Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

Chile Environmental Export Market Plan

IV-Air Pollution Prevention and Control

Priorities in Air Pollution Prevention and Control

The severe air pollution problems plaguing Santiago have raised air quality to a priority issue for the Chilean Government, making air quality the second-largest market for environmental technology. Despite the various programs that have been in place for the past seven years, air quality in the capital has continued to deteriorate, seriously affecting human health and the natural environment. A World Bank survey found Santiago to have the sixth worst particulate emissions problem in the world, with mortality due to respiratory problems at 10 percent above what is considered normal.
At the national level, air quality standards comparable to those in the United States were established in 1978 for criteria pollutants, including total suspended particulates, sulfur dioxide, carbon monoxide, ozone, and nitrogen dioxide (see table 7). To combat air emissions from major pollution sources, most specifically copper smelters, the Ministry of Mining also established air quality standards for sulfur dioxide (SO2) and particulate matter (PM10) from sources emitting more than three tons of sulfur dioxide or one ton of particulate matter per day. When air pollution levels in a region or zone exceed the established standards, the area can be declared a “saturated zone,” triggering a requirement under the 1994 Environmental Framework Law to develop a decontamination plan to reduce air pollution.

Table 7: National Air Quality Standards

Pollutant	Standard
Total Suspended Particulates (痢/m3)	75 (annual) 260 (24 hours)
Sulfur Dioxide (痢/m3)	80 (annual) 365 (24 hours)
Carbon Monoxide (痢/m3)	10,000 (8 hours) 40,000 (1 hour)
Photochemical Oxidants (痢/m3)	160 (1 hour)
Nitrogen Dioxide (痢/m3)	100 (annual)

* These standards can be strengthened in regions where more restrictive requirements are needed to protect tourist areas, natural preserves, agricultural land, or other areas.
Source: Resolution No. 1215/1978.

In the greater Santiago metropolitan region, air quality became so poor in mid-1996 that the area was declared a “saturated zone” for ozone (O3), carbon monoxide (CO), total suspended particulates (TSP), and PM10, and a “latent” zone for nitrogen dioxide (NO2). Thus, a comprehensive decontamination plan was developed for the region. This plan went into effect in July 1997. Plans have also been put into place for the large copper smelters to control SO2 emissions. Table 8 highlights the major regulations for air quality and emissions from fixed sources for both the entire country and the Santiago metropolitan region.

Table 8: Principal Air Quality Regulations

Regulation	Agencies	Scope
		National
Decree No. 144 (1961)	Ministry of Health	Requires that all gases and dust from fixed sources be captured or eliminated.
Resolution 1215 (1978)	Ministry of Health	Establishes air quality standards for total suspended particulates, SO2 , CO, ozone, and NO2. Also regulates smoke emissions from combustion processes.
Decree No. 185 (1991)	Ministry of Mining Ministry of Health Ministry of Agriculture	Establishes air quality standards for PM10, SO2, and arsenic for sources that emit more than three tons/day of SO2 or one ton/day of particulates. Also applicable to all sources located in “saturated zones” that emit these pollutants.
		Santiago Metropolitan Region
Resolution 369 (1988)	Ministry of Health	Establishes an air quality index for determining the level of air pollution.
Decree No. 32 (1990)	Ministry of Health	Regulates stationary sources during emergency air quality situations.
Decree No. 4, No. 1583, and No. 1905 (1992 and 1993)	Ministry of Health	Establishes emissions standards for particulates from stationary sources.

Source: Environmental Management by the Government of Chile, CONAMA, 1997.

Initiatives to Combat Air Pollution in the Greater Santiago Metropolitan Region
Like Mexico City, the greater Santiago metropolitan region is surrounded by mountains that restrict the flow of air currents through the valley, trapping pollutants and creating a thick layer of smog, particularly during the winter months (June to August). The first efforts to reduce air pollution in Santiago were launched in 1989 with the creation of the Special Commission for the Decontamination of the Metropolitan Area (CEDRM), a move that coincided with the return of democracy to the country. The objective of this commission was to develop a master plan to reduce the emissions of particulate matter.
A number of measures were put into place to control emissions from fixed and mobile sources, including establishing emissions standards for particulates from stationary sources and requiring catalytic converters for all automobiles. An emergency plan was also adopted that requires contingency measures, such as further restrictions for vehicles and temporary stoppages of industrial sources, are taken.

Table 9: Primary Sources of Air Pollution Emissions, 1997
(Tons/Year)

	PM10	CO	NOx	VOCs	SO2
Mobile Sources	2,730	225,992	30,943	28,417	3,157
Fixed Sources	3,175	4,303	10,959	241	17,037
Agricultural Sources	1,532	9,493	359	9,669	0
Domestic Sources	1,539	5,134	1,567	4,859	975
Dust	32,986	0	0	0	0
TOTAL	41,782	244,921	43,828	62,221	21,169

Source: “Inventario de Emisiones 1997 del Estudio: Fuentes Emisoras que Impactan la Calidad del Aire
de la Zona Saturada de la Regi鏮 Metropolitana, que Corresponde a las Provincias de Santiago y Cordillera,” Revista Induambiente, Year 5, No. 28, September-October 1997, p. 70.

Despite some improvements, Santiago continues to suffer from chronic air pollution. Urban population growth,
industrial expansion, and heavy vehicular traffic have led to high concentrations of TSP, PM10, CO, volatile organic compounds (VOCs), and nitrogen oxides NOX. Severe problems in 1996 led to the requirement under the 1994 Environmental Framework Law to develop a new decontamination plan to significantly reduce air emissions. Santiago’s SESMA released the plan and put it into effect in July 1997. The plan’s release followed a record period of six straight days at “preemergency” levels, a situation which sparked intense public debate about the city’s smog problems. Table 9 presents emissions of key pollutants by source in 1997 for the greater Santiago metropolitan region.

Table 10: Timetable for Emissions Reduction in Santiago (Tons/Year)

Year	PM10	CO	NOx	VOC	SO2
1997	41,782	244,921	43,828	62,221	21,169
2000	38,648	226,552	40,541	57,554	19,581
2005	29,137	183,691	32,871	46,666	15,877
2011	20,891	97,968	21,914	31,110	10,585

Source: “Metas de Emisi鏮 del Plan para la Descontaminaci鏮 Ambiental del Gran Santiago, Cronograma de Reducci鏮 de Emisiones,” Revista Induambiente, Year 5, No. 28, September-October 1997, pp. 66–72.

The decontamination plan outlines 261 measures that must be taken during the period 1997–2005, requiring an investment of $60 million by the government and an additional $120 million by the private sector over the life of the plan. Table 10 outlines target emission levels for the key pollutants. The success of the plan in reducing pollution levels will be evaluated in the year 2005, and corrective measures will be taken. An overview of key strategies that will be undertaken to meet these targets is provided (see box).

Strategy for Combating Air Pollution under the Decontamination Plan for the Greater Santiago Metropolitan Region

Strategy 1: Reduce Vehicle Emissions

Renovate existing public and private fleets.
Enact stricter requirements for new vehicles.
Put into place better controls for vehicles currently in use.
Reduce suspended dust in the streets.
Incorporate environmental aspects in land-use planning.
Contain urban expansion.
Improve the quality of public transportation.
Provide incentives for the rational use of automobiles.

Strategy 2: Reduce Emissions from Fixed Sources

Define technological requirements for different types of sources.
Establish mechanisms to permit compliance with existing requirements.
Reduce fugitive emissions and improve industrial combustion.
Establish mechanisms for sustainable industrial growth.
Control emissions from construction.

Strategy 3: Control Agricultural Emissions

Promote forestation and green spaces.

Source: “En Plan de Espera, Estrategias y L璯eas de Acci鏮 del Anteproyecto de Descontaminaci鏮 para el Gran Santiago,” Revista Induambiente, Year 5, No. 26, May-June 1997, pp. 40–45.

Air Pollution Monitoring Programs
To identify air pollution levels in major urban areas and track them over time, establishing air pollution monitoring systems has been a high priority. The monitoring network in the greater Santiago region (Red MACAM) is run by SESMA. This system has operated five stations for nearly a decade to continuously monitor the principal contaminants. With funding from the Japanese, SESMA installed five more monitoring stations in 1996. In addition to these fixed monitoring stations, two high-tech mobile monitoring stations reach areas not covered by the stationary monitors, such as the outskirts of Santiago and some of the industrial zones. Funding for this equipment was also provided by the Japanese International Cooperation Agency (JICA).
Outside Santiago, a monitoring network has been installed in the heavily industrialized city of Talcahuano. Due to the severity of this city’s environmental problems, CONAMA launched the Environmental Recuperation Plan for Talcahuano (PRAT) in 1994. As this plan focuses principally on air pollution problems, a key component was to establish a monitoring network. Preliminary monitoring and system design were completed with $90,000 in funds from the Swiss Development Agency, which is providing an additional $350,000 for installation of the monitoring network. The Swiss also funded a preliminary study completed in mid-1997 for a monitoring network in Region V and are likely to fund installation of the network.
Emergency Alert Program in Santiago
In 1988, the Ministry of Health established thresholds for triggering the emergency alert program for Santiago. Resolution No. 369 established an air quality index (ICA) based on concentrations of four pollutants (CO, SO2, NO2, and O3) and an air quality index for particulates (ICAP) based on PM10. These data are collected by the Metropolitan Area Monitoring Network.

Table 11: Criteria for Air Quality Alerts

Index	Rating
0-100	Good
101-200	Regular
201-300	Bad
301-400	Critical
401-500	Dangerous

Source: Resolution No. 369, Ministry of Health, 1988.

Table 11 illustrates the air quality ratings, based on levels of designated pollutants, for the emergency system. The following measures are triggered when indices reach bad, critical, and dangerous levels:

Air Pollution Alert (“Bad”): In this scenario, the vehicle program that restricts use of automobiles on certain days based on the last digits of the license plate numbers is expanded from two to four digits.
Air Pollution Preemergency (“Critical”): All “listed” fixed sources must cease operation for 24 hours. (Per Decree No. 32 of 1990, SESMA maintains a list of the primary sources of particulates that together account for 20 percent of daily emissions. In 1997, there were 136 companies on the list.) The license plate–based program restricting automobile usage is expanded to six digits.
State of Emergency (“Dangerous”): The government announces a state of emergency, and those sources that account for 50 percent of daily emissions of particulate matter must cease operations. The vehicle program to restrict usage is expanded to eight digits.

Stationary Sources

The most active program to control air emissions from stationary sources is in effect in the greater Santiago metropolitan region. The over 2,500 industrial facilities in the region are required to meet air quality standards as well as emissions standards for PM10. On January 1, 1998, a new emissions standard for PM10 went into effect, halving the standard from 112 to 56 mg/m3.
SESMA has two programs to combat air pollution: the Program for Air Quality Enforcement (PVCA) and the Program to Control Fixed Source Emissions (PROCEFF).

Under PVCA, private sector companies are required to demonstrate compliance with the standards by monitoring their emissions using official methods and government-approved private laboratories. SESMA validates the companies’ reports through periodic audits.
Through PROCEFF, SESMA also maintains a regional registry of fixed sources of emissions. While SESMA closely guards the information it gathers on emissions sources, during the air emergency of April 1997 it made public the fact that 82 companies had exceeded the PM10 standard.

Outside Santiago, the major industrial sources of emissions are power plants, copper smelters, fishmeal-processing facilities, and pulp and paper mills. Copper smelters are responsible for about 90 percent of sulfur emissions in Chile. To control these emissions, Decree No. 185 of the Ministry of Mining requires each of the smelters to prepare a decontamination plan, which must be approved by CONAMA. Four of the smelters (Chuquicamata, Paipote, Ventanas-Chilgener, and Chagres) have had their plans approved, while the plans for the Caletones and Potrerillos smelters are still being prepared. The state mining companies, CODELCO and ENAMI, plan to invest $400 million in Chiquicamata, $44 million in Ventanas-Chilgener, and $46 million in Paipote to reduce SO2 emissions by 1999. Many of these smelters have already made or are in the process of making investments in measures to reduce air emissions. Approximately $18 million was invested at Paipote to reduce 65 percent of its emissions, and $50 million at Ventanas for the purchase of converters and electric ovens and the construction of sulfuric acid plants.
CODELCO has signed a contract with Lurgi Umvelt GmbH in Germany to construct a $100 million sulfuric acid plant at its Salvador division of the Potrerillos plant. This first phase of the project is expected to come on-line in 1999 and will capture 73 percent of sulfuric dioxide emissions and cut arsenic emissions by 60 percent. Two additional phases are expected to be constructed later to further reduce emissions.
Ozone Reduction Program. To comply with its responsibilities under the Montreal Protocol, CONAMA has launched the Program for the Protection of the Ozone Layer. Under Article 5 of the Protocol, Chile has ten years to comply and can access the Multilateral Fund established under the Protocol to finance the costs associated with technology conversion. The program includes a certification program that can be used by companies to signify products that are free of ozone-depleting substances, a subsidy plan for process and technology conversions, and a joint program with the U.S. Environmental Protection Agency to recycle chlorofluorcarbons in air-conditioning systems and mobile refrigeration.

Mobile Sources

The Ministry of Transportation has issued a series of decrees regulating emissions from new automobiles, and one for automobiles currently in use. These stringent regulations are comparable to, and in some cases more rigorous than,those in many industrialized countries.

Tradeable Permit Program for Particulates

A new market-based program to reduce emissions went into effect in 1997 in Santiago. Under this program, stationary sources that reduce their emissions to levels below the new standard can sell their emissions rights to other companies that cannot cost-effectively meet the standard, thereby providing an incentive for companies to curb emissions. This program will initially be just for particulates, but later will be expanded to other pollutants.

Throughout the country, all imported cars are required to have catalytic converters. In addition, Santiago has implemented a program to restrict the number of automobiles on the road each day during the periods of most severe contamination. During the work week, all vehicles with license plates ending in two specified numbers are not allowed to be on the road, thereby reducing the volume of traffic by about 20 percent. The program is expanded as levels of contamination increase. Vehicles with catalytic converters are exempt from this program.
In July 1997, the government also began to require fuel modifications in the metropolitan region to reduce air emissions. The two most important changes are the reduction of sulfur content in residual fuels and the introduction of two types of diesel fuel, one for motors and the other for boilers. A natural gas distribution network is also being put into place in the metropolitan region to serve light vehicles, buses, and trucks. It is estimated that if all the buses currently using diesel switched to natural gas, particulate emissions would diminish from 1,500 tons annually to a little less than 200 tons annually.

Market Summary and Best Prospects

The Chilean market for air pollution prevention and control equipment is estimated at $295 million for 1998. As industry responds to the measures being enacted under decontamination plans and strengthened regulations and enforcement in the greater Santiago metropolitan region, this market is expected to continue to grow. The target markets are in those areas that have been declared “saturated zones,” where measures must be taken to reduce emissions. The best prospects include the following:

Monitoring Equipment. Expanding and installing air monitoring networks will continue to be a priority. International funding, particularly Japanese and European, has supported initial studies for the design of monitoring systems, giving their equipment companies a competitive advantage.
Prevention and Control Equipment for Major Industrial Sources. All major sources of air emissions(e.g., copper smelters; fishmeal-processing facilities; and steel, pulp and paper, and power plants) are required to prepare decontamination plans. The state mining companies plan to invest close to $500 million in environmental measures. Pollution prevention technologies will have an advantage. Investments will be made in sulfuric acid plants to control SO2 emissions and for electrostatic precipitators to control particulates. Fishmeal plants are making investments in odor-controlling equipment such as chlorinator scrubbers.
Process and Control Equipment to Control Particulates. As Santiago’s emissions trading program and the new, more stringent PM10 standards go into effect, demand will increase for scrubbers, precipitators, baghouses, packed-bed collectors, cyclones, and separators.
Mobile Sources. All new vehicles in the Santiago metropolitan region and in regions V and VI were required to have catalytic converters as of 1993; the rest of the country required them as of 1994. A large percentage of the automotive fleet will begin replacing this equipment in 1998.
Alternative Fuels Conversion. The company Metrogas is constructing a natural gas pipeline from Argentina to Santiago to increase the supply of natural gas. This will enable conversion of the public transportation fleet and industrial boilers to natural gas.

The demand for air pollution control technology is met largely by local production, although this production is focused mainly on low-tech, end-of-pipe solutions. U.S. and international companies should focus on providing higher technology and pollution prevention solutions. A number of U.S. companies have established local partners or distributors for their products. These companies face strong competition from other international companies with similar products. Companies from nations with incentives from trade agreements with Chile (e.g., Canada and Mexico) have a strong advantage in that their equipment exported to Chile is exempt from Chilean tariffs.

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