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34 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 CREATING BUSINESS OPPORTUNITIES 35

In addition, we are developing a smart energy business One example is the research and development we HVO from Inedible Bio-grease
that includes solar photovoltaic power generation have been carrying out on biomass utilisation through
systems and energy storage facilities. Coupled with our wholly owned subsidiary, ECO Environmental In Zhangjiagang city, Jiangsu province, we established our first hydro-treated vegetable oil (HVO) plant for
the application of big data, artificial intelligence and Investments Limited (ECO), the business platform we converting inedible bio-grease feedstock into advanced biofuels with International Sustainability & Carbon
the Internet to enhance energy utilisation and dispatch founded 20 years ago for pursuing opportunities in new Certification (ISCC). These fuels offer a significant reduction in greenhouse gas (GHG) emissions as
efficiency, Towngas is helping to conserve energy and energy. It has developed proprietary technologies for compared with traditional fossil diesel. Construction of the plant’s second phase was completed in 2020,
reduce emissions, while also generating economic converting inedible bio-grease and agricultural waste into increasing total production capacity to 250,000 tonnes per year.
benefit. high-value products, which have been implemented in a
number of projects. In 2020, the HVO facility produced around 88,000 tonnes of HVO, of which 90 per cent was sold to
Development of New Energy and Europe. The production of HVO saved around 259,000 tonnes of carbon emissions. We are now exploring
Unconventional Energy Towngas will continue to invest resources on other markets such as North America for this product.
environmentally-friendly innovative technologies to
In the process of bringing about the transition to cleaner create a better future. We are also planning to
fuels, we have identified several opportunities that are put into trial production
playing an increasingly important role in our business sustainable aviation fuel
development. using biofuels in 2021.

High-value Products from Low-grade Feedstock Since our HVO processing
technology has proven to
Liquefied Natural Gas Ethylene Glycol and Methanol be so successful, we are
Conversion of coalbed Clean coal chemical plant in now exploring possible
methane in Shanxi Inner Mongolia sites for new plants in other
province areas.

Hydro-treated Vegetable Oil Natural gas
Upgrade of inedible waste oil Organic waste resource
in Zhangjiagang city utilisation in Suzhou city and
Tongling city

Cellulosic ethanol and/or green chemicals such as furfural and paper pulp
Conversion of agricultural waste in Hebei province
Organic Waste Resource Utilisation

We established our first organic waste resource utilisation project in Suzhou Industrial Park, Suzhou city, Jiangsu
province. Currently, this organic waste resource utilisation plant can process up to 500 tonnes daily of organic
wastes for conversion into natural gas. In 2020, it processed 92,000 tonnes of organic wastes from nearby
Utilisation of Agricultural Waste
catering businesses that helped our downstream customers to reduce 5,900 tonnes of carbon emissions. When
construction of the second phase of this plant is completed in 2021, daily processing capacity will increase to
Towngas has developed a new technology that utilises agricultural waste such as straws and corn cobs for the
production of cellulosic ethanol, an advanced biofuel, as well as paper pulp and furfural, a chemical that can be 800 tonnes.
used as a building block for renewable fuels. Two pilot projects in Hebei province, which will each process 240,000
tonnes of agricultural waste annually, are expected to commence trial production in 2021. Another food resource waste utilisation project is located in Tongling city, Anhui province with a daily processing
capacity of 100 tonnes of food waste. When the second phase of this project goes into operation in 2021, the
plant’s food waste processing capacity will be doubled.
Feedstock for these plants is available in abundance as mainland China produces massive amounts of agricultural
waste each year, giving this renewable resource a valuable role to play in the replacement of non-renewable
resources such as crude oil. Towngas is also exploring additional food waste treatment projects in other cities.