This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/30/2019

Overview

China is the largest and fastest growing emerging market for environmental technologies.  According to China’s Ministry of Ecology and Environment, the overall environmental technologies market in China (including goods and services) is estimated to be valued at $77.27 billion in 2019. 
 
China is strengthening efforts to improve environment quality and enhance environmental governance during the 13th Five-Year Plan period (2016-2020).  The 13th Five-Year Plan promotes a cleaner and greener economy, with strong commitments to environmental management and protection, clean energy, emissions controls, ecological protection and security, and the development of green industries.  The Chinese government announced its "zero tolerance" for polluters, launching a pollution control campaign in 2017 targeting about 62,000 irregular enterprises in the Beijing-Tianjin-Hebei region and surrounding cities.  Steps are being taken to implement pollution control action plans, strictly enforce various environmental indices, and promote pollutant discharge standards and the reduction of total emissions by more than 10%.  Measures include the orderly relocation, transformation or closure of heavily polluting enterprises in built-up urban areas, and the implementation of clean production transformation in key industries.  The plan calls for regulatory requirements for industrial pollution sources to meet emissions standards to be fully implemented.  Moreover, polluting enterprises that fail to meet discharge standards will be revamped, projects that cause serious pollution will be banned, urban domestic sewage and refuse treatment will be fully implemented, and the enforcement of the relevant laws will be strengthened, according to the plan.

In January 2018, China’s first Environmental Protection Tax Law came into force with the aim of strengthening the enforcement of environmental regulations.  It replaces the pollutant discharge fees which China had been collecting for nearly 40 years.  Taxes collected are now based on the volume of the pollutants discharged.  The local government has the right to set the tax range and incentives to collect the tax since all the tax income belongs to the local government.  The reliance on monitoring and incentives to reduce emissions should result in opportunities for environmental technology firms.

In March 2018, the Ministry of Environmental Protection (MEP) changed its name to the Ministry of Ecology and Environment (MEE) and took on the following new functions:
  • Climate change and emissions reduction policies, formerly under the National Development and Reform Commission (NDRC)
  • Underground water pollution regulation, formerly under the Ministry of National Land and Resources
  • Watershed environmental protection, formerly under the Ministry of Water Resources
  • Agricultural pollution control, formerly under the Ministry of Agriculture
  • Marine conservation, formerly under the State Oceanic Administration
  • Environmental protection during project implementation, formerly under the State Council’s South-to-North Water Diversion Project Construction Committee
This change is considered a milestone for China in its fight against pollution and serves as a potential remedy to the fragmented and overlapping structure that has long plagued China’s environmental governance.  Under the new Environmental Protection Law, MEE is authorized to seize, impound or close facilities that cause serious environmental pollution. It also allows them to order entities discharging excessive levels of pollutants to limit or cease production in order to rectify the problem.  Penalties and punishments for non-compliance have been drastically increased.
Although China’s environmental regime has improved with the development of a national legal framework, enforcement remains weak in many areas. Market barriers, particularly those related to protection of intellectual property, continue to make China a challenging market for U.S. companies.
 
Air Pollution Control
Air pollution is arguably the most egregious environmental problem plaguing China.  The central government has placed improving air quality as a priority on its agenda for the next several years, with China’s Premier pledging in March 2017 to “bring back blue skies” and work faster to address air pollution.

The amended Air Pollution Prevention and Control Law (Air Pollution Law), approved by the National People's Congress in September 2015 and took effect on January 1, 2016, established various legal mechanisms to improve air quality. In its 13th Five Year Plan, China requires cities to reach eighty percent of “good” or “excellent” air quality days by 2020 and for the first time, included Volatile Organic Compounds (VOCs) as a target for emission reduction (the 13th FYP aims to reduce VOC emissions by ten percent over the next five years).  According to Chna File (2016), the addition of VOCs is ambitious because its reduction will require regulating many more sources of pollution than does managing sulfur dioxide and nitrogen oxides.

Waste Management and Recycling
According to the World Bank, over the next decade, China’s municipal solid waste (MSW) generation is expected to increase on pace with its rapidly urbanizing population and is likely to reach 1.39 million tons per day by 2025. In 2017, the government began taking steps to develop a domestic solid waste management and recycling market. China Dialogue (2017) reports that the State Council issued a plan in March 2017 to make sorting household waste a requirement, and in July 2018, NDRC released a new regulation requiring cities and towns to establish a comprehensive fee-based system for household waste collection and processing by 2020.  The government recently tightened limits on landfills, as well, and 46 cities have established recycling quotas, including Beijing and Shanghai, according to Bloomberg News (2018).  In 2017, China also announced a ban on the import of most types of scrap and recoverable materials, including most plastic, paper and metals.  By 2020, all materials classified as “solid waste” are expected to be banned from importation.  On the other hand, China’s demand for scrap and recyclables continues to be strong, while the country’s recycling infrastructure, although burgeoning, is not yet mature.  Although uncertain for now, it is worth watching whether foreign companies can take part in building China’s recycling capabilities.
 
The Chinese government is particularly interested in waste-to-energy (WTE) as a means to address the country’s increasing MSW generation.  MDPI, Energies (2015) reports that China’s 13th Five Year Plan calls for $41.3 billion in investment in the development of incineration plants by 2020.  Based on a report by the World Energy Council (2016), the country more than doubled its WTE capacity between 2011-2015.  According to the MDPI, Energies (2015), WTE projects often rely on a public-private partnership (PPP) model.  Given the central government’s ambitious plans for the build-out of WTE infrastructure, China is likely to remain the world’s largest and fastest-growing market for WTE technology until at least 2020, according to Waste to Energy 2016/2017 Extract, 9th Edition.  Solid waste in China has a relatively high moisture content and thus delivers low calorific values when incinerated.  Companies with particular expertise in managing such combustion efficiency challenges are likely to find opportunities in this sector.
 
Water and Wastewater Treatment
Aggressive construction of water treatment plants continues as China works to improve water quality and enhance access to drinking water and sanitation services.  In 2016, the 13th Five-Year Plan established a new discharge standard for wastewater treatment plants (WWTPs). In the coming years, China hopes to protect drinking water sources and improve the water quality of centralized drinking resources.The government hopes to expand and promote the protection and management of important water resources.  According to an article by Woody Chan in China Water Risk (2017), rural wastewater is still neglected, however, with a treatment rate of only 22%.  The government aims to increase this coverage to 70% by 2020.  Tightening of national regulations will provide retrofit opportunities for existing plants to move beyond mechanical treatment alone and introduce improved chemical and biological methods.

Opportunities

Solid opportunities exist for U.S. companies in the following areas:
  • Air Pollution Control
  • Ambient Air Monitoring
  • Industrial Air Pollution Reduction
  • Power Plant Emissions Reduction
  • Mobile Source Emissions Control
  • Solid Waste and Recycling
  • Recycling of Discarded Electronics
  • Hazardous Waste Management
  • Promotion of Waste-to-Energy (WtE)
  • Municipal Water and Wastewater Treatment and Plant Development
  • Sludge Treatment
  • Groundwater Monitoring, Pollution Prevention, and Remediation
  • Water Efficiency and Reuse
  • Process and Produced Water
  • Soil Remediation
  • Environmental Engineering and Consulting

Trade Shows & Events

IE expo 2020
April 21-23, 2020
Shanghai, China
China International Environmental Protection Exhibition & Conference (CIEPEC)
June, 2019
Beijing, China
IE Expo Guangzhou
September 18-20, 2019
Guangzhou, China

Web Resources

Ministry of Ecology and Environment
China National Environmental Monitoring Center
China Environmental News
China Solid Waste
Water China
China City Water
 
U.S. Commercial Service Contact for Environmental Technology Sector

U.S. Embassy in Beijing
Jiangyao Zhang, Commercial Specialist
(86 10) 8531-3426
jiangyao.zhang@trade.gov

U.S. Consulate in Chengdu
Mengyue Xu, Commercial Specialist
(86 28) 8558 3992 ext. 6720
mengyue.xu@trade.gov

U.S. Consulate in Shanghai
Sophia Chen, Commercial Specialist
(86 21) 6279-7637
shiqiao.chen@trade.gov

U.S. Consulate in Shenyang
Xiaolei (Evelyn) Zhou, Commercial Specialist
(86 24) 2322 1198 – 8146
evelyn.zhou@trade.gov

U.S. Consulate in Guangzhou
Linda Lu, Commercial Specialist
(86 20) 3814-5718
linda.lu@trade.gov

U.S. Consulate in Wuhan
Jing Wang, Commercial Specialist
(86 27) 8555 7791 – 808
jing.wang@trade.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.