Garbage sorting and processing to become big business
July 30, 2019 Category Macro-economy, Weekly
Residents of big Chinese cities, including Beijing and Shanghai, are now required to sort their garbage, according to the latest waste disposal regulations. But they face a steep learning curve to understand what kind of garbage goes into with bag or bin. Luckily, Chinese tech entrepreneurs were quick to help out by developing smart apps to make the sorting task less troublesome.
In Shanghai, a new municipal regulation on waste management took effect on July 1, requiring everyone, from households to businesses, to sort their trash into recyclable, kitchen, hazardous and residual waste. Though the regulation inconveniences people while they form new habits and those who don’t comply face fines, it has boosted the existing waste treatment business and will create new opportunities in the circular economy.
Dealing with waste is big business as CNY200 billion in investment will be needed if the current trash-sorting program in Shanghai is to be implemented across China. A recent report by Orient Securities calculated a CNY7.56-billion market for Shanghai in the whole industrial chain – education, monitoring of garbage disposal, transportation, and construction of waste treatment facilities. It then projected the Shanghai model to the national level, and estimated the market size will be around CNY200 billion. China plans to set up domestic waste classification systems in 46 major cities by next year, and all the cities at prefecture level and above, about 300, should have similar systems to classify and dispose of trash by 2025, according to the Ministry of Housing and Urban-Rural Development. Zhang Lequn, Deputy Director of the Urban Development Department at the Ministry, said that the government will inject CNY21.3 billion into the building of waste treatment facilities.
As the trash-sorting program is implemented in Shanghai, more kitchen and food waste, which will demand proper treatment facilities, is being separated from residual waste. According to the Shanghai Municipal Administration of Landscaping and City Appearance, Shanghai now has more than 6,000 metric tons of kitchen waste every day, but the existing kitchen waste treatment facility can only process about 5,000 tons.
According to the National Bureau of Statistics (NBS), China produced 215 million tons of domestic waste in 2017, up nearly 60% from 2001. The government plans to reach a recycling rate of at least 35% of domestic waste in the 46 major cities by 2020. “The amount of solid waste recycling in China is only one-third of that in the United States and less than 30% of related industries are commercialized in the country,” Zhang Xiaowen, Deputy Director of Investment at Everbright Financial Holding Asset Management Co said. “Therefore, China’s solid waste-related industry is still at a decentralized stage. There is huge potential for integration and development in the future,” he said.
New recycling trends in China are paving the way for hundreds of waste-related applications, which industry insiders believe will spur a billion-dollar market over the next few years. When unsure if a lobster is dry or wet trash, an app can solve the problem. Using text and speech input or an uploaded image, several apps can assess what type of trash an item is in seconds, the Shanghai Daily reports.
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