17. November 2017

Pilot Project in Panzhihua for the Implementation of ECOPROFIT in China

Contract No. ASI/B7-300/2544/75793-70

This Project is funded by the European Union Asia Urbs Programme



China, Sichuan Province, City of Panzhihua

Austria, City of Graz

Germany, City of Hanover


a) The aim of the project is to support the City of Panzhihua on its way towards sustainable economic development. By transferring the ECOPROFIT know-how via high quality training to China and by implementing best practice models the eco-efficiency of small to large-scale industrial units will increase and the local economical and environmental development will be strengthened. Within this project the co-operation between the governmental and the business sector of the city will be intensified to improve the quality of life for the inhabitants of the city.

b) The main target groups of the projects are representatives of the local administration of the City of Panzhihua and experts for the training as well as Chinese enterprises for the implementation of ECOPROFIT.

c) The project includes three main activities, which are training of local experts, realisation and implementation of the ECOPROFIT approach and setting up new and efficient structures of networking among all partners.


1. General Objective

The general objective of the project is to  transfer the ECOPROFIT know-how to China in order to reduce the environmental impacts from small to large-scale industrial activities within Chinese Cities with a focus on small and medium sized enterprises and simultaneously to strengthen the economical development of a company by introducing innovative, integrated and environmental-friendly technologies. In the framework of Local Agenda 21 the cooperation between the governmental sector and the business sector will be established and fostered to increase the quality of life for the citizens. This will be of utmost importance for the Chinese society in regard of the rapid privatisation and fast growing economy.


2. To build local structures for ECOPROFIT

The local partners in Panzhihua shall be enabled to build the necessary structures for the local economy and technical experts for the implementation of ECOPROFIT in their City.  This includes the allocation of the necessary responsibilities within the administration in order to allow efficient work and to create a single reference point for the business partners. It also includes the establishment of a local base for the virtual ECOPROFIT Academy that will provide technical advice and consultancy and organises the necessary support to the businesses. Finally a network structure for enterprises that are interested to participate in the programme will be created.


3. To train and coach local ECOPROFIT consultants

12-15 local experts for the implementation of ECOPROFIT will be trained to support and guide local enterprises during the implementation of their ECOPROFIT activities. They should be able to train company representatives in order to prepare the implementation of ECOPFOFIT and to guide enterprises through the implementation phase. The training of local experts will be done during Study and Support Visits both in Asia and Europe. The implementation phase will be supported by coaching visits of ECOPROFIT experts from Europe. The Chinese experts will also be available to train new experts in the future and thereby become part of the virtual ECOPROFIT Academy.  Additionally, there will be elements of Distance Training organised through the project  Website that is also supporting communication and feedback between trainer and participants


4. To develop Chinese training material

In order to make the implementation possible, training and information material will be produced in Chinese and continuously developed and adapted based on the local experience with ECOPROFIT and the training activities. This has to be done parallel to the training of the local experts. The material will be the basis for the development of a Chinese ECOPROFIT GUIDE, a necessary Training Manual for further ECOPROFIT projects in Asia.


5. To run a local test phase

Local enterprises for the participation in the ECOPROFIT programme will be recruited. They will receive training and will be coached by the ECOPROFIT consultants that have been trained from European Partners within the project. Supervision by experienced European experts will be available. Just a successful implementation will add the necessary credibility and showcase effect to the project and support a successful dissemination strategy within China.


6. To develop a Chinese ECOPROFIT Academy

By the end of the project, the Chinese partners will be enabled to carry out further ECOPROFIT projects within China. In this context, a Chinese ECOPROFIT Academy (competence centre) will be built for future processes. The organisational base for the Academy will be located in Panzhihua, but will spread necessary information and act as consultants and trainers throughout the country.


7. To disseminate the results and spread ECOPROFIT around China and other Asian countries

The project is intended to create a model and a showcase for the implementation of ECOPROFIT in China and other Asian countries. The trained experts and the course material (Training manual – guidebook) are basic needs for the involvement of many other cities around China. The development of a competence centre for ECOPROFIT is crucial for the sustainability of the project. At the end of the whole implementation phase, a dissemination workshop will be held, as a starting point for spreading the concept within China.


(a) socio-economic, administrative and political context

The project is based on the results of the UNCED Conference in Rio 1992 with focus on Chapter 28 of AGENDA 21 calling for a Local Agenda 21. To involve local stakeholders in a sustainable local development strategy is one of the key points. In many cities around the world it has however been proven extremely difficult to involve the private economy into Local Agenda 21 activities and to motivate them for action. With ECOPROFIT the City of Graz has developed an approach that is trying successfully to overcome this deficit and to include the private economy into the Local Agenda 21 and to co-operate for a common vision.  It combines an action oriented approach leading to short and mid-term tangible results with the long-term vision for sustainable urban development.

ECOPROFIT is a programme targeting at the reduction of environmental impacts from the local economy and at the same time the support of sustainable economic development on the local level. Instead of using a regulatory approach and restrictions which might endanger companies and workplaces, ECOPROFIT is using a co-operative approach including all relevant stakeholders. Training, capacity building and incentives for companies are in the core of the programme. Companies are encouraged to take actions to save money and the environment by applying technological improvements and thereby create a win-win situation for all partners. This also involves standard setting, controlling and certification by the local authority supported by technical partners. The City of  Graz together with partners has also established an ECOPROFIT Academy, a pool of experts for training to make the experience and knowledge available for other Cities mainly within Europe. Only recently a lot of interest has been raised in Asia and ECOPROFIT has been presented to several fora in the region. In addition a co-operation with the UN Global Compact has been started.

The project is based on the long-term positive experience with ECOPROFIT made by the City of Graz. Graz is a medium sized City where the main economic activities are automobile and machinery production, shoe manufacturing, and brewing. Air and water pollution from industrial emissions have been a major environmental problem. However Graz has taken a lot of action to improve the situation and to develop itself into a sustainable City. These activities have won international recognition like, for example, the European Sustainable Cities Award. ECOPROFIT has been a core element of these activities.

For the implementation of ECOPROFIT the City of Graz cooperates with the Clean Production Centre Austria (CPC). The CPC Austria is a company providing support for a sustainable economic development by acting as a turntable between research, companies and authorities by order of the Federal Ministry for Agriculture and Forestry, Environment and Water Supply and Distribution, the Federal Ministry of Traffic, Innovation and Technology as well as of the City of Graz. In this context, providing extensive information on technologies, concepts, solutions, consulting, expertises and literature relating to the topic of Cleaner Production is to the fore.

The City of Hanover is well known for its very active Local Agenda 21 process and many model projects for sustainable urban development. Hanover is also leading the political Steering Group of the European Sustainable Cities and Towns Campaign. It is one of those cities to which the ECOPROFIT approach has been successfully transferred from Graz. Different than Graz, the Local Agenda 21 had been started a long time before ECOPROFIT. However, ECOPROFIT as in many other cities has been used to achieve a more active involvement of the local economy. Therefore Hanover is the perfect example where ECOPROFIT implementation has been driven by the Local Agenda 21 process. The training of the experts for the City of Hanover has been carried out at the ECOPROFT Academy based in Graz. The Local Agenda 21 team is located with the environmental department of the City.

The City of Panzhihua is located in the Southwest of China where Sichuan Provinces border Yunnan Province. It is the first city alongside the upper reaches of the Yangtze River and it belongs to Sichuan Province. Panzhihua has only a short history of 37 years. The construction of the booming city started in the ages when traditional planning economy dominated the country’s economic activities. In the 1960s, trailblazers from all around the country began to flock into the region to exploit the rich mineral resources (iron, vanadium, titanium…, etc.). With the establishment of more and more factories, the city shaped. Panzhihua is a typical heavy-industry-based city, which boasts the pillar industry categories like steel & iron, vanadium & titanium industry, energy, construction material industry, etc. The city’s industry structure is not very diversified and therefore to some extent fragile. The total GDP in 2001 comes to 12.4 billion RMB Yuan and the percentage between the one to third industry sectors comes to: 6.7%(Agriculture)  67.75%(Industry, Manufacture, Construction ) 25.55%(Service).

The economic development at some points conflicts with environmental protection. The rich reserve of natural resources and the comparatively low level of social and economic development put the city into a situation where the resources-based industry is inclined to use the environmental resources quite extensively.  On the other hand the reality of a limited environment capacity and a frail eco-system as well as its peculiar geographic position in the upper stream of the Yangtze River with strategic importance and a decisive role to protect the river brings about the need to bring the development of an environmentally friendly industry on the agenda. ECOPROFIT offers the chance to enter into cooperative approach with the economic sector to start such a development step by step, by offering benefits for the industry by providing savings and for the local population by reducing the environmental impacts and improving the quality of life.

The partner in Panzhihua will be ACPA 21. ACPA21 is the special administrative organisation to push forward the sustainable development strategy for Panzhihua city and it is headquarter for the implementation of Agenda21 in the city. It was established in 1996 and its role is to coordinate the planning, organisation and implementation and corresponding research and cooperation work for the city’s sustainable development strategy, Agenda21 for Panzhihua City.


The main strategies of economic development for Panzhihua:

During the "9th Five Years Plan" (from 1995 to 2000) GDP of the city grew at the rate of 38.3% and increased at an average annual rate of 6.7%. In 2000, GDP of the city amounted to 11.48 billion, which doubles over that in 1980.

During the "10th Five Years Plan" (from 2000 to 2005), the guidelines on the economy and social development of Panzhihua are:


To hold the key to restructuring economy and implementing three strategies: 

  • to invigorate Panzhihua in science and education,
  • to follow sustainable development
  • to stick to reform and opening to outside world.

In addition several other points of emphasis are defined and under implementation at the moment:

  • to combine energy superiority with mineral resource development
  • to combine ecological restoration with bio-resource development
  • to combine upgrade of traditional industry with developing new and high technology
  • to combine infrastructure construction with urban management over plan and construction so as to strengthen and form five pillar industries such as:
    - iron and steel
    - energy
    - vanadium and titanium
    - chemical and biology
    - and bring up the new points of growth
  • to promote system innovation vigorously, mechanism innovation, science and technology innovation
  • to improve general adoption of the market principle, information, industrialisation and urbanisation
  • to endeavour to make a new stride in Panzhihua's development


Goal of economic development

The main goal of economic development for the city is to speed up economic progress under the prerequisite of improving economic benefit continuously. Up to  year 2007, on the base of optimising structure and improving economic benefit, the city intends to make great efforts to double in GNP increasing 14% annually.


Goal of restructuring economy

To speed of restructuring economy and structure optimisation, and to improve the quality of economic operation is one of the targets of restructuring the economy. Also to stabilise the primary industry, adjust and improve the secondary industry, and develop the tertiary industry vigorously is a very ambitious goal to reach. Other points of interest are: to strengthen further non-public ownership development and to bring up new points of the economic growth actively.


The main goals of ecological restoration in Panzhihua are:

  • To build Panzhihua city into green mountains and clear rivers, and make ecological situation and the quality of the environment.
  • The rate of forest coverage is planned to increase by 1% annually, it will add up to 62.5% in 2005. 
  • The standard of air quality in industrial area will meet the National Standard III, the one in residential area will meet National Standard II, water quality will meet National Standard II.

As a result of the fast growing city and the fast growing industries in Panzhihua a lot of environmental problems arose during the past decades. In order to face this problems some actions were undertaken by the local authority as well as by the industry. As two outstanding examples it is worth to mention:


- an international joint venture project on efficient and eco-friendly steel production:

Japan's New Energy and Industrial Technology Development Organization (NEDO), and China's State Planning Commission, undertook a joint venture project whereby Kawasaki Steel's energy saving technology was incorporated into the Panzhihua Iron and Steel facility.

Kawasaki Steel technologies are developed to be effective for protecting the natural environment via energy saving and environmental conservation.


- an international co-operation with Sweden in terms of Local Agenda 21 and many different aspects of the Green Market:

Being renowned as First City of The Yangtse River, Panzhihua is one of the typical resource-based cities of China. Presently, it faces enormous challenges emerging from the process of structural mix rearrangement and economic reform. Hence there will be great chance and space in the process of the city's sustainable development, especially concerning fields as vegetation recovery, ecological-system reservation, urban infrastructure, environmental protection, pollution management, eco-agriculture and eco-tourism etc.

The Green Marketing Forum is co-advocated by Life International Foundation for Ecology and Panzhihua Municipal Government and it has gained supports from SIDA and ACCA21. The goal is to create a visual platform for bilateral exchange and dialogue in industrial and commercial fields of sustainable development, especially for Small-and-Medium Sized Enterprises.

The co-operation started in 2002 and is still running.

On that basis the co-operation with European partners was intensified and the feasibility of an ECOPROFIT project was discovered first (see the study project) and is now ready to set into practice.


(b) identification of perceived needs and constraints in the target country

China is a very rapidly developing country. Due to the opening up to the global economy and the encouragement of private economic activities there is a big structural change going ahead. Large rates of economic growth go parallel with growing unemployment in other sectors and a big movement of the rural population into the Cities. All this is putting a lot of pressure on the urban development. Also most of the existing industries are not at all producing according to the latest technological standards and are causing a lot of environmental pollution. This results in a very bad environmental quality in many cities and a lot of health problems for the population.

Therefore there is a strong and immediate need to tackle the pollution from industrial activities. Given the fact that there is often a lack of capital for large investments, it is important to proceed step by step and to offer solutions that have a short to mid-term payback rate for the investor. It is also important to avoid simple end of pipe solutions but to motivate the whole company to take part in the efforts to improve the environmental performance. ECOPROFIT offers training, support and ideas for that kind of solutions.


State of the environment

The environmental situation in Panzhihua is - compared to European standards - bad and comprises a great potential for future improvements. The following statements and data were evaluated by the Chinese partners and show a widespread picture of the situation in Panzhihua.


Waste, Air

Problems mainly caused by:

Panzhihua's development is mainly driven by natural resource utilisation, especial mineral ore, and the city's pillar industries  consists of metallurgy, building materials and electricity, which means a great amount of pollutants will be inevitably discharged. Furthermore the landform of Panzhihua  features closure, wind speed average is slow and  temperature inversion is strong,, the fore-mentioned factors make against the diffusion of pollutants.

The general situation concerning waste and air is evaluated as follows:


  • General situation:  average - bad
  • Waste separation in private households:  no
  • Waste separation in industry:  no
  • Only some of industry waste is separated but details are not available.


  • air quality in general:  bad
  • main pollutants:  dust (absorbable particulate matter), SO2, and NOx



Problems mainly caused by

  • Imperfect Treatment of water from living.  Presently cesspools are major spot-disposal facility in residential area, and so anaerobic treatment is major technology available in Panzhihua.  Other advances, costly technology and facilities are rarely available in Panzhihua due to cost issue. But now the sewage-treatment plant is under construction.
  • Imperfect treatment of waste from industry.  Part of waste  from industry are treated by the state-owned enterprises, and some of them fail to be treated effetely by SOE, which lack funds to get technology and facilities.
  • Imperfect system for wastewater disposal. Presently, the pipeline systems for rain, sewage are not established separately. And the classification and treatment of wastewater are not finalised, such as the ones from hospital, rain, household etc.

The biological system on the upper reaches of Yangtze River is destroyed in different degrees, especial soil erosion leads to surface-source pollution.

Coverage of public water supply in %:    92.74 %

Coverage of sewage water system in %:    98 %

Wastewater consists of industry one and domestic one. The sewage treatment consists of anaerobic treatment (cesspools) and aerobic treatment. The one from industry is operated by the enterprise, which discharge the water. And the one from households is operated by management agencies or the owner of the building.


  • quality of river water:  average
  • quality of drinking water:  average



Problems mainly caused by

  • Steep landform, extensive and laggard cropping pattern, which lead to soil erosion and loss of nutrients.
  • general situation:  average
  • The planned per capita greenbelt is 7.0 m2 , the greenbelt coverage percentage amounts to 48.0% of the entire area



The main kinds of power generation in Panzhihua are hydro-power, thermal power generation and solar energy due to Panzhihuas rich water, coal and solar energy resources.


Energy supply

  • Coverage of household electricity supply in % (total): about  92%
  • Coverage of household electricity supply in % (in urban area): 100%



c) size of the population of the areas administered by the Applicant Local Government and the Local Government Partners

City of Graz

Area: 127,5 km2    Population: app. 235.000 inhabitants

City of Hanover

Area: 204 km2   Population: app. 515.000

City of Panzhihua

Area: 7.434 km2 (92% mountainous) Population: 1,111,000  (620,000 urban)



(d) List of target groups with an estimate of the anticipated number of direct and indirect beneficiaries

ACPA21 (The local Agenda 21 Agency for Panzhihua)

20 people will get training on communication and awareness raising. This will support the integration of the ECOPROFIT activities into Local Agenda 21. Further beneficiaries will be stakeholders involved in the LA 21 process and ultimately the local population who will profit from the implementation of ECOPROFIT and other activities that might be triggered from it, like behavioural changes on the side of the workforce and improvements of service systems provided by the local authority (for example waste management).

The awareness raising and communication for ECOPROFIT and Local Agenda 21 focus first on the participants to the project (administration, companies, consultants). Therefore the participants in the awareness raising workshop will be the above mentioned group of local partners.

The participants to this workshop will therefore be:

members of the local ECOPROFIT network, such as staff from administration, companies [environmental agents and environmental managers of the companies], consultants other participating institutions (University).

ACPA21/Greenteam/ECOPROFIT Experts (personal base for ECOPROFIT Academy)

12-15 people will go through the complete training on the technical implementation of ECOPROFIT to work with companies participating in the programme. They will form the core expertise that should guarantee the continuation and sustainability of the project. The transfer and further spreading of the knowledge to a larger number of Cities and companies is intended.

The candidates for the ECOPROFIT Academy should fulfill the following criteria:

  • appropriate technical knowledge (chemists, physicists, engineers etc.)
    knowledge in consultancy
  • some of the selected staff will be: members of the local administration (department of economics, department of environment)
  • A more detailed list of criteria for the selection of the target groups and the participants in the project implementation will be identified during the project inception phase and communicated to the European Commission.

Participating Local Companies

Their selected ECOPROFIT liaisons will be trained and supported by the ECOPROFIT consultants with the support of the European project partners. They will also be invited to take part in the study tours to visit ECOPROFIT  companies and Cities in Europe. Secondary beneficiaries will be the staff of the companies involved who will also get new know-how and awareness. The programme will be continuously open for new companies to join also beyond the period of the pilot project supported through the ASIA URBS Programme.

There will be appr. 15 companies be involved in the project.

The criteria for their selection are as follows:

- Companies with a production line

- companies, willing to improve their environmental performance

- companies with ecological or technical problems

- companies, which intend to be certified according to ISO 14000 (ECOPROFIT is a good preparation for the ISO certificate)

The Local Population in the City of Panzhihua

The ultimate goal of the ECOPROFIT implementation is to substantially reduce the negative impacts of industry and enterprises on the quality of the environment and quality of life of the citizens. Therefore a successful and widespread implementation of ECOPROFIT will finally be of benefit to the whole population and the future sustainable development of the City.

How many citizens are expected to receive a positive impact from the implementation of the project activities?

After a successful implementation of the programme in the first stage of a long lasting ECOPROFIT development it is expected that the entire population of the city/region will benefit from the various activities. It is obvious that the impact on these parts of the population, directly effected by the influence of the industry (neighbours, employees, urban residence [appr. 550.000] will be higher than the rest of the city’s population, which will still benefit from some "side effects" of the project such as information on ecological living, ecological housing, awareness raising on ecological topics etc.



(e) Reasons for the selection of the target groups and activities


Being the institution to manage and facilitate the LA 21 for Panzhihua ACPA21 is the perfect choice to act as the core communicator and facilitator of ECOPROFIT in Panzhihua. ECOPROFIT should be an activity within the LA 21 and sustainable development approach and be especially targeted at the involvement of local companies into that process. The approach is a participative effort including the local administration, the companies, the workforce and the local population. Therefore it is important to include representatives in the training both on ECOPROFIT and on communication and awareness raising strategies.

ECOPROFIT Experts (ACPA21/Greenteam/personal base for ECOPROFIT Academy)

This will be core group forming the ECOPROFIT knowledge and competence centre for all further activities. This group will be responsible for all local training activities in close cooperation with the ECOPROFIT Academy in Graz. It is the key contact point for the Liaisons in the participating companies who will manage and implement ECOPROFIT with their workforce.

Local Enterprises

Are the target group to actually implement the approach and to reduce the environmental impact of their activities and realise economic benefits at the same time. It is a key for the success of the project that successful approaches could be realised in practice to make showcases available to attract more companies in Panzhihua but also from the whole of China to the project.

The local population

Even though they are not directly targeted by the core activities the motivation for ECOPROFIT is to increase the quality of life for the population by improving the environmental quality without damaging the economic development.



(f) Relevance of the project to target groups


The project will provide ACPA21 with a crucial instrument for the involvement of the local economy into their activities towards a sustainable development of Panzhihua. Improving the quality of the environment  and reducing the negative impacts on the local population is a defined priority for ACPA21. The project will also improve the skills for the implementation of LA21.

ECOPROFIT Experts (ACPA21/Greenteam/Competence Centre)

They will be provided with the know-how that is the key to the success of the project. They should form the basis for ongoing and growing activities. Establishing an ECOPROFIT academy should be in the mid- to long-term perspective lead to an independent economically viable service activity, which should be open for Cities and companies in the whole of China in analogy to the ECOPROFIT Academy in Graz that will be the partner of academy in Panzhihua.

Local Companies

The Chinese economy is undergoing a rapid development and change. Opening to the global market will also ask for an improvement of the standards of production. This relates to the rationalisation of processes as well as environmental standards. Also companies have to contribute to an improvement of the quality of life in the Cities. ECOPROFIT is an approach that brings knowledge into the companies and motivates the workforce to mobilise knowledge resources for that purpose.

The local population

The rapid development of the industries without taking care of the quality of the environment has a lot of negative impacts on the health and quality of life of the local population. ECOPROFIT, if successfully implemented, can make a substantial contribution to improve the situation.



(g) Relevance of the projects to objectives of the programme

Transferring the ECOPROFIT approach that has been successfully applied in many cities within the EU to China will support the sustainable development approaches in Chinese cities, especially the always problematic inclusion of the private economy sector into LA 21 processes. The transfer and adaptation of an approach originating from Europe to the Chinese situation will be a mutual learning effort for all participants. The inclusion not only of the companies but also their workforces will deepen the understanding of the different cultures and systems and at the same time help improve the socio-economic situation in China based on the transfer of knowledge. It will found the basis for a permanent cooperation for capacity building and training of a joint competence centre for Panzhihua and China.



(h) Relevance of the project to the priorities of the programme

The ultimate target of the project is not the implementation of ECOPROFIT for the sake of the companies but for the sake and health of the workforce and the improvement of the environment and health situation of the whole population of the participating City of  Panzhihua and further cities in the future. Especially poorer people who reside closer to the industrial areas and also children are extremely vulnerable to the negative impacts of environmental pollution and degradation caused by industrial activities.

The implementation of a project based on public-private cooperation based on incentives, training and advice is of high interest for the Chinese society in the phase of transition from a state economy to a more and more private economy.

Furthermore the improvement of the Local Agenda 21 approach in general should open new perspectives for participation and improvement of the local development for the population.



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