2014 Key Words in the Instrument Industry: Environmental Monitoring

Introduction: Another key word for the instrumentation industry in 2014 was "environmental monitoring." Based on national policy releases, the environmental protection industry experienced rapid growth in 2014, indirectly driving the development of the environmental monitoring instrument field. Industry insiders predict that with the promulgation of the strictest environmental protection law in history, 2015 will see a growth period for environmental monitoring instruments. Environmental protection has received increasing attention from people around the world. While focusing on economic development, my country has also listed environmental protection as a basic national policy. Therefore, the research and development and use of environmental protection-related instruments and equipment are receiving increasing attention. Environmental science monitoring instruments are the basis for transmitting environmental source information and are essential means for environmental quality assessment, monitoring, and environmental science management. At the same time, environmental instruments are also an important link in realizing the mechatronics of environmental protection equipment and improving the automation level of pollution control equipment.

Industry experts believe that, focusing on strengthening environmental law enforcement, accelerating the pace of environmental protection construction, increasing investment in environmental protection construction, and cultivating the environmental protection industry as a new growth point for the national economy, the market for environmental protection-related instrument and equipment industrial products will see significant growth in the future. Especially in the field of environmental protection instruments and equipment, the demand for instruments related to environmental monitoring of the atmospheric and water environments (such as laboratory pure water systems) will be extremely strong.

A foreign market research company released the "2013-2015 China Environmental Monitoring Instrument Industry Report." The report states that as the foundation of the environmental protection industry, China's environmental monitoring instrument industry has experienced explosive growth in recent years. Sales of environmental monitoring products in China increased from 1 billion yuan in 2006 to 4.9 billion yuan in 2013, with a compound annual growth rate of 25.5%. This indicates that China's environmental monitoring instrument industry has entered a period of rapid growth.

The market share of domestically produced monitoring equipment continues to increase.

Starting in the second half of 2013, the market structure of monitoring equipment in my country underwent significant changes. After the implementation of the new air quality standards monitoring implementation plan, there was a clear import substitution effect in monitoring equipment. In 2012, approximately 80% of monitoring equipment was imported, but by the second half of 2013, the market share of foreign monitoring equipment had fallen below that of domestic equipment.

There are three main reasons for the continuous expansion of the market share of domestically produced monitoring equipment. First, information security factors support the localization of monitoring equipment. Environmental data is transmitted wirelessly, and monitoring equipment is gradually moving towards an integrated model. It can also monitor sensitive information, and from an information security perspective, the government encourages the localization of monitoring equipment.

Secondly, leading domestic companies have a first-mover advantage for expansion, such as technological reserves and financial strength. The market space for single environmental monitoring indicators is limited. Domestic leaders, after undergoing IPOs and financing, have ample funds and a high R&D investment ratio, establishing technological and financial advantages and possessing expansion potential.

Thirdly, there is a blue ocean of competition for domestic companies in third-party operation and maintenance. Transforming into third-party operation and maintenance is a development trend for environmental monitoring companies and a crucial step in increasing industry differentiation.

On the one hand, domestically produced equipment offers high cost-effectiveness. Under the premise of meeting monitoring performance standards, the government requires, according to policy, to prioritize the selection of designated domestic equipment. On the other hand, atmospheric monitoring involves national security, therefore, government procurement shows a clear preference for domestic equipment. Therefore, the market share of foreign and domestic manufacturers will shift in the future, and the structure will undergo significant adjustments. It is estimated that the market share of domestic monitoring equipment will reach 80% by 2015.

According to data analysis, in the next 2-3 years, with the country's continuous increase in investment in environmental monitoring, the market for environmental monitoring instruments and related products will maintain a growth rate of over 20%, far exceeding the economic growth rate during the same period. It is estimated that by 2016, the entire market size for environmental monitoring instruments will exceed 25 billion yuan.

2014 Comprehensive Environmental Protection Catalogue Released

In late December, the Ministry of Environmental Protection recently provided the "Comprehensive Environmental Protection Catalogue (2014 Edition)" (hereinafter referred to as the "Comprehensive Catalogue") to 13 departments including the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, and the People's Bank of China, and simultaneously released the full text to the public.

The catalogue includes two parts: a catalogue of high-pollution, high-environmental-risk products and a catalogue of key environmental protection equipment. The list of key environmental protection equipment has increased from 13 items in 2013 to 14 items, adding an automatic permanganate index water quality analyzer for water pollution monitoring.

The permanganate index refers to the mass of oxygen equivalent to the amount of potassium permanganate consumed when certain organic and inorganic reducing substances in a water sample are oxidized with potassium permanganate under certain conditions.