In-Depth Investigation | Garbage Incineration Plants "Not Operating at Full Capacity" Draws Attention, Is There Really a Shortage of Garbage to Burn?

Is China’s Waste Incineration Plant Really Facing a “Hunger” Crisis?

“Right now, waste incineration plants still need more waste than they have,” said Yang Bo (pseudonym), who has worked in the waste treatment industry for over ten years. He is employed at a waste incineration plant in South China and has personally witnessed the city transforming from a “garbage city” to a situation where some incineration plants are forced to shut down due to “not enough waste,” and even cases of “scrambling for waste” and paying to buy waste have emerged.

Data shows that there are currently over 1,000 waste incineration plants in China, with more than 2,000 incinerators. These plants, originally built to solve the “garbage city” problem, are now facing a new challenge: “not enough waste to burn.” A review of public information from several listed waste-to-energy companies, along with interviews with industry insiders and experts, attempts to uncover the truth behind the current shortage of waste.

Whose waste is not enough?

At a waste incineration plant in South China, a massive reinforced concrete closed pit is piled high with household waste, mixed with plastic bags, paper scraps, debris, and industrial construction waste, creating a chaotic and dense visual impact. On-site, a large mechanical grab is seen repeatedly collecting waste and transporting it to designated locations that lead to the incinerator. “To keep the incinerator running, we need a continuous supply of waste,” Yang Bo told reporters. He explained that his plant is currently operating at near full capacity, while many other incineration plants are experiencing a shortage of waste.

This phenomenon is supported by data. According to the 2024 Urban and Rural Construction Statistical Yearbook published by the Ministry of Housing and Urban-Rural Development, in 2024, China’s 1,129 urban and county waste incineration plants burned a total of 268 million tons of waste, with an overall capacity utilization rate of about 63.22%, roughly the same as 2023’s 63.93%. This figure is below the national standard GB/T 18750-2022 “Domestic Waste Incineration Boilers and Waste Heat Boilers,” which requires a minimum incineration rate of 70%, indicating that China’s waste incineration industry is generally in a state of overcapacity.

Further analysis of the yearbook data reveals that in 2024, Xinjiang, Sichuan, Ningxia, and Qinghai had capacity utilization rates above 80%, with Tibet even experiencing overloading. Conversely, Hainan, Jiangxi, Guangdong, Hebei, Zhejiang, and Tianjin had rates below 60%. This shows significant regional differences: using the “Hu Huanyong Line” (a demographic boundary in China), the northwest region’s waste incineration capacity is relatively saturated, while the southeast region is comparatively overcapacity, making “not enough waste” more likely.

Within the same province, disparities also exist due to differences in economic development, population density, waste generation, and collection systems. For example, Guangdong’s overall capacity utilization rate was 54.41%, ranking fourth from the bottom nationwide. However, according to local government disclosures, in 2024, Shenzhen’s five waste incineration plants had a combined designed capacity of 18,025 tons per day, but the actual processing capacity reached 18,722.7 tons per day, with an overall utilization rate of about 103%. Three of these plants are operating over capacity. In stark contrast, projects in western Guangdong, such as the Yangchun Haishuo collaborative waste incineration project, had a utilization rate of only 54.2% in 2024.

The differentiation is also clear at the corporate level. Some leading waste incineration companies are relatively saturated in capacity. Review of several major companies’ financial reports shows strong performance in the household waste incineration sector. For example, Hanlan Environment reported a net profit of 627 million yuan in the first half of 2025, a 13.25% increase year-over-year, with waste incineration volumes steadily rising in recent years.

A relevant executive from Weiming Environmental told Securities Times that by the end of Q3 2025, the company operated 56 wholly owned and controlling waste incineration projects, with a designed daily capacity of about 38,800 tons. Based on full-year operational data, the company’s incineration projects are not experiencing a “not enough waste” problem.

“We are also aware that in some regions, due to mismatched capacity planning and population distribution, there are temporary supply-demand mismatches. But these are more regional and structural phenomena rather than a widespread overcapacity issue,” the executive said. From international experience, as the economy develops, per capita waste production may increase, and domestic waste incineration capacity still has room for future growth.

Overcapacity as the Main Cause

Why do some areas face a “lack of waste” problem? Some believe that technological improvements have increased incineration efficiency. By the end of 2024, China’s daily waste incineration capacity exceeded 1.1 million tons, accounting for about 60% of the world’s total, far surpassing the combined capacity of Europe, Japan, and the United States, leading globally.

However, some experts argue that this is not the fundamental reason for the “waste shortage” in certain regions. “The shortage of waste to burn is not simply due to technological progress,” said Professor Dang Yan from Beijing Forestry University. He pointed out that waste incineration technology has been mature for a long time, and the main reason for the recent “waste shortage” is the surge in new incineration plants nationwide, leading to an oversupply of incineration capacity.

It is understood that the early 21st-century introduction of the BOT model and government subsidy policies attracted many companies into the waste incineration sector, leading to a golden period from 2012 to 2019. Even after 2020, when subsidies declined, the number of incineration plants continued to grow rapidly. According to the Ministry of Ecology and Environment, by 2024, China had over 1,000 waste incineration plants with more than 2,000 incinerators.

“Because waste incineration is a profitable industry, capital keeps flowing in, but inaccurate capacity assessments before construction have led to an excess of processing capacity relative to actual waste generation,” Dang Yan explained.

Overcapacity has pushed the industry into a phase of “competition for existing waste,” with fewer new projects and fierce competition among companies for waste collection and transportation rights. Over the past five years, the number of successful bids for waste-to-energy projects, new capacity, and investment amounts have all declined. According to Guoxin Securities, the peak of bidding occurred in 2021 with 75 projects, then sharply decreased to 20 in 2024. Although there was a slight rebound in 2025, competition remains intense.

Leading companies continue to strengthen their advantages, while smaller firms face shrinking opportunities, signaling industry consolidation. For example, Hanlan Environment, after acquiring Yuefeng Environmental in June 2025, reached a waste incineration capacity of 97,590 tons per day, ranking among the top three domestically and leading A-share listed companies. In July 2025, Zhongke Environmental acquired Guigang Environmental and Pingnan Environmental for 303 million yuan and 51.75 million yuan, respectively. Weiming Environmental’s executive also stated that the industry has opportunities for consolidation, and the company has completed acquisitions of Guoyuan Environmental and Shengyun Environmental in 2021–2022, with plans to actively pursue further integration of domestic existing projects.

Is Waste Sorting Still Necessary?

Besides structural issues, many companies have noticed that since the implementation of waste sorting policies, the amount of waste suitable for incineration has decreased. Weiming Environmental noted that, based on their operational experience, waste sorting has led to a reduction in direct incineration volume, although organic waste like kitchen scraps has increased.

Does the shortage of source waste mean waste sorting is no longer necessary? From the perspective of maintaining healthy incinerator operation, Dang Yan emphasized that waste sorting remains essential. “Unsorted waste directly burned is not good for the incinerator’s operation. Kitchen waste accounts for over 60% of total waste weight, with moisture content up to 80%. Burning it directly affects efficiency and lifespan, and increases costs for leachate treatment.”

Moreover, compared to direct burning, kitchen waste has higher resource utilization potential. “Currently, there are two main technologies for processing kitchen waste: one involves aerobic microbial fermentation to produce high-value organic fertilizer, and the other uses anaerobic microbes to convert organic matter into biogas. But these technologies rely on waste sorting.”

Weiming Environmental also believes that although the volume of waste entering incineration plants may fluctuate in the short term, the long-term benefits include resource savings and environmental protection, which are signs of improved industry quality.

In addition to “scrambling for waste” and paying for waste, another significant source is stockpiled waste buried underground for years. In recent years, many cities have begun excavating early landfills to promote land reuse and supply incineration plants with more environmentally friendly raw materials. Shenzhen Yulong Landfill is a typical example.

According to Huafu Securities, in 2024, 44 waste incineration or landfill projects involving the incineration of old waste through open bidding or single-source procurement were completed, with a total bid amount of nearly 4.3 billion yuan.

“Decomposable parts of old buried waste have been fully degraded by underground microbes, and water has been drained as leachate, leaving the remaining non-degradable parts with significantly reduced moisture content, making them suitable for incineration. This can help alleviate overcapacity issues to some extent and is also a form of ecological restoration,” Dang Yan said. However, he believes that permanently solving the overcapacity problem ultimately requires market-driven adjustments; this approach is more of a temporary fix, and structural overcapacity must be resolved through market selection until supply and demand are balanced.

“Downsizing” and Going Overseas

What if waste incineration plants still “don’t have enough waste”? In July 2025, the Central Urban Work Conference emphasized shifting from large-scale expansion to quality improvement of existing stock. The meeting pointed out that urban governance should adapt proactively to changing circumstances, transforming development concepts and methods. This provides new perspectives and actions to address the “waste shortage” dilemma.

On one hand, companies are expanding diversified operations based on existing facilities and capabilities, such as combined heat and power (CHP) and direct green electricity connections, to create synergistic benefits and enhance risk resistance. Huayuan Securities reported that in the first three quarters of 2025, green power supply and heating increased by 112%, with Hanlan Environment and Sanfeng Environment’s heating capacity growing by 40% and 15.5%, respectively. Yongxing Shares and Chengfa Environment also saw significant growth. Sanfeng Environment successfully bid for the Youyang waste incineration heating project in the first half of 2025, which mainly provides heating and is a benchmark for small-scale county projects.

On the other hand, efforts are underway to develop intelligent waste incineration pathways. Hanlan Environment established an AI joint research institute in 2025, creating China’s first “superbrain” for the environmental protection industry. Several projects by Sanfeng Environment have successfully implemented smart incineration. Wangneng Environment introduced Alibaba Cloud’s Industrial Brain to further reduce secondary pollution and improve equipment stability and unit power generation from household waste.

Additionally, companies are actively seeking waste sources in county towns and overseas markets. Since late 2022 and early 2023, multiple government departments, including the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development, have issued documents promoting “waste incineration in counties.” Many companies have responded, targeting county and township areas. Hanlan Environment’s financial reports show service coverage for 77 counties and districts nationwide. To avoid further overcapacity, some companies are developing small-scale facilities suitable for counties and below. Sanfeng Environment has successfully developed and commercialized small-scale incineration equipment for counties. Everbright Environment is developing 200-ton-per-day small-scale units, currently in installation and commissioning in Hebei’s Guangzong project.

In overseas markets, Southeast Asia, especially Indonesia, has become a “hot spot.” In March 2026, Weiming Environmental won bids for waste-to-energy projects in Bali and Moluccas, with investments not exceeding $175 million each. Wangneng Environment also secured a project in Indonesia’s Muara Gembong. In February, Zhongke Qingfeng signed an investment agreement for a waste-to-energy project with PT. Sumber Kamulyan Nusantara in Indonesia.

A Weiming Environmental executive told reporters that going overseas is a strategic choice based on their technological advantages and long-term planning. “Indonesia, with its large population, has a huge demand for waste treatment facilities. The government plans to build 33 waste-to-energy plants, creating a vast potential market and providing a new development platform for our company.”

According to E20 Research Institute, China’s overseas waste incineration projects—those completed, under construction, or signed—exceed 50,000 tons per day. By May 2025, 79 projects had been built, with many located in Southeast Asia, South Asia, and Central Asia.

Proofread by: Li Lingfeng