Renewable and Sustainable Energy Reviews 80 (2017) 276–289

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Renewable and Sustainable Energy Reviews

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PESTEL analysis of the development of the waste-to-energy incineration MARK

industry in China
⁎
Jinbo Songa, Yan Sunb, , Lulu Jina
a
Faculty of Management and Economics, Dalian University of Technology, Dalian, China
b
Faculty of Humanities and Social Sciences, Dalian University of Technology, Dalian, China

A R T I C L E I N F O A BS T RAC T

Keywords: With the upgrading of living standards and rapid urbanization throughout the world, municipal solid waste
Waste-to-energy (WTE) incineration (MSW) treatment has become a ubiquitous environmental issue. Incineration can reduce the quantity and
PESTEL analysis volume of MSW, save land resources and generate power, and it has been considered an effective means of MSW
China treatment. However, a variety of obstacles to the development of the waste-to-energy (WTE) incineration
industry have emerged. To identify and overcome these obstacles, this paper applies the Political, Economic,
Social, Technological, Environmental and Legal (PESTEL) framework to analyse the macro-environment of the
WTE incineration industry in China. First, the MSW treatment status and treatment methods in China are
summarized. Then, we analyse the PESTEL factors in the WTE incineration industry in China, including
relevant legislation and policies, investment modes and intensity, the distribution and scale of investment,
difficulties in MSW treatment and classification, public concerns, the various incineration techniques,
environmental protection issues and the existing shortcomings. Finally, managerial implications and sugges-
tions for the government and private sector regarding policy changes, the application of the Public-Private
Partnership (PPP) mode and efficient project operation are provided. It is expected to pave the way for private
investors to finance such projects.

1. Introduction Waste-to-energy (WTE) incineration is considered to be an effective

From now until 2025, the amount of municipal solid waste (MSW)
in world cities will increase sharply from the current average of 1.3
billion tons to 2.2 billion tons per year, and this increase will mainly
take place in rapidly growing cities in developing countries [23]. Due to
changes in economic development and consumption patterns, MSW is
being generated at a staggering rate that outstrips the ability of the
natural environment and municipal authorities to cope with it [36].
The United States Environmental Protection Agency (2015) [39] has
listed MSW as a renewable energy source, and the management of
MSW has been identified as a global challenge to the achievement of
sustainability goals [18]. With rapid urbanization, significant popula-
tion growth and the upgrading of living standards in China, the amount
of MSW is continually increasing, and many cities are now surrounded
by MSW. Thus, the government faces a huge challenge in disposing of
MSW [13]. MSW not only occupies a massive amount of land, it also
causes pollution that impacts both the atmosphere and groundwater.
Therefore, MSW treatment is considered to be a critical issue for China
as well as many other developing countries.
method to treat MSW that has been widely used in many countries
[21,41]. As a core WTE technology, incineration is currently widely used
[43]. Tan et al. [36] found incineration to be the superior technology
choice for WTE in Malaysia for the production of electricity and heat
based on the energy, economics and environmental (3E) analysis. WTE
incineration can significantly reduce the quantity and volume of MSW,
save land resources, reduce emissions of greenhouse gases, and generate
power and heat. The design of such incineration technologies must both
meet the primary purpose of waste treatment and produce as much
energy as possible [35]. After the energy crisis of the 1970s, WTE
incineration techniques developed rapidly in some developed countries,
such as Japan, Denmark, Sweden and Switzerland. In 2012, WTE
incineration capacity accounted for over 50% of the total in these
countries, and power generated through WTE incineration has been
widely used [23]. WTE incineration can also significantly contribute to the
achievement of waste management goals [11].
In China, the WTE incineration industry started late but has
developed quickly in recent years. In fact, the first WTE incineration
plant in China was established in Shenzhen in 1988. Since 2000,

⁎
Corresponding author.
E-mail addresses: songjinbo@dlut.edu.cn (J. Song), sunyan@dlut.edu.cn (Y. Sun), jll15033563828@126.com (L. Jin).

http://dx.doi.org/10.1016/j.rser.2017.05.066
Received 3 March 2016; Received in revised form 18 April 2017; Accepted 15 May 2017
1364-0321/ © 2017 Elsevier Ltd. All rights reserved.
J. Song et al.
Fig. 1. Quantities of treated and untreated MSW.
(Source: National Bureau of Statistics of China)
however, the Chinese government has increased its focus on developing
the WTE incineration industry and has issued a series of policies and
passed stimulus legislation that encouraged the establishment of WTE
incineration projects in many large cities. Thus, the WTE incineration
industry in China has entered a golden age. However, a variety of
political, economic, social, technological, environmental and legal
obstacles have emerged that are challenging the private sector, the
public and the government. For example, WTE incineration plants in
Heze, Xingjin, Tongxing, Wuhua and Nanshan have faced significant
difficulty due to public opposition, poor decision making, and techno-
logical shortcomings, among other issues [32].
The Political, Economic, Social and Technological (PEST) framework is
a method developed by Fahey and Narayanan [22] that analyses the
business environment from a macroeconomic perspective. The PEST
framework primarily analyses these four factors in order to provide
strategic advice regarding the markets and business. The political factors
mainly concern social institutions, policies and laws. Economic factors
include macro- and microeconomic aspects that jointly influence industry
development. Social factors refer to residents, the culture and values.
Technological factors include the application conditions for various tech-
niques and technology development trends. The PEST framework has been
widely used in analyses of an industry's prospects for development.
A PESTEL review is a multifaceted approach to assess big-picture
forces in order to better understand the strategic orientation of an
organization [1] and to assist in making considered and informed
decisions about organizational activities [25]. The PESTEL framework
primarily concerns six factors: political, economic, social, technical,
environmental, and legal. As a structured way to organize environ-
mental factors, PESTEL is used to analyse and map how the external
environment influences an industry. The tool provides an overview of
the macro-environmental factors that a company needs to consider in
its decision making [31]. By taking into account key external drivers of
change, the PESTEL framework can encourage firms to consider long–
term goals and to choose sustainable business innovation and invest-
ment strategies [34]. Daramola Oladipo [20] used the PESTEL method
to analyse Nigerian business operations in the macro-environment for
renewable energy opportunities. Aruvian's R'search [2] analysed the
European renewable energy industry using the PEST framework.
Collen et al. [17] outlined novel thinking about the political, economic,
social, technological, legal, and environmental challenges that con-
strain the development of renewable energy technologies in Malawi
through the PESTEL method. Sandberg et al. [31] applied the PESTEL
method to analyse the macro-environment for specific WEC (Wave
Energy Converter) systems and summarized the critical factors that
influence the viability of the off-grid commercialization of a WEC
system for small utilities and luxury resorts.
277
Renewable and Sustainable Energy Reviews 80 (2017) 276–289
China has become one of largest WTE incineration markets in the
world. However, so far, there has been no systematic academic analysis
of the China's WTE incineration industry. To identify obstacles and
promote the sustainable development of the WTE incineration indus-
try, this paper applies the PESTEL framework to analyse the macro-
environment of the WTE incineration industry in China, and it can also
serve as a reference for private investors who may intend to enter the
country's WTE incineration industry.
2. MSW treatment status in China
According to the Asian Development Bank, China has become the
second largest MSW producer in the world, with more than 220 million
tons of MSW annually and an annual rate of increase of 8–10% [3,29]).
It has been predicted that by 2030, China's annual quantity of MSW
will increase to more than 480 million tons [19]. In 2015, China had
890 WTE incineration plants that treated 94.1% (approximately 180
million tons) of the country's collected MSW, of which 640 were landfill
plants, 220 were incineration plants and 30 were plants that used other
treatment methods [16]. However, there was still 11.3 million tons of
MSW that was untreated because of insufficient capacity. The quan-
tities of treated and untreated MSW over the past decade are shown in
Fig. 1.
According to the China's 13th Five-Year Plan, enacted in 2016,
incineration will account for more than 50% of the harmless treatment
of MSW throughout the country and 60% in the eastern region [27].
The specific targets for MSW treatment are as follows: by the end of
2020, MSW will be completely treated harmlessly in municipalities,
provincial capital cities, and certain specifically designated cities in the
state plan; over 95% of MSW will be treated harmlessly in other smaller
cities; and MSW treatment capacity will increase by 509,700 t per day.
Currently, in China, landfills, compost and incineration are the
three main MSW treatment methods.
(1) Landfills. Landfills are currently the most popular method of MSW
treatment in China. Landfills require less investment and are
appropriate for all types of MSW. It is increasingly difficult to
construct new landfill plants, particularly in large cities where land
is extremely limited. Another serious problem is that landfill
leachate is a potential environmental hazard that threatens soil
and groundwater.
(2) Compost. Compost is a process in which organic matter is broken
down by microorganisms and converted to a rich, soil-like product
[7]. It is not widely used in China because it requires a long
treatment period and substantial space, with high costs and low
efficiency. Moreover, due to the lack of MSW classification facil-
J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

Table 1
Comparison of MSW treatment methods in developed countries.
(Source: The World Bank, 2012)

Country Landfill (%) Compost (%) WTE (%) Recycled (%) Others (%)

Denmark 5.09 15.28 54.04 25.57 0.03

Sweden 5 10 50 34 1
Switzerland 1 16 50 34 –
Netherlands 2 23 32 25 17
Norway 26 15 25 34 0
Japan 3 – 74 17 6
Korea, South 36 – 14 49 –
United States 54 8 14 24 –

ities, heavy metals that accumulate in the soil can lead to soil and
groundwater contamination.
(3) Incineration. Compared with the treatment methods described
above, WTE incineration can effectively reduce the weight and
volume of MSW by 80% and 90%, respectively, if modern
incinerators are used [9] as well as provide power and heat.
Currently, WTE incineration has been adopted widely in Europe
and developed Asian countries as the predominant method for
MSW treatment [21]. Table 1 provides a comparison of MSW
treatment methods in some developed countries. Table 2 shows the
detailed MSW treatment methods in and data for China.
Based on the statistics above, it can be concluded that WTE
incineration has played an increasingly significant role in China during
the past decade. The number of WTE incineration plants increased
from 47 in 2003 to 220 in 2015 (as shown in Fig. 2), and the percentage
of WTE incineration increased from 2.49% in 2003 to 32.26% in 2015,
with the treatment capacity thus having increased by more than nine
times.
3. PESTEL analysis of WTE incineration
3.1. Political aspects
3.1.1. Relevant legislation and policies on WTE incineration in China
3.1.1.1. Industrial policies. By referring to the operational patterns
and experiences of developed countries, the WTE incineration industry
in China is attempting to transition from state-owned companies to the
private sector. According to the Opinion about Promoting the
Industrial Production of Municipal Waste Water and Solid Waste
Management (2002) and the State Council, Reform of Investment
System Decision (2004) by the National Development and Reform
Commission (NDRC), the Chinese government encourages economic
entities of all ownership types to participate in investment and
operation of the WTE incineration industry. It also allows the private
sector to enter the fields of infrastructure and utilities projects as well
as other fields in which participation is not prohibited by legislation or
policies. The prices of public products and services will be gradually
standardized, and such measures as capital injections, investment
subsidies, low-interest loans and tax cuts have been taken to attract
the private sector to participate in the construction of for-profit public
welfare and infrastructure projects through individual proprietorships,
joint ventures, and project financing. The aim of this investment
system is to build a new structure of multi-investors with multiple
channels of capital resources, diversified methods of investment, and
market-oriented project construction mechanisms.
A series of policies and industrial legislation related to WTE
incineration have already been implemented in China to promote the
transformation of the administrative functions of the government and
to establish the private sector as the main investor. National and local
investment departments, administrative departments and other rele-
vant departments have supervision responsibility rather than providing
products or services. Meanwhile, a social supervision mechanism has
been established for government investment projects to encourage
transparency for the general public and news media. Trade associations
and investment intermediary institutions have been improved to
establish a management system with legal regulation, government
supervision and industry self-discipline. In addition, regional blocks
and industrial monopolies have been eliminated to create an open and
fair investment intermediary service market. The industrialization of
WTE incineration not only eases the financial burden for the govern-

Table 2
MSW treatment methods in China.
(Source: China Statistical Yearbook 2004–2016)

Year Quantity of MSW Landfill WTE Incineration Others

treatment (thousand
tons/year) Treatment Treatment rate of Treatment Treatment rate of Treatment Treatment rate of
capacity (tons/ collected MSW (%) capacity (tons/ collected MSW (%) capacity (tons/ collected MSW (%)
day) day) day)

2003 75,447 187,092 43.11 15,000 2.49 16,511 4.82

2004 80,887 205,889 44.42 16,907 2.90 15,347 4.71
2005 80,511 211,085 44.02 33,010 5.08 11,767 2.22
2006 78,726 206,626 43.18 39,966 7.67 9506 1.94
2007 94,377 215,179 50.17 44,682 9.43 7890 1.64
2008 103,066 253,268 54.57 51,606 10.17 5386 1.13
2009 112,323 273,498 56.56 71,253 12.85 6979 1.14
2010 123,178 289,957 60.73 84,940 14.66 5480 1.14
2011 130,896 300,195 61.38 94,114 15.85 14,810 2.60
2012 170,809 310,927 61.55 122,649 20.98 12,692 2.30
2013 153,940 322,782 60.87 158,488 26.88 11,030 1.55
2014 163,937 335,316 60.16 185,957 29.85 12,182 1.79
2015 180,130 344,135 59.99 219,080 32.26 13,679 1.85

278
J. Song et al.
Fig. 2. Number of incineration plants and designed treatment capacity for WTE incineration in China.
(Source: China Statistical Yearbook 2004–2016)
ment but also improves management efficiency by giving full respon-
sibility for profit and loss to the private sector and encouraging the
public to become actively involved. Therefore, a ‘multi-wins’ mechan-
ism has been created for the government, the private sector and the
public.
The Opinion about Promoting the Industrial Production of Municipal
Waste Water and Solid Waste Management (2002) proposed increasing
the capacity of harmless treatment by 0.15 million tons per day by 2005.
Since the beginning of 2006, WTE incineration has been encouraged by the
government; eastern cities were encouraged to adopt incineration as their
treatment main method, and southwestern cities were also encouraged to
gradually increase their proportion of WTE incineration with their
economic development. By the end of 2015, the MSW harmless treatment
rate had reached 90.2%, and the Construction Plan for MSW Harmless
Treatment Facilities Nationwide (2016) proposed that by 2020, the MSW
harmless treatment capacity by incineration would reach more than 50%
and more than 60% for the eastern cities. In addition, by 2015, there were
more than 300 incineration plants in China, and the power generation
capacity from MSW had reached 3 million KW. Moreover, The Eleventh
Five-Year Plan for Urban Environmental Sanitation (2006), China's
National Climate Change Program (2007), Opinions on Strengthening
the Comprehensive Management of Municipal Solid Waste & Pollution
(Draft) (2010) and the Notice on the Comprehensive Program of Work in
Energy-saving and Emission Reduction (2011) also encouraged the WTE
incineration industry, particularly in areas with a shortage of land resources
and with enough MSW to satisfy the requirements for incineration. The
Guidance on Promoting the Development of the Environmental Protection
Industry (2011) clearly noted that in large cities, WTE incineration would
be one of the key industries for the period of the 12th Five-Year Plan. The
Opinions of the State Council on Accelerating the Development of the
Energy Saving and Environmental Protection Industry (2013) proposed
that the harmless treatment capacity would reach more than 87 million
tons per day by 2015. Thus, with the recognition and support of the
Chinese government, the WTE incineration industry has achieved sub-
stantial development. In recent years, R & D spending has accumulated,
and some local enterprises have developed core WTE incineration tech-
nologies. Investment in MSW treatment facilities is growing quickly, and a
number of new WTE incineration plants are being built. The WTE
incineration industry has indeed entered a rapid growth stage in China.
3.1.1.2. Economic policies. The Chinese government's financial
support policies for the WTE incineration industry mainly include tax
incentives, price subsidies, purchase commitments and preferential
construction policies. The taxation benefits include favourable value-
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Renewable and Sustainable Energy Reviews 80 (2017) 276–289
added taxes (VAT), sales taxes and income taxes. With the notice from
the MOF and SAT defined since January 1, 2001, China implemented a
VAT refund mechanism among the WTE incineration industry's
incentives. The Reply of the State Administration of Taxation for
Income Tax Issues of MSW Treatment Fees (2005) and the Notice
about Waste Treatment Fees Levying Business Tax Issues (2007)
stipulate that MSW treatment by WTE incineration enterprises is
exempt from sales taxes. The Regulation on the Implementation of
the Enterprise Income Tax Law (2007) stipulates that beginning with
the first tax year when a project commenced production and collected
operating income, the enterprise would be exempt from corporate
income taxes from the first to the third year and would be levied one-
half of the required corporate income taxes from the fourth to the sixth
year.
In terms of preferential power prices, the Trial Guidelines on
Renewable Power Generation Price and Expense (2006) clearly defined
a price subsidy method for WTE incineration plants. WTE incineration
projects approved after 2006 that consume less than 20% conventional
energy could apply for a government pricing method. The government
pricing standards include desulfurized coal grid-connected prices and a
subsidy of 0.25 Yuan/KWH. From the date of commissioning, projects are
entitled to subsidies for 15 years. Since 2010, the subsidies for newly
approved projects decreased by 2% each year from the previous year. In
2012, the latest release of the Notice on Improving the Price Policies of
WTE Incineration for Power Generation clarified what was considered
WTE incineration grid-connected income: for WTE incineration projects
that use MSW as the raw material, the grid-connected power is calculated
based on the quantity of MSW treated.
In terms of purchase commitments, the Renewable Energy Law
(amendment) of 2009 stipulates that grid enterprises should prior-
itized and try to buy all of their grid-connected power from renewable
energy projects.
With regard to supportive policies for construction, the Notice on
Further Support for the Development of Renewable Energy-Related
Issues (1999) proposed that WTE incineration plants with more than
3000 kW of capacity should be prioritized for infrastructure bank loans
and financial discounts of 2%, preferential power prices apply to the
plants, and new MSW treatment facilities should be provided with the
construction land for projects by administrative allocation. The Opinion
about Promoting the Industrial Production of Municipal Waste Water
and Solid Waste Management (2002) also noted that a certain percentage
of government funding would be arranged to compensate for operational
costs when MSW treatment charges are not in place.
J. Song et al.
3.1.1.3. Technological policies. In order to address the phenomenon
that the immature industry standards are increasingly obvious in the
development of WTE incineration industry, a series of related provisions
have been successively promulgated by the Chinese government to upgrade
the industry standards for WTE incineration. In terms of the construction
and operation of WTE incineration plants, the Technology Policies on
MSW Treatment and Pollution Control (2000), jointly issued by the
MOHURD, MEP and MOST, provided specific provisions for all types of
treatment technologies, particularly in the field of dioxins emissions. To
reduce dioxins emissions, MSW should be fully burned in incinerators. The
flue gas should stay in the combustion chambers for at least 2 s with the
temperature not less than 850 °C, and it should be treated with the semi-
dry and bag dust removal technology. Dangerous slag and fly ash from
dangerous MSW must be disposed of as hazardous MSW. The Notice on
the Administrative Measures for the Identification of Comprehensive
Utilization Resources Encouraged by the State (2006) indicates that
MSW power generation should meet the following conditions: the
construction and operation of furnaces should meet the relevant industry
standard, the actual quantity of the monthly volume of MSW should not be
less than 90% of the design value, and the facilities must be equipped with
automatic displays and recording devices for MSW and coal feeding. The
Notice on Further Strengthening the Environmental Impact Evaluation
Management of Biomass Power Generation Project (2008) introduced
some essential requirements for the site selection of WTE incineration
plants: WTE incineration plants should not be established in built-up areas
in cities, and the distance between WTE incineration plants and other
buildings should not be less than 300 m. The WTE Incineration Treatment
Project Technical Specification (2009), WTE Incineration Project
Construction Standards (2010), and the Standard for Pollution Control
for Municipal Solid Waste Incineration (2002, 2014) as well as other
relevant policies and legislation also established specific requirements for
the construction and operation of WTE incineration plants. The Standard
for Pollution Control in Municipal Solid Waste Incineration (2014)
established the strict requirement for emissions of dioxin of 0.1 ng TEQ/
m3, which meets the standard for the European Union.
Moreover, the Chinese government has promulgated several poli-
cies to promote R & D of WTE incineration technology, including
integrating the research and applying renewable energy in national
high-tech industrial development planning, improving innovation
capabilities and establishing special research funding to support R & D.
3.1.2. Existing problems
3.1.2.1. Weak supervision. Supervision is a significant responsibility of
the government; however, most policies simply emphasize the importance
of government supervision and lack clear and specific provisions.
Moreover, unreasonable institutional designs and inadequate risk
allocation mechanisms lead to unclear rights and liabilities and to a
“blame-shifting game”. Effective supervision and cooperation mechanisms
should be established between government departments to effectively
implement the relevant legislation and policies.
3.1.2.2. Lack of capacity and experience. Due to mistakes in decision-
making on project planning, technical evaluations and MSW supply,
many WTE incineration projects have encountered problems. With
regard to the private actors that will be involved in WTE incineration
projects, the key risks they consider are their unclear obligations and
rights, inaccurate MSW supply information offered by the government,
slow decision-making processes, and insufficient guarantees regarding
policy changes. For the government, the risks that are considered to be
the main concerns are the private sector obtaining excessive profits
from public works and the failure to enact rigorous incineration and
emission standards. These situations could create further consequences
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Renewable and Sustainable Energy Reviews 80 (2017) 276–289
in cases of disputes and early termination of WTE incineration
projects. Thus, the general public tends to be concerned more about
the design standards and supervision of the construction and operation
phases of WTE incineration plants. The WTE incineration industry in
China is expected to struggle with these issues for some time.
3.2. Economic aspects
3.2.1. Investment mode
The investment mode for WTE incineration plants in China has
experienced three phases. These include direct investment by the
government, investments by state-owned enterprises with concession
agreements and investments by the private sector with concession
agreements. Since 2010, the private sector has become significantly
involved in the WTE incineration industry through PPP agreements.
From May 2012 to January 2017, 108 PPP WTE incineration projects
were deployed, with a total investment of 489 billion RMB.
A typical BOT agreement between the government and a private
actor generally stipulates that the government grants the private actor
the opportunity to build the project, to operate the project for a certain
period, and finally to transfer the project to the government at the end
of the concession period [26]. The BOT mode can significantly ease the
burden on government financing, improves efficiency, reduces con-
struction costs, and reduces operation and maintenance costs in the
delivery of public services [32]. However, in some WTE BOT projects,
private investors add extra coal into incinerators to obtain more grid-
connected income, which is obviously higher than thermal power
generation, thus reducing pollutant emissions control costs. To prevent
this illegal behaviour and obtain better management efficiency, some
governments with sufficient financial revenue have chosen to construct
WTE incineration plants by themselves and hire professional manage-
ment companies to operate the plants, which is called the Operation
and Maintenance (O & M) Contract mode.
Currently, the number of investors in the WTE incineration industry in
China has increased to approximately 50, and there are a couple of new
models for the development of the industry. These investors are primarily
divided into three categories. The first is government-oriented enterprises
that operate as a platform for the WTE incineration projects built by local
governments, such as the Shanghai Environmental Group, Tianjin Teda
Company, the Beijing Environmental Sanitation Engineering Group and
the Shanghai Pudong Development Group. The second category is profes-
sional investment operation enterprises, which introduce technology
developed by others and focus on operations management, such as
Veolia Environment, the Golden State Environment Group Corporation,
Everbright International and Eguard Resources Development Co., Ltd. The
third category includes project investment operation enterprises, which
employ independent technology and focus on construction and operations
management, such as Beijing China Sciences General Energy &
Environment Co., Ltd, Chongqing Sanfeng Covanta, Tsinghua Tongfang,
Dynagreen Environmental Protection Group Co., Ltd, Hangzhou Jinjiang
Group and Zhejiang Weiming Environmental Protection Co., Ltd.
3.2.2. Investment distribution and scale
In China, most of the WTE incineration plants are located in the
eastern region. By the end of 2015, 150 of the 220 WTE incineration
plants were located in the east (Fig. 3). Zhejiang, Jiangsu and
Guangdong provinces possess one-half of the WTE incineration plants
in China. There are several main reasons for this concentration. First,
these provinces have highly developed economies, high population
density, large amounts of MSW and significant land scarcity, all of
which require fast and efficient MSW treatment methods such as WTE
incineration. Second, developed tertiary industry leads to high MSW
heating values, which is more suitable for incineration (Table 3).
Compared with the east, eight provinces (Jiangxi, Guizhou, Shaanxi,
J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

Fig. 3. Distribution of incineration plants in China.

Fig. 4. Investment intensity.
(Source: China Statistical Yearbook 2016)

3.2.3. Investment intensity

Gansu, Qinghai, Ningxia, Xinjiang, and Tibet) in the centre and west of
In China, the unbalanced economic levels in different areas have led
China do not have any WTE incineration plants. In the western region,
to differences in investment intensity (as shown in Fig. 4).
the WTE incineration industry is developing slowly, mainly because of
Megalopolises (including Beijing, Shanghai, and Guangzhou) are
economic restrictions and the fact that the heating value of MSW in the
the economic and political centres and are the first choices for
west is not suitable for incineration, so investors are less willing to
investors. These cities have high population densities and highly
explore these areas. In addition, the western region has abundant
developed economies, resulting in large amounts of MSW with high
landfill land, which means that WTE incineration is not profitable.
heating value, which make WTE incineration plants more likely to be
Moreover, most WTE incineration plants are located in large cities,
profitable. However, because of the higher cost of imported equipment,
but small and medium-sized cities, which have 40% of the urban
stricter air pollution controls, higher land acquisition costs and higher
population, also face serious MSW treatment problems and are in need
indirect costs including design, supervision and administration fees,
of WTE incineration [6]. The local governments of these cities have
the construction costs in these cities are much higher than in other
opened sectors for WTE incineration through concessions; however, a
areas, and the average investment intensity is approximately 500,000
lack of sufficient financing support is still a bottleneck in promoting
to 700,000 Yuan/ton*day.
cleaner WTE technologies [4]. In response to this situation, the Asian
There is a great difference in investment intensity for WTE incinera-
Development Bank and Dynagreen Company plan to form a partner-
ship to develop nine WTE incineration plants in small and medium- tion plants in the eastern region and the midwest, and both imported and
domestic equipment play important roles in the eastern cities. For the
sized cities before 2018 with a capacity of 6300 t/day. To ensure that
the projects are profitable, minimum MSW supply quantities and the developed cities in the east, such as the municipalities that are directly
under the Central Government, provincial capitals and special economic
subsidies are included in the concession agreement, which can serve as
a reference for future investors. It is predicted that as the MSW zones (except for Beijing, Shanghai, and Guangzhou), the economic
development level is not higher than that in the megalopolises; rather,
treatment facilities in large cities gradually become more mature and
sufficient, the smaller cities will attract more investors. it is similar that in developed countries, and subsidies from the govern-
ment are relatively high, which makes the competition to construct WTE
The scale of the early construction of WTE incineration plants in
incineration plants in these areas fierce due to the urgent need for such
China was small, and their treatment capacity was only approximately
facilities. Thus, imported facilities are preferred, and the investment
300–500 t per day. The newly constructed plants tend to have larger
intensity ranks second only to the megalopolises, with approximately
design scales and treatment capacities; the average capacity is approxi-
400,000 to 500,000 Yuan/ton*day. Considering the land shortages and
mately 1000–1500 t per day. The largest WTE incineration plant in
large investment costs, medium and small cities in the eastern region
Asia was constructed at Lujia Mountain, Beijing, with a design capacity
prefer WTE incineration with domestic facilities, and the investment
of 3000 t per day. There are two reasons to promote larger WTE
intensity is approximately 250,000 to 400,000 Yuan/ton*day.
incineration plants. The first concerns public protests of WTE incin-
An imbalance has been observed in the central and western regions,
eration due to the toxic dioxins produced by plants; it is difficult to
where WTE incineration plants are mainly distributed in provincial
choose construction sites, so once they find an appropriate site,
capitals. Except for Chengdu and Taiyuan, which have imported
investors make the WTE incineration plants as large as possible. The
treatment facilities, the remaining cities use domestic fluidized beds,
second reason is the scale effect of WTE incineration; that is, the MSW
which have a price advantage for low levels of economic development
treatment capacity needs to reach a certain scale to be profitable, and
and need additional coal, which is in sufficient supply in these areas.
the greater the scale of a plant is, the greater the benefits are.
Some typical WTE incineration plants are shown in Table 4.

Table 3
Comparison of GDP and tertiary industry in five provinces.
(Source: China Statistical Yearbook 2016)

Province Number of incineration plants GDP Tertiary industry

Figure (Billions of Yuan) Rankinga Percentage of GDP Rankinga

Zhejiang 33 4289 4 48.6% 11

Jiangsu 31 7012 2 49.2% 9
Guangdong 21 7281 1 50.6% 8
Fujian 14 2598 11 41.6% 22
Shandong 21 6300 3 45.3% 14

a
Excluding municipalities directly under the Central Government.

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J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

3.2.4. Major sources of income

Operation MSW treatment subsidies and grid-connected income are the major
sources of income for WTE incineration projects. Currently, the

2006/1

2007/7

2005/5

2010/1

2006/8
subsidy for MSW treatment is estimated using the cost-plus pricing
time

2005

2001

2005
method, which primarily contains two parts: the first is operational
costs and taxes, and the second is estimated profit, which multiplies the
first part by a certain percentage. The grid-connected price in China is
connected power

primarily divided into two categories. For projects approved before

Price of grid-

January 1, 2006, the grid-connected price is the approved price

according to the bidding price. For projects approved after January
0.527

0.553

0.583
1, 2006, the conversion coefficient from MSW to grid-connected power
0.63

0.55

0.32
0.52

0.55
is determined to be 280 KWH/ton, and the grid-connected price is
0.65 Yuan/KWH. When the converted grid-connected power is less
government (Yuan/

than 50% of the actual grid-connected power, the WTE incineration

project is regarded as a conventional power generation project and
Subsidy from

does not enjoy the WTE incineration price subsidies. When the
converted grid-connected power is more than 50% of the actual grid-
connected power and less than the actual grid-connected power, the
ton)

138

100

167

converted grid-connected power is regarded as the grid-connected

80

10

86

70
71

power. Meanwhile, when the converted grid-connected power is higher

than the actual grid-connected power, the actual grid-connected power
Capacity (Billions

is regarded as the grid-connected power.

As a matter of fact, many WTE incineration plants in China find it
Generation

difficult to operate. The subsidy for MSW treatment in China is lower

of KWH)
Installed

than that in developed countries, and there are substantial differences

1.013
1.58

between the various cities, from 10 to 243 Yuan/ton. Moreover, some

1.5

1.2

1.9

0.8
1.3

WTE incineration projects are now only funded from the government's
fiscal revenue and therefore suffer delays in payment because it is
difficult to charge MSW treatment fees. In addition, inaccurate
Investment

(Billions of

estimations of the amount of MSW, the lack of pre-classification, low

amount

heating values and high levels of moisture in MSW make WTE

Yuan)

7.25

3.15

incineration plants in China inefficient to operate. For example,

5.7

2.2

5.4
1.6

3.8

5.5

according to statistics from 2012, there were five WTE incineration

plants in Kunming with a total design capacity of 5300 t per day, but
Japan Mitsubishi-Mart in

German SITY2000 grate

Japan Takuma SN grate
High-density circulating

High-density circulating
Fluidized bed, made in

Japan Hitachi VonRoll

fluidized bed, made in

fluidized bed, made in

only 4000 t of MSW were collected every day, which is less than the
Belgian Seghers SHA

design capacity [14]. Due to the unreasonable distribution of these

multi-grade grate

plants and the high transportation fees for MSW, the actual quantity of
Incinerator

MSW is only approximately 50% of the design capacity. As a result,

these plants cannot obtain sufficient subsidies.
China

China

China
grate

grate

3.3. Social aspects

Design Treatment

(metric tons/day)

3.3.1. MSW treatment and classification difficulties

Currently, most cities in China are surrounded by MSW and face
Capacity

serious environmental pollution. The acceleration of urbanization is an

1040

1200

1200

1600

1200
1200

important reason for the rapid growth in the quantity of MSW in China.
600

600

The current urban population of China is 731 million [15], and the
urban population is expected to comprise nearly 60% of the total
population by 2025 [23]. It has been reported that approximately 30%
Investment

of the country's MSW is not collected [44], and more than 200 cities in
China are surrounded by waste [3]. The contradiction between the
Operation situation for typical WTE incineration plants.

mode

O&M

BOT

BOT

BOT
BOT

BOT

BOT
BOT

continuous growth of MSW and the insufficiency of MSW treatment

capacity has become increasingly prominent and severely restricts
Guangdong Province

Guangdong Province

urban development.
Dezhou, Shandong

Kunming, Yunnan

Chengdu, Sichuan

Faced with the huge amounts of MSW generated each year and
Ningbo, Jiangsu

valuable land resources, the serious problem of MSW is difficult to

Guangzhou,

Chongqing
Shenzhen,
Location

solve by solely relying on landfilling and composting. Beijing started

Province

Province

Province

Province
Tianjin

running the Gaoantun MSW landfill plant in 2002, in which the

quantity of MSW exceeded three times its treatment capacity in
2008. In addition, much MSW not only affects the environment but
Central and western

also human health from the toxic substances emanating from it, which
Types of Cities

causes residents to protest. In April 2009, the Gaoantun WTE

Megalopolises

Eastern area

incineration plant commenced trial operations, which to a certain

areas

extent decreased the pressure on the landfill plant.

Table 4

In addition to MSW treatment difficulties, MSW classification is

another serious problem in the cities of China, which has restricted the

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J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

development of MSW treatment for a long time. At present, large cities
in China have generally established dustbins for separate collection
from the main streets and in residential areas, but so far, many
problems have emerged in the implementation of MSW collection.
First, the general public lacks environmental awareness and ignores the
importance of classification. Second, the separate collection facilities
are inadequate and also lack classification guidance. Third, the
classification transportation facilities are insufficient, which results in
classified MSW being remixed. Finally, China lacks mandatory regula-
tory measures; thus, MSW classification in China still has a long way to
go.
3.3.2. Public concern
With the aggravation of the global energy crisis, the concept that
"MSW is a misplaced resource" has grown in the public's conscious-
ness. However, the idea of using WTE incineration to treat the huge
amount of MSW has brought much controversy. On the one hand, WTE
incineration can reduce greenhouse gas (GHG) emissions, such as
carbon dioxide and methane, and effectively alleviate the greenhouse
effect as well. From 2006 to 2014, there were 54 WTE incineration
projects in China with total annual cuts of 8.23 million tCO2e that were
approved by the National Development and Reform Commission as
Clean Development Mechanism (CDM) projects. On the other hand,
due to the emissions of dioxin and other carcinogenic substances, such
projects often face fierce public opposition.
So far, there have been several mass disturbances by residents that
have led to the failure of WTE incineration projects in many cities of
China (Table 5). The public is most concerned about three aspects: 1)
what can be considered a safe distance between WTE incineration
plants and neighbourhoods? 2) what WTE incineration technology is
most suitable for local MSW? and 3) what are the effects of the choice
of WTE incineration technology and devices on profit transfer beha-
viours? Both the reality of incineration and the continuous public
opposition indicate that WTE incineration problems in China have
evolved from technical problems, environmental problems and urban
management issues into sensitive social issues that have therefore
become a major threat to social stability.
As a matter of fact, with the development of urbanization and the
real estate industry, many real estate projects violated the urban
planning regulations and were built close to WTE incineration plants.
In practice, local residents who lived nearby WTE incineration plants
were deceived by the government, which hid information concerning
approval and site selection because the government feared that public
opposition would lead to the failure of environmental impact assess-
ments and prevent implementation of the projects. Most residents
knew nothing about incineration pollution before the construction of
the projects because if the project information was disclosed, harsh
criticism and opposition from the public would have resulted. On the
surface, the public's doubts and objections specifically concern incin-
eration techniques and standards and the equipment used, but the
public's deep distrust of the government's capacity to make decisions,
inform the public, and implement policies is a more profound problem.
On the other hand, after the completion of construction, it was also
difficult for the public to acquire actual operation information about
the WTE incineration plants. The WTE incineration plant reports
always show that resident inspectors are able to obtain inspection
records daily, and the environmental monitoring authorities indicate
that the operational indicators coincide with the requirements.
However, the surrounding residents often experience only dense smoke
and a stench. In 2012, an investigation by Wuhu Ecology Centre
showed that in 122 operational WTE incineration plants in 76 cities in
China, only 18 cities had disclosed pollutant monitoring data for 42
WTE incineration plants, and the pollutant monitoring data for
dioxins, fly ash and slag were limited. In addition, although many
residents reported secondary pollution problems many times through
multiple channels, they were unable to obtain any satisfactory answers
or solutions.
Public participation in the supervision of WTE incineration projects
in China has been lacking. The issue is not that the public is unwilling
to participate in supervision, but incomplete regulatory mechanisms, a
lack of open public hearings and methods of supervision and informa-
tion asymmetry make it difficult for the public to assume supervision
responsibility. Although many citizens have the desire to monitor WTE
incineration projects, they cannot do so because of the inconvenience
and high cost of personal supervision.
3.3.3. Solution to the public opposition
With regard to the government, effective methods to alleviate the
public's concerns include improving existing policies and regulations,
investigating and evaluating problems caused by the projects, and
providing appropriate compensation to residents who live close to a
plant. In addition, it should also be feasible to provide more open
operational information to local residents and thus improve the plants’
transparency.

Table 5
Public opposition events caused by WTE incineration since 2007.

Time Place Main Events

Jun. 2007 Beijing The Liulitun WTE incineration plant was strongly resisted by the public and then stopped by the MEP.
Jun. 2008 Wuhan The Chenjiachong WTE incineration plant was blocked by surrounding residents, and some of Hankou's MSW was forced to detour to the Jiangxia
landfill plant, which is 130 km away from the waste transfer station. Because of the long journey, some MSW cannot be cleaned up and transported in
a timely manner.
Feb. 2009 Nanjing More than five thousand residents jointly opposed the construction of the Nanjing Tianjingwa WTE incineration plant.
Mar. 2009 Beijing Thousands of people in the Chaoyang district of Beijing launched a petition against the construction of the Gaoantun WTE incineration plant.
Apr. 2009 Shanghai Surrounding residents of the Shanghai Hongqiao WTE incineration plant protested and hung banners at the gate of the plant, stating “Unite and fight
against the worsening living environment”.
Apr. 2009 Zhengzhou Surrounding residents of a WTE incineration plant blocked MSW trunks, which resulted in confusion and a 35-metre long MSW pile on the road.
May. 2009 Shenzhen Hundreds of residents gathered to protest the construction of the Baigehu WTE incineration project.
Aug. 2009 Beijing People organized a motorcade to protest the construction of the Asuwei WTE incineration plant.
Oct. 2009 Jiangsu Ten thousand local residents in Wujiang engaged in street protests against the operation of a WTE incineration plant.
Nov. 2009 Guangzhou Thousands of surrounding residents launched a petition against the Panyu WTE incineration plant.
Jan. 2010 Guangzhou The Likeng WTE incineration plant exploded, and 5 people were injured.
Dec. 2013 Shanghai The Jiangqiao WTE incineration plant exploded; 2 people were killed and 5 injured.
May 2014 Hangzhou Thousands of residents blocked Provincial Highway 02 to protest the construction of the Yuhang Zhongtai WTE incineration plant.
Sep. 2014 Huizhou Thousands of residents gathered to protest the construction of the Guangdong Boluo WTE incineration project.
Apr. 2016 Haiyan The public gathered at the gate of the Haiyan government and at the intersection of East and West Avenue due to their objections to the Haiyan WTE
incineration plant.
Jun. 2016 Xiantao Local residents in Xiantao gathered to protest the construction of the WTE incineration plant.
Jul. 2016 Zhaoqing More than one thousand people in Lubu town gathered in front of the town government to protest the construction of a WTE incineration project.
Oct. 2016 Xian Residents in Gaoling staged a large-scale demonstration against the construction of a WTE incineration plant.

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To supervise the operation of WTE incineration plants more

effectively and to respond to the public's concerns, China's 13th Five-
Year Plan requires all WTE incineration plants to publish their
pollutant emissions by 2020. If this occurs, the public's confidence
and trust could be restored. For example, the public strongly opposed
the Panyu WTE incineration project in Guangzhou in the beginning, so
the construction was delayed and even suspended. The government
then re-examined the entire project, applied for approval by experts
and the public, established a Citizens’ Advisory and Oversight
Committee, and ultimately determined the proper location for the
project and restarted construction. Five WTE incineration plants in
China were rated as 3 A in 2012, and they all had the common
characteristic of being open to the public, including the Gaoantun
WTE incineration plant in Beijing. In fact, it became a one-day trip for Fig. 5. Types of incinerators.
scenic and environmental education for youths organized by the Beijing (Source：Development Report on Treatment Industry of MSW in 2015)

Civilization Office, with at least one large-scale visit each week.

3.4. Technological aspects
3.4.1. MSW characteristics
In China, the composition of MSW is particularly complicated, with
high moisture and low heating value. The composition has changed
tremendously from coal cinders to kitchen MSW [12]. Statistics show that
the average heating value and moisture in China are 3350-5000 kJ/kg and
40–60%, respectively, while the corresponding data for developed countries
are 7500-10,450 kJ/kg and 20–40% [24,30,37,38,40]. According to the
World Bank [41], the average minimal heating value should be at least
7000 kJ/kg and never lower than 6000 kJ/kg; otherwise, the recycle heat
will be low, and excess treatment fees will be needed. The heating value of
MSW in China is in a transition period from a low heating value (3350 kJ/
kg) to stable, high heating value (7530 kJ/kg) [8]. For investors, it is
essential to investigate the characteristics of the MSW in an objective area,
particularly the heating value, moisture, organic content and the degree of
classification, and then choose the appropriate equipment and operational
patterns.
At present, the percentage of ash in MSW has decreased to less than
20%, while combustibles represent more than 20%, and biodegradable
organics have increased to approximately 50% [13,29,42]. However,
there are substantial differences between various areas with regard to
biodegradable organics. The percentage of biodegradable organics in
large cities is 31–36%, while that in medium and small-sized cities is
50% and 65%, respectively.
3.4.2. Incineration techniques
In contrast to the status in Europe, where most incinerators are
grate furnaces, the fluidized bed technology plays an important role in
China, and in a few areas, rotary kilns and pyrolysis furnaces are also
employed. Fig. 5 shows the incinerator types used in China as of the
end of 2015 [33].
3.4.2.1. Grate furnace technique. The grate furnace technique is
complex and is widely used overseas. Statistics show that 64% of WTE
incineration plants with grate furnaces in China imported equipment from
abroad, 15% imported the technique but produced it domestically, and
the others used domestic equipment. The foreign suppliers primarily
include Belgium's Seghers SHA multi-grade grate, Japan's Mitsubishi-
Martin grate, Japan's Takuma SN grate, Germany's Noerkeerchi grate,
Germany's Sitanmile grate and the United States’ Detroit grate. Because
all of this equipment aims to treat MSW with high heating value and low
moisture in developed countries, the equipment is not a perfect match in
China. To meet the requirements of MSW in China, some famous
producers such as ABB in Switzerland, DBA in Germany, Mitsubishi in
Japan, Alstom in France, and Ebara in Japan developed specialized
incinerators for plants in Beijing, Guangzhou, Shanghai and Ningbo.
Some Chinese WTE incineration plants choose to import techniques and
then manufacture the equipment domestically to reduce costs and
improve the equipment's performance to meet the requirements for
WTE incineration in China. These grate furnaces, such as SITY2000,
Hitachi Zosen and Seghers, promote the application and development of
grate furnaces in China; however, there is still a large performance gap
between the domestic and imported equipment. Compared with the
German equipment, which can operate perfectly over a 30-year period,
a series of breakdowns have occurred with some of the domestic
equipment that had operated for no more than for 3 years, and much
of the domestic equipment performs ineffectively. The lower heating value
of the MSW in China makes it more difficult to maintain a stable and high
working temperature, thus aggravating the generation of dioxins.
3.4.2.2. Fluidized bed technique. Most fluidized beds use domestic
techniques produced by Hangzhou Jinjiang Group, Beijing China
Sciences General Energy & Environment Co. Ltd. and Tsinghua
Tongfang Co. Ltd. The technique from the first two firms generally
requires auxiliary fuels of approximately 20% of the quantity of MSW,
and some even must add coal of more than 40% of the quantity of
MSW. It should be noted that Hangzhou Jinjiang Group developed a
density circulating fluidized bed that is particularly designed for the
characteristics of MSW in China and can burn raw MSW directly
through some processes, such as pre-treatment for MSW, smoke
treatment, slag sorting and recycling, and automatic ignition control
devices. As for adding coal as an auxiliary fuel, the fluidized bed is more
likely to burn MSW with a lower heating value and higher moisture
adequately.
3.4.2.3. Development trends. Influenced by the incinerators’ properties,
most plants that use the grate furnace technique are located in the eastern
coastal areas, particularly provincial capitals and sub-provincial cities. In
contrast, most plants in large cities in the centre, west and northeast as
well as those in smaller cities in the east have chosen the fluidized bed
technique, including Changchun, Dalian and Zhengzhou.
Before 2006, there were many fluidized bed plants in China because
restriction policies were rare. However, according to the Trial
Guidelines on Renewable Power Generation Price and Expense, there
are no subsidies given if an incinerator uses more than 20% of coal as
an auxiliary fuel; such a project will be considered a thermal power
generation project. Thus, newly constructed plants using fluidized beds
could not obtain subsidies because they added more than 20% of
auxiliary fuels. Moreover, the treatment capacity of fluidized beds is
relatively small, which makes them only suitable for small and
medium-sized cities.
Currently, developed countries and areas no longer implement
WTE incineration techniques that need auxiliary coal. For example, the
Ministry of the Environment of Japan has made it clear that the

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J. Song et al.
fluidized bed technique is no longer in use because of its high cost and
the contamination it causes. It has been predicted that the percentage
of grate furnaces will gradually increase because of the localization of
the technology and policy support.
In contrast to the two former techniques, the pyrolysis technique in
the WTE incineration industry has already started to be used and has
significant potential in developed areas, although it has not been
employed in China [8]. The characteristics of the pyrolysis technique
include a high power generation rate, high energy consumption, and
high investment in flue gas controls. The MSW treatment scale is small
when using dry distillation, and there are no flue gas purification
facilities and higher pre-treatment requirements. At present, the
marketization of pyrolysis furnaces is still unclear.
As the latest policy standard for MSW treatment, the 13th Five-year
Ecological Environmental Protection Plan has proposed that large-
and medium-sized cities should prioritize the development of WTE
incineration techniques and encourage regional co-constructed and
shared incineration facilities. It has also proposed that biological
treatment techniques should be further promoted. In order to improve
collection, storage and transportation systems, MSW should be col-
lected and conveyed through completely closed methods. Moreover,
landfill leachate treatment, the disposition of fly ash from incineration,
landfill methane utilization and stench treatment should be enhanced.
To speed up the construction of resource utilization and harmless
treatment systems for MSW, such as food waste, construction waste
and waste textiles, demonstration areas and projects for MSW treat-
ment and disposal facilities for food waste should be built in large- and
medium-sized cities. In addition, the plan also advocates for the
treatment of MSW using cement kilns.
3.5. Environmental aspects
3.5.1. Environmental protection expenditures
In the 1970s, China pursued economic development blindly, which
led to ignorance about environmental protection [5]. As a result, China
faces various emerging environmental problems that the Chinese
government has had to address due to public pressure. In recent years,
environmental protection has been proposed by the government as a
primary national policy. The total investment for environmental
protection and the proportion of total GDP have both consistently
increased from China's 7th Five-year Plan to the 12th Five-year Plan
(Fig. 6). According to the 13th Five-year Environmental Protection
Plan , the development of an ecological civilization has become a
national strategy. By 2020, the MSW treatment rate will reach 95% or
more, and the waste incineration rate will reach 40%.
3.5.2. Pollution and environmental risk control
MSW treatment has a history of over 100 years, but flue gas
treatment started only in the 1970s. Dioxins in flue gas have strong
lipophilicity and stability; they settle and persist in various environ-
mental mediums, are transferred to the human body through food and
water and ultimately endanger human health and the safety of
ecosystems [10].
Before 2014, China had been adhering to the Standard for
Pollution Control in Municipal Solid Waste Incineration, released in
2001, which was much lower than the European EU2000/76/EC
standard, particularly in the field of dioxin emissions. Ni [28] inves-
tigated the dioxin emissions in 19 WTE incineration plants in China
that had a daily treatment capacity between 150 to 500 t, and the
results showed that the dioxin emissions from the 19 incinerators were
between 0.042 ng TEQ/m3 and 2.461 ng TEQ/m3, with an average of
0.423 ng TEQ/m3, which was much higher than the EU limit. Among
them, only 6 samples, or 31.6%, were below 0.1 ng TEQ/m3 and met
the EU standard. A comparison of existing studies shows that dioxin
emissions from WTE incineration plants in developed countries must
meet the EU standard of 0.1 ng TEQ/m3.
285
Renewable and Sustainable Energy Reviews 80 (2017) 276–289
On June 16, 2014, the MEP and the General Administration of
Quality Supervision, Inspection and Quarantine (AQSIQ) released the
latest revision of the Standard for Pollution Control in Municipal Solid
Waste Incineration, in which the smoke criteria changed from 80 mg/
Nm3 to 20 mg/Nm3, Hg from 0.2 mg/Nm3 to 0.05 mg/Nm3, and
dioxins from 1 ng TEQ/m3 to 0.1 ng TEQ/m3. Since July 1, 2014,
newly built incinerators must adhere to the new standards, and existing
incinerators will need to comply with the new standards as of January
1, 2016. A comparison of the pollutant emissions standards between
China and the EU is shown in Table 6.
The 13th Five-year Ecological Environmental Protection Plan has
attached great importance to the prevention and control of environ-
mental risks from hazardous waste. By 2020, the Chinese government
will clarify the situation regarding the production, storage, utilization
and treatment of hazardous waste in key industries, will carry out
national surveys of hazardous waste and will revise its hazardous waste
list. For example, the government intends to crack down on criminal
activities in the petrochemical and chemical industry, including the
illegal transfer, utilization and treatment of hazardous waste.
Furthermore, the government will strengthen the quality and super-
vision of imported petrochemical and chemical products, and the
import of solid waste such as waste oil in the disguise of the crude
oil, furnace oil and lubricating oil, will be forbidden. The plan also
proposes further development of the supervision and assessment of
hazardous waste management and describes special procedures for the
rectification of fly ash caused by WTE incineration, heavy metal waste
and antibiotics residue. Standards for secondary pollution control from
the treatment of hazardous waste must be clearly stipulated to meet
requirements for environmental protection and to promote the safe
utilization of hazardous waste. The plan thus provides clear guidance
for the future of the MSW treatment industry.
3.6. Legal aspects
The industrial, economic, technological, and environmental protec-
tion legislation and policies related to WTE incineration in China have
been promulgated over the past two decades.
(1) The Chinese government has taken measures to encourage the
industrialization of WTE incineration. The industrial legislation and
policies released since 2000 are shown in Table 7.
(2) In order to attract private investment in the WTE incineration
industry, the Chinese government has implemented a variety of
economic policies (as shown in Table 8).
(3) The industrial and economic policies listed above aim to
accelerate the development and reform of the WTE incineration
industry. Meanwhile, the Chinese government has successively pro-
mulgated a series of related technological policies to standardize the
construction and operation of WTE incineration plants (as shown in
Table 9).
(4) In order to standardize the construction and operation of WTE
incineration projects, the Chinese government also promulgated a
series of environmental protection policies, which are shown in
Table 10.
In China, the legislation and policies related to WTE incineration
lag far behind the development of the WTE incineration industry.
Although national departments, including the State Council, NDRC,
MOHURD, MEP, MOF, NPCSC, MOST, SAT, SERC, NEA and AQSIQ,
have promulgated legislation and policies regulating the MSW treat-
ment industry, detailed provisions, clear legal responsibility and
manoeuvrability and reliable rewards and punishments in the legisla-
tion and policies related to WTE incineration are still lacking. In
addition, these policies and legislation are often not fully implemented
in practice by some local public agencies. Due to the instability and
incompleteness of the legislation and policies, the private sector faces
unfair project bidding practices and policy change risks, which
frequently occur during operational periods. Moreover, there are also
J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

Fig. 6. The trend of environmental protection expenditures in China.

(Source: China's 7th Five-year Plan to 12th Five-year Plan)

regional differences in MSW in China. For most MSW, the composition which represents a significant challenge for the private sector, as it
is quite complex due to the lack of environmental awareness and the will cause confusion and a desire to renegotiate subsidies, investment
lack of a classification system. Therefore, it is necessary to strengthen modes and technical standards. Meanwhile, the continued develop-
local legislation and the mechanisms for punishment in order to ment of the industry can also be considered a new opportunity for
support the successful implementation of nationwide legislation and investors in the Chinese market to meet the emerging demand. Since
policies. 2014, PPPs have become an important instrument for local govern-
ments to stabilize economic growth, adjust the economic structure,
promote market reforms and benefit the livelihoods of the Chinese
4. Conclusion
people. By 2017, 108 WTE incineration projects with a total investment
of 489 billion RMB had been proposed for bids via the PPP mode. To
MSW treatment is considered to be one of the most critical
mitigate the myriad of risks, such as legal and policy change risks,
environmental issues in China. As an effective method of MSW
technical risks, contract change risks, MSW supply risks and revenue
treatment, WTE incineration can significantly reduce the quantity
risks, the private sector should emphasize the completion of project
and volume of MSW and generate power and heat. During recent
feasibility studies, obtain government guarantees by specifically defin-
decades, the WTE incineration industry in China has experienced rapid
ing each party's obligations and rights, and carefully design compensa-
development, and many projects are in operation. However, the lack of
tion clauses, formulas and conditions for adjusting subsidies and
a systematic analysis of the macro-environment has led to significant
concession periods in PPP agreements. Another important aspect is
risk and many failure cases of the WTE incineration industry in China.
the complex characteristics of MSW caused by the lack of classification
By using the PESTEL framework, the macro-environment of the
facilities and the low level of environmental awareness. It is essential to
WTE incineration industry in China has been analysed based on
investigate the heating value, moisture and content of the MSW in an
political, economic, social, technological, environmental and legal
objective area, to carry out MSW pre-classification treatment before
aspects, and managerial implications as well as suggestions for the
incineration and to adopt the appropriate equipment and technology. It
government and private sector have been provided.
is also necessary to promote research on WTE incineration technology
For the private sector, policy changes, the extensive application of
that responds to the specific characteristics of MSW.
PPPs and the complex characteristics of MSW in China are considered
For the government, by summarizing and clarifying the policy
to be the critical factors that should be taken into consideration. With
change process for the WTE incineration industry in China, the main
the development of the new type of urbanization and the recognition of
obstacles to MSW treatment have been identified and relevant sugges-
the importance of environment protection, the policies on the WTE
tions proposed. This study concludes that MSW management in China
incineration industry in China have been continuously improved,

Table 6
Comparison of pollutant emissions standards between China and the EU.
(Source: Standard for Pollution Control in WTE Incineration)

Pollutant Units Standard in China (2001) Standard in China (2014) Standard in EU

smoke mg/Nm3 80 20 10
HCL mg/Nm3 75 50 10
HF mg/Nm3 – – 1
SOx mg/Nm3 260 80 50
NOx mg/Nm3 400 250 200
CO mg/Nm3 150 80 50
TOC mg/Nm3 – – 10
Hg mg/Nm3 0.2 0.05 0.05
Cd mg/Nm3 0.1 0.1 0.05
Pb mg/Nm3 1.6 1.0 ≤0.5
other metal mg/Nm3 – 1.0 ≤0.5
dioxins ng TEQ/m3 1.0 0.1 0.1

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J. Song et al. Renewable and Sustainable Energy Reviews 80 (2017) 276–289

Table 7
Industrial policies on WTE incineration.

Legislation and policies Issuance date Administrative department

Notice on Promoting the Charge System and Industrial June 7, 2002 NDRC/ Ministry of Housing and Urban-Rural Development (MOHURD)/ Ministry
Development of Municipal Solid Waste Treatment of Finance (MOF)/ Ministry of Environmental Protection (MEP)
Opinion about Promoting the Industrial Production of Municipal September 10, 2002 NDRC/MOHURD/MEP
Waste Water and Solid Waste Management
Opinions on Speeding up the Marketization of Municipal Public December 27, 2002 MOHURD
Utilities
The State Council's Decision on Reform of the Investment System July 16, 2004 State Council
Administrative Measures on the Concession of Municipal Public March 19, 2004 MOHURD
Utilities
Administrative Measures on Municipal Solid Waste April 28, 2007 MOHURD
Suggestions on Enhancement of MSW and Sewage Treatment June 8, 2010 MEP/MOHURD/NDRC
Work
Notice on Further Enhancement of MSW Treatment Work April 19, 2011 State Council
Construction Plan for MSW Harmless Treatment Facilities April 19, 2012 NDRC/MOHURD/MEP
Nationwide
Administrative Measures on Municipal Solid Waste (Revised) May 4, 2015 MOHURD
Suggestions for the Further Enhancement of WTE Incineration October 22, 2016 NDRC/MOHURD/Ministry of Land and Resources (MLR)/MEP
Treatment

Table 8
Economic policies on WTE incineration.

Legislation and policies Issuance date Administrative department

Notice on Further Support for the Development of Renewable Energy-Related Issues January 12, 1999 NDRC/ Ministry of Science and Technology (MOST)
Notice on Implementing Charge System of MSW and Improving Industrialization of June 7, 2002 NDRC/MOF/ MOHURD/MEP
MSW Treatment
Catalogue for Comprehensive Utilization of Resources January 12, 2004 NDRC
Catalogue for Guiding the Development of the Renewable Energy Industry November 29, 2005 NDRC
Approval for Income Tax Issues of MSW Treatment Fees from State Administration of November 30, 2005 State Administration of Taxation (SAT)
Taxation
Renewable Energy Law of the People's Republic of China January 1, 2006 NPCSC
Trial Guidelines on Renewable Power Generation Price and Expense January 1, 2006 NDRC
Management Guideline of Renewable Energy Power Generation May 1, 2006 NDRC
Notice about Waste Treatment Fees Levying Business Tax Issues May 8, 2007 MOHURD
Method to Regulate Power Grid Enterprises to Purchase All the Renewable Resource September 1, 2007 State Electricity Regulatory Commission (SERC)
Power
Regulation on the Implementation of the Enterprise Income Tax Law December 6, 2007 State Council
Resource Comprehensive Utilization Enterprises’ Income Tax Preferential Catalogue January 1, 2008 MOF/SAT/NDRC
Circular Economy Promotion Law August 28, 2008 Standing Committee of the National People's Congress
(NPCSC)
Notice on Added-value Tax Policy about Renewable Resources January 1, 2009 MOF/SAT
Notice of Comprehensive Utilization of Resources and Value-added Tax Policies for January 1, 2009 MOF/SAT
Other Products
Circular Economy Promotion Law of the People's Republic of China January 1, 2009 NPCSC
Revised Draft of Renewable Energy Law of the People's Republic of China April 1, 2010 NPCSC
Notice on Improving the Price Policies in WTE Incineration for Power Generation April 1, 2012 NDRC
Guidelines for Item Segregation of Construction Budget for Garbage Power Generation September 1, 2013 National Energy Administration (NEA)
Project
Notice on Assessment Index System of Circular Economy Development (2017 Edition) December 27, 2016 NDRC

Table 9
Technological policies on WTE incineration.

Legislation and policies Issuance date Administrative department

Technology Policies on MSW Treatment and Pollution Control May 29, 2000 MOHURD/MEP/MOST
Standard for Pollution Control in Municipal Solid Waste Incineration January 1, 2002 MEP
Renewable Energy Law January 1, 2006 NPCSC
Notice on Enhancing Environmental Impact Assessment of Biomass-to-Energy June 2006 MEP/NDRC
Power Projects
Notice on the Administrative Measures for the Identification of Comprehensive September 7, 2006 NDRC/MOF/SAT
Utilization Resources Encouraged by the State
Notice on Further Strengthening the Environmental Impact Evaluation September 4, 2008 MEP/NDRC/NEA
Management of Biomass Power Generation Project
Circular Economy Promotion Law of the People's Republic of China January 1, 2009 NPCSC
Technical Manual of WTE Incineration Treatment Projects July 1, 2009 MOHURD
Revised Draft of Renewable Energy Law of the People's Republic of China April 1, 2010 NPCSC
Technical Requirements of MSW Grab Cranes in Domestic WTE Incineration Plants May 24, 2013 MOHURD
Standard for Pollution Control in Municipal Solid Waste Incineration May 16, 2014 MEP/ General Administration of Quality Supervision, Inspection
and Quarantine (AQSIQ)

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J. Song et al.
Table 10
Environmental protection policies on WTE incineration.
Legislation and policies
Guidance on Promoting the Development of Circular Economy
The Eleventh Five-Year Plan for Urban Environmental Sanitation
China's National Climate Change Programme
Opinions on Strengthening the Comprehensive Management of Municipal Solid Waste & Pollution (Draft)
Notice on the Comprehensive Program of Work in Energy-saving and Emissions Reduction
Guidance on Promoting the Development of the Environmental Protection Industry
Opinions of the State Council on Accelerating the Development of Energy Saving and the Environmental Protection
Industry
Law on the Prevention and Control of Environmental Pollution by Solid Waste
Law on the Prevention and Control of Environmental Pollution by Solid Waste (Revised)
Notice on Forwarding the Implementation Program of the MSW Classification System
is controlled by many administrative departments that lack coordina-
tion. As shown in Tables 3–5, relevant regulations and policies have
been released by the State Council, NDRC, MOHURD, MEP, MOF,
NPCSC, MOST, SAT, SERC, NEA and AQSIQ. The duties, rights and
work responsibilities of these departments should be clarified to avoid
overlapping regulation by different departments and inconsistency
between central and local policies. Moreover, local governments should
learn from their past experience with WTE incineration projects,
improve their decision-making capacity to prevent public opposition
and mass disturbances caused by improper project location and
unreasonable project plans, and establish public monitoring mechan-
isms and accountability systems for MSW treatment. To break down
the barriers to MSW treatment, the Chinese lifestyle must also be
considered, and the importance of MSW classification must be
recognized. Thus far, the Chinese government has attempted to
implement a scheme for the waste classification system that includes
classified collection, shipping, recycling and treatment. Through en-
forcement classification in developed areas and incentive classification
in less developed areas, the scheme is expected to improve the quality
of urbanization and to promote an ecological civilization.
The PESTEL analysis carried out in this paper provides a systematic
framework for WTE incineration projects in China. By including
comprehensive references and suggestions, such as policy changes,
application of the PPP mode and guidance on encourage efficient
project operations, the study is also expected to facilitate investment,
operation and management in WTE incineration projects and pave the
way for potential private investors who intend to enter the Chinese
market.
Acknowledgements
This work was supported by the National Natural Science Foundation
of China (Grant Nos. 71472022 and 71672018) and the Humanities and
Social Sciences Foundation of the Ministry of Education of China (Grant
No.16YJC630107).
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