The China National Chemical Construction Corporation, the State Environmental Protection Administration and Xi'an Jinzhu Modern Chemical Industry Co Ltd signed a US$25.41 million contract to produce substitutes for ozone depleting substances (ODSs) here yesterday.

The UN Multilateral Fund for the Implementation of the Montreal Protocol will foot the entire bill by supplying a grant for the project, a production line which is expected to produce an annual total of 10,000 tons of chemical hydrofluorocarbons (HFC-134a), an ozone layer friendly product to replace Chlorofluorocarbons (CFC-12), an ozone depleting substance often used in refrigerators, aerosol propellants, automobile air conditioners and for making foaming plastics.

The US$25 million grant is the largest single contribution China has received from the UN Multilateral Fund since its establishment in 1991, and the money will be used to produce the country's first production line for HFC-134a.

Xi'an Jinzhu Modern Chemical Co Ltd, a venture jointly established by Jinzhu Group in the Tibet Autonomous Region and Xi'an Modern Chemical Research Institute, will be responsible for implementing the project.

The first phase of construction is expected to be completed by 2002 and will have a production capacity of 5,000 tons of HFC-134a a year. According to sources with Xi'an Jinzhu, the entire project should be completed by 2004.

Representatives from the State Environmental Protection Administration said the production line represents a major step towards fulfillment of China's goal to phase out ODS production by year of 2010. They also claimed the project will end the country's dependency on imported HFC-134a which costs the country over 120 million yuan (US$14.5 million) every year.

HFC-134a has been recognized worldwide as the best substitute for CFCs in the operation of automobile air conditioning systems.

Data from the State Environmental Protection Administration indicates that China's current consumption of HFC-134a is not large, but the data also suggests consumption will soar up in the next 10 years following the country's ban on use of CFCs in new cars, effective next year.

It is estimated the country will need about 10,000 tons a year of HFC-134a for use in cars and other purposes by 2005. By 2010, experts predict that annual demand will rise to 20,000 tons annually.

HFC-134a is now mainly produced in Europe, the United States and Japan, with total production reaching over 100,000 tons each year. China presently imports some 2,000 tons each year at an annual cost of over 120 million yuan (US$14.5 million).

China has accepted a total of US$550 million from the Multilateral Fund since 1991. The country has combined the money with its own effort in phasing out 90,000 tons of ODSs, according to State Environmental Protection Administration numbers. By the end of last year, around 30 ODS production plants had been closed.

According to the administration, ODS production in China had been frozen at a level of about 60,000 tons a year by 1999 and will be totally phased out by year 2010.

The Multilateral Fund agreed to assist China with grants worth US$150 million in the 10 years between 1999-2009 to reduce and phase out ODS production. The construction of an HFC-134a production line is one of the major projects to be undertaken with the money.

(China Daily 01/15/2001)