China has too many incinerators. Southeast Asia has the trash
China built a vast waste-to-energy industry — then ran short of trash. As incinerators sit idle at home, Chinese firms are heading to Southeast Asia, pitching modern plants as a fix for looming landfill crises. Lianhe Zaobao correspondent Lim Zhan Ting reports.
Too many incinerators, too little waste — China’s waste-to-energy (WtE) industry has found itself in this peculiar dilemma in recent years. Amid this imbalance in supply and demand, an increasing number of Chinese companies are exploring new paths and embarking on a “trash hunt” in Southeast Asia.
WtE incineration is a vast industry in China. Official figures show that the country has more than 1,000 incineration plants, processing more than 1.1 million tonnes of waste daily. Yet, some facilities are operating with spare capacity.
By contrast, in Southeast Asia, countries such as Vietnam, the Philippines and Indonesia — traditionally reliant on landfill — are showing growing demand for WtE incineration as a more modern and environmentally friendly method of waste disposal, opening up new market opportunities for Chinese firms.
Chinese WtE company SUS Environment is among those that have accelerated their overseas expansion in recent years. Liu Heng, the group’s brand director, told Lianhe Zaobao that the company has stepped up its presence in Southeast Asia since 2023, with nine of its 12 overseas projects located in Indonesia, Vietnam, Thailand, the Philippines and Malaysia, all of which are currently under construction.
Liu assessed, “The overseas market remains a largely untapped blue ocean, and SUS Environment’s strategic goal is to build another SUS Environment abroad.”
From being surrounded by waste to a shortage of waste
Why are Chinese companies seeking trash overseas? To understand China’s current oversupply of waste incineration capacity, we have to look back on the “garbage crisis” that affected many cities over a decade ago.
Ma Jun, director of the Institute of Public and Environmental Affairs, explained in an interview that during China’s early phase of rapid urbanisation, waste volumes surged in many cities, which practically became “besieged by waste”. To address this problem, local governments moved quickly and on a large scale to build WtE plants, creating vast incineration capacity in a short period to make up for the shortfall in waste disposal capability.
... after China’s waste-sorting campaign aimed at boosting recycling went into full swing in 2019, this in turn reduced the volume of waste suitable for incineration. — Ma Jun, Director, Institute of Public and Environmental Affairs
However, as this construction boom continued, some areas along China’s eastern coast began to face excess processing capacity. Meanwhile, the approach to waste management has also shifted under the promotion of a circular economy. Ma noted that after China’s waste-sorting campaign aimed at boosting recycling went into full swing in 2019, this in turn reduced the volume of waste suitable for incineration.
Some analysts have also pointed out that the economic slowdown in recent years has dampened consumption, leading to a corresponding decline in household waste and further exacerbating overcapacity.
Citing monitoring data from WtE plants across the country, The Paper reported that 107 incinerators in China last year remained idle for more than 50% of the time — at least half the year.
A commentary in Xinhua Daily bluntly evaluated that while advances in China’s waste treatment capacity is good news, the fact that incinerators are now “starving” is worrying, reflecting how in some places projects were launched blindly and built haphazardly, making full capacity operation little more than a hope.
Ma noted that WtE plants typically require heavy investment, and the current overcapacity poses a serious challenge to the entire industry. Some leading companies have thus started to rethink their development paths, including making use of existing treatment capacity to move into waste sorting, recycling and reuse.
For firms with sufficient financial and technological strength, overseas expansion has also become a natural choice.
... Southeast Asia has become the preferred destination for many Chinese WtE companies, largely because local lifestyles and culture are similar to China’s.
Taking the ‘incinerator+’ model to Southeast Asia
As with many industries driven abroad by saturation in the domestic market, Southeast Asia has become the preferred destination for many Chinese WtE companies, largely because local lifestyles and culture are similar to China’s.
SUS Environment’s Liu pointed out that the composition of waste in Southeast Asia is similar to that in China, with relatively higher water content due to the mixing of food waste. “By comparison, the technologies and equipment of European, American and Japanese firms tend to be less well suited to conditions in Southeast Asia,” he said.
Furthermore, some Southeast Asian countries are stepping up policy support for foreign investment in waste incineration projects. Indonesia, for example, announced in October this year that it intends to roll out WtE projects in 33 cities, actively inviting both domestic and international investors to take part.
According to incomplete figures from solidwaste.com, a Chinese industry portal, more than ten Chinese companies — including SUS Environment, Everbright Environment and Shenzhen Energy Environment — secured 16 overseas waste incineration projects in the first five months of this year. Besides Southeast Asia, Central Asia is also emerging as a popular destination for overseas expansion.
“Our waste incineration plants are beautifully designed. If we didn’t say they were incinerators, some members of the public might even think they were landmark buildings or large shopping centres.” — Liu Heng, Brand Director, SUS Environment
These companies are adopting various approaches overseas, including joint ventures with local firms, providing engineering, procurement and construction services, or supplying only key equipment and technologies.
Liu believes that the appeal of Chinese companies’ solutions lies not only in the ability of modern incineration technology to help reduce the environmental pollution caused by landfills, but also in the aesthetic and thoughtful design of the plants.
He said, “Our waste incineration plants are beautifully designed. If we didn’t say they were incinerators, some members of the public might even think they were landmark buildings or large shopping centres.”
More practically, these facilities are planned with community functions in mind, incorporating features such as basketball courts, charging stations and welfare amenities. They also regularly host community and public interest activities, making waste incineration plants part of everyday life for local residents.
Liu noted that while some may still hold stereotypical views of incinerators as dirty, messy and smelly, this kind of open design helps to ease potential “not in my backyard” sentiments among the public in Southeast Asia.
“The [waste dumping areas] that we have in Jakarta, for example, in Bantar Gebang, is as high as a seven-storey building, and it can topple down anytime there’s rain, and kill people who live next to it.” — Associate Professor Linda Yanti Sulistiawati, Faculty of Law, Universitas Gadjah Mada
Technology transfer the key
For Southeast Asian countries grappling with rapidly dwindling landfill capacity, WtE incineration solutions offered by Chinese companies are opening up a possible way out of the predicament.
Linda Yanti Sulistiawati, an associate professor of Law at Universitas Gadjah Mada and senior research fellow at the National University of Singapore’s Asia-Pacific Centre for Environmental Law, said in an interview that the solid waste management in Indonesia is “very problematic”.
She explained, “The [waste dumping areas] that we have in Jakarta, for example, in Bantar Gebang, is as high as a seven-storey building, and it can topple down anytime there’s rain, and kill people who live next to it.”
She noted that while WtE incineration plants can help ease pressure on waste disposal, a more desirable approach in terms of overall waste management is to reduce, reuse and recycle. She stressed that Indonesia needs more comprehensive policies to tackle the challenges of waste governance.
On the introduction of Chinese technology, Linda noted that public opinion in Indonesia is divided. While the government is actively bringing in Chinese waste incineration technology, the Jakarta-Bandung High-Speed Rail (Whoosh), has in recent months sparked public concern over debt risks.
Linda thinks that for Indonesia to truly benefit from the construction of WtE plants, the key lies in ensuring technology transfer and involving more Indonesians in the operation of the projects.
Meanwhile, the Institute of Public and Environmental Affairs’s Ma thinks that Chinese waste incineration firms have moved from the backlash they faced over lax operations more than a decade ago to much higher standards of environmental monitoring and information disclosure in recent years. The experience in green governance accumulated along this journey should be taken overseas alongside their technological capabilities.
However, China’s current problem of overcapacity also serves as a cautionary tale for other countries. Ma noted, “When waste sorting and recycling are done properly, the volume of waste suitable for incineration declines, accelerating the saturation and overcapacity of incinerators. This is something Southeast Asian countries need to consider from the outset, ensuring sound planning and avoiding a rush to build.”
This article was first published in Lianhe Zaobao as “中国垃圾焚烧厂纷纷赴东南亚“找垃圾””.
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