BMW-Brilliance Denied Environmental Permit for Tiexi Plant Expansion Project

BMW-Brilliance hit roadblock as the Chinese government denied environmental clearance for its project to double production capacity at the Tiexi plant. In a public notice issued on July 26, the Ministry of Environmental Protection (MEP) said the project lacked effective measures to deal with unwanted byproducts.

BMW and its partner Brilliance Auto produce vehicles in two locations in the city of Shenyang, Dadong (No.1 Plant) and Tiexi (No.2 Plant). Construction of the Tiex plant, which started in June 2010, will proceed in three phases according to plan. The first phase, completed in May 2012, created an annual production capacity of 100,000 units (currently of BMW X1 and 3 Series). That capacity will be doubled later this year when the next stage is finished. While phase two was still underway, in November 2012 the joint venture submitted application for environmental impact assessment (EIA) of further expansion. Having yet to receive an approval, construction started three months ago, with an aim to raise the production capacity at Tiexi to 400,000 per year by 2017 (it is not unusual in China for projects to apply for environmental permits during or even after the construction). The rejection by MEP was pronounced on the third phase.

bird view of the planned tiexi factory

Plan for BMW’s Tiexi Plant in Shenyang

MEP cited three reasons for turning down BMW-Brilliance’s application. "First, there is inadequate analysis on the production of waste-water at the paint shop. Second, the project fails to meet requirements set out in The 12th Five-year Plan on Air Pollution Control in Key Regions; the nearby water bodies to take in pollutants already contain excessive levels of nitrogen. Third, for treating waste-water and exhausts, phase three largely depends on facilities previously proposed or constructed. But as phase one (of the expansion project) has yet to get final environmental clearance and phase two is to be completed, more proof is needed to show this arrangement is viable."

A PR official at BMW-Brilliance said that the decision from MEP was not final and the joint venture would re-submit the application to include more supporting materials.