化工蒸发塘坝体管涌事故向环保部申请信息公开", Read01, 24-Oct-2016. [Accessed: 10-June-2021]
https://read01.com/zh-cn/aGM3LD.html#.YQGUBpMzYqw

Meta information

Contributor:EnvJustice, ICTA-UAB/BG
Last update02/08/2021

Images

 

Industrial wastewater discharge point

Source and credit: Green Collar volunteer, 2012/09/26, http://blog.sina.com.cn/s/blog_7f8e88c0010139gx.html

Datang Duolun Coal Chemical emissions from the chiney

Source and credit: Volunteers from the public and Green Collar, 2012, http://blog.sina.com.cn/s/blog_7f8e88c0010139gx.html

Coal ash dumping site

Source and credit: Green Collar volunteer, 2012/09/26, http://blog.sina.com.cn/s/blog_7f8e88c0010139gx.html