The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) Hebei Air Pollution Prevention and Control Program (P154672) EAST ASIA AND PACIFIC | China | Environment, Natural Resources & the Blue Economy Global Practice | Requesting Unit: EACCF | Responsible Unit: SEAE1 IBRD/IDA | Program-for-Results Financing | FY 2016 | Team Leader(s): Dafei Huang Seq No: 7 | ARCHIVED on 30-Dec-2019 | ISR39884 | Created by: Dafei Huang on 09-Dec-2019 | Modified by: Dafei Huang on 29-Dec-2019 Program Development Objectives Program Development Objective (from Program Appraisal Document) To reduce emissions of specific air pollutants in the key sectors in Hebei Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status and Key Decisions The Program is on track to close with full implementation by its closing date of December 31, 2019. The Program has achieved its Program Development Objective (PDO) and its PDO indicators. The program provided direct support to Hebei's Air Pollution Control and Prevention Action Plan with incentives to targeted prioritized measures. Hebei has reported significant results since the start of the Action Plan, achieving 40 percent reduction in annual average ambient PM2.5 concentration in 2018 compared to 2013. The program has supported (a) installing continuous emissions monitors (CEMs) in all state- and municipal-controlled industrial facilities and using the CEM system to enforce air pollutant emissions standards; (b) decommissioning more than 4,500 older, highly polluting buses and their replacement with clean energy buses; (c) deployment of over 1.2 million clean stoves in Langfang and Baoding; (d) increasing nitrogen utilization efficiency (NUE) on more than 6.2 million hectares of cropping land; (e) implementation of a comprehensive inventory system; and (f) approval of the guidance on priority actions for air quality actions for the 14th Five-Year Development Plan period 2021-2025. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P154672 IBRD-86230 Effective USD 500.00 500.00 0.00 500.00 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date 12/30/2019 Page 1 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) P154672 IBRD-86230 Effective 06-Jun-2016 12-Jul-2016 11-Oct-2016 31-Dec-2018 31-Dec-2019 DLI Disbursement Achievement Disbursed amount in Disbursement % DLI ID DLI Type Description Coc DLI Amount Status Coc for DLI Loan: IBRD86230-001 number of EPBs at the 1 Regular USD 60,000,000.00 Fully Achieved 60,000,000.00 100 % provincial and ref percentage of enterprises 2 Regular USD 120,000,000.00 Fully Achieved 120,000,000.00 100 % in statecontro number of clean stoves 3 Regular USD 80,000,000.00 Fully Achieved 80,000,000.00 100 % installed number of hectares with 4 Regular USD 79,980,000.00 Fully Achieved 79,980,000.00 100 % increased NUE of number of clean energy 5 Regular USD 78,770,000.00 Fully Achieved 78,770,000.00 100 % buses replacing implementation of a 6 Regular USD 40,000,000.00 Fully Achieved 40,000,000.00 100 % comprehensive offici approval of a cost effective 7 Regular USD 40,000,000.00 Fully Achieved 40,000,000.00 100 % comprehensi Program Action Plan Action Description Training is provided to no less than 480 monitoring and enforcement staff at the EPB at all levels. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Dec-2018 Completed Completion The PMO and BEE provided evidence of the training on 480 members of enforcement staff on air quality monitoring Measurement and enforcement related topic. Comments Action Description Training is provided to no less than 60 work safety supervision staff. Source DLI# Responsibility Timing Timing Value Status Other Client Due Date 09-Feb-2018 Completed Completion Training provided to no less than 60 work safety supervision staff has been completed by mid-term. Report and Measurement evidence was submitted during previous mission. Comments 12/30/2019 Page 2 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) A GRM is established at the provincial level with staff appointed at the HAP leading group office. The operation Action Description structure and protocols and a complaint hotline, is made available to public. Source DLI# Responsibility Timing Timing Value Status Client Due Date 30-Dec-2016 Completed Completion Measurement Comments Report to the Bank of any credible and material allegations of fraud/and/or corruption regarding the Program; and no Action Description persons or entities debarred or suspended by the Bank are awarded a contract under the Program. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Client Recurrent Yearly Completed Completion Recurrent update Measurement The Bank team was informed by Hebei as of May 8, 2019, no contracts had been awarded to the Bank’s debarred or Comments suspended firms. The CNAO to develop audit TOR and enable required Program financial statement audit report timely issued, Action Description acceptable to the Bank Source DLI# Responsibility Timing Timing Value Status Client Due Date 30-Dec-2016 Completed Completion Measurement Comments Action Description Program’s implementation status should be disclosed publicly on annual basis. Source DLI# Responsibility Timing Timing Value Status Technical Client Recurrent Yearly Completed Completion EPB created a “Public Information Disclosure” column on its official website where has published information on the Measurement updated '2018-2020, Winning the Blue Skies Battles' Work Plan. EPB created a “Public Information Disclosure” column on its official website where has published information on the Comments updated '2018-2020, Winning the Blue Skies Battles' Work Plan. 12/30/2019 Page 3 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Low Low Low Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Low Low Low Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Substantial Substantial Substantial Environment and Social Substantial Moderate Substantial Stakeholders Low Low Low Other -- -- -- Overall Substantial Substantial Substantial RiskComments Comments E&S risk is adjusted to Substantial. News media reported fatalities related to carbon monoxide poisoning in Hebei. These reports are directly targeting the use of 'clean coal', a semi-coked briquette, but little information is available on the type of stoves involved in the incidents. The Program has a DLI of the number of households installed with cleaner heating stoves. The loan allocation has been fully disbursed against the verified number of stoves using natural gas and electricity. Although the Program approved a list of clean stoves that have been tested to meet technical criteria. It is unclear whether the incidents are within the Program boundary. The Hebei government has started investigations. The Borrower counterpart is following up with relevant agencies on the investigation results, and will share information as soon as it becomes available. The current risk rating is adjusted to Substantial with the potential linkage with the incidents. Risk rating may be adjusted pending on fact finding result and more information available. The task team has filed the ESIRT incident report. Results PDO Indicators by Objectives / Outcomes Reduce emissions from specific air pullutants in the key sectors in Hebei IN00782256 ►Reduction of SO2 emissions from enterprises included in the CEM (tons) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 454,000.00 150,000.00 Date 02-Dec-2013 08-May-2019 16-Dec-2019 31-Dec-2019 The PMO's ICR reported results over the years of implementation. The emission reductions of SO2 historical trend is as below: Comments 2015: 180,200 tons less than in 2014 2017: 35,000 tons less than in 2016 2018: 238,800 tons less than in 2017 12/30/2019 Page 4 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) The three year total emissions reduction is 454,000 tons, but reductions are likely to have been even larger. In 2016, the government changed the estimation method to calculate emissions, and that's the reason why the official emission data from 2015 cannot be compared with that of 2016. Therefore, for the estimation of this indicator, the reduction in SO2 emissions for the year 2015 compared to the year 2014 are estimated, together with the emission reductions for the year 2017 compared to the year 2016, and for the year 2018 compared to the year 2017. Total SO2 reduction from 2014 to 2018 are thus likely to have been even larger. IN00782257 ►Reduction of NOx emissions from enterprises included in the CEM (tons) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 331,100.00 160,000.00 Date 01-Jan-2014 08-May-2019 16-Dec-2019 31-Dec-2019 The PMO ICR reported total emission reduction of NOx 331,100 tons. The historic trend is as below: 2015: 188,200 tons less than 2014 2017: 78,900 tons less than 2016 Comments 2018: 64,000 tons less than 2017 Emission reductions of 2016 was not included for the same reason abovementioned for SO2. IN00782258 ►Reduction of PM2.5 emissions from the 800,000 clean stoves deployed (tons) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 3,269.00 1,300.00 Date 01-Jan-2014 08-May-2019 16-Dec-2019 31-Dec-2019 The PMO ICR reported 3,269 tons of PM2.5 emission reductions achieved by replacing 800,000 stoves. The actualy verified result was a total of 1,221,500 stoves replaced, which, in total, is equivalent to 4,991 tons of emission reduction. The indicator was thus overachieved both in the total number of clean stoves Comments deployed through the program (which went up to 1,221,500) and in the total emission reduction achieved, which went up to 4,991 tons. IN00782259 ►Reduction of NOx emissions from the transport sector (tons) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 42,170.00 40,000.00 Date 01-Jan-2014 08-May-2019 16-Dec-2019 31-Dec-2019 The PMO ICR reported total 51,272 tons of NOx emission reduction, with historic trends as below: 2015: 6,801 tons from the previous year 2016: 10,150 tons from the previous year Comments 2017: 11,961 tons from the previous year 2018: 13,195 tons from the previous year Intermediate Results Indicators by Results Areas Comprehensive control of industrial enterprises and reduced emission of multi-pollutants emissions (SO2, NOx, and primary PM2.5) from key industrial sectors IN00782260 ►Number of EPBs at the provincial and prefecture level implementing Standard Protocols on CEM Systems for emissions of air pollutants (Number, Custom) 12/30/2019 Page 5 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.00 12.00 12.00 Date 06-Jun-2016 06-Sep-2018 06-Sep-2018 29-Jun-2018 Comments IN00782263 ►Percentage of enterprises in State-controlled Lists and Municipal-controlled Lists integrated in the Improved CEM and Enforcement Systems for Air Pollutants (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 06-Jun-2016 06-Sep-2018 06-Sep-2018 29-Jun-2018 Comments Area pollution control and dust control IN00782261 ►Number of clean stoves installed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,221,500.00 1,221,500.00 800,000.00 Date 06-Jun-2016 18-Oct-2018 18-Oct-2018 29-Jun-2018 Comments Prevention and control of emissions from mobile sources IN00782262 ►Number of Clean Energy Buses replacing diesel buses, which are disposed of, in accordance with the National Regulations (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4,432.00 4,632.00 4,500.00 Date 06-Jun-2016 08-May-2019 19-Dec-2019 29-Jun-2018 The dismantling of replaced old buses advanced. The PMO reported verified 200 dismantled buses with Comments replacement by new energy buses. Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Number of EPBs at the provincial and prefecture level implementing Standard Protocols on CEM Systems for emissions of air pollutants (Process, 60,000,000.00, 100%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 12.00 12.00 12.00 12/30/2019 Page 6 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) Date 06-Jun-2016 06-Sep-2018 06-Sep-2018 -- The 3rd-party verified the completion report based on the agreed verification protocol. Comments ►DLI 2 Percentage of enterprises in State-controlled Lists and Municipal-controlled Lists integrated in the Improved CEM and Enforcement Systems for Air Pollutants (Process, 120,000,000.00, 100%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 100.00 100.00 100.00 Date 06-Jun-2016 06-Sep-2018 06-Sep-2018 -- The 3rd-party verified the completion report based on the agreed verification protocol. Comments ►DLI 3 Number of Clean Stoves installed (Output, 80,000,000.00, 100%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 1,221,500.00 1,221,500.00 800,000.00 Date 06-Jun-2016 18-Oct-2018 18-Oct-2018 -- Disbursement of US$ 80,000,000 was made based on the verified results. Comments ►DLI 4 Number of hectares with increased NUE of at least 37% due to the application of formula fertilizer based on soil testing (Intermediate Outcome, 79,980,000.00, 84%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 5,234,360.00 6,211,160.00 6,200,000.00 Date 06-Jun-2016 08-May-2019 19-Dec-2019 -- The DLI is fully achieved. In December 2019, the Bank has approved the final disbursement of US$12,456,756 for the 976,800 ha of land cropped with 7 minor crops with application of formula fertilizer based on soil testing, which has been verified by 3rd-party following agreed verification protocol. Previously, there were two rounds of verifications disbursements. NUE improvement on 2,231,500 ha of land Comments planted with winter wheat has been verified, and US$ 28.79 million has been disbursed. And NUE improvement has been verified for 3,002,860 ha of land planted with summer corn. US$38,74 million has been disbursed. ►DLI 5 Number of Clean Energy Buses replacing diesel buses, which are disposed of, in accordance with the National Regulations (Output, 78,770,000.00, 98%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 4,432.00 4,632.00 4,500.00 Date 06-Jun-2016 08-May-2019 19-Dec-2019 -- 12/30/2019 Page 7 of 8 The World Bank Implementation Status & Results Report Hebei Air Pollution Prevention and Control Program (P154672) The DLI is fully achieved. The Bank approved the final disbursement for the 200 buses disposed with replacement of new energy buses, verified by third-party. The disbursement was made based on 68 buses as Comments the remainder to meet the 4,500 target since the last ISR. Two verifications have been completed on the 4,432 buses disposed with replacement of new energy buses. ►DLI 6 Implementation of a Comprehensive Official Emissions Inventory System (Process, 40,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 0.00 1.00 1.00 Date 06-Jun-2016 08-May-2019 20-Dec-2019 -- Hebei submitted achievement notification with completion and verification report. A comprehensive inventory Comments system has been implemented. ►DLI 7 Approval of a Cost-effective Comprehensive Plan on Air Quality Control for the next 5 years (Process, 40,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) 2016- 2018 Value 0.00 0.00 1.00 1.00 Date 06-Jun-2016 08-May-2019 20-Dec-2019 -- A new air quality action plan was approved on December 20 by the Provincial Government. The Bank is processing confirmation of achievement to account for the advanced amount. Hebei Government approved a new air quality action plan on December 20, namely Hebei Province Guidance on Key Actions for Air Pollution Control for the 14th Five-Year Plan Period (2021-2025). A Bank technical assistance (TA) supported a study on cost-effectiveness assessment of measures across sectors to inform formulation of the Guidance. The Guidance sets a target for the province to further reduce 20 to 25 percent of Comments annual ambient PM2.5 concentration during the 14th FYP and identifies priority measures for implementation cross different sectors. Over the past years, the Government has committed to address air quality as a top priority. Measures were taken without much consideration on costs. As the obvious measures have already been implemented, further reduction of pollution level will not only become more challenging but more costly. The TA output informed the Hebei Government of the remaining potential and feasible options with quantified effectiveness, thereby identified priorities for implementation. 12/30/2019 Page 8 of 8