Zhang Quan pointed out that Shanghai’s pollution governance framework will shift from the traditional principle of "polluter pays and takes responsibility" to a market-based operational mechanism featuring "polluters bear primary liabilities, third parties deliver treatment services, governments conduct supervision, the public exercises social oversight, and polluters and third-party environmental service providers mutually supervise and restrain each other through contractual agreements".

This reform is designed to make pollution control more market-oriented, professional and socialized. This year, Shanghai will roll out major supporting policies for third-party governance, including administrative and legal liabilities for third-party treatment enterprises that cause pollution due to poor management or fraud. Pilot projects will be carried out across priority sectors. By 2017, Shanghai aims to establish a unified, open, orderly competitive, credible and standardized market system for third-party pollution governance.

It is reported that Shanghai’s third-party pollution governance originated in the 1980s and saw rapid expansion starting in the 1990s. The model has grown from a small number of foreign-funded enterprises to over one thousand projects covering foreign, state-owned and private businesses. At present, the output value of the local third-party environmental governance industry exceeds 5 billion yuan.

Third-party pollution governance means that pollutant-emitting entities sign paid service contracts to entrust their pollution treatment work to professional environmental protection companies. By introducing market mechanisms, this model enables specialized and socialized pollution treatment services.

Third-party environmental governance ranks among Shanghai’s key reform priorities. On October 8 last year, the Shanghai Municipal People’s Government issued the Guiding Opinions on Accelerating the Development of Third-Party Environmental Pollution Governance in Shanghai, which clarified phased development goals, implementation approaches and core tasks up to 2020. The city will prioritize breakthroughs in seven key areas of third-party governance: power plant dust removal, desulfurization and denitrification, urban sewage treatment, industrial wastewater treatment, volatile organic compound (VOC) abatement, construction dust control, catering fume treatment, and automatic continuous environmental monitoring. Law enforcement and supervision will be intensified; illegal acts will be severely penalized and publicly disclosed in accordance with the law.

At this year’s IEexpo China, 1,100 enterprises from 27 countries and regions showcased nearly 20,000 cutting-edge environmental solutions covering sewage disposal, solid waste treatment, air pollution abatement and site remediation. Nineteen Shanghai enterprises displayed successful cases from local third-party governance pilots. The Jinshan Chemical Industrial Zone presented its volatile organic compound treatment practices, while electroplating industrial clusters in Pudong, Jinshan and Jiading shared experience in electroplating pollution control.