From Surplus to Solutions: The Migration of China’s Waste-to-Energy Industry

The waste-to-energy (WtE) sector in China, formerly a hallmark of the nation’s aggressive strategy to combat urban pollution, is currently navigating a period of significant structural transition. Although the domestic infrastructure is expansive—comprising more than 1,000 incineration facilities with a daily processing capacity of approximately 1.1 million tons—the industry is grappling with an unexpected scarcity of combustible waste. This phenomenon, often termed a "waste shortage," has forced major industry players like SUS Environment and Everbright Environment to pivot their strategic focus away from a saturated domestic market toward the burgeoning opportunities in Southeast Asia.

Several factors have contributed to this domestic decline. The implementation of rigorous waste-sorting mandates and the broader transition toward a circular economy have increased recycling efficiency, thereby reducing the volume of waste available for incineration. Furthermore, a deceleration in economic consumption has led to a measurable decrease in household refuse. The impact on investors has been profound; reports indicate that over 100 Chinese incinerators operated at less than half capacity last year, leading to the emergence of "starving incinerators" that represent significant sunk costs.

In contrast, Southeast Asian nations such as Indonesia and Vietnam are facing a crisis of overflowing, hazardous landfills. This disparity has created a "blue ocean" for Chinese firms, which possess a distinct technical advantage. Unlike European or Japanese systems, Chinese incineration technology is specifically engineered to process waste with high moisture and organic content—characteristics common to both Chinese and Southeast Asian refuse. To mitigate local opposition (the "Not In My Backyard" or NIMBY syndrome), these firms are promoting the "Incinerator+" model, which integrates waste processing into aesthetically pleasing community hubs featuring amenities like sports facilities and green spaces.

Despite these advantages, the expansion of Chinese WtE technology into Southeast Asia is met with a degree of skepticism regarding debt sustainability and technological dependency. Critics emphasize that for these partnerships to be truly beneficial, there must be a genuine transfer of expertise to the local workforce. Moreover, the Chinese experience serves as a cautionary tale: without integrated planning that balances waste-sorting initiatives with incineration capacity, Southeast Asian nations risk repeating the mistake of over-investment in infrastructure that may eventually lack the raw materials to function. Ultimately, this regional migration represents a critical test of China’s ability to export sustainable governance while challenging Southeast Asian regulators to exercise unprecedented foresight in environmental planning.