‘Super-Pollutant’ Emitted by 11 Chinese Chemical Plants Could Equal a Climate Catastrophe

Emissions controls worked perfectly at Chinese plants, until a foreign subsidy dried up.

In December 2007, Charles Perilloux, an American chemical engineer, traveled to China to help install inexpensive and game-changing technology at a Chinese chemical plant that was spewing a climate "super-pollutant" into the atmosphere. The emissions quickly fell to near zero. 

The state-owned Henan Shenma Nylon Chemical Company manufactures adipic acid, a key ingredient in nylon and polyurethane, which is used in everything from car parts to running shoes. While producing adipic acid, the factory emitted thousands of tons of nitrous oxide, a greenhouse gas nearly 300 times more potent than carbon dioxide in warming the planet.   

Shenma's emission reductions had a greenhouse gas impact equivalent to taking one million cars off the road, records from the United Nations' Clean Development Mechanism (CDM) show. Through the program, Shenma reduced its emissions in exchange for lucrative carbon credits. 

The plant's abatement technology produced a financial windfall. Shenma, and another, larger, state-owned adipic acid plant that also reduced its emissions, sold carbon credits over a five-year period that were worth as much as $1.3 billion, records from the U.N. and carbon markets show. 

Then, in 2012, funding for the U.N. program dried up.

What has happened since at the two plants, and at nine others across China that now manufacture nearly half of the world's adipic acid, has been a mystery. 

Zhao Duo, a general manager with Shenma, told InsideClimate News that his company continues to abate its nitrous oxide (N2O) emissions, but he would not say to what extent.

Satellite imaging and stationary air monitors can't discern nitrous oxide emissions from chemical plants versus N2O emissions from other sources. Plant operators and government officials in China are hesitant to talk at this critical moment, when China is finalizing a wide ranging plan for economic development and emission reduction targets that will guide the country for the next five years. 

However, an InsideClimate News investigation, based on dozens of interviews and a review of hundreds of pages of documents from the Chinese government, the United Nations, and Chinese state media, strongly suggests that when funding for the U.N. program ended, so too did nearly all of the emissions reductions. This likely occurred despite the availability of proven, low-cost abatement technology.  

If the vast majority of the plants' emissions are released, unabated into the atmosphere, their collective emissions would exceed the yearly greenhouse gas emissions from all passenger vehicles in California, the most populous state in America, as well as the emissions from all cars in Beijing and Shanghai, China's two largest megacities.

If this is true, it's a climate tragedy of epic proportions.  

'Great Significance for Mitigating Global Warming' 

Perilloux first traveled to Pingdingshan, or "Flat-top mountain," a provincial city of two million people, in the mid-2000s. 

Pingdingshan, home to one of China's largest and oldest adipic acid plants, is in Henan, a province in China's central plain whose name means "south of the Yellow River." The region is widely viewed as the cradle of Chinese civilization, yet has long since been eclipsed by Eastern China's coastal cities. Perilloux's collaboration with Shenma, the operator of the adipic acid plant, would help put the city on the map for hosting one of the largest greenhouse gas abatement projects in China. 

A Ph.D. chemist, Perilloux spent decades overseeing research and development teams with DuPont. Starting in the early '90s, DuPont, then the largest nylon producer in the world, led an ambitious and entirely voluntary global effort to reduce nitrous oxide emissions from adipic acid plants after the company became aware of the pollutant's outsized impact on the climate.  

Invista, a subsidiary of Koch Industries that acquired DuPont's nylon business in 2004, continues to abate approximately 99 percent of its N2O emissions from its one remaining U.S. plant. 

Around 2005, Perilloux, who was working then for Invista, began visiting adipic acid manufacturers in Europe and Asia in an effort to license nitrous oxide abatement technology to others.

Company representatives and government officials discuss the proposed nitrous oxide emissions reduction project at the Henan Shenma Nylon Chemical Company on February 24, 2006. Credit: UNFCCC

Company representatives and government officials discuss the proposed nitrous oxide emissions reduction project at the Henan Shenma Nylon Chemical Company on February 24, 2006. Credit: UNFCCC

Over roughly two years, he helped work out an agreement with Shenma in which Invista would license its patented chemical reactor and catalyst technology to the Chinese company, allowing Shenma to turn its nitrous oxide emissions into harmless nitrogen and oxygen gas. 

Invista provided a detailed diagram for one of its existing reactors, a high-temperature chamber that would decompose more than 95 percent of the nitrous oxide, and one or more giant sacks full of a proprietary catalyst, enough to last Shenma a couple of years.

The catalyst, a zirconium metal oxide, hastened the decomposition of nitrous oxide into harmless nitrogen and oxygen gas. Without it, the N2O wouldn't break down until it reached higher temperatures, at which point more of the gas would decompose into NO, a pollutant that causes ozone depletion and can lead to the formation of acid rain.

Duo, Shenma Nylon's general manager, said the company continues to employ this method of abatement, but no longer buys catalyst from Invista and instead uses a catalyst developed in China. 

Before Perriloux's final trip to Pingdingshan, Invista hosted roughly a dozen Shenma employees, including Duo, for a training session in Orange, Texas. Perilloux and others walked them through the reactor's operation and maintenance details. They also took their Chinese guests on a boat tour of the marshes surrounding the plant and dined with them each night, introducing them to Texas barbeque and Louisiana seafood.

Perilloux, who retired from Invista in 2013, recalled the Shenma employees as being quick studies.

"They did everything exactly like we told them to do," Perilloux said. "Americans are kind of cowboys; they kind of wing it. But they did it exactly like we said and if they had a question they didn't understand, they made sure they understood exactly what the intent was."

A January 2006 announcement in the Pingdingshan Daily by Shenma company officials describing the environmental and economic benefits of nitrous oxide emissions reductions under the UN's Clean Development Mechanism. Credit: UNFCCC

A January 2006 announcement in the Pingdingshan Daily by Shenma company officials describing the environmental and economic benefits of nitrous oxide emissions reductions under the UN's Clean Development Mechanism. Credit: UNFCCC

Shenma officials touted the project's environmental and economic benefits in an announcement of the project in the Pingdingshan Daily in January 2006:

"Our company plans to import integrated processing equipment to decompose N2O emissions, which will help protect the global environment," the announcement said. "At the same time, we will also get economic benefits from selling carbon emission reduction credits to developed countries through the CDM. Implementing this project not only will improve the local environment, but it also has great significance for mitigating global warming."

When Perilloux returned to Pingdingshan in December 2007, he planned to stay for a couple of weeks to help oversee the initial startup of Shenma's abatement reactor. After the first day, however, there was little for him to do.

"The startup went just absolutely perfect," Perilloux recalls. "From the time they first started putting heat to the reactor till it was at full rate, achieving greater than 99 percent conversion, was probably 12 hours or less. I mean, it was just 'boom.'"

The Carbon Credit Game 

The Clean Development Mechanism allowed rich countries to offset their emissions by buying carbon credits from emissions reduction or clean energy projects in poorer countries.  

From December 2007 through 2012, Shenma's abatement reactor and another, larger reactor at the Liaoyang Petrochemical Company's plant in northeastern China that was also earning credits under the Clean Development Mechanism, were wildly successful.  The two reactors kept 282,269 tons of nitrous oxide from being emitted into the atmosphere over a five-year period, according to CDM records. That is equal to the greenhouse gas emissions of four coal-fired power plants over the same time period, according to the U.S. EPA's greenhouse gas equivalencies calculator

Nitrous Oxide Abatement Reactor

The projects were also very profitable. A typical adipic acid abatement project under the CDM, including the two Chinese reactors, would pay for itself through carbon credits sold to companies in industrialized countries after just 19 days of operation, according to a 2010 report by the Stockholm Environment Institute.

When the Great Recession hit, adipic acid producers in North America and Europe dialed down production. But, buoyed by lucrative abatement credits, CDM plants, including Shenma and Liaoyang in China, and two other plants, one in South Korea, and one in Brazil, ramped up to near full capacity.

An InsideClimate News assessment found the two projects in China probably produced close to $1.3 billion for the two companies over the five-year period. The exact amount they received by selling the credits isn't known because the contracts they had with buyers were confidential.  The $1.3 billion dollar estimate is based on the amounts those credits were selling for at the time on a secondary market where CDM carbon credits were traded.

This was before CDM administrative fees and a 30 percent tax that was deducted on CDM funds imposed on the two companies by the Chinese government. The tax helped pay for a Clean Development Fund established by China that reinvested the money in other clean energy or emissions reductions projects.  

The CDM profits still far outweighed the cost of investing in and operating the abatement technology. The two companies likely took in a combined total of around $900 million in CDM credits after taxes and CDM registration fees, yet their combined costs to initially construct and then operate the reactors for the five years that they were part of the CDM program were less than $40 million, according to CDM data. 

Perrilloux Arrived at a Time of Staggering Emissions

Stepping off the plane near Pingdingshan, Perilloux recalls the air pollution in central China being so thick he could not see from one end of the airport terminal to the other. 

On each of several visits in the mid 2000s he stayed at a company hotel where a driver would come each morning and take him and a few Invista colleagues to the nearby plant, a vast industrial complex of low rise buildings, chemical storage tanks, and soot-stained smokestacks interconnected by a warren of stainless steel pipes.   

Perilloux was fascinated by the country, its sights and cuisine. He took side trips with an interpreter, visiting the Great Wall and the terracotta soldiers in Xi'an.  

At banquets hosted by Shenma he tried everything they served, surprising those around him when he downed a dozen fried scorpions.

"They are not too much more exotic than crawfish," the Louisiana native recalled. 

In meetings, Shenma officials spoke about the climate benefits of the abatement technology Invista was licensing to the company. Perilloux said he figures it was simply a business deal for the more senior company officials but felt he sensed some environmental idealism among the younger employees. 

For Perilloux it was both. "I thought it was obviously such a good thing to do," he said.  

At the time, China's emissions were growing at a staggering pace. The country overtook the United States as the largest emitter of carbon dioxide in 2006 as it built a fleet of new coal-fired power plants at an astonishing rate of one every 10 days.  

Since then, China has turned a corner, driving wind and solar development and projecting itself as a global leader in addressing climate change.  

How the Side Hustle Collapsed   

While China stepped up its climate action on some fronts in the 2010s, the country's efforts to control nitrous oxide from adipic acid likely collapsed. The adipic acid projects and the larger Clean Development Mechanism became a victim of their own success. 

The 2010 Stockholm Environment Institute report that concluded adipic acid abatement projects would pay for themselves in just 19 days suggested the high value of CDM credits may have distorted the global adipic acid market.  

Shenma and Liaoyang were making so much money from their side hustle, the sale of CDM credits, they were able to flood the market with adipic acid at prices other producers couldn't compete with. 

The CDM program may have been partly to blame for adipic acid plant closures elsewhere in the world that were already abating the vast majority of their emissions. Before the CDM program began, Invista was the largest adipic acid producer in the world. But between 2009 and 2015, four of the company's five adipic acid plants, including its plant in Orange, Texas, shut down.

Over roughly the same time period, the number of plants in China grew from two to 11, equal to the number of major producers in the rest of the world combined, though the newer Chinese plants were benefiting from Chinese import tariffs rather than CDM credits.

After the Stockholm Environment Institute report was published, the European Union, the largest buyer of CDM credits, announced it would stop buying nitrous oxide and other industrial gas credits beginning in 2013 because of market distortions caused by the program. 

In effect, the EU was telling China, and other, well-off developing countries that had already benefited tremendously from the CDM program, that they could foot the bill for future incentives themselves. 

"The vast majority of industrial gas projects are located in advanced developing countries with sufficient capabilities to finance those cheap reductions themselves, and the revenues gained from those projects in the past should suffice to finance them," the EU regulation stated. 

At the same time, the high price of CDM credits was fueling a flood of additional abatement projects in developing countries just as the world's wealthier countries were scaling back on purchases of additional credits. The end result was an oversupply of carbon credits that outstripped demand. The price of CDM credits fell through the floor, dropping from approximately $15 per ton of carbon dioxide equivalent at the start of 2011 to less than $1 per ton by the end of 2012.

The game was up. It would cost Shenma more money to continue abating and reporting its emissions reductions to the Clean Development Mechanism than the company could earn in carbon credits. In October 2012, Shenma submitted its last emissions reduction report to the CDM. Liaoyang followed with its final report three months later.

The Emissions Equivalent of 27.8 Million Cars  

What happened at the Shenma and Liaoyang plants after the carbon market crashed remains as opaque as the Yellow River's loess-filled waters.  

A 2018 study co-authored by a member of Liaoyang's internal research institute noted that the company's nitrous oxide abatement reactor is "currently the largest greenhouse gas emission reduction device in China." What's not clear, however, is if the device is actually still operating. 

Liaoyang and Shenma's abatement efforts were well-documented in China's state media while the two projects were receiving credits under the CDM program. An extensive search of Chinese language news sites after the CDM period, however, yielded no articles describing continued regular use of the abatement technology.

A 2014 report by the Institute for Applied Ecology in Germany concluded that the Shenma and Liaoyang plants faced "a high risk of stopping GHG [greenhouse gas] abatement." The companies had no financial incentive to abate after the value of CDM credits plummeted and there were no government regulations requiring abatement, the report noted.  

The report also stated that by 2014 there were five other adipic acid plants in China that were not part of the Clean Development Mechanism. "None of them abates N2O emissions," the report concluded.

If a country puts regulations in place or other incentive schemes, the abatement projects may continue, said Lambert Schneider, the lead author of the report and a member of the Clean Development Mechanism's executive board. But Shenma and Liaoyang's abatement reactors face annual costs and generate no revenue, he said, and from a purely economic standpoint, it made no sense for Shenma and Liaoyang to continue abating. 

A book published in early 2014 by the Chinese Ministry of Environmental Protection also warned that abatement at the Shenma and Liaoyang plants would likely stop. "If the CDM projects are restricted in the international market trading mechanism, and China hasn't issued related emissions restriction policies, then the N2O gas won't be eliminated through decomposition," the book said. "Rather it will be directly emitted into the atmosphere."

The Henan Shenma Nylon Chemical Company in China. Credit: United Nations Clean Development Mechanism

The Henan Shenma Nylon Chemical Company in China. Credit: United Nations Clean Development Mechanism

Yang Lirong, the lead author of the chapter on adipic acid and official with the Ministry of Ecology and Environment who could not be reached for comment, laid out two possible emissions reduction scenarios that China could implement moving forward.

Under the first scenario, the Chinese government would continue funding abatement at the Shenma and Liaoyang plants through 2020, using revenue the government collected from the CDM program by taxing Shenma and Liaoyang's CDM earnings.

"Thirty percent of the earnings from the emissions reductions was given to the CDM Fund Center to support the country's activities related to addressing climate change," the book said. "Therefore, it is recommended to provide financial and policy support to independent industrial N2O emissions reduction projects in the future, including returning a portion of the CDM fund to support companies of a certain scale to reduce their emissions, or providing certain subsidies for their electricity costs or energy consumption."

The funds the Chinese government collected over five years from its tax on Shenma and Liaoyang's CDM income, according to the InsideClimate News analysis, would easily cover the $3.2 million in combined annual maintenance and operational costs for both projects as reported in CDM documents.

China Clean Development Mechanism Fund officials did not respond to a request for comment. An InsideClimate review of the fund's annual reports from 2013 to 2017, the most recent years available, shows no mention of funds being allocated to the Shenma or Liaoyang plants, though the reports do not provide a comprehensive accounting of all projects that were funded. 

A Chinese Ministry of Ecology and Environment official who used to work on abating non-CO2 greenhouse gases for the ministry under the Clean Development Mechanism told InsideClimate News that, according to his understanding, the government did not subsidize abatement at the plants after their participation in the Clean Development Mechanism ended, while noting that he was not very involved in overseeing N2O emissions reduction specifically and therefore his knowledge is limited.  

Under the second scenario outlined in the 2014 book, China would require all companies to abate their own emissions. No such regulation has been implemented in China, according to interviews and records. Guidance published by China's National Development and Reform Commission in 2013 did, however, direct all adipic acid manufacturers to report the volume of their N2O emissions to the government. 

The National Development and Reform Commission did not respond to an InsideClimate request for the emissions data. A 2016 government directive called for nitrous oxide emissions from adipic acid production and other industrial sources to peak by 2020. However, it remains unclear if the policy will be enforced.   

The 2014 book included a graph that plotted nitrous oxide emissions from adipic acid plants under the two different abatement scenarios, as well as under a "baseline" scenario that assumed no abatement takes place. 

Under the baseline scenario, adipic acid plants would emit 128,464,000 tons of carbon dioxide equivalent per year by 2020, according to the book, or, based on a more conservative method of conversion used by climate researchers in other countries, 123,491,000 tons of carbon dioxide equivalent. The more conservative figure is equal to the annual emissions of 26.7 million cars per year, according to the EPA's greenhouse gas equivalency calculator. 

An estimate of China's adipic acid production volume in 2019 provided to InsideClimate News by the market analysis firm Maia Research suggests emissions may be even higher, as China claims an ever-greater share of the world's adipic acid production. Based on that production figure, and assuming no nitrous oxide abatement took place, emissions from the plants would equal 128,907,000 metric tons of carbon dioxide equivalent, or the annual emissions of 27.8 million cars.

'China Does Not Have Nitrous Oxide Standards' 

Interviews with company representatives suggest that as many as six of China's 11 adipic acid plants, including the Shenma and Liaoyang plants, use chemical catalysts or other means, including capturing and selling their nitrous oxide emissions to electronics manufacturers, to reduce at least a portion of what they emit into the atmosphere.  

Few, however, knew or would comment on the extent to which they reduce their total N2O emissions. Information on three of the six plants that said they abated came second hand, provided by an industry insider after company representatives refused to talk. A company representative at one of the 11 plants said the factory did not use any abatement technology, nor did any of the other plants.

"China does not have nitrous oxide standards—that is the key problem," an industry expert who has worked in the Chinese adipic acid industry for 30 years told InsideClimate News. "If the Chinese government takes something seriously, then the government will definitely solve it."

The two companies about which most is known are Shenma and Liaoyang. The 2018 study co-authored by an engineer at Liaoyang's internal research institute stated that the company was still using a catalyst it licensed from German chemical company BASF, at a cost of $1.4 million per year.  

BASF spokeswoman Olivia Liu, however, said BASF supplied catalyst to the Liaoyang plant several times after the start-up of an abatement reactor under the Clean Development Mechanism in 2008, but only did so "until this mechanism was discontinued." The CDM continues to operate, but Liaoyang stopped participating in the program at the end of 2012, according to CDM records.

As for Shenma Nylon, Duo, the company's  general manager, said they continue to abate emissions but use their own catalyst.  

A worker makes nylon products for export on the production line, Hai'an City, Jiangsu Province, China, May 6, 2020. Credit: Costfoto/Barcroft Media via Getty Images

A worker makes nylon products for export on the production line, Hai'an City, Jiangsu Province, China, May 6, 2020. Credit: Costfoto/Barcroft Media via Getty Images

For years, Chinese companies and government research institutes have had a strong interest in developing their own nitrous oxide abatement catalysts, as a way to reduce costs. The 2014 book published by the Chinese Ministry of Environmental Protection noted that the high cost of foreign catalysts was "the main difficulty" for nitrous oxide emissions reductions.  Researchers from Liaoyang urged the company to explore options other than continuing to import expensive catalysts in their 2018 report.  

A 2015 Chinese patent by Beijing University of Chemical Technology describes a lower cost, domestic catalyst. The catalyst was successfully tested at Shenma's plant, according to a 2016 study published in Industrial Catalysis, an academic journal run by the Northwest Research Institute of Chemical Industry, a government research center in Shaanxi province.  

The 2016 study, however, suggests that domestic catalysts had yet to see large-scale deployment because of a lack of regulatory requirements.

"The technology only remains at the laboratory and pilot stages and industrial use has yet to be developed because N2O emissions are not strictly controlled at present," the study stated.

If Shenma has been using a new, domestic catalyst in its CDM-era reactor, the company still couldn't be abating all of its emissions. Since Shenma's Clean Development Mechanism project began in 2007, Shenma's adipic acid production capacity has grown nearly ten-fold, with a third of total production occurring at a second, nearby location. It is now the third largest adipic acid producer in China. The reactor installed by Invista would be capable of abating only slightly more than half of the company's total nitrous oxide emissions, Perilloux said.  

Shenma has, however, begun to capture and purify a "small amount" of its nitrous oxide emissions for reuse in the electronics industry, Duo said. 

Nitrous oxide is used in semiconductor and LCD display manufacturing. It is also used as an anesthetic—N2O is the "laughing gas" long used by dentists—and as a propellant in foods such as whipped cream. 

The gas has also grown in popularity as a party drug in China in recent years. But the market for all uses of N2O is limited and represents only a small fraction of the N2O produced as a byproduct of manufacturing adipic acid. 

Chinese industry news reports and an environmental assessment by the city of Pingdingshan, show that an outside company began capturing a small fraction of Shenma's nitrous oxide emissions in 2017. Another company broke ground on a second, larger facility in the fall of 2019. Combined, the two facilities will be able to capture as much as 21,000 tons of nitrous oxide per year, according to publicly available records. This is approximately 16 percent of Shenma's total emissions, based on total production capacity.

Shenma Industry Company, a parent company of Henan Shenma Nylon Chemical Company, mentioned these nitrous oxide recovery facilities and the CDM facility in a 2020 shareholder report, but did not mention any ongoing abatement using catalysts and chemical reactors. 

Assuming Shenma uses its nitrous oxide capture facilities at full capacity, and using the most conservative figure for nitrous oxide emissions from the 2014 Ministry of Environmental Protection book, adipic acid plants in China could be emitting the greenhouse gas equivalent of 25.3 million automobiles, more than all cars in California, Beijing and Shanghai combined.  

'A Topic Worth Investigating' 

In December 2018, China submitted an official report on greenhouse gas emissions to the United Nations Framework Convention on Climate Change. The report, China's "Second Biennial Update Report on Climate Change," is a high-level country summary that provides a single figure for nitrous oxide emissions from across China's chemical sector in 2014—311,000 tons, the most recent official statistic available. This has a carbon dioxide equivalent of 92,678,000 tons and aligns with the projections in the 2014 book by the Chinese Ministry of Environmental Protection that assumed no nitrous oxide abatement from adipic acid manufacturing.  

The vast majority of those emissions come from adipic acid production, according to the 2014 Ministry of Environmental Protection book. Such a high volume of emissions is "not plausible if these adipic acid plants all run with abatement in place," said Wilfried Winiwarter, a senior research scholar on greenhouse gases with the International Institute for Applied Systems Analysis, based in Laxenburg, Austria.

There could be three reasons why the government figure for nitrous oxide emissions is so high, Winiwarter said.

The first possibility is that Chinese officials may have simply calculated nitrous oxide emissions based on adipic acid production volumes rather than checking with plant operators to see if they abate any of their emissions, Winiwarter said.  

A second possibility is that adipic acid plants in China are reducing their emissions, but the Chinese government is intentionally failing to acknowledge their efforts, Winiwarter said.

Chinese officials may "on purpose act as if these companies run unabated in order to allow them the possibility to at a later stage claim the reductions and get financial benefit for it," Winiwarter said. 

Such a case would depend on there being a future international carbon credit trading scheme similar to the CDM that would allow existing adipic acid plants to sell credits. No known mechanism that would allow for such credits is currently being considered, Winiwarter said.  

The third possibility is that the government figures are correct and "these emissions really happen," Winiwarter said.

Winiwarter and his colleagues at the institute developed a widely used emissions model, the Greenhouse Gas and Air Pollution Interactions and Synergies model, which assumes that 40 percent of adipic acid plants in China abate nitrous oxide. Another prominent emissions inventory, the Emission Database for Global Atmospheric Research, assumes nearly all nitrous oxide emissions from China's adipic acid plants are abated.

But Winiwarter concedes that the assumptions on abatement are speculative. "Adipic acid production and related N2O emissions are a topic worth investigating," he said. "However, I am a scientist and not a detective. I will not be able to provide ultimate solutions to the issue."

An Opportunity for China on Climate Change 

In 2016, the Chinese government stated that it would ensure nitrous oxide emissions from adipic acid production would reach its peak by 2020.  However, a 2019 report by the World Resources Institute, a think tank based in Washington, D.C., projects that if nitrous oxide emissions from adipic acid plants in China continue on their current trajectory, an estimate that assumes none of the emissions are abated, they will increase by more than 60 percent in the next decade.

It remains to be seen if actual emissions will plateau rather than continue to climb after this year. The World Resources Institute notes, however, that China could go much further, bringing emissions from adipic acid plants to near zero in the next 10 years.

"Adipic acid production is highly concentrated and relatively easy to regulate," the report states.  "China can reach a 100 percent installation rate for mitigation systems in adipic acid production by 2030."

The report calculates that the cost of abatement would be $0.12 to $1.35 per ton of carbon dioxide—and even less at plants like Shenma and Liaoyang with existing reactors—making it one of the least expensive ways to reduce greenhouse gas emissions.

By comparison, building wind turbines or solar power installations to replace coal-fired power plants costs more than $20 per ton of carbon dioxide emissions eliminated by the renewable energy sources. Retrofitting existing coal plants with carbon capture and storage technology would cost more than $80 per metric ton.  

While costs for nitrous oxide abatement are low, they are not insignificant. Shenma's reactor cost $10 million and had $1.1 million in annual operating and maintenance costs, according to the CDM. 

China has seen a surge in adipic acid production capacity over the past decade, as companies and the local, provincial and national government looked to expand economic development.  The buildout created overcapacity that severely limited the profitability of adipic acid production. 

With China's economy slowing down in recent years and as the country begins to emerge from its coronavirus lockdown, additional costs for abatement would be a hard sell for individual companies if the government didn't require it. 

The WRI report comes as China's central government readies its 14th five-year-plan, a blueprint for the country's economy for the next five years. The plan is a document that has historically set ambitious targets for economic activity and, increasingly, for emissions reductions as well.  Chinese state media have called the five-year plan "one of the most important documents on the planet" for global sustainability. 

At the same time, China is also preparing to release its next round of commitments to the Paris Climate Agreement, including, perhaps, how to tackle "non-CO2" emissions such as nitrous oxide. China's current Paris commitment and five-year plan focus on carbon dioxide emissions reductions.

Ranping Song, the author of the World Resources Institute report, said China should also set its sights on reducing non-CO2 greenhouse gases; pollutants like methane, hydrofluorocarbons, highly potent greenhouse gases used in refrigeration and air conditioning, and nitrous oxide.

"If China's non-CO2 emissions were a country, they would be the 7th largest emitter of total GHGs [greenhouse gases] in the world," Song wrote in a blog post last September. 

To have a chance at limiting global warming to 1.5 degrees, the world's nations must reduce greenhouse gas emissions to net zero by 2050, Song said. Reducing non-CO2 emissions "offers a range of low cost, feasible technologies that should be deployed," Song told InsideClimate News. "We think non-CO2 emissions reductions are a good opportunity for China to demonstrate momentum" on climate change. 

Ending Abatement: 'Unconscionable' 

For Perilloux, who licensed the abatement technology to Shenma more than a decade ago, the thought that the plant might have stopped using the device is "unconscionable."

"It is galling to consider that you might have raked in that much money and not have continued to abate at 99 plus percent forever," he said. 

Even without the CDM windfall, Perilloux said, continuing to use the abatement technology is the right thing to do. 

Perrilloux's former employer, Invista, continues to abate roughly 98 percent of its emissions at its last remaining adipic acid plant in Victoria, Texas. The only other remaining adipic acid plant in the U.S., Ascend Performance Materials' plant near Pensacola, Florida, abates 75 percent of its emissions. Company officials say they plan to voluntarily increase abatement to more than 95 percent by deploying new controls starting this summer. 

"The cost of abating N2O is so cheap, we'd certainly think it is something you ought to do because it just doesn't cost you much," Perilloux said. "It was cheap as compared to the negative publicity you might get if you didn't do anything."

Phil McKenna is an InsideClimate News staff writer. Lili Pike is an InsideClimate News fellow covering China. Katrina Northrop is a staff writer at The Wire China covering China's impact on trade, business, labor, and the environment. Her work has been published in The New York Times, The Atlantic, The Providence Journal, and SupChina.

Top Photo Credit: Yang Qing/Xinhua via Getty Images

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