Chinese Water Policy Focus – Waste Water Treatment

A Chinese financial company (Sun Hung Kai) has recently confirmed the view that the waste water treatment sector in China is continuing to grow and prosper. They first published a review in 2013 suggesting that the waste water treatment industry was becoming stronger in China due to: “treatment fee hikes, upcoming stricter discharge standards, government efforts to increase waste water treatment in rural areas, and the development of new financing channels for the sector”.

They go on to say that “the waste water treatment fee hikes implemented in most provincial capitals last year are expected to be rolled out to other cities”. Policy makers believe that if wastewater treatment fees are made higher; there is incentive for investment in this area and an overall reduction of water usage.

New wastewater treatment guidelines have been implemented with testing of Total phosphorus, Total nitrogen, Ammonia nitrogen, Biological Oxygen Demand (BOD) and Chemical Oxygen Demand (COD). Strict discharge guidelines are to be met by the end of 2018 and therefore local governments are feeling the increased pressure to clean up their wastewater. The research carried out by Sun Hung Kai Financial states that “spending on waste water treatment in urban areas is targeted to increase in the 2016-20 period, compared with the previous five year period. Policymakers are also turning their focus to rural areas, where water treatment rates are a fraction of what they are in cities. The emerging green bond market allows water companies to diversify their financing channels”.

China’s green bond issuance is a rapidly growing sector. In 2016 it reached USD36bn up from zero the year before and representing 40% of global green bond issuance. 11% of the green bond funds raised in H1 2017 went to the water sector.

Phoslock Environmental Technologies (PET) is actively working and investing in the Chinese waste water treatment sector. This is a rapidly growing industry in China with already a lot of interest being shown in Australian innovative technologies such as Phoslock and other remediation tools that PET offers.

Information contained in this blog was sourced from a SHKF report dated 19^th September 2017 and can be found at www.shkf.com.