China company to produce CFC replacement

Asian Economic News, Jan 22, 2001

BEIJING, Jan. 15 Kyodo

A Chinese company has launched a project to build the country's first plant to produce a replacement for the most widely used chlorofluorocarbons (CFC-12).

Xian Jinzhu Modern Chemical Industry Co. Ltd. signed a contract with the World Bank on Sunday to formalize its agreement to use $25.4 million in U.N. Multilateral Fund money to develop the capacity to produce hydrofluorocarbons on an industrial scale ''for the first time in China's history,'' a company official told Kyodo News on Monday.

This is a major first step toward eliminating China's production of ozone-depleting substances (ODS).

The new product, HFC-134a, is regarded as the best ozone-friendly replacement for CFC-12, which is used in refrigerators, air conditioners, as aerosol propellants and in producing foam plastics.

China became one of 160 signatories to the 1987 Montreal Protocol in 1992, thus committing itself to phase out production and use of CFCs by 2010. The U.N. Multilateral Fund is specifically aimed at helping developing counties meet the protocol.

This most recent grant is the largest single allotment in China to date, although the country has already received $550 million from the fund, the official China Daily said Monday.

The Jinzhu grant is also the first in the ''ODS 4'' stage of the fund's work, which began in the early 1990s, a World Bank official said in a telephone interview. Whereas previous funding efforts targeted consumers of CFCs and other ODS in an effort to convert them to non-CFC replacements, the latest stage aims to build capacity to produce replacements.

China still produces 60,000 tons of ODS per year, the production level frozen in 1999, China Daily said.

The market for non-CFC replacements has expanded as the government imposes increasing restrictions on CFC use. Demand is still limited, however, and entirely met by imports. Last year China bought 2,000 tons of HFC-134a on the world market, 2% of total output, at a cost of $14.5 million, China Daily said.

The Jinzhu project is designed to produce 5,000 tons annually on the completion of its first stage in 2002, with the second and final stage, two years later, doubling capacity.

The Xian Jinzhu chemical firm was chosen for the project simply because the company was ''the only one in China'' that could implement the necessary technology on an industrial scale, spokesman Luo Yijun said. The company was formed in the 1980s with the merger of the Xian Modern Chemical Research Institute, formerly under China Weapons Industry Co., and the Tibet Jinzhu Shareholding Co., he said.