KEY POINTS:
Former trade commissioner Merv Stark is spearheading a push by a New Zealand firm to decontaminate polluted sites in China.
Stark, a director of Environmental Decontaminations Ltd (EDL), says demand for environmental technology is enormous in developing countries like China. The best prospects are in old industrial areas in inland provinces where there has been less attention has been given to environmental issues until the last decade.
But with China now paying an enormous price in galloping pollution, which is badly affecting the quality of its air, waterways and soils, the pressure to do something about it is intensifying. Beijing has spent enormous sums trying to clean up the smoggy air in time for the Olympics. But the pollution goes well beyond its borders, resulting in a yellow haze affecting Hong Kong and even Japan.
Environmental services is one of the key sectors that China agreed to designate within the FTA.
The environmental industry in China was valued at US$24 billion in 2004 and is estimated to have increased by 15 per cent in each subsequent year.
Stark says EDL's particular decontamination technology is appropriate for a good percentage of contaminated sites that are required to be re-mediated under China's obligations with the Stockholm Convention on the elimination or persistent organic pollutants to meet a 2028 deadline for phase-out.
Such technology doesn't come cheap: One project on soil remediation is valued at US$31 million ($40 million).
China has enlisted support from the World Bank to fund environmental clean-up projects. Stark says companies like EDL have an opportunity to work with such agencies and the Chinese Government to obtain approval for the technology and tender for projects.
He says Zhejiang province has identified 37 sites that are appropriate for decontamination with an average value for each project in excess of US$15 million. Lianoning province is also well advanced in singling out contaminated sites.
But EDL has not ventured beyond these locations yet as the technology is too capital intensive to spread the net far.
Both Stark and NZTE China Markets manager Pat English say there are lots of opportunities for Kiwi companies to get involved in China's environmental cleanup. But English says the problem is finding project funding: The Chinese sometimes expect foreign governments to support their companies work.
"I look out the window and I see enormous environmental opportunities," says Trade Minister Phil Goff. "You can see the market."
Prime Minister Helen Clark is also keen to make sure that that New Zealand companies operating in the environmental services are alert to the new opportunities that the free trade deal brings.
Clark notes there is a mechanism for dialogue in the environment side agreement to the FTA.
She would also like to see China and its partners in the Climate Change Partnership extend an invitation to New Zealand to join their technology based approach to reducing greenhouse gas emissions.
English says other NZ companies have tried their luck. One environmental project was involved setting up a mini eco system on Shanghai's Chongming Island: "It didn't come off."
Christchurch's HotRot Exports, which produces high-quality composts, has attracted Chinese attention. It says research indicates that 30 per cent to 40 per cent of landfill in New Zealand is made up of organic waste, contributing to problematic leachate and methane gas emissions. The HotRot in-vessel composting system is an environmentally superior and cost-effective alternative to landfill that also produces top-quality compost just as useful to China as New Zealand.
