Major state-owned enterprises (SOE) ignored energy saving and pollution regulations, said a report published by National Audit Office (NAO) yesterday.

The central government has annual targets to reduce energy consumption and pollution emissions for the country's 1,000 heavy polluting and high energy-consuming enterprises based on China's 11th five-year (2006-2010) plan.

Sources from the Ministry of Environmental Protection (MEP) said enterprises found violating environmental laws would be severely punished.

NAO's inspection of 41 such SOEs showed that some failed to fulfill energy-saving targets on time in 2007.

Zhangjiaokou coal-fired power plants owned by China Datang Corp achieved only 19.3 percent of their energy saving goals in 2007.

Meanwhile, the energy consumption for producing electrolytic aluminum at Baotou Aluminium Co increased by 1.83 percent, instead of decreasing.

Similarly, the emissions of sulfur dioxide (SO2) from 10 of the 41 SOEs failed to reach standards.

The NAO report said one enterprise's SO2 emissions in 2007 were 1.41 times higher than the national standard, but it did not give the name of the business.

Another nine enterprises recorded a higher level of emissions of other major pollutants, such as chemical oxygen demand (COD), than permitted. The concentration of COD from one enterprise was five times higher than the standard set by local government, the report said, without naming the company.

The improper treatment of industrial waste also resulted in potential environmental risks, the report found.

For instance, a total of 209,800 tons of hazardous wastes were handed to unlicensed recycling companies, while another 108,000 tons were simply buried or stored without proper treatment.

The solid wastes from two aluminum-producing firms led to soil pollution following a lack of effective prevention measures.

The detailed information of the enterprises' misdeeds has been reported to National Development and Reform Commission (NDRC) and MEP, the authorities that oversee the energy efficiency and emission reduction.

NAO also proposed that the NDRC and MEP should strengthen monitoring of these enterprises.

Companies involved in the illegal treatment of hazardous wastes will be fined according to the law.

China has set targets to improve energy efficiency by 20 percent, and reduce emissions of SO2 and COD by 10 percent by 2010 from the 2005 level.

The country's energy consumption per unit of GDP has already dropped 10.1 percent from 2006 to 2008. Emissions of SO2 and COD, also fell by 8.95 and 6.61 percent, respectively.

The 41 SOEs invested a total of 16.89 billion yuan (US$2.5 billion) on energy saving and emissions reduction between 2006 and 2007, and 36 achieved their five-year plan to reduce coal consumption by 87,981 million tons within two years, said the report.

(China Daily June 19, 2009)