INDUSTRIAL STATUS

1.Increasing demand

Metal processing has always been the pillar industry of global economy. As the rapid development of China’s economy, the demand for industrial welding and cutting gas is on the increase;

2.Red warning card on acetylene

Traditional acetylene welding and cutting gas has been shown red warning card in China due to serious environmental pollution and great hidden danger, and has been completely forbidden all over the country;

3.Other fuel gases could not undertake the task as the substitute of acetylene

Other fuel gases have the common disadvantages of slow warm-up and high oxygen consumption, and the tools can't be completely interchangeable with acetylene. Therefore, they can’t shaller the important duty of substituting acetylene;

4.Few counterparts

Due to restriction on technology, there are few welding and cutting gas energy resource equipment manufacturers in the market at present, so market price is far higher than cost.

MARKET CAPACITY

Chinese annual acetylene consumption is as high as the total investment of one Three Gorges Project. According to the statistics from China Welding Association in 2000, there were 12 million welding and cutting gas users in China. With the expansion of world trade and economy, state-owned and private-owned enterprises will increase year by year. Therefore, substituting acetylene is imperative with a bright "money" future, and need to be gradually promoted for the purpose of persistent operation, as a trans-century welding technology reform project.

About 85 percent of Chinese enterprises use acetylene, and the total annual demand for acetylene has reached 100 million cylinders or so all over the country; the average annual consumption for acetylene has reached 350 thousand cylinders in big cities, 100 thousand cylinders in medium-sized cities and 30 thousand cylinders or so in county-level cities. Meanwhile, about 15 percent of enterprises use other gases. Therefore, the huge market demand for industrial gas is matter-of-course.

Due to restriction on technology, there are few welding and cutting gas energy resource equipment manufacturers in the market at present, so market price is far higher than cost. This brings endless fortune opportunity to the operators of such technology achievements. On the occasion of industrial production like a raging fire, the widely applied unique "oxy-hydrogen energy generation device" is undoubtedly a rich fortune gold ore.

Government policies

The government has realized the negative influence of acetylene on the society, environment, safety and economic benefit, so the government has formulated related policies, in order to point out the orientation for the development of new type welding and cutting gas industry and provide powerful policy safeguard.

• In 1992, Achievements Office of State Science Committee called for popularization of oxygen-hydrocarbon cutting technology, and listed this project in Major Popularization Program of National-level Scientific and Technological Achievements;

• In 1995, the Ministry of Machinery Industry of the State made the decision on Abolition of Examination and Approval for Newly Established and Expanded Acetylene Plants;

• In 1996, former State Economic and Trade Commission, State Development and Planning Commission and State Science and Technology Commission jointly issued state economic and trade file, and listed new type welding and cutting gas in major energy conversation popularization program;

• In 1999, former State Economic and Trade Commission promulgated the Decree No.6, listed acetylene in laggard production process equipment, and required resolutely weeding it out;
  
  　

Advancement of emission reduction by economic policy

In 2007, Chinese pollution emission reduction work achieved evident effect, but the situation of emission reduction is still severe. Why? One of important reasons is that enterprises are lack of sufficient motive power for actively weeding out laggard production capacity and slowing down the production of "two high" products, and the consciousness for energy conversation emission reduction hasn’t been completely inspired.

At the present stage, the main factors that restrict the pollution emission reduction work of Chinese enterprises include:

Firstly, the problem about cost exists. Under the circumstance of "high cost in case of abiding by the law, low cost in case of offending against the law", enterprises need a large quantity of investments for pollution control facilities as well as a large amount of money for daily operation and maintenance. This undoubtedly will increase the production cost of enterprises, so some enterprises have minimized pollution control facilities, or have often stopped the operation of the installed facilities for the purpose of saving cost.

Secondly, the problem about motive power exists. At present, "two high and one fund" industry still has big profit space, and environmental and ecological industry is positive for long term, but the economic benefit is fairly good for the time being, even some enterprises will lose money, so it has no attraction for enterprises.

Thirdly, the problem about ability exists. Although some enterprises also want to actively carry out emission reduction, using the production mode of energy conversation and environmental protection, but they suffer from incapability of introducing new technology equipment, and in case of weeding out original laggard technology equipment, they will face bankruptcy, so they only can struggle in the dilemma between "existence and destruction".

This year is a key year for finishing the energy conversation emission reduction goal of "eleventh five-year plan". To encourage enterprises to carry out pollution emission reduction, administrative compulsory measures are not enough, but the environmental-economic policies beneficial to energy conversation emission reduction must be formulated, in order to give full play to the role of market regulation mechanism and inspire the initiative of enterprises.

The Government Work Report of this year obviously embodies the orientation of the policies formulated by central government. The report points out that the adjustment of financial expenditure and government investment structure shall be continued, and the expenditures for energy conversation emission reduction, etc. shall be greatly added; the growth of medium and long-term loans shall be controlled, especially for the loans for the industries with high energy consumption, high emission and excess capacity; bank credit service shall be innovated and improved, the systems about pledge, discount, etc. shall be perfected, and the loans for energy conversation emission reduction shall be greatly supported; financial transfer payment shall be perfected, and general transfer payment scale and proportion shall be improved; resource tax and fee system shall be reformed, resource paid use system and ecological environment compensation mechanism shall be perfected, etc.

The implementation of these policies is of important significance for promoting energy conversation emission reduction. Related departments shall increase reform and innovation, formulate specific measures, establish and perfect corresponding systems; also shall clear up the policies that are not beneficial to pollution emission reduction and form perfect environment policy system, in order to make enterprises benefit from emission reduction and obtain more development opportunities.