Garbage incineration plants lack sufficient waste to burn; restructuring and optimizing layout are imperative.

Source: Securities Times

In the garbage storage pit at a waste incineration plant in South China, mountains of household waste have piled up. Zhuo Yong/Photo

Reporter from Securities Times: Zhuo Yong

“Now waste incineration plants have more waste than they have waste.” After working in the waste treatment industry for more than a dozen years, Yang Bo (a pseudonym) said with helplessness. He works at a waste incineration plant in South China and has personally witnessed the industry’s tremendous transformation: from the once troublesome “waste-city-encirclement,” to today, some incineration plants being forced to shut down because they can’t “eat enough,” and even strange phenomena emerging within the industry—such as “racing for waste” and paying money to buy waste. According to data, there are currently more than 1,000 waste incineration plants in China and over 2,000 incinerators. These facilities, built to break the “waste-city-encirclement,” why have they ended up facing a new dilemma of furnaces that can’t be fed? Securities Times reporters reviewed publicly disclosed materials from multiple waste-to-power listed companies, interviewed industry insiders and academic experts, and attempted to uncover the truth behind the current state of China’s waste incineration industry.

Whose waste isn’t enough to burn?

At a waste incineration plant in South China, inside a massive steel-reinforced concrete sealed garbage storage pit, household waste has piled up like a mountain, with plastic bags, paper scraps, miscellaneous items, and a small amount of construction waste mixed together. Massive mechanical grabbers operate back and forth: they grab the waste and send it to the incinerators. “The incinerators can’t go out—we need a steady stream of garbage supply,” Yang Bo told reporters. The incineration plant he works at is currently operating at a very tight balance in terms of capacity utilization, but many peers in the industry have already been facing insufficient waste volumes.

Data from the Ministry of Housing and Urban-Rural Development’s《2024 Yearbook of Urban and Rural Construction Statistics》shows that in 2024, China’s 1,129 municipal and county waste incineration plants had an annual incineration volume of 268 million tons, with an overall capacity utilization rate of about 63.22%, basically unchanged from 63.93% in 2023. This figure is below the 70% minimum processing volume specified by the national standard GB/T 18750-2022《Municipal Waste Incinerators and Waste Heat Boilers》, meaning China’s waste incineration industry as a whole is already experiencing excess capacity.

And the differentiation in capacity utilization is especially evident regionally. From a provincial perspective, in 2024, capacity utilization rates in Xinjiang, Sichuan, Ningxia, and Qinghai were all above 80%; even Tibet saw cases of over-capacity incineration. By contrast, capacity utilization rates in Hainan, Jiangxi, Guangdong, Hebei, Zhejiang, Tianjin, and other places were below 60%. Provinces along the southeastern coast have become the worst-hit areas that can’t “eat enough,” while waste incineration demand in the Northwest is relatively well-supplied.

Even within the same province, this differentiation is quite pronounced. Taking Guangdong Province as an example: the province-wide overall waste incineration capacity utilization rate was 54.41%, ranking fourth from the bottom nationwide. But Shenzhen is the opposite: in 2024, Shenzhen’s five waste incineration plants had a designed daily processing capacity of 18,025 tons, while actual processing volume reached 18,722.7 tons, with a capacity utilization rate of about 103%. Among them, three plants were also operating in an over-capacity state. In sharp contrast is the western Guangdong region: the Yangjiang Yangchun Conch Co-built coordinated household waste incineration project in 2024 had a capacity utilization rate of only 54.2%. Due to differences in economic development, population density, waste generation quantities, and the collection and transportation system between regions, the industry’s situation varies drastically.

The differentiation at the enterprise level is also obvious: capacity utilization among leading companies is relatively saturated, and their operating performance is outstanding. After compiling financial reports from multiple leading waste-to-power incineration companies, the reporter found that revenues and profits from their municipal waste incineration segments have both maintained steady growth. In the first half of 2025, Hanlan Environment’s net profit from municipal waste incineration business was RMB 627 million, up 13.25% year over year, and waste incineration volumes in recent years have also increased year by year. Relevant executives at Weiming Environmental, in interviews with reporters, said that as of the end of Q3 2025, the company had 56 wholly owned and controlling waste incineration projects in operation, with a designed daily processing scale of about 388,000 tons. Based on full-year 2025 operating data, its projects did not show any obvious issue of being unable to “eat enough.”

“Mismatch between domestic capacity planning and population distribution leads to phased supply-demand mismatches, but that is more of a regional and structural phenomenon rather than a widespread type of excess capacity across the entire industry,” said the above-mentioned relevant executive at Weiming Environmental. From foreign development experience, as economic development continues, there is still room for growth in per-capita waste generation. The current capacity planning of domestic waste incineration plants also leaves a certain amount of room for future waste treatment demand.

Excess capacity is the main cause

Why do some regions end up with a “waste shortage”? One view holds that improvements in waste incineration technology increase processing efficiency, and that this is the cause of the phenomenon. By the end of 2024, China’s daily waste incineration processing capacity exceeded 11 million tons, accounting for about 60% of global total processing capacity—far exceeding the combined totals of North America, Europe, and Japan, with technology levels among the world’s best.

But in the view of experts, technological improvement is not the core reason. Qiu Yanbo, a professor at Beijing Forestry University, said bluntly that waste incineration technology has long been mature. In the past two years, some regions have seen “not enough waste to burn,” and the most important reason is the “incineration plant construction boom” nationwide, which has led to a situation where incineration power plants have supply exceeding demand, resulting in serious excess capacity.

The reporter learned that in the early 21st century, the introduction of the BOT model (Build—Operate—Transfer) and the launch of national subsidy policies attracted large amounts of capital into the waste incineration sector. From 2012 to 2019, the industry enjoyed its golden development period. Even when national subsidies were reduced in 2020, the number of waste incineration plants continued to grow rapidly, up until 2024, when the nationwide number of waste incineration plants exceeded 1,000 and the number of incinerators exceeded 2,000. “The profitability of the waste incineration industry drew follow-the-crowd capital, but many projects did not have sufficiently accurate capacity assessments before construction. Ultimately, processing capacity far exceeded the local actual waste volumes,” Qiu Yanbo said.

Excess capacity directly pushes the industry into a stage of “fighting for stock to secure waste.” New project approvals have dropped sharply, and competition among companies has increasingly focused on winning rights to collect and transport waste for incineration. According to statistics from Guoxin Securities, over the past five years, the number of successful bids, new capacity, and total investment amounts for domestic waste-to-power incineration projects have all shown a downward trend. After reaching a peak of 75 projects in 2021, the number of successful bids fell sharply to 20 in 2024. In 2025, there was a slight rebound, but competition in the industry remains fierce.

Against this backdrop, the process of integrating existing capacity is accelerating, advantages among leading companies are being continuously strengthened, and the survival space for small and medium-sized enterprises is being squeezed further and further. In June 2025, Hanlan Environment completed its acquisition of Yuefeng Environmental. Its daily waste incineration and treatment scale reached 97,590 tons/day, placing it among the top three nationwide and first among A-share listed companies in the sector; in the same year in July, Zhongke Environmental acquired all equity of Guigang Environmental and Pingnan Environmental for RMB 303 million and RMB 51.75 million, respectively. The above-mentioned relevant executive at Weiming Environmental also acknowledged that industry integration opportunities are significant. The company acquired Guoyuan Environmental and Shengyun Environmental in 2021 and 2022. In the future, it will continue to actively look for integration opportunities involving domestic stock projects.

Waste sorting is still necessary

In addition to structural excess capacity, many companies have also found that after waste sorting policies are implemented, the amount of waste directly sent for incineration decreases significantly. The above-mentioned relevant executive at Weiming Environmental said that based on the company’s actual operations, after waste sorting was promoted, the amount of household waste directly incinerated decreased, but the processing volume of organic waste such as food waste and kitchen waste increased.

This also raises questions for many people: if the amount of source waste sent for incineration is insufficient, does that mean waste sorting is no longer necessary? From the perspective of the sound operation of incineration plants and the long-term development of the industry, Qiu Yanbo clearly stated that the necessity of waste sorting has not decreased—it has become even more important.

On the one hand, un-sorted waste can seriously affect the operating efficiency of incinerators and their service life. “Kitchen waste accounts for more than 60% of the total weight of household waste, and its moisture content is as high as 80%. If it is directly incinerated together with other waste, it will greatly reduce incineration efficiency, increase equipment wear and tear, and also generate more leachate, thereby raising treatment costs,” Qiu Yanbo explained.

On the other hand, kitchen waste has greater potential for resource utilization, and all of this is built on waste sorting. “At present, there are two conventional treatment technologies for kitchen waste: one is aerobic microbial digestion to produce high-value organic fertilizer, and the other is using anaerobic microorganisms to convert organic matter into biogas. The implementation of both technologies requires effective waste sorting as a prerequisite.”

From the perspective of Weiming Environmental, although waste sorting may cause fluctuations in the volume of incineration waste entering the plant in the short term, what it brings is long-term resource savings and environmental benefits—an important sign that the waste treatment industry’s development quality is improving.

Worth noting is that stockpiled aged waste buried underground is becoming an important supplementary raw material for waste incineration plants. In recent years, many cities have begun excavating early municipal landfills. While promoting reuse of urban land, they are also sending aged waste into incineration plants in a more environmentally friendly way. The Shenzhen Yulong landfill is a typical case.

Data from Huafu Securities show that in 2024, there were 44 projects nationwide for disposing of aged waste through methods such as public bidding and single-source procurement, with a total successful bid amount of nearly RMB 4.3 billion. “In landfill sites, the biologically degradable portion of aged waste has already been sufficiently broken down, and moisture has also been extracted in the form of leachate, leaving an extremely low moisture content in the remaining non-degradable portion, which makes it very suitable for incineration,” Qiu Yanbo said. Resource utilization of aged waste can, to a certain extent, alleviate the problem of incineration plants being unable to “eat enough,” and it is also an important means of ecological restoration. However, this approach is a temporary fix rather than a cure-all. For the structural excess capacity problem, it ultimately still requires market selection to achieve supply-demand balance.

Downstream into county-level markets, and overseas expansion

When facing the industry dilemma of some regions having “not enough waste to burn,” how should waste incineration companies break through? The Central Urban Work Conference held in July 2025 provided guidance. The meeting made clear that urban development should shift from large-scale incremental expansion to focusing mainly on improving the quality of existing stock. City governance needs to transform development concepts and methods, which also offers new ideas for the transformation and development of the waste incineration industry.

From corporate practice, expanding diversified businesses and building synergistic returns has become a primary choice for many companies. Relying on existing incineration facilities and operating capabilities, companies have been rolling out businesses such as combined heat and power (CHP) and direct connections to green power to strengthen their ability to withstand risks. Data from Huayuan Securities shows that in the first three quarters of 2025, the volume of heat supplied by Green Momentum increased by 112% year over year. Hanlan Environment and Sanfeng Environment’s heat supply volumes increased by 40% and 15.5%, respectively. Yixing Shares and Chengfa Environment’s heat supply volumes also achieved notable growth. Diversified businesses have become an important supplement to company revenue.

Exploring intelligent pathways is also an important direction for industry transformation. Hanlan Environment established an Artificial Intelligence (AI) Joint Research Institute in 2025, building the first AI “super brain” in the environmental protection industry to empower the entire waste incineration process; multiple projects of Sanfeng Environment have achieved smart incineration, significantly improving operational efficiency; Wantong Environment introduced Alibaba Cloud Industrial Brain, using AI technology to reduce secondary pollution and improve the stability of equipment operation and the unit electricity generation from household waste.

In addition, pushing into county-level markets and expanding overseas has become a new track for companies to “fight for waste.” In county-level markets, from late 2022 to early 2023, the country released policy signals for “incineration down to counties,” opening up new market space for the industry. Hanlan Environment’s financial reports show it already provides solid waste treatment services to 77 counties and districts nationwide. Considering the low waste transfer/clearance volumes of towns and counties, companies also developed small-scale incineration facilities to avoid adding excess capacity. Sanfeng Environment’s small-scale waste incineration equipment for county-level areas has already been applied on a market basis. The 200-ton/day packaged small-furnace equipment developed by Everbright Environment has also been successfully used in the Hebei Guangzong waste-to-power project.

Overseas markets have become another key focus for corporate expansion, especially the waste incineration market in Southeast Asia—particularly Indonesia—which has become a “must-win” area for domestic companies. In March 2026, Weiming Environmental won consecutive bids for waste incineration power projects on Bali Island and in Bogor in Indonesia, with the total investment amount for each single project not exceeding USD 175 million. On March 2, Wantong Environment won a bid for an Indonesian waste incineration power project in Nibakasi. On February 4, Zhongke Qingfeng and an Indonesian company signed an investment agreement for a waste incineration power project, and domestic companies’ pace of “going global” continues to accelerate.

“Going global is an active choice made by companies based on their own technological strengths and long-term development needs,” said the relevant executive at Weiming Environmental. Indonesia, as a country with a large population, has huge demand for waste treatment facilities. The local government plans to build 33 waste incineration power plants, meaning the potential market scale is vast.

According to incomplete statistics from the E20 Research Institute, the current scale of overseas waste incineration projects from Chinese environmental enterprises that have been completed, are under construction, and have been signed is already over 50,000 tons/day. As of May 2025, 79 projects have been completed, and regions such as Southeast Asia, South Asia, and Central Asia have become key areas for deployment. From “fighting for waste” to “building internal capabilities” and expanding markets, the waste incineration industry is undergoing structural adjustments, seeking new development equilibrium points.

Endless information and precise interpretation—All available on the Sina Finance APP