Study On The Environmental Services Contract Mode Of Iron And Steel Industry

With air pollution getting worse, the Chinese governments have increased the requirements of flue gas treatment of the industries including power plants, steel mills, chemical plants, cement and glass factories and so on. Particularly, the iron and steel enterprises pollution control tasks is prominent.In this paper, the environment service contracts(ESC) were introduced in the first part, including its concepts, development, application and the advantages and disadvantages in the environmental protection. The severe situation faced by the steel industry pollution control, technical difficulty and the present management modes were also investigated. Additionally, the dilemma of ESC application in iron and steel industry were analyzed from the aspects of overall economic benefits, ESC projects risks, environmental protection investment pressure and relevant subsidies policies.Then, in view of the particularity of iron and steel industry pollution control and the authority-responsibility relationships among participants in ESC, we proposed the “special fund of environment protection” and “ESC+SFEP” mode innovatively to find out key breakthrough of the pollution control dilemma. The paper also deeply discussed the policy development, effects of subsidy funds and win-win for related parties. The results indicate that the “ESC+SFEP” mode involves innovations in the transforming of government's role and subsidies funding using, increasing the effects of funds using and the government's control, as well as expanding subsidies sources. Therefore, it is advisable to expand “ESC + SFEP” mode in projects of iron and steel industry.Finally, taking the XG company project as the case, we compared the financial impact by adopting BT, BOT and “ESC+SFEP” modes, respectively. It is concluded that the “ESC+SFEP” can effectively ease financial pressure of environmental protection in iron and steel enterprises, reduce financing costs and risks of provider in ESC, improve the subsidies efficiency of governments, ensure the quality of facilities construction and operation, as well as promote development and technological innovation of environmental protection fields. Therefore, “ESC+SFEP” provides a new way for environmental governance in our iron and steel industry.