In recent years, China has been facing a shortage of garbage for incineration, leading to idle capacity in waste incineration plants. This has resulted in a bizarre phenomenon where localities are scrambling to collect and bury stale waste, with reports of instances where money is being used to purchase garbage. Analysts believe that the shortage of garbage for incineration, akin to the price drops in electric cars, is a consequence of excessive support from the Chinese government, reflecting the industry over-support and excess capacity issues within the Chinese economy.
According to the preliminary estimates from the Chinese Ministry of Ecology and Environment’s “2024 China Ecological Environment Status Bulletin,” the total urban residential garbage removal volume in 2024 was 262.3662 million tons, equivalent to about 718,800 tons being removed daily. However, the total urban residential garbage processing capacity in the country is 1.1555 million tons per day. The severe surplus in garbage processing capacity has led to the issue of insufficient garbage for incineration.
As reported by the China Solid Waste Network, several cities and counties in Shandong Province initiated projects to excavate and transport stale waste from landfill sites in 2023, including counties like Shanghe County in Jinan, Wendeng District in Weihai, Juancheng County in Heze, Dongming County in Heze, Chiping District in Liaocheng, Wulian County in Rizhao, Feixian County in Linyi, and Dongping County in Tai’an.
As of 2023, Shandong Province had 100 operational residential waste incineration facilities with an incineration capacity of 85,900 tons per day (about 31.35 million tons per year). However, the incineration volume of residential waste in Shandong Province was 16.05 million tons per year (as per data from the 2021 statistical yearbook). Excavating and incinerating stale waste from landfill sites provided some relief to incineration plants facing underutilization.
In July 2021, during an inspection in Henan province, the Ministry of Ecology and Environment of the CPC Central Committee reported that some newly built garbage incineration power plants were operating at only 50% capacity. By the end of October 2022, the city of Hebi in Henan Province redirected all residential waste from towns, counties, and districts under its jurisdiction, coordinated the transfer of 90,000 tons of residential waste from neighboring Anyang city, and initiated excavation of existing landfill waste, unearthing 91,000 tons of stale waste to compensate for the shortfall. In 2021, Jinhua city in Zhejiang Province began planning to excavate and incinerate 260,000 tons of stale waste to address emergency landfill issues.
In addition to excavating stale waste, there have been instances of paying for garbage. According to a report by the Zhejiang local media Dongfang Weekend, two garbage incineration plants in Hunan were offering “introduction fees” to property management companies for garbage supply, providing a rebate of 50 yuan per ton of waste. This activity was subsequently reported by the Central Environmental Protection Inspection Team.
According to research by the E20 Institute, the average operating rate of garbage incineration plants in China is approximately 60%, with 40% of capacity remaining idle, leading to inconsistent operation levels. The E20 Institute, established in 2003, was formerly known as the Water Policy Research Center of Tsinghua University.
A recent report in “Huashang Taolue” mentioned that in July 2020, a waste incineration power project in rural Xianyang, Shaanxi was connected to the grid for power generation, with a daily waste processing capacity of 1,500 tons. However, the urban area of Xianyang was generating only 800 tons of residential waste daily.
One waste incineration plant in Pucheng County, Weinan, Shaanxi has the capacity to incinerate 182,500 tons of waste annually but actually processes only 133,000 tons. The waste incineration power plant in Hanzhong City, Shaanxi faced interruptions in operations as inadequate waste supply forced a shutdown for one month after every three months of operation.
A recent analysis by “The Paper” studied the operational status of 2138 waste incineration furnaces in 2024 through the monitoring platform for incineration power plants. It revealed that 1267 furnaces had operational rates exceeding 90% throughout the year, accounting for 59.2% of the total. Additionally, 107 furnaces had stoppage times exceeding 50%, constituting 5.0%.
David Wong, an economic scholar based in the United States, explained to Epoch Times that the absurdity of insufficient garbage for incineration in China underscores three main levels of issues.
The first issue lies in the misalignment of capacity. The Chinese government’s excessive subsidies for waste incineration power generation have led to an oversupply of incineration capacity. According to E20 Environmental Platform’s chief partner Fu Tao in the 2020 article “Introduction to China’s Environment,” in 2003, the Chinese government shifted responsibility for waste incineration from the government to open franchise operations and promoted the BOT model for waste incineration power generation (where the government grants planning projects to private enterprises for construction, operation, and management, eventually transitioning back to government ownership after a set period).
In 2006, enhanced subsidies were introduced for renewable energy power generation projects, making waste incineration power more lucrative.
Writer Gao Tianyou of the Hong Kong “Sing Tao Daily” expressed a similar viewpoint, suggesting that the shortage of garbage for incineration stems from local governments heavily subsidizing waste incineration plants for the sake of performance KPIs, ultimately resulting in severe overcapacity issues.
By 2023, China had already achieved a 100% urban garbage processing rate, yet there were still 55 new waste incineration projects initiated. From 2017 to 2021, an average of around 103 new waste incineration power plants were commissioned annually in China. In 2019, Henan province launched tenders for 20 waste incineration power generation projects, while Hebei even initiated 37 projects.
An article in “Huashang Taolue” mentioned that to date, there are over 2,100 waste incineration plants worldwide, with China hosting 1,010 incineration enterprises, accounting for nearly half of the total.
David Wong highlighted that a second reason for the insufficient waste for incineration in China is the economic slowdown resulting in reduced consumption, declining export orders, and consequently, less waste generated from production and living. Lack of waste does not signify growth or environmental protection but indicates stagnation in consumption, contraction in production, disrupted logistics, and an overall reduction in economic activities.
Statistics show that prior to 2013, the annual increase in national residential waste removal volume exceeded 10%, but there was a significant slowdown thereafter. From 2019 to 2023, waste volume increased from 2.42 billion tons to 2.54 billion tons, with an average annual growth rate of only about 1%, significantly lower than the GDP growth rate.
It is noteworthy that China’s key economic indicators such as GDP, CPI, and unemployment are sometimes suspected of containing “water,” while waste production to some extent can serve as a reference for comparison.
Wong pointed out that the shortage of waste for incineration reflects a deep-seated distortion in China’s economy, with internal circulation permeating various industries, including the waste management sector facing its own challenges.
The waste incineration industry bears similarities to the electric vehicle industry, which has recently experienced internal circulation issues. Fueled by subsidies and support from higher-tier and local governments in China, numerous automotive manufacturers ventured into the market. However, with increasing automotive production capacity, coupled with obstructed exports and a continual economic slowdown in China, market competition intensified, leading to a wave of bankruptcies among electric vehicle brands, resulting in significant losses in investments amounting to billions. With waste incineration plants now facing underutilized capacity and declining efficiency, following in the footsteps of the electric vehicle industry is inevitable.