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

Securities Times reporter Zhuo Yong

“Now waste incineration plants have more than enough waste.” Yang Bo (a pseudonym), who has been deeply involved in the waste treatment industry for over a decade, is at a loss. He works for a waste incineration plant in South China and has firsthand witnessed a major transformation in the industry: from the once troublesome “city-surrounding by garbage” to today, with some incineration plants being forced to shut down because they “can’t get enough to burn,” and even weird phenomena like “racing to get garbage” and “paying to buy garbage” appearing within the industry. Data show that currently China has more than 1,000 waste incineration plants and over 2,000 incinerators. These facilities created to solve the “city-surrounding by garbage” problem—why have they ended up facing a new predicament of “feeding-unfilled furnaces”?

The Securities Times reporter combed through publicly available information from multiple listed waste-to-power incineration companies, talked with industry insiders and academic experts, and attempted to uncover the truth behind the current situation in the waste incineration industry.

Whose garbage isn’t enough to burn?

Inside a waste incineration plant in South China, in a massive reinforced-concrete enclosed municipal solid waste storage pit, household waste is piled up like a mountain. Plastic bags, paper scraps, miscellaneous items, and a small amount of industrial construction waste are mixed together. With giant mechanical grab buckets moving back and forth, the waste is grabbed and then sent to the incinerators. “The incinerator can’t be shut down; it needs a steady supply of garbage.” Yang Bo told the reporter that the incineration plant he is currently at is operating at an extremely tight balance in capacity utilization, but many peers in the industry have already encountered the problem of insufficient waste amounts.

Data from the Ministry of Housing and Urban-Rural Development’s 《2024 Statistical Yearbook of Urban and Rural Construction》 show that in 2024, China’s 1,129 municipal solid waste incineration plants in cities and counties processed 268 million tons of waste. The overall capacity utilization rate is about 63.22%, basically in line with 63.93% in 2023. This figure is below the 70% minimum treatment volume required by the national standard GB/T 18750-2022 《Municipal Solid Waste Incinerators and Waste Heat Boilers》, meaning that China’s waste incineration industry as a whole is already operating with excess capacity.

The divergence in capacity utilization is especially evident by region. Judging by province, in 2024 the waste incineration capacity utilization rates in Xinjiang, Sichuan, Ningxia, and Qinghai were all above 80%. In Tibet, there was even a situation of incineration above rated load. In contrast, places such as Hainan, Jiangxi, Guangdong, Hebei, Zhejiang, and Tianjin had capacity utilization rates below 60%. The southeastern coastal provinces have become the worst-hit areas of “can’t get enough to feed.” Meanwhile, waste incineration demand in the northwest is relatively saturated.

Even within the same province, this kind of divergence is also quite prominent. Taking Guangdong as an example, the provincewide waste incineration capacity utilization rate is 54.41%, ranking fourth from the bottom nationwide. Shenzhen, however, is the opposite. In 2024, Shenzhen’s five waste incineration plants had a designed daily processing capacity of 18,025 tons, while actual processing reached 18,722.7 tons, with a capacity utilization rate of about 103%. Of them, three plants are operating in an overload state. By stark contrast, in Western Guangdong, Yangjiang Yangchun Haolou’s coordinated municipal solid waste incineration project had a capacity utilization rate of only 54.2% in 2024. Due to differences in economic development, population density, waste generation volumes, and collection-and-transport systems across regions, the industry landscape varies dramatically.

The divergence at the enterprise level is also clear. The top companies have relatively saturated capacity utilization and strong operating performance. The reporter reviewed the financial reports of multiple leading waste-to-power incineration enterprises and found that the revenue and profits of their municipal solid waste incineration segments have both maintained stable growth. In the first half of 2025, Hanlan Environment’s net profit from its municipal solid waste incineration business was 627 million yuan, up 13.25% year over year, and in recent years its incinerated waste volumes have also been rising year by year. Relevant负责人 of Weiming Environmental said in an interview with the reporter that as of the end of the third quarter of 2025, the company has 56 wholly owned and controlled waste incineration projects in operation, with a designed daily processing scale of about 3.88 million tons. Based on 2025 full-year operating data, its projects have not shown any obvious “can’t get enough to feed” problem.

“Some domestic regions’ capacity planning doesn’t match population distribution, leading to a temporary mismatch between supply and demand. But this is more a regional, structural phenomenon rather than widespread excess capacity across the entire industry.” The relevant负责人 of Weiming Environmental said. From international development experience, as the economy develops, there is still room for municipal waste generation per capita to increase. The capacity planning of domestic waste incineration plants also reserves some space for future waste treatment demand.

Excess capacity is the main cause

Why do some regions experience a “waste shortage”? One view holds that improvements in waste incineration technology raise processing efficiency, and that this is the reason behind the phenomenon. By the end of 2024, China’s daily waste incineration capacity exceeded 11 million tons, accounting for about 60% of the world’s total processing capacity. The processing scale is far higher than the combined total of Europe, the United States, and Japan, and the technological level is among the world leaders.

But in experts’ view, technology improvement is not the core reason. Qilang, a professor at Beijing Forestry University, said directly that waste incineration technology has long been mature. In the past two years, some regions have seen “not enough waste to burn.” The most important reason is the “incineration-plant construction boom” across the country, which has led to incineration power plants having supply that exceeds demand, resulting in serious excess capacity.

The reporter learned that at the beginning of the 21st century, the introduction of the BOT model (build—operate—transfer) and the release of national subsidy policies attracted large amounts of capital into the waste incineration sector. From 2012 to 2019, the industry enjoyed a golden development period. Even when facing the decline in national subsidies in 2020, the number of waste incineration plants continued to grow rapidly, until 2024, when the number of waste incineration plants nationwide exceeded 1,000 and there were over 2,000 incinerators. “The profitability of the waste incineration industry lured funds in, following the trend. But many projects didn’t have sufficiently accurate capacity assessments before building the plants, which ultimately led to processing capacity far exceeding the actual local waste generation volume.” Qilang said.

Excess capacity directly pushes the industry into the stage of “fighting for existing contracts—competing to secure garbage.” The number of newly approved projects drops significantly, and competition among companies focuses on vying for waste incineration collection-and-transport rights. Data from Guoxin Securities show that over the past five years, in domestic waste-to-power incineration projects, the number of winning bids, new capacity additions, and investment amounts have all shown a declining trend. After reaching a peak of 75 bids in 2021, the number of winning bids dropped sharply to 20 in 2024. Although there was a slight recovery in 2025, competition in the industry remains fierce.

Against this backdrop, the pace of industry consolidation of existing capacity keeps accelerating; the advantages of leading companies continue to strengthen, while the survival space for small and mid-sized enterprises is being continually squeezed. In June 2025, Hanlan Environment completed its acquisition of Guangdong Feng Environmental? (Yuefeng Environmental), and its municipal solid waste incineration processing scale reached 97,590 tons per day, ranking among the top three in the national industry and #1 among A-share listed companies. In the same year in July, Zhongke Environmental acquired the entire equity interests of Guigang Environmental and Pinnan Environmental for 303 million yuan and 51.75 million yuan, respectively. The relevant负责人 of Weiming Environmental above also frankly acknowledged that consolidation opportunities in the industry are significant. The company acquired Guoyuan Environmental and Shengyun Environmental in 2021 and 2022, respectively. In the future, it will still actively monitor consolidation opportunities for existing domestic projects.

Waste sorting is still necessary

Besides structural excess capacity, many companies also found that after waste sorting policies were implemented, the amount of waste directly sent for incineration decreased significantly. The relevant负责人 of Weiming Environmental said that based on the company’s actual operations, after waste sorting was promoted, the amount of household waste directly incinerated entering the plant declined. But the processing volume of organic waste such as food waste and kitchen waste increased.

This also leads many people to wonder: If the source amount of waste intended for incineration is insufficient, does that mean waste sorting is no longer necessary? From the perspective of the benign operation of incineration plants and the long-term development of the industry, Qilang clearly stated that the necessity of waste sorting has not decreased; instead, it has become even more important.

On the one hand, un-sorted waste would seriously affect the operating efficiency and service life of incinerators. “Kitchen waste makes up more than 60% of the total weight of household waste and has a moisture content as high as 80%. If it is directly incinerated together with other waste, it would significantly reduce incineration efficiency and increase equipment wear and tear. At the same time, it would produce more leachate and raise treatment costs.” Qilang explained.

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

Hanlan Environment believes that while waste sorting may cause fluctuations in the amount of incineration waste entering the plant in the short term, what it brings is long-term resource savings and environmental benefits—an important marker of improved development quality in the waste treatment industry.

Worth noting is that the stockpiled, sedimentary-aged waste buried deep underground is becoming an important supplemental raw material for waste incineration plants. In the past two years, many cities have started excavating early landfill sites. While promoting the reutilization of urban land, they send aged waste into incineration plants in a more environmentally friendly way. Shenzhen Yulong Landfill is a typical example.

Statistics from E20 Research Institute show that in 2024, there were 44 aged-waste-to-incineration disposal projects completed through open bidding, single-source procurement, and other methods nationwide, with a total winning bid amount of nearly 4.3 billion yuan. “For landfill’s aged waste, the biodegradable portion has already been sufficiently decomposed, and the moisture has also been separated as leachate, leaving a very low moisture content in the remaining non-degradable portion, which is highly suitable for incineration.” Qilang said. Resource utilization of aged waste can, to a certain extent, help ease the “can’t get enough to feed” problem faced by incineration plants, and it is also an important approach for ecological restoration. However, this method only treats the symptoms rather than the root cause. The structural excess capacity problem ultimately still needs market selection to achieve supply-demand balance.

Going deeper into county-level areas and expanding overseas

In response to the industry dilemma in some regions where “there isn’t enough waste to burn,” how should waste incineration enterprises break through? The Central Urban Work Conference held in July 2025 provided direction. The meeting made it clear that urban development should shift from large-scale incremental expansion to prioritizing the quality improvement of existing stock. Urban governance needs to change development concepts and approaches. This also provides new ideas for the transformation and development of the waste incineration industry.

From enterprise practices, expanding diversified businesses and building synergistic returns has become a primary choice for many companies. Leveraging existing incineration facilities and operating capabilities, companies are laying out businesses such as combined heat and power (CHP) and direct connection to green electricity, improving their ability to withstand risks. Data from Huayuan Securities show that in the first three quarters of 2025, the green power heating supply increased 112% year over year. Hanlan Environment and Sanfeng Environment’s heating supply increased 40% and 15.5%, respectively. Yongsing Co., Ltd. and Chengfa Environment’s heating supply also achieved notable growth. Diversified business has become an important supplement to enterprise revenue.

Exploring an intelligent path is also an important direction for industry transformation. In 2025, Hanlan Environment established an Artificial Intelligence (AI) Joint Research Institute to build the first AI “super brain” in the environmental protection industry, empowering the entire waste incineration process. Multiple projects by Sanfeng Environment have achieved smart incineration, significantly improving operational efficiency. Wantou Environment introduced Alibaba Cloud’s Industrial Brain; using AI technology to reduce secondary pollution and improve the stability of equipment operations and the electricity output per unit of municipal solid waste.

In addition, moving into county-level markets and deploying overseas markets has become a new track for companies to “compete for garbage.” In county-level markets, from the end of 2022 to the beginning of 2023, the country released policy signals for “incineration into counties,” opening up a new market space for the industry. Hanlan Environment’s financial report shows it already provides solid waste treatment services for 77 counties and county-level districts nationwide. Given that waste transportation volumes for county towns are relatively low, the company also specifically developed scaled-down incineration facilities to avoid adding excess capacity. Sanfeng Environment’s small-scale waste incineration equipment for county-level applications has achieved market-based deployment. The 200 tons/day small-furnace complete equipment developed by Everbright Environment has also been successfully applied to the Hebei Guangzong waste-to-power project.

Overseas markets have also become another key area for enterprise deployment, and among them, the waste incineration market in Southeast Asia—especially Indonesia—has become a “must-win” territory for domestic companies. In March 2026, Weiming Environmental won tenders one after another for waste incineration power generation projects in Bali and Bogor in Indonesia, with the total investment amount for each individual project not exceeding 175 million USD. On March 2, Wantou Environment won the tender for an Indonesian waste incineration power generation project in Mojoc? (勿加泗). On February 4, Zhongke Qingfeng and an Indonesian company signed an investment agreement for a waste incineration power generation project. Domestic companies’ pace in going out continues to accelerate.

“Going abroad is a proactive choice made by companies based on their own technological advantages and long-term development.” The relevant负责人 of Weiming Environmental said. Indonesia, as a populous country, has enormous demand for waste treatment facilities. The local government plans to build 33 waste incineration power plants, with a vast potential market size.

According to incomplete statistics from E20 Research Institute, the current scale of overseas incineration projects of Chinese environmental protection companies that have been completed, are under construction, and have signed agreements has exceeded 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 of deployment. From “competing to secure garbage” to “strengthening internal capabilities and expanding the market,” the waste incineration industry is undergoing structural adjustment and searching for new development balance points.

Massive information, precise interpretation—everything is available on the Sina Finance app