Enhanced regulatory framework for environmental protection industry

The regulatory standard of pollutants in landfill for municipal solid waste was revised by the Chinese Environmental Protection Department on 15 July 2008. This aligns the construction and operation of municipal solid waste landfill with the requirements of energy conservation and environmentally friendly living.

At the Fourth Session of the 11th Standing Committee of the NPC in August 2008, the Chinese government voted to pass the Recycling Economy Promotion Law of the People's Republic of China. Key elements of the law include: Establishing systems to regulate energy use and pollutant emission Diverting capital into environmentally friendly industries Allocating special funds for supporting technological research, key projects and capacity building.

In September 2008, the Ministry of Environmental Protection (MEP) issued the »Circular on Further Strengthening EIA Management of Biomass Power Generation Project«. According to the updated regulations, provincial environmental protection authorities, rather than central government, can now assess the approval of the environmental impact of waste incineration power generation projects.

The premier of the State Council, Wen Jiabao, publicly stated on 1 July 2008 that energy saving and emission reduction is important for economic restructuring. During a teleconference for the »Special Campaigns of Environmental Protection« in 2008, the minister for the MEP, Zhou Shengxian, stressed that further efforts should be made in environmental law enforcement to ensure public environmental rights and interests. The Vice-Chairman of the NPC Standing Committee, Zhou Tienong, indicated that environmental impact assessment is the key to achieving coordinated development of the economy and environmental resources.

The Chinese government has reaffirmed its commitment to environmental protection and intends to establish a growth structure for Chinese industry that is both energy and resource efficient. As one of China's leading providers of small and medium-sized waste incinerator equipment, ZhongDe is in a prime position to benefit from the government's environmental protection policies. The issue and implementation of the Recycling Economy Promotion Law of the PRC will bring a tremendous opportunity for the Company.

The updated regulations regarding the environmental impact assessment of biomass power generation projects, including waste incineration power generation projects, is likely to accelerate the process of building new waste to power plants in China. And ZhongDe will benefit from this.