Shanghai orders emission fees

Shanghai announced that it will charge enterprises for emitting volatile organic compounds (VOCs), the primary sources of smog and airborne particles. Analysts say that the government is implementing financial incentives to strengthen air pollution control.

Shanghai will adopt three phases of pilot measures charging enterprises for emitting VOCs, with the standard charge increasing in each phase, the Shanghai-based news portal thepaper.cn reported on Wednesday.

The Shanghai Municipal Development and Reform Commission, Shanghai Municipal Finance Bureau and Shanghai Environmental Protection Bureau jointly made the announcement.

A total of 12 industries will be targeted, including shipbuilding, automobile manufacturing, furniture manufacturing and petrochemicals.

In the first phase, which began on October 1, the standard charge is 10 yuan ($1.50) per kilogram of VOCs. In the second phase starting on July 1, 2016, the charge will be 15 yuan per kilogram, while in the third phase starting January 1, 2017, the charge will rise to 20 yuan per kilogram.

VOCs constitute the main sources of PM2.5 - airborne particles with a diameter smaller than 2.5 micrometers - which have caused hazardous smog in many large cities in China, Ma Jun, director of the Institute of Public and Environmental Affairs, told the Global Times on Thursday.

According to the announcement, enterprises that reduce their emissions to 50 percent below Shanghai's emissions cap and that have not been punished by environmental protection authorities for at least one year can pay half of the standard emission fees.

"The policy has set an example for other cities. Instead of relying on administrative orders, Shanghai is trying to resort to financial incentives to force enterprises to control pollutant emission," Zhang Zhen, an expert from the Department of Environmental Science and Engineering at Shanghai-based Fudan University, said.

Enterprises which have been categorised by the national government as restricted industries will be charged twice the standard rate, while those categorised as industries marked for gradual elimination will be charged three times the rate in an effort to reduce outdated production facilities and upgrade industrial structure.

Environmental authorities have vowed that the policy will help the city cut total VOCs emission by 50 percent by 2017. Beijing issued a similar policy on September 1, but its policy does not include the same transitional phases as Shanghai's.