In-Depth Analysis of the Impact of 'Waste-Free City' Construction Policies on Environmental Protection Industry Investment

Based on collected policy information and industry data, I will systematically analyze the impact of the ‘Waste-Free City’ construction policies on investments in the environmental protection industry.

---

On January 13, 2025, the State Council Information Office held a regular policy briefing, where Li Gao, Vice Minister of the Ministry of Ecology and Environment, announced:

, with over . to continue ‘Waste-Free City’ construction [1].

---

Based on the policy framework and industry data, the 560 billion RMB solid waste management investment mainly flows into the following

:

• Construction and upgrading of waste incineration treatment facilities
• Co-processing facilities for food waste
• Harmless treatment and resource utilization of fly ash

In 2025, the number of bid-winning domestic waste incineration power generation projects rebounded to , with new capacity of and a cumulative investment of approximately , representing a year-on-year growth of [2]. As of 2024, the national domestic waste incineration treatment capacity has reached , completing the 14th Five-Year Plan target ahead of schedule [2].

Sanfeng Environment (54 projects in operation, designed treatment capacity of 42,500 tonnes per day), Everbright Environment, Hanlan Environment, etc. [3]

• Regional centralized hazardous waste disposal facilities
• Hazardous waste collection and transportation system for small and micro enterprises
• Pilot projects for centralized collection and storage of hazardous waste in industrial parks

The inter-provincial “white list” system for hazardous waste in the Yangtze River Delta region has been officially implemented, promoting regional collaborative disposal [4]. The construction of a medical waste collection, transportation and disposal system continues to advance to ensure emergency response capabilities for major public health incidents.

Sub-Sector	Market Characteristics	Growth Potential
Waste Mineral Oil	Dominated by leading enterprises	Steady Growth
Waste Lead-Acid Batteries	Improved recycling system	Moderate Growth
Laboratory Waste	Emerging Blue Ocean	High Growth
Halogen-Containing Organic Waste	Tight production capacity	Supply Shortage

• Increase the resource utilization rate of construction waste to
  65%
• The proportion of recycled aggregates replacing natural sand and gravel exceeds
  50%
• Promote the application of recycled construction waste aggregates in construction and road engineering [5]

The general industrial solid waste sector is exploring collaborative disposal with domestic waste, such as co-incineration of sludge and general solid waste [4].

• Large-scale utilization of bulk industrial solid waste (tailings, gangue, metallurgical slag, etc.)
• Construction of green mines and “waste-free” mining areas
• Exploration of industrial solid waste reduction paths in key industries [5]

Leading enterprises in metal smelting, papermaking, automobile manufacturing, etc., cooperate with renewable resource recycling and processing enterprises to build integrated green sorting, processing and distribution centers for waste steel, non-ferrous metals, waste paper, etc., as well as waste power battery recycling centers.

Professor Wang Kaijun from the School of Environment, Tsinghua University, pointed out that the potential of the organic solid waste treatment sector cannot be ignored. If the potential installed capacity of the is calculated as 20 times that of Germany, the corresponding turnover can reach , and the organic solid waste industry will become a in the next decade [6].

• Construction of straw collection and storage systems
• Resource utilization of livestock and poultry manure
• Recycling of agricultural film and promotion of degradable alternatives

The “Ten Measures for Solid Waste Management” clearly requires the development of the “Internet + Recycling” model, and deepens the “integration of two networks” between domestic waste classification outlets and waste material recycling outlets [5].

Market	2024 Scale	2025 Forecast	Annual Growth Rate
Power Battery Recycling	RMB 75 Billion	RMB 82 Billion	9.3%
Waste Steel Recycling	RMB 300 Billion	RMB 350 Billion	16.7%
Waste Electrical and Electronic Products	RMB 200 Billion	RMB 240 Billion	20%

---

The policy clearly promotes the active joint construction of regional “Waste-Free Cities” in the

[1].

Region	Characteristics	Investment Density
Beijing-Tianjin-Hebei	Policy Pioneer, Collaborative Governance	High
Guangdong-Hong Kong-Macao Greater Bay Area	Economically Developed, Technologically Leading	High
Middle Yangtze River Urban Agglomeration	Undertakes Industrial Transfer	Medium
Chengdu-Chongqing Region	Western Growth Pole	Medium

1. Inter-Provincial “White List” System:
   Pilot cooperation between Shanghai and hazardous waste disposal enterprises in Jiangsu and Anhui
2. Enclave Cooperation:
   Overall planning of solid waste disposal between Shanghai Laogang and Jiangsu Haimen
3. Ecological Compensation Mechanism:
   Water quality improvement rate in the Taipu River Basin of the Yangtze River Delta reaches 41% [7]

---

The environmental protection industry is shifting from “incremental construction” to “stock optimization”. In 2025, the proportion of investment in ecological environmental engineering is expected to drop to

, and operational services have become the core competitive point [6].

• Upgrading of waste incineration plants (flue gas purification efficiency improvement, zero sewage discharge)
• Smart Operations (AI optimization of incineration processes to improve power generation efficiency)
• Refined management of existing facilities

1. Low-Carbon Technologies:
   Hydrogen metallurgy, Carbon Capture, Utilization and Storage (CCUS), biomass energy
2. Intelligent Technologies:
   Industrial Internet smart environmental protection platform, AI pollution traceability system
3. Biotechnology:
   Application of gene editing in contaminated soil remediation [7]

Sub-Sector	Market Space	Growth Rate
Power Battery Recycling	RMB 82 Billion	11x (2020-2025)
Organic Solid Waste Treatment	RMB 600 Billion (Biogas)	Trillion-Level Track
Smart Environmental Protection	RMB 300 Billion (Contract Environmental Services)	Sustained Growth

---

• Sanfeng Environment:
  54 projects in operation, 42,500 tonnes per day treatment capacity, handled 7.73 million tonnes of waste in H1 2025 [3]
• Everbright Environment:
  Leading enterprise in hazardous waste disposal, acquired 45% equity of Beijing Orient Landscape Co., Ltd.
• Hanlan Environment:
  Full industrial chain layout for solid waste treatment

• Shan Gao Huan Neng:
  Resource utilization of waste oil, benefiting from the EU’s mandatory SAF blending policy
• INTCO Recycling:
  Leading enterprise in recycled plastics
• GEM:
  Closed-loop system for power battery recycling, metal recovery rate of 98.5% [7]

• Focused Photonics:
  Domestic substitution of scientific instruments, benefiting from equipment update policies
• SDL:
  Leading enterprise in environmental monitoring

---

1. Overcapacity Risk:
   In 2023, the waste incineration treatment capacity was 862,000 tonnes per day, while the actual treatment volume was only 629,000 tonnes per day, leaving an
   unused capacity of over 200,000 tonnes per day
   [6]
2. Subsidy Reduction Risk:
   The agricultural and forestry biomass power generation industry is highly dependent on subsidies
3. Intensified Competition:
   Low-price competition erodes profit margins
4. Payment Collection Cycle:
   Tight government fiscal funds lead to longer accounts receivable periods for waste disposal fees

---

The ‘Waste-Free City’ construction policies have brought

to the environmental protection industry. The 560 billion RMB solid waste management investment focuses on:

1. Domestic Waste Incineration Power Generation
   (RMB 140 Billion) — In the era of stock operation, we are optimistic about technological upgrading and refined management
2. Hazardous Waste Disposal
   (RMB 120 Billion) — Regional collaboration brings new opportunities
3. Construction Waste Resource Utilization
   (RMB 90 Billion) — Policies drive the increase of resource utilization rate
4. Industrial Solid Waste
   (RMB 110 Billion) — Core area of circular economy
5. Agricultural Organic Solid Waste
   (RMB 50 Billion) — New trillion-level track
6. Renewable Resource Recycling
   (RMB 40 Billion) — Key direction supported by policies

Focus on leading enterprises with , while laying out emerging sub-sectors such as .

---

[1] Ministry of Ecology and Environment: Around 200 More Cities to Carry Out ‘Waste-Free City’ Construction During the 15th Five-Year Plan Period - People’s Finance News (https://finance.eastmoney.com/a/202601133617100472.html)
[2] 2026 January Investment Strategy for Public Utilities and Environmental Protection - Guosen Securities (https://pdf.dfcfw.com/pdf/H3_AP202601061816141962_1.pdf)
[3] 2025 Half-Year Report of Chongqing Sanfeng Environment Group Co., Ltd. (https://stockmc.xueqiu.com/202508/601827_20250827_V9EU.pdf)
[4] In-Depth Research on the Most Competitive Environmental Protection Market in China: 5 Key Changes We Observed - Green Hill Research Institute (https://mp.ofweek.com/ecep/a056714079547)
[5] Work Plan for ‘Waste-Free City’ Construction During the 14th Five-Year Plan Period - Ministry of Ecology and Environment (https://www.mee.gov.cn/xxgk2018/xxgk/xxgk03/202112/W020211215761126730366.pdf)
[6] Not Enough Waste to Incinerate: Can the “Ten Measures for Solid Waste Management” Bring New Opportunities to the Environmental Protection Industry? - Sina Finance (https://finance.sina.com.cn/stock/wbstock/2026-01-10/doc-inhfvsui4655663.shtml)
[7] China’s Environmental Protection Industry: From Policy-Driven to Dual-Driven by Market and Technology in 2025 - HC360 Water Industry Network (http://www.water.hczyw.com/detail/new/825090908010128)