Anyone reading AcuComm’s waste reports will know there is a lot going on in China. Since January 2018, AcuComm has collected information on 123 new waste projects in China. The majority of these (87, or 70%) are for WtE incineration of waste. They have a combined estimated value of US$13.2 billion, or US$106 million each, with a feedstock throughput of 46.3 million tonnes (roughly 1,200 tonnes per day on average) and power generation of 2,095 MW (17 MW each).
The map below shows the distribution of these investments; principally in the richer areas of the east, but increasingly in the major urban centres further inland. China is clearly experiencing something of a waste investment boom. Remember, these projects are just those announced over the past year.
Source: AcuComm database, March 2019
The principal driver of this investment is rapid urbanisation and economic growth, allied to a historic lack of modern waste facilities. I mentioned Shenzhen in an earlier article; this city near Hong Kong has grown from near zero to 12 million people in just a few decades. This has been the consequence of government policies, which have striven to create wealthy urban centres, largely in the east. This has been all-too successful from a waste management point of view, as modern facilities have either not been built or have been overwhelmed by demand. In recent years, the Chinese government has altered its focus to greater development of previously-poorer cities further west and inland, such as Chongqing. These places are far from empty. Chongqing municipality famously has over 30 million people, although it should be noted that the city itself accounts for only a fraction of this.
The traditional method of waste disposal in China has been, at best, landfill which is often unmanaged, or simple dumping of waste outside a city’s boundaries. This has become unpopular and increasingly difficult to ignore. No wonder therefore that China’s municipal authorities have tended to seize on waste incineration as a relatively quick and easy way to ameliorate the problem. China is building, or plans to build, some of the largest waste-to-energy facilities in the world over the next few years. There is perhaps an element of competition here, as city governments compete with each other to be seen to be addressing the issue with certainty.
So, China is a boom market for waste plants, which should gladden the international industry. But does it? The market is heavily concentrated in the hands of Chinese companies. The most important of these are China Everbright International, based in Hong Kong, and Chongqing Sanfeng Covanta Environmental Industry. A lot of waste plants have been built using Chinese companies alone, although there is a degree of technology transfer. There are a handful of European companies active in this respect, headed by Martin GmbH fur Umwelt und Energietechnik, which mainly provides equipment for Chongqing Sanfeng Covanta, as well as a few major Japanese players such as Hitachi Zosen and Mitsubishi. Equipment suppliers or contractors from the USA, Canada or the UK appear to be almost entirely absent from the market.
Why is this? It would seem that China remains a difficult market, in perception and maybe reality too. Anecdotal evidence suggests that worries about intellectual property persist, alongside a perception of bureaucracy, corruption and political interference. Nor should China be seen as an easy place to throw up any old plant. A lot of prestige attaches to adherence to international standards, and even in these cases, developments can be held up for years in the face of popular opposition. For example, the Beijing city government has long had plans to build more plants than it has ever been politically able to do. Click here for some clips from a 2010 documentary on the subject.
A small number of companies outside China have taken the plunge, headed by Martin GmbH, which is clearly concentrating on China as a principal export market. Should others look at following suit? Waste generation in China is only going to increase as the economy expands and the average wealth of the Chinese people rises accordingly. And while the current focus appears to be squarely on WtE incineration, other areas, such as environmentally-aware recycling, sorting and advanced resource recovery, are severely under-developed but will surely be needed in future. The market may be difficult, but the opportunities are clearly there for anyone with a long term perspective.
Written by Andy Crofts, Chief Data Analyst.