2025, the trend and prospect of environmental protection industry
In the past two decades, the environmental protection industry has roughly experienced phases such as policy dividends, capital surges and technological innovations. As we move into 2025, the industry begins to enter a more realistic and challenging state: the need for pollution control is still there, but growth has slowed; Competition intensifies, but profit margins are squeezed; The policy orientation is more pragmatic, but the subsidy dividend is declining. More urgently, the business model, technology research and development and market expansion of environmental protection enterprises are encountering unprecedented internal and external pressure. In 2025, the environmental protection industry, in front of enterprises and practitioners, will be a new situation where the change will be further intensified. This article will deeply analyze the current core issues of the industry, and discuss the development trends and coping strategies of environmental protection enterprises in 2025.
The current situation of the environmental protection industry is huge scale and hidden crisis
The environmental protection industry has grown into a huge market, data show that in 2024, the total output value of China's environmental protection industry has exceeded 2 trillion yuan, covering multiple subsectors such as water treatment, solid waste treatment, and atmospheric governance. However, behind this huge market size, the industry also hides many crises, the incremental market tends to be saturated, policy support is gradually withdrawn, market competition is becoming increasingly fierce, and technological innovation is slowly promoted. For environmental protection enterprises and practitioners, 2025 will be a key node to link the past and the next.
The tide of environmental infrastructure receding: the pains of industrial restructuring
The rapid growth of the environmental protection industry in the past mainly relied on large-scale environmental infrastructure driven by policy, and the structure of the industry is based on this underlying logic. From sewage treatment plants to waste incineration power generation facilities, the core of market operation is engineering. However, with the increase of urbanization rate and the improvement of infrastructure construction, the demand for engineering environmental protection has gradually returned to normal, and the industry structure is therefore facing adjustment, from mainly construction to operation services. Sewage treatment has always been the most important sector in the environmental protection industry. However, by the end of 2024, the national urban sewage treatment rate has reached more than 95%, and it is close to 100% in the eastern coastal areas, and the demand for new large-scale sewage treatment plants is rapidly declining. In the field of solid waste treatment, the national waste incineration treatment capacity has reached 450 million tons/year, and the phenomenon of "insufficient food" in waste incineration plants has appeared in many areas. Some incinerators have to compete with their peers by driving down treatment prices to stay in business. Taking a waste incineration enterprise located in the Yangtze River Delta region as an example, its waste disposal unit price in 2024 fell by 15% compared with three years ago, and its profit margin shrank sharply. The incremental market of the environmental protection industry is shrinking rapidly, and the scale expansion is difficult to sustain. In the future, the environmental protection industry will face the pains of this transformation, and the clearance of the supply of environmental protection engineering construction is inevitable.
Project operation debt forward: hidden worries under financial constraints
The scale expansion of the environmental protection industry has largely relied on the PPP model, which has promoted the growth of the industry in the short term with high capital investment. However, with the intensification of the financial pressure on local governments, many PPP projects have fallen into difficulties in payment collection and insufficient income, and the operational burden of enterprises has become increasingly heavy. The problem of local government debt has become an important obstacle to the payment of environmental protection projects. Many companies' project funds or operating subsidies can not be in place on time, resulting in tight cash flow. A PPP project undertaken by a sewage treatment enterprise, due to the lag of local government financial allocation, the payback cycle was extended from the initial 6 months to 18 months, which seriously affected the capital turnover of the enterprise. A large number of environmental protection enterprises have assumed excessive debt risks in the expansion of the PPP model, and the actual returns of these projects are often lower than expected, and even drag down the main business of enterprises. Under the double pressure of fierce market competition and delayed project payment, the cash flow problems of environmental protection enterprises are transmitted layer by layer and generally face a liquidity crisis. In 2024, more than 30% of environmental listed companies have negative operating cash flow.
The bottleneck of technology application: the dilemma of R&D investment
The future development of the environmental protection industry cannot be separated from technological innovation, but in practical applications, many innovative technologies are difficult to promote on a large scale due to high costs and long verification cycles. This problem is preventing the industry from further upgrading. New technologies are often accompanied by high input costs, and many customers lack the ability to pay and the willingness to try new technologies and products. Environmental protection technology needs to be continuously optimized in actual projects to mature, and this verification often takes a long time, increasing the pressure of enterprise research and development. In the field of high-end environmental protection equipment, domestic enterprises still face technical barriers. The industry has an urgent need for localized replacement, but it will take time for core technology to break through. Technological innovation is the key to the upgrading of the environmental protection industry, but the current practical problems of difficult investment and long cycle are hindering the large-scale landing of new technologies, and enterprises need to find a more flexible business model and technology iteration path.
Industry differentiation intensifies: the marginalization of innovation entities
With the intensification of competition, the industry gradually presents a situation of strong and weak differentiation. Leading enterprises in the industry further expanded their market share through mergers and acquisitions, while the living space of small and medium-sized private enterprises was greatly compressed. Industry giants rely on capital advantages to optimize the regional market layout through mergers and acquisitions to form scale effects of regional integration. At present, integration cases of state-owned enterprises can be seen in some local areas. Due to the lack of core competitiveness, small and medium-sized enterprises can only survive in the low-end market through price wars, but this model is difficult to support long-term development. A small environmental protection equipment manufacturer, its product profit margin dropped from 20% in 2018 to 6% in 2024, and finally withdrew from the market due to the break of the capital chain. As the main body of innovation, private enterprises, due to the disadvantages of capital and scale, are gradually at the edge of the industry. The above is part of the crisis of the environmental protection industry, on the one hand, the industry from the construction period into the operation period, the driving force needs to change to innovation, on the other hand, the innovation of the industry loses space and soil, this contradiction will become the main dilemma of the industry next.
The development trend of environmental protection industry collaborative breakthrough of technology, market and operation
With the development of policies, markets and technologies, the environmental protection industry has entered a period of profound transformation. From "incremental expansion" to "stock optimization", from a single governance to resource, intelligent evolution, from local competition to the upgrade of system coordination, the industry is undergoing a comprehensive reshaping of the pattern. In this process, environmental protection enterprises must focus on the three core dimensions of technology, market and operation, and find ways to adapt to the new stage of survival and development.
Technical dimension: from "governance" to "resource and wisdom"
The direction of technological innovation in the environmental protection industry is changing, and the traditional pollution control technology has been difficult to meet the market demand, and enterprises are moving from simple emission control to resource and wisdom. This is not only the evolution of environmental protection technology, but also the internal needs of the development of the industry. Resource utilization is one of the keys of current technological innovation. In the field of water treatment, the extraction and recycling of salts, heavy metals and other recyclables in industrial wastewater is becoming a hot spot in the high value-added market. In terms of solid waste treatment, anaerobic fermentation of kitchen waste to biogas and recycling of precious metals in waste lithium batteries have shown great potential in policy promotion and technological progress. These technological breakthroughs have transformed environmental protection facilities from "pollution managers" to "resource producers". At the same time, intelligent operation is fully permeating the industry. With the Internet of Things (IoT), artificial intelligence (AI) and digital twins at its core, smart technologies are changing the way environmental facilities operate. For example, by optimizing the dosage and energy consumption of wastewater treatment plants through real-time monitoring and data analysis, companies can not only improve operational efficiency, but also reduce operating costs. This technology-driven smart management is giving new value to environmental facilities. The iteration of technology is not only the improvement of efficiency, but also the change of the role of the environmental protection industry. Future environmental protection facilities will not only be a tool for pollution control, but also become the core node of resource conversion, energy output and smart data.
Market dimension: from "incremental construction" to "stock optimization and refined competition"
The market pattern of the environmental protection industry is shifting from "incremental construction" to "stock optimization" as the core. With the gradual saturation of infrastructure construction, the opportunities for new projects are reduced, and the stock market has become the main battlefield for enterprises to compete for. At the same time, the differentiation of market competition is more and more obvious, the head enterprises rely on scale advantages to expand the territory, while small and medium-sized enterprises need to find living space through refined services and differentiated positioning. In the stock market, facilities upgrading and operation optimization are the main growth points. Waste incineration plants, for example, can tap into existing facilities by improving energy efficiency and resource utilization. At the same time, the trend of regionalization and segmentation of market competition is becoming more and more obvious. Providing customized services to local characteristics, such as providing water-saving industrial wastewater treatment solutions for water shortage areas, and developing targeted pollution treatment technologies for heavy industry concentrated areas, has become a new direction. Market segments such as volatile organic compounds (VOCs) management, medical waste treatment and waste lithium battery recycling, are gradually becoming new growth areas due to policy promotion and high technical thresholds. The transformation of the market means that environmental protection enterprises need to shift from "wide coverage" to "deep service". Who can find accurate positioning in the region and field, who can get an advantage in the competition.
Operation dimension: from "project orientation" to "platformization and collaboration"
The operation mode of the environmental protection industry is developing from a single project-oriented to a platform-based and collaborative development. Under the background of project complexity and diversified customer needs, the integration of resources and the construction of collaborative network become an important means for enterprises to break through the bottleneck. Platform operation is the key to improve efficiency. By building a regional environmental protection comprehensive service platform, enterprises can integrate the various needs of water, gas and solid waste treatment, forming centralized management and efficient allocation of resources. For example, in industrial parks or urban agglomerations, environmental protection enterprises can realize pollution source monitoring, energy optimization management and data sharing through digital platforms, providing customers with integrated solutions of "monitoring - governance - operation and maintenance". This model not only improves the efficiency of project management, but also enhances customer stickiness. At the same time, ecological synergy has become a new driving force for the development of the industry. Environmental protection enterprises can build a whole-process collaboration network from research and development to implementation through in-depth cooperation with equipment suppliers, university scientific research institutions and local governments. For example, in regional integrated environmental governance projects, enterprises and local governments share risks and achieve win-win results by optimizing revenue distribution models (such as PPP projects). In addition, with the help of green financial instruments, such as green bonds and green funds, companies can improve project sustainability while reducing financing costs. The change of operation mode makes environmental protection enterprises no longer participants in a single project, but integrators of multiple services and coordinators of industrial resources. This kind of systematic operation ability will become the core advantage of enterprises in the future competition. The future development of the environmental protection industry is no longer the story of a single breakthrough, but the collaborative evolution of the three dimensions of technology, market and operation. Technological innovation provides the impetus for efficiency gains and the development of new functions; Market optimization guide enterprises from wide coverage to deep service; Operational collaboration improves the overall competitiveness through resource integration and platform management. These three complement each other and jointly shape the new pattern of the environmental protection industry.
2025, environmental protection enterprise management keywords positioning, upgrading, innovation, and improvement
The environmental protection industry in 2025 has bid farewell to the last round of extensive growth, and the breakthrough of enterprises in the new pattern requires new strategies, and a deep understanding of the new market demand and industry operation logic. At this critical juncture, the success of environmental companies no longer relies on simple expansion, but to achieve breakthroughs with more sophisticated strategies. The following are four core directions, each of which is a complementary strategic choice.
Positioning: Dig deep into the market segment and find your own stage
In the landscape of the environmental protection industry, the method of casting a wide net is outdated. Enterprises must clearly find their own advantages in the field of market segmentation, in order to establish a foothold in the fierce competition. Whether it is industrial wastewater or difficult solid waste treatment, every market segment has potential, but the premise is that enterprises can accurately cut into and solve the core pain points of customers. For example, zero discharge of high-salt wastewater, recycling treatment of waste lithium batteries, specialized treatment of medical waste, etc., these are all segments with high technical thresholds and large profit margins. Enterprises can establish a clear market position by pooling resources to conquer a certain type of key technology. Focusing on one high-value market often leads to more sustainable growth than blindly diversifying into multiple sectors.
Upgrade: From technology vendor to system solution provider
The competition in the environmental protection industry has shifted from "single product and technology competition" to "comprehensive service capability competition". Customers want not only to buy equipment or services, but also to seek a full process solution from design, construction to long-term operation and maintenance. If enterprises can break the "single point of supply" model and transform into system integrators and comprehensive solution providers, they will get more market opportunities. For example, in the field of sewage treatment, enterprises can provide customers with real-time monitoring, operation optimization and overall services of energy saving and consumption reduction through intelligent water systems; In the field of waste incineration, it can help customers achieve maximum energy utilization and carbon emission control. Packaging products and services to provide a "package" solution not only increases customer retention, but also creates sustained revenue. The core of this transformation is to improve system integration capabilities, and through the digital platform to seamlessly connect different links, from a single supplier to a "customer strategic partner" role.
Innovation: Use differentiated technology to occupy the commanding heights of competition
Technology is the core of the environmental protection industry, but in today's homogenized competition, the simple technological update is not enough to support the long-term growth of enterprises. What really makes a company stand out is addressing the unmet needs of the industry through differentiated innovative technologies. For example, in the VOCs governance market, traditional high-cost equipment has discouraged some small and medium-sized customers. If companies can develop lower cost and more efficient governance technologies, they can capture this huge potential market. Similarly, in the direction of solid waste resources, the precious metal recycling of waste lithium batteries, the bioenergy utilization of kitchen waste, etc., all contain huge technical dividends. Innovation does not stop at a single point of breakthrough, but also requires cross-border integration. Environmental protection enterprises can combine big data, artificial intelligence and Internet of Things technology to improve the operational efficiency and technical effect of projects through intelligent means. Differentiated technologies and services are the real commanding heights in the future competition.
Refinement: Leveraging stock market benefits with intelligent operation
Many companies in the environmental protection industry are still faced with low efficiency and high costs at the operational level. Whether it is sewage treatment plants, waste incineration plants, or regional comprehensive environmental treatment projects, how to improve operational efficiency through intelligent means has become the key for enterprises to win competition in the stock market. The core of intelligent operation is data-driven. By introducing AI algorithms, iot devices, and digital twins, companies can optimize resource allocation in real-time monitoring, reducing energy consumption and operating costs. For example, sewage treatment plants can use AI to dynamically adjust the dosage of chemicals to reduce waste; Waste incineration plants can optimize combustion processes through digital twin technology to maximize energy output while reducing pollutant emissions. This operating model not only brings significant cost benefits to customers, but also helps companies build differentiation. In the case of increasingly fierce competition in the stock market, intelligent operation will become an important means for enterprises to build competitive barriers.
2025, a new starting point for the environmental protection industry
2025 will be a key node in the transformation and upgrading of the environmental protection industry, and the three-dimensional collaboration of technology, market and operation is becoming a new engine to promote the development of the industry. This is a challenging time for environmental companies and a major opportunity to redefine the industry landscape. Enterprises need to be driven by technological innovation as the core, to market optimization as the precise orientation, to operational wisdom as the efficiency guarantee, through clear positioning, strengthening capabilities, deep cultivation of the field, to find their own development path. The dividend drive of the past two decades has become history, and the next two decades belong to those enterprises that dare to change and are good at breaking the game.
Source：https://mp.weixin.qq.com/s/cLTBU4YxA256pe_AtKP2fA