Can China burn away Indonesia’s waste crisis?

In March 2026, a 50-metre wall of garbage collapsed after heavy rain at the Bantar Gebang landfill, one of the world’s largest landfills, outside Jakarta, Indonesia. Seven people died. The 110-hectare site (over 200 football fields in size) receives 8,000 tonnes of waste per day from a metropolitan area of 42 million people. The collapse is the fifth waste avalanche in the metropolitan area in six months.

The collapse exposed a wider failure in Indonesia’s waste management system. In 2024, the country generated 37.3 million tonnes of waste, of which only 32% was managed, while nearly 200 of 514 jurisdictions do not report their data. Annual generation could reach 65 million tonnes, with daily volumes exceeding 140,000 tonnes. Much goes to more than 70 landfills, 63% of which still practise illegal open dumping. Many sites have less than three years of capacity remaining, and President Prabowo Subianto has warned that most could reach capacity by 2028.

Against this looming crisis, Indonesia’s rapid waste-to-energy (WtE) expansion, with Chinese firms at its centre, is emerging as a “product-market fit” for a regional waste problem.

From policy deadlock to market boom

WtE, which burns municipal waste to generate electricity, could address around 25% of Indonesia’s waste volume at full build-out. Yet despite legislation dating to 2008 and Presidential Regulation 35/2018 identifying 12 priority cities, only two WtE plants, both on Java, were operating by 2024.

The obstacle was largely economic. Developers needed a tipping fee for each tonne processed in addition to electricity revenue, but payments depended on municipal budgets and negotiations with provincial legislatures. Projects, therefore, faced political and fiscal uncertainty.

Presidential Regulation 109/2025 changed the equation. Signed in October 2025, it incorporated waste-disposal costs into a fixed electricity tariff of US$0.20 per kilowatt-hour for 30 years, with no escalation, while requiring the state utility PLN to purchase the electricity generated. It also centralised procurement under Danantara, Indonesia’s new sovereign wealth fund, which selects developers and takes direct equity stakes. Host cities, meanwhile, must guarantee a daily supply of at least 1,000 tonnes of waste.

The result was a rapid expansion. Indonesia has planned the construction of 34 projects across 34 cities. The first tender, launched in November 2025, attracted 24 prequalified firms, with all three “phase one” awards going to Chinese companies. Phase two attracted 85 prequalified entities, with Chinese partners in six of the eight winning consortia, although only two were Chinese-led. French companies Suez and Veolia also won contracts. Total investment is estimated at US$5 billion.

Why Chinese companies are winning 

Three factors explain the Chinese advantage.

First, Chinese WtE technology is well suited to the physical characteristics of Indonesia’s waste. Indonesian municipal waste is wet, unsorted and relatively low in calorific value. Food waste accounts for around 40% of the stream and plastics for 18%. Chinese grate furnaces and fluidised-bed systems were developed under similarly difficult feedstock conditions and use extended drying zones. Many Western and Japanese systems have traditionally been designed around drier and more pre-sorted waste.

Second is the delivery model. Chinese firms can package equipment, construction, financing and decades of operation into build-operate-transfer concessions. They can tolerate a fixed, non-escalating tariff over 30 years, absorbing inflation, currency and political risks that commercial lenders would price more aggressively.

This advantage is reinforced by China’s extensive experience exporting WtE as a complete infrastructure package. Indeed, Chinese companies already operate more than 43 overseas WtE projects across 13 countries, representing US$6.43 billion in disclosed investment. Indonesia piggybacks off an established export model, not an unproven risky investment.

Likewise, Chinese participation should not automatically be equated with weaker environmental standards. Everbright, the world’s largest WtE operator, and SUS Environment, a major equipment supplier, design overseas facilities to meet European emissions standards.

A third advantage is that Chinese firms have strong incentives to seek overseas markets as domestic WtE growth slows. The share of urban waste treated through incineration rose from 9.8% in 2005 to 82.5% in 2023. But stricter waste-sorting requirements have reduced the volume and calorific value reaching incinerators. Utilisation rates have fallen to around 60%, while 5% of furnaces were idle for more than six months in 2024. As central subsidies have been progressively withdrawn, overseas projects offer Chinese operators an outlet for industrial capacity, technology and accumulated operating expertise.

Mixed take-up rates in Southeast Asia

Not unique to Indonesia (though outstanding for its size), the same combination of rising waste, full landfills and limited municipal budgets exists across Southeast Asia. 

In the region, Vietnam stands out for how Chinese WtE investment addresses an infrastructure challenge while also serving as a government showcase. In Vietnam, the Chinese-invested Soc Son WtE plant outside Hanoi –– the second-largest WtE facility in the world after Shenzhen’s — has become a Xinhua success story of how a dumping ground was transformed into rice fields.

Yet the showcase narrative sits uneasily alongside Hanoi’s history of local opposition: in 2019, residents blockaded the road to the Nam Son dumping ground in the same district for five days over unresolved compensation and pollution grievances. A second Chinese-backed plant, worth roughly US$153 million, broke ground in Hung Yen province in March 2026.

Thailand also tells a similar story of Chinese investments in WtE. C&G Environmental Protection, a China-invested firm, has operated a Bangkok plant since 2016. Its three phases, once fully operational, are expected to process nearly 40% of the city’s daily waste. China Tianying has separately signed a deal to build a plant worth around US$70.04 million in Chiang Mai.

Yet these examples do not amount to a region-wide Chinese takeover. Malaysia and the Philippines illustrate limitations. Shanghai Electric’s 2,900-tonne-per-day plant in Selangor was slated to begin operations in 2026, but Malaysia’s flagship Sungai Udang plant in Melaka is led by Malakoff, the country’s largest independent power producer. Manila’s 2026 WtE auction remains open to bidders generally, despite interest from Chinese suppliers such as SUS Environment. 

Nimby concerns

But the success of Chinese technology abroad may depend as much on public trust as on engineering. A 2025 survey experiment in Thailand found that support for a hypothetical WtE plant fell when respondents were told it would be operated by a Chinese company rather than a Thai or Japanese operator — a “penalty for foreignness” specific to Chinese operators.

China itself has experienced this problem repeatedly. Incinerator siting has triggered “not-in-my-backyard” (Nimby) protests from Guangzhou’s Panyu district in 2009 to Beijing’s Liulitun and Shenzhen’s Longgang district in 2017. Such disputes pushed some Chinese cities to develop public consultation mechanisms around facility siting. If Chinese operators export the technology without similar consultative practices, the perception penalty could compound as more plants come online.

For Indonesia, however, the immediate attraction of WtE is that it could address several security challenges at once. Diverting waste from landfills can reduce leachate contamination of groundwater and rivers used for irrigation and drinking, while also reducing landfill methane. The Denpasar plant alone is projected to avoid roughly 640,000 tonnes of CO2-equivalent annually.

WtE also offers an energy-security benefit, although this should not be overstated. Waste is Indonesia’s single largest source of methane emissions, accounting for 56% of the total, driven mainly by poorly managed organic and food waste. WtE can provide firm, dispatchable electricity and diversify a coal-heavy power system.

Risks, sovereignty and open questions

Ultimately, WtE is not a long-term solution. While it can reduce landfill dependence, it cannot substitute for better waste reduction, recycling, and organic waste management.

The most immediate concern is whether rapid expansion can be reconciled with public health and environmental safeguards. Sampling near the existing Benowo plant found PM2.5 and PM10 levels eight times the World Health Organisation (WHO) thresholds, alongside noise, odour and respiratory complaints. Indonesia’s leading environmental group, WALHI, has rejected the accelerated WtE rollout, arguing that it reflects a failure to build a sustainable and equitable waste-management system. A separate Asia Times critique similarly argues that the initiative risks shifting environmental harm rather than delivering a genuine clean-energy transition.

More fundamentally, Indonesia must avoid solving its landfill crisis by undermining the waste reduction and food security goals that should address the problem upstream. Presidential Regulation 97/2017 set a national target of 30% waste reduction and 70% proper handling by 2025 — a target the government’s own 2024 data shows fell well short. Indonesian policy has generally prioritised reduction, reuse, recycling and composting ahead of disposal-based solutions.

The food waste component makes this tradeoff particularly important because organic waste is not simply rubbish, but also a resource for agriculture. Then Environment Minister Siti Nurbaya Bakar said in 2023 that nationwide household composting could keep an estimated 10.92 million tonnes of organic material out of landfills annually. That material could instead return nutrients to agricultural soils. The Jakarta Post has similarly reported that Indonesian food industry practitioners generally regard incineration as the lowest-priority option for food waste, behind source reduction, donation and composting.

The economics of the new WtE model could also create incentives that work against these upstream priorities. PLN’s 30-year fixed-price obligation and each city’s 1,000-tonne daily supply guarantee create a potential lock-in effect, giving cities reason to maintain waste volumes rather than reduce them. The subsidy bill — estimated at US$34 million annually per project at full build-out — could also add to Indonesia’s existing energy-subsidy burden.

It is also unclear whether Indonesia will capture enough economic and technological value from Chinese participation. Local-content requirements of 25–30% apply to construction, while Danantara frames technology transfer as an expectation for consortiums rather than a contractual obligation. It remains unclear whether Indonesian firms will move beyond civil works into technical and operational roles, or whether promised employment will translate into permanent skilled jobs.

An Indonesian commentary marking Danantara’s first anniversary noted that the Bekasi and Denpasar awards to Chinese firms had already “ignited debates over technological sovereignty”, a concern echoed elsewhere in arguments that the deal risks locking Indonesia into Chinese-dependent infrastructure rather than building toward energy independence.

The concern is consistent with Jakarta’s broader effort to balance Chinese investment against strategic dependence. In 2026, Indonesia tightened state control over Chinese-dominated nickel processing precisely because of dependency concerns, even as it recognised the importance of Chinese capital. WtE is a different kind of exposure — not mineral processing, but technology, financing and operators locked into 30-year contracts.

Towards a sustainable model

On 26 August 2026, Danantara broke ground on the Bekasi plant, a facility developed with Wangneng Environment that is expected to handle over 500,000 tons of waste per year and begin operating in mid-2028. It sits right next to Bantar Gebang, where the collapse happened. It is the second project under construction, after Denpasar in July.

Indonesia has the agency to shape what comes next. Stronger emissions monitoring, integration of the region’s abundant clean energy sources, and diversification of partners and technology could push WtE closer to a sustainable model. 

However, WtE cannot be truly sustainable on its own. Fundamental policy drivers like plastic bags and waste sorting are what address the problem at its source. But for now, a pragmatic transition solution grounded in economic viability makes more sense for a region balancing economic development and environmental integrity. Chinese WtE capital, firms and technology carry high political momentum and a “product-market fit” for Southeast Asia’s continuing waste problem.

Related: China has too many incinerators. Southeast Asia has the trash | Why China’s waste incinerators are running out of trash