In the context of active government support and policy promotion, the core competitiveness of waste management companies is increasingly determined by factors such as technological innovation, operational experience, cross-regional capabilities, and financial strength. Companies that have established a complete industry chain for waste incineration are well-positioned to benefit from both short-term and long-term growth opportunities. These firms often adopt business models combining equipment manufacturing, BOT (Build-Operate-Transfer), and financing, with examples like Shengyun Shares and Sander Environment leading the way.
The garbage treatment industry is currently experiencing rapid development. Since 2012, the approval and implementation of waste-to-energy projects have accelerated significantly. According to incomplete data, nearly 40 projects have been signed, involving a total investment of approximately 17 billion yuan. Regionally, third-tier cities have become the main drivers of new project construction. Additionally, several listed environmental companies have expanded their presence in the waste-to-energy sector. For instance, Shengyun Shares acquired shares of Zhongke General to build a full waste incineration industry chain, while Yongqing Environmental recently entered the waste-to-energy field with its first project. Meanwhile, companies like Z have enhanced their control over waste power generation through equity participation. These developments indicate that the waste incineration power generation industry is entering a phase of rapid expansion.
Internally, the industry is being driven by several factors. The increasing volume of waste requiring removal and transportation, combined with the insufficient capacity of existing treatment facilities, has created a strong demand for new solutions. Rising land costs and the preference for incineration as a more sustainable option further support this trend. Additionally, the localization of waste incineration equipment has significantly reduced project costs, making it more economically viable.
Rapid economic growth and urbanization have led to a surge in waste generation, especially in urban areas. However, the development of waste treatment infrastructure has lagged behind, resulting in inadequate disposal capacity. In 2010, China's overall waste treatment rate was 63.5%, with urban areas reaching 77.9% and county towns at only 27.4%. Although the country has made significant progress in improving treatment capacity—from 21.9 thousand tons per day in 2003 to 480,000 tons per day by 2011—existing facilities still struggle to meet growing demand. This is particularly true in densely populated and economically developed regions, where landfill sites are nearing closure and new facilities face challenges in securing suitable locations.
Historically, landfill has been the primary method of waste disposal in China, despite its harmful environmental impacts. As waste production continues to rise and land resources remain limited, landfills are no longer a viable long-term solution, especially in coastal areas where space is scarce. In contrast, waste incineration offers a more efficient and environmentally friendly alternative. It reduces waste volume significantly, eliminates contaminants effectively, and can generate electricity, making it a widely adopted method in developed countries around the world.
The localization of waste incineration equipment has also played a key role in the industry’s growth. Equipment accounts for about 40–50% of the total project cost, and the domestic production of critical components like grates and incinerators has improved significantly since 2009. This shift has led to cost savings of over 30%, accelerating the development of waste-to-energy projects.
Externally, the industry is being propelled by clear government policies, a proven commercial model, and growing environmental concerns. In 2012, two major policies were introduced to support the waste incineration power generation sector. First, the National Development and Reform Commission issued a notice setting a national benchmark price of 0.65 yuan per kWh for waste-to-energy power, which is higher than local thermal power tariffs. Part of the difference is covered by provincial grids, while the rest is included in the national renewable energy surcharge. Second, the State Council’s “Twelfth Five-Year Plan for the Construction of Harmless Treatment Facilities for Urban Domestic Garbage†set ambitious targets, including a 90% harmless disposal rate for urban waste and 70% for county towns by 2015. These plans not only outline future goals but also provide a stable foundation for long-term investment in the sector.
Moreover, increased government focus on environmental protection and rising public awareness have boosted confidence in waste-to-energy projects. As a result, bidding activity for garbage treatment projects has surged since 2012, signaling a positive outlook for the industry’s continued expansion.
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