After President Ma Ying-jeou expressed his opposition to the Kuokuang petrochemical project in Changhua County in central Taiwan, Chen Bao-lang, chairman of Kuokuang Petrochemical Technology Co. announced the withdrawal of the naphtha cracker project on April 26. Chen said it is regrettable that the project failed to win approval after 24 environmental impact reviews in the past five years.
The important factor that increased the strong opposition to the project was the devastating nuclear disaster and contamination caused by the recent earthquake in Japan. This has alarmed the environmentalists in Taiwan, prompting them to focus on the projects likely to have an impact on the surrounding area. In rejecting the project, President Ma stressed that the government has to cultivate a balance between a sustainable environment and economic development. He instructed the minister of the Interior to promote the wetland in Changhua as a national wetland and to develop a national park there.
The United Daily News reported that the environmental movement has been revitalized in recent years by opposing the plans for the Kuokuang petrochemical facility in Changhua.
The Taipei-based China Times said that the case marks a milestone for the Taiwan’s environmental movement. On the one hand, people have mobilized nationally, kickstarting the long-silent environmental movement, yet on the other hand, the government has reversed its policy following a strong public outcry, enabling people to see the possibility of shifting major policies as a result of citizen action.
Specific environmental toll of Kuokuang’s project
Since the start of the environmental movement in Taiwan in the 1970s, most of its protests have been directed at the petrochemical industry. The United Daily News said that the environmental concerns over the Kuokuang project included the destruction of wetlands, seabird habitat, migratory dolphins and other environmental conditions. The most serious concern was the risk of over pumping the groundwater in Changhua and nearby areas. The petrochemical industry requires a huge amount of water, and current water supplies in that region are already insufficient. The land would only sink further if groundwater was further exploited as part of the project.
Another concern was the predicted carbon dioxide (CO2) emissions, which were likely to be in the region of 11.87 million tons of CO2 per year. The Central News Agency reported that environmental groups asked Taiwan’s state-run CPC Corporation to transfer its carbon credits to Kuokuang to allow only 3.7 million tons of CO2 to be emitted per year. Du Zih-jyun, the director general of the Economic Ministry’s Industrial Development Bureau, said it is unacceptable because CPC is a 100 percent state-owned enterprise, while Kuokuang is a private company. Even though CPC is the largest shareholder of Kuokuang, CPC cannot transfer its state-owned assets to the private Kuokuang. He said that even fully utilizing solar energy, wind power and other renewable energy, Kuokuang could only reduce annual CO2 emission to 6 million tons, still higher than the upper limit set by the environmental groups.
Stopping the project would cost 600,000 potential jobs
The Taipei-based China Times reported that the proposed operation of the Kuokuang project was designed to recruit about 6,800 workers. Based on its impact, it was estimated to have the potential to create up to 230,000 jobs. Now that the project has been axed, it is estimated that over 600,000 job opportunities will be lost.
Taiwan’s textile, chemical fiber, apparel industry, and electronics companies, all use a certain amount of petrochemical products. If Taiwan neglects its petrochemical industry, it will have to depend entirely on foreign supplies. And, in cases of natural disasters, even foreign suppliers might be jeopardized and Taiwan would face an industrial shut down.
The China Times noted that Taiwan is the ninth largest ethylene producer in the world with about 4.2 million tons, while 3.12 million tons is produced by the Formosa Petrochemical system, and about 1.08 million tons by CPC Corporation. Up to 70 percent of the medium raw materials produced by Formosa Petrochemical system are for exports, while 70 percent of those produced by CPC are for domestic consumption. The bulk of the CPC production is used to supply the demands of the downstream petrochemical industry in Taiwan, but its capacity is far short of the Formosa Plastics system, limiting the future development of Taiwan’s nationalized industries.
The United Daily News reported that the scrapping of the Kuokuang project, when calculated based on the gross domestic product of the economy, will cut into the national infrastructure spending by NT$630 billion (US$31 billion), in addition to the loss of NT$280 billion (US$9.3 billion) of future added-value which is not accounted for yet.
Back to agricultural past?
The United Daily News said in an editorial that from an environmental point of view, discarding the petrochemical industry would resolve all disputes. But from an employment perspective, without a petrochemical industry, how can Taiwan create more than 600,000 job opportunities? If the industry’s environmental impact can be reduced, causing less damage to human health and to ecosystems, the petrochemical industry may still be an option.
With great candor, Vice Economics Minister Hwang Jun-chiou said Taiwan’s economy has to keep a certain amount of high energy consuming industries so as to maintain its international competitiveness. Is it a zero-sum game or a life and death issue for environmental protection and economic development? Can we find a better balance between them?
If we object to industrial development on the one hand, yet complain that there are no jobs for our young people, lament the aging population, and ask for improved social welfare on the other hand, Taiwan will fall into a vicious cycle of mutual destruction. The paper questioned can Taiwan afford to revert back to its agricultural past.