Special Moment! China's Garbage Suddenly in High Demand
Is China Running Out of Trash to Burn? Those with some life experience might scoff at this question. The entrenched image is of "cities besieged by garbage" due to large-scale landfills, leading to land occupation and water pollution—that seemed the perennial norm.
Yet the reality, according to data from the Ministry of Ecology and Environment, is that in 2024, the average capacity utilization rate of waste-to-energy (WtE) plants nationwide was only about 60%, with 40% of capacity sitting idle. There really isn't enough garbage to burn!
The shift from "cities besieged by garbage" to "not enough garbage to burn" marks not only a major transformation for China's WtE industry but also reflects a historic turning point in China's economic development level and lifestyle.
Phase I: Over-ambitious Development and Poor Fit
China's WtE industry began in the late 1980s. In 1985, the Shenzhen Qingshuihe Waste-to-Energy Power Plant imported two complete incineration lines from Mitsubishi Heavy Industries, establishing mainland China's first modern WtE plant. This starting point wasn't particularly late—only about 20 years behind Western developed nations. However, the gap in societal development was far greater, and blindly adopting new concepts led to a poor fit.
First, technological backwardness meant relying on expensive imported equipment. The Qingshuihe plant, for instance, cost 47.74 million yuan, consuming 2% of Shenzhen's GDP that year. Long construction and debugging meant it only became operational in 1988.
More critically, China's garbage was completely different. Not all waste is suitable for incineration. Stable furnace operation requires dry, high-calorific waste. Compared to Western societies generating more plastic and paper, less-developed China had a much higher proportion of low-calorific kitchen waste. Additionally, high coal usage led to significant ash residue in waste, which absorbed moisture, making it hard to burn stably. Early plants had low power generation and often required supplemental coal, making costs high.
Consequently, WtE had little commercial viability in this phase, limited to tentative efforts in a few major cities.
Phase II: Solving Problems, Gaining Momentum
The real take-off came around the turn of the century. Rapid economic growth led to an explosion in waste volume, overwhelming landfill methods—hence terms like "villages besieged by garbage" emerged. Simultaneously, increased paper, plastic, textiles, and other high-calorific items improved the economics of incineration.
The industry itself advanced through policy support, technological breakthroughs, and business model innovation. In 2000, WtE equipment was included in the encouraged development catalog. In 2006, WtE was classified as biomass power generation eligible for a subsidy of 0.25 yuan/kWh on top of the coal-fired benchmark tariff.
Technologically, teams from the Chinese Academy of Sciences and Zhejiang University led localization efforts. In 2004, Chongqing Sanfeng Environment successfully developed China's first domestic waste incinerator, breaking reliance on imports. This was a decisive shift.
Around 2005, calculations showed that with the subsidy and tipping fees (estimated over 100 yuan/ton), revenue per ton of waste could reach around 200 yuan. The Chongqing Tongxing WtE plant, using fully domestic equipment, saw its total investment halved and operating costs plummet from 240 to 69.9 yuan/ton compared to a Shanghai plant using imported kits. Commercial profitability became possible.
The mature BOT model attracted private capital, leading to a wave of plant construction. However, as public awareness grew, new conflicts emerged around pollution, particularly concerning dioxins. Several high-profile "Not-In-My-Backyard" (NIMBY) incidents in Beijing, Guangdong, and Hangzhou fueled public opposition but ultimately pushed the industry towards greater transparency, higher standards, and stricter supervision.
Phase III: The Golden Decade
2012 was a milestone year. Economic prosperity increased waste, industrial upgrades provided technical confidence, and improved living standards raised green demands—all building momentum. Key policies that year ignited it.
Notifications on improving WtE tariff policies and renewable energy subsidy management raised the national subsidy to 0.65 yuan/kWh (for the first 280 kWh/ton), a one-third increase. Local governments often added extra subsidies. Other supportive policies, like tax rebates for waste treatment, further enhanced commercial value.
Simultaneously, domestic technology advanced—furnaces grew larger and more efficient. By 2020, China's Everbright International launched the world's largest capacity grate (1000 tons/day). Waste quality also "improved," with calorific value rising from about 1000 kJ/kg to 5000 kJ/kg. These dual advances dramatically increased power generation efficiency.
Official data shows the national average electricity generation per ton of waste nearly doubled from earlier stages to 279 kWh/ton by 2016. By 2020, a study of 92 plants indicated a range of 366-467 kWh/ton. Taking the lower figure (366 kWh), with 280 kWh at the subsidized rate (0.65 yuan) and the rest at the benchmark rate (~0.3-0.4 yuan), power revenue alone could reach about 202 yuan/ton. Adding tipping fees (60-80 yuan/ton), total revenue could hit 260 yuan/ton. A small city plant processing 500 tons/day could thus earn 130,000 yuan daily just from these streams.
Downstream revenue channels also opened, such as supplying industrial steam, turning bottom ash into construction materials, and extracting valuable materials from fly ash. With profits potentially 4-5 times costs, WtE became a highly lucrative industry.
During the real estate boom, local governments, optimistic about urban expansion, encouraged advanced planning. Capital flooded in—state-owned enterprises with policy resources, private firms racing for market share, and even cross-sector investors. It was a "golden decade" from the 12th (2011-2015) to the 13th (2016-2020) Five-Year Plan periods.
The number of operational urban WtE plants soared from 167 in 2012 to 840 in 2021, with capacity rising from 132,100 tons/day to 891,000 tons/day, reaching 1.166 million tons/day in 2024. Around 2021, China's WtE design capacity officially surpassed the volume of urban household waste collected and transported.
Phase IV: Not Enough Garbage to Burn
After 2021, reports emerged of plants "hungry for waste." In July 2021, a central environmental inspection team reported to Henan province that some new WtE plants were operating at only 50% capacity. Last year, CCTV reported a plant in Pucheng County, Shaanxi, operating at about 70% of its design capacity.
Overall, in 2024, with a design capacity of 1.166 million tons/day but a national urban waste collection volume of only about 720,000 tons/day, the industry average utilization rate hovered around 60%, with nearly 16% of capacity below 50%.
Multiple factors converge here. Over-construction during the boom created a capacity-waste growth mismatch. Progress in waste sorting also plays a role, diverting recyclables and kitchen waste (to composting), reducing the flow to incinerators.
More importantly, "not enough garbage" reflects not simple overcapacity but a regional and structural imbalance. Data shows WtE facilities are densely concentrated in eastern coastal and central regions, thinning out towards the north and west. While influenced by population, geography, and economics, this exposes an uneven distribution.
Eastern provinces, with earlier optimistic planning, generally face lower utilization rates. Some central-western provinces have better demand-capacity alignment. Meanwhile, provinces like Shanxi, Ningxia, Qinghai, and Tibet have insufficient coverage, with some existing facilities overloaded while others struggle to collect enough waste, especially in rural counties where collection systems are weak.
The Path Forward
Despite challenges, the WtE market continues to grow. Addressing these issues is key to higher-quality development.
Inter-regional waste coordination and cross-regional dispatch present a core opportunity to resolve supply-demand mismatches and utilize idle capacity. The logic is complementary: developed regions need external waste to unlock capacity value, while central-western regions, with ongoing urbanization, need both new facilities and waste transfer solutions. Nationally, mechanisms for cross-provincial waste transport standards, cost-sharing, and environmental responsibility are being explored, potentially moving from pilot projects to wider adoption.
Simultaneously, optimizing capacity layout through shared regional facilities, adopting AI for smart combustion and carbon capture to reduce costs and increase efficiency, and diversifying revenue models ("WtE + heating + carbon assets") will help the industry break through current bottlenecks.
The industry's journey underscores a key principle: healthy growth requires scientific planning. Whether for environmental infrastructure, new energy capacity, advanced manufacturing chains, or modern service sectors, development without systematic planning leads to resource misallocation or missed opportunities.
As China enters the critical window for formulating its 15th Five-Year Plan (2026-2030), scientific industrial planning is more crucial than ever to avoid pitfalls, identify core opportunities, and serve as a powerful engine for high-quality development.