When it comes to global warming, China has more or less been treated as the naughty kid brother of the industrialized world. Excuses were made for its dismal environmental planning because its economy was young and growing, and the government was still trying to make sense of the modern world.
But that slack has been reined in. Developed countries with bruised economies are less empathetic towards China’s growing pains, and it has been become obvious that any discussion to stem global warming is worthless without China’s participation. Though not part of the Kyoto Protocol because of its developing nation status, China is expected to deliver an emission reduction plan when meetings begin in December on Kyoto’s successor. The Chinese government refuses to mandate specific emissions caps because they believe more developed countries have been polluting longer and should pick up more of the slack. But they have gotten a bit of the message. Zhang Lijun, vice minister of environmental protection, said collecting environmental taxes from polluting enterprises would be part of the country’s tax reform. http://www.shanghaidaily.com/sp/article/2009/200906/20090606/article_403213.htm
A number of smallcaps in the pollution & treatment control industry are well positioned to land some Chinese contracts and companies that mitigate the impact of coal use may very well be best positioned of all. A 2008 report in the magazine Science found that China was building the equivalent of two coal-fired power plants per day. China has to build urban infrastructure and create urban jobs for a new, relatively poor city of 1.25 million people every month, and that will likely continue for the better part of the next two decades. Coal currently provides about 70% of China’s energy, and there is no serious alternative to coal for many decades to come, according to The Brookings Institute. http://www.brookings.edu/testimony/2009/0604_china_lieberthal.aspx
Fuel-Tech Inc. of Warrenville, IL (Nasdaq:FTEK), www.ftek.com, develops emissions reduction technology for utility and industrial applications. Its is partnered with Chinese industrial giant ITOCHU Corporation to market an injection called Fuel Chem™ that will enable coal-fired generation boilers to run cleaner. Selective Catalytic Reduction (SCR) has long been a common means of reducing nitrogen oxide (NOx) emissions from industrial power generation equipment, with ammonia as the most common reagent. As new power plants are constructed with NOx-reducing SCR systems during the next several years, Fuel Tech’s NOxOUT ULTRA process is believed to be a leading candidate for the safe delivery of ammonia, particularly near densely populated cities, major waterways, harbors or islands, or where the transport of hazardous anhydrous ammonia is a safety concern. It recently landed a $4.6 Million contract for its NOxOUT ULTRA system®, a nitrous oxide (NOx) reduction technology, to be used by a coal-power generation site. The Company has been a darling of the small business press, having landed spots in Fortune and Forbes’ list of top small cap firms.
Nasdaq newcomer SmartHeat Inc (Nasdaq:HEAT), www.smartheatinc.com, markets plate heat exchangers (PHEs) to facilitate heat capture for the HVAC and industrial markets. It maintains that its PHE technology can heat 100,000 homes at 1/3 the coal consumption as compared to a traditional boiler. The Company also expects demand for its heat meters to grow as the movement towards private residential ownership has led utilities to mandate them. O.I. Corp. (Nasdaq:OICO), www.oico.com, of College Station, TX develops and markets systems that measure organic and inorganic carbon levels in ultrapure, drinking, natural, ground, waste, and process water, as well as soils and solids. Though no specific China plans could be found on its website, the Company recently announced the hiring of Manager for Asia Pacific Sales. You might also be on the lookout for future China contracts to be announced by Littleton, CO-based ADA-ES (Nasdaq:ADES), www.adaes.com, a company that sells pollution control equipment to coal-fired power plants. ADA-ES has a family of proprietary flue gas conditioning (FGC) additives to provide utilities and industries with a cost-effective means of complying with environmental regulations on particulate emission.
Cincinnati’s CECO Environmental Corp. (Nasdaq:CECE), www.cecoenviro.com, is holder to a suite of subsidiaries that that provide pollution reduction and ventilation systems to industries across the globe. Last year, the Company acquired Fisher-Klosterman of Louisville. Fisher products aid particulate recovery in industries including petroleum refining, power production, petrochemicals and manufacturing. Its 40,000 sq. ft. sales and manufacturing facility in Shanghai was the crown jewel in the deal as CECO plans to use it as a beach head to expand its China operations.