A SURGE in the demand for industrial gas boilers is expected with the introduction of new regulations to outlaw the use of coal boilers in Shanghai. About US$7 million of industrial gas and oil boilers will be needed in the fast-growing Pudong industrial zone and other parts of Shanghai within the next two years, according to a visiting Shanghai delegation. The demand is prompted by a new environmental protection law which came into force last month to reduce the highly polluting industrial coal boilers. The import and installation of the more environmental friendly boilers will be partly financed by the United Nations Global Environment Fund and the World Bank as a move to support cleaner industrial environment in China. The two world organisations will provide more than $10 million in a grant and loan to subsidise the purchase of more advanced gas or oil boilers in various state-owned enterprises and joint ventures. 'More than 150 gas or oil industrial boilers will be needed by Shanghai's manufacturing sector with the introduction of new environmental protection laws as of January this year,' said Cheng Qiyao, delegation head and senior engineer of the Shanghai Industrial Boiler Research Institute, yesterday. The new legislation bans, in most part of Shanghai's industrial zone, the use of industrial boilers fuelled by coal. Factories in the inner-ring area, Pudong and part of Puxi are required to install boilers consuming either oil or gas, while existing coal boilers should be gradually replaced. More than 10,000 industrial boilers are used in Shanghai and a majority of them are burning coal. Mr Cheng believes the new law will increase calls for gas boilers to replace the old ones although a definite schedule for the entire replacement has not been laid out. The fund from the UN and the World Bank is expected to arrive in June. The fund will be open to all state-owned enterprises, joint-venture and private companies for application.