I. Current Status

(I) Rapid Development of Domestic Waste Treatment Facilities in Cities

By the end of 2002, a total of 651 domestic waste treatment plants (sites) had been built nationwide, with a treatment capacity of 76.88 million tons. Among these:

• 528 were landfills, accounting for 81.1% of the total number of facilities and 89.7% of the total treatment capacity (68.96 million tons);

• 45 were incineration plants, accounting for 6.9% of the total number and 3.6% of the total treatment capacity (2.75 million tons);

• 78 were composting plants, accounting for 12% of the total number and 6.7% of the total treatment capacity (5.17 million tons).

By the end of 2003, treasury bonds had supported 359 waste treatment projects, with a total investment of 24.5 billion yuan. Cumulative treasury bond investment reached over 8 billion yuan, driving additional investment from local governments and social capital.

However, due to the continuous and significant increase in domestic waste generation in cities, coupled with a large backlog of historical arrears, the existing facilities still cannot meet the waste treatment needs of urban development. In 2002, the 660 established cities nationwide generated 136 million tons of domestic waste, of which only 74.04 million tons were centrally treated. The remaining 62 million tons were either piled up at designated sites or randomly dumped along riverbanks, ponds, and urban-rural junctions, resulting in the persistent issue of "waste surrounding cities." Additionally, counties and towns outside these 660 established cities generated approximately 36 million tons of domestic waste annually, with almost no treatment applied to this waste.

(II) Increased Centralized Treatment Rate of Urban Domestic Waste, but Low Harmless Treatment Level

In 2002, the centralized treatment rate of domestic waste in the 660 established cities reached 54.2%, an increase of 52 percentage points compared to 2% in 1990. Nevertheless, a considerable number of waste treatment facilities failed to meet environmental protection requirements, leading to a low harmless treatment rate. According to a sampling survey conducted by the State Environmental Protection Administration in 2001, the harmless treatment rate of waste was less than 20%. Among existing landfills:

• 27% had no anti-seepage measures whatsoever;

• 39% lacked leachate collection and treatment facilities, causing severe pollution to surrounding groundwater, surface water, and soil.

Waste incineration also faced issues such as substandard flue gas emissions and improper disposal of fly ash (which was not safely landfilled as hazardous waste). For composting, although compost products used in farmland could improve soil quality and increase crop yields to a certain extent, they posed risks of heavy metal contamination in soil, and the safety and hygiene of agricultural products could not be guaranteed.

The main reasons for the low harmless treatment rate are as follows:

1. Historical factors: Waste treatment facilities built before the mid-1990s had low standards and failed to meet harmless treatment requirements.

2. Lagging standards: The formulation of standards for waste treatment facility construction and pollution control was delayed. The current pollution control standards were formulated (or revised) in 2001, meaning most existing facilities either lacked pollution prevention measures or could not meet harmless treatment requirements.

3. Technological gaps: There was a shortage of core technologies, equipment, and materials for harmless waste treatment with independent intellectual property rights.

4. Insufficient investment: Funding for harmless waste treatment facilities was inadequate, leading to a shortage of such facilities.

(III) Improved Technology for Urban Domestic Waste Treatment, but Backward Technical Equipment

Through research, development, introduction, and absorption of advanced foreign technologies, some world-leading technologies have been applied to varying degrees in waste landfilling, incineration, and composting:

• Landfilling: Multiple engineering cases have demonstrated the use of landfill gas power generation and leachate treatment technologies.

• Incineration: Circulating fluidized bed incinerators with independent intellectual property rights have developed rapidly, handling over 1.8 million tons of waste annually; domestic demonstration projects for grate furnace incineration technology have also been completed.

• Composting: More than 10 process technologies have been developed domestically and applied in some regions.

However, overall, the technical equipment level for waste treatment remains low, with most core technologies and equipment relying on imports:

• Landfilling: High-performance anti-seepage membranes, compactors, leachate treatment technologies, and landfill gas power generation technologies are still mainly imported or based on introduced foreign technologies.

• Incineration: Mature and reliable domestic technologies and equipment for grate furnace grates and hydraulic control systems are lacking, limiting the promotion of grate furnace incineration.

• Composting: The degree of automation in process technologies and equipment lags far behind that of foreign countries.

Landfilling remains the dominant treatment method, occupying over 700,000 mu (approximately 46,667 hectares) of land. The utilization rate of waste resources (e.g., waste-to-energy via incineration) is low.

(IV) Inadequate Implementation of Urban Domestic Waste Charging Policies

To promote the industrialization of urban domestic waste treatment, in 2002, the National Development and Reform Commission (NDRC) jointly issued the Notice on Implementing the Urban Domestic Waste Treatment Charging System to Promote the Industrialization of Waste Treatment (Jijia Ge [2002] No. 872) with relevant departments, introducing a waste treatment charging policy. However, this policy has not yet been fully implemented. Currently, fewer than 200 cities have implemented waste treatment fees, and most cities have not yet introduced such fees. The main issues are:

1. Misclassification of fees: In some regions, waste treatment fees are not managed as operational service fees. According to the policy, waste treatment fees should be classified as operational service fees, but the sanitation market has not yet taken shape. In most cities that have implemented the fee, the administrative department in charge of sanitation is designated as the fee collector, and the fee is still treated as an administrative fee.

2. Low fee standards: An analysis of 171 cities that implemented waste treatment fees in 2002 showed that the collected fees only covered 50% of the costs of waste collection, transportation, and treatment (and as low as 20% in some cities).

3. Low collection rate: The payment rate among residents was only 20%. Factors contributing to this include: difficulty in identifying actual waste generators due to current housing structures and waste collection methods (making it impossible to charge based on waste generation); lack of effective collection channels; and no mandatory measures for non-payment. Due to poor implementation of the charging system, the operating costs of waste treatment facilities cannot be guaranteed.

(V) Sanitation System Reform Fails to Meet Development Needs, and Industrialization Progresses Slowly

Through sanitation system reform—especially the promotion of industrialized operation of waste treatment—waste collection, transportation, and treatment have gradually shifted from administrative management to market-oriented operation. However, sanitation system reform remains relatively lagging and cannot meet current development needs. Currently, in most cities, sanitation departments serve both as administrative supervisors of waste treatment and as service providers for waste collection, transportation, and treatment, resulting in blurred boundaries between government and enterprises, and between administrative and operational functions.

Inadequate system reform has led to: an incomplete supervision system for harmless waste treatment; difficulties in implementing the waste treatment charging system; and certain monopolistic operations. A competitive pattern for construction and operation—characterized by diversified investment entities, enterprise-based operation entities, and market-oriented management—has not yet been formed, leading to slow industrialization progress.

II. Countermeasures and Measures

Overall Approach

With the goal of safeguarding public health and environmental safety, we will: conduct overall planning and rational layout; provide policy guidance and adapt to local conditions; increase investment, improve policies, and promote technological demonstrations; deepen reform, improve laws and regulations, and strengthen supervision; accelerate the construction of urban domestic waste treatment facilities; continuously enhance the reduction, recycling, and harmless treatment of urban domestic waste; and promote the sustainable development of the economy and society.

(I) Formulate the National Plan for the Construction of Harmless Urban Domestic Waste Treatment Facilities

Based on in-depth research and demonstration, the National Plan for the Construction of Harmless Urban Domestic Waste Treatment Facilities will be formulated, outlining the overall approach, goals, principles, scale, investment, and policy measures for harmless urban domestic waste treatment. The construction of waste treatment facilities must adhere to the principles of reduction, recycling, and harmlessness. Guided by the concept of circular economy, pretreatment will be used to reduce moisture and organic matter content; classification and sorting will be employed to recover useful materials from waste and reduce the final disposal volume. In regions with conditions, waste treatment facilities will gradually shift toward resource utilization. All urban domestic waste treatment facilities must meet harmless treatment requirements.

Local governments of all cities must formulate development plans for harmless domestic waste treatment within their jurisdictions. Based on local resources, environmental conditions, and economic development levels, and under national policy guidance, they should select economical and practical technologies for harmless domestic waste treatment through multiple channels and in accordance with local conditions:

• Economically developed regions (e.g., coastal and riverside areas in southern China) and regions with scarce land resources may prioritize waste incineration technologies for harmless treatment.

• Regions with relatively abundant land resources and less developed economies may prioritize landfill technologies for harmless treatment.

(II) Increase Investment and Accelerate Facility Construction

We will significantly increase investment in harmless urban domestic waste treatment and accelerate the construction of such facilities. Urban domestic waste treatment is a public welfare undertaking. At this stage, governments at all levels must increase investment in the construction of waste treatment facilities. For the operation of these facilities, a concession system will be implemented in line with market-oriented requirements. Operating costs will be covered by urban domestic waste treatment fees, and the industrialization of waste treatment will be gradually realized.

The state will use central government funds to support the construction of harmless urban domestic waste treatment facilities, in order to mobilize the enthusiasm of local governments. The funds will be mainly used for:

1. The construction of harmless urban domestic waste treatment facilities (including collection, transportation, and treatment facilities);

2. The construction of demonstration projects for advanced technologies suitable for national conditions;

3. The technological transformation of existing waste treatment facilities and the improvement of pollution prevention facilities (to enhance harmless treatment levels);

4. The development of environmental monitoring and management capabilities.

Local governments of all cities must fulfill their responsibilities for harmless waste treatment, increase financial investment year by year, and attract bank loans and social investment.

(III) Promote Technology Development and Demonstration to Address Core Technical Issues

Targeting core technical issues in urban domestic waste treatment, we will promote technology development, demonstration, and popularization to continuously improve the level of harmless treatment. Priority will be given to:

1. Researching comprehensive waste treatment technology routes and developing waste sorting and pretreatment technologies (to fully recover usable resources from domestic waste and reduce final disposal volume);

2. Implementing demonstration projects for the localization of core technologies and equipment:

• For landfilling: Absorbing and innovating core technologies and equipment (e.g., high-performance anti-seepage membranes, compactors, leachate treatment, and landfill gas power generation) to enhance landfill anti-seepage capabilities, increase leachate treatment rates, and effectively prevent secondary groundwater pollution from landfills;

• For incineration: Demonstrating the optimization of grate furnace hydraulic control technology and grate production technology; strengthening the development of pollution control technologies for waste incineration to ensure the discharge of flue gas and wastewater meets standards; promoting circulating fluidized bed incineration technology in regions with conditions;

• For composting: Demonstrating harmless biochemical composting technologies, focusing on addressing compost odor and improving compost quality, minimizing toxic and harmful components in compost, and promoting the use of compost in urban landscaping and fast-growing forest cultivation.

(IV) Improve Charging Policies and Establish a Sound Waste Treatment Charging System

In accordance with the "polluter pays" principle, waste treatment fees will be fully implemented. In cities where sanitation system reform has not been completed, some may temporarily collect waste treatment fees as administrative fees. Local governments may adopt integrated charging methods (combining water supply, sewage, and waste treatment fees) or joint charging methods (combining waste fees with water, electricity, housing, or gas fees) to improve the collection rate of urban domestic waste treatment fees and reduce collection costs.

Fee standards will be gradually increased to cover the costs of waste collection, transportation, and treatment, and ensure reasonable profits for waste treatment enterprises. Waste treatment fees will be prioritized for the operation of existing facilities, to ensure their efficient and stable operation and maximize their investment and environmental benefits. Supervision over the collection of urban domestic waste treatment fees will be strengthened, and the collection, management, and use of these fees must be publicly announced to residents.

(V) Deepen Sanitation System Reform to Promote the Industrialization of Waste Treatment

In accordance with the requirements of industrialized development, market-oriented operation, enterprise-based management, and legalized supervision, construction administrative departments at all levels must strengthen guidance on sanitation system reform, formulate operable reform plans, effectively transform government functions, separate government from enterprises and administrative functions from operational services, and ensure public interests and urban environmental benefits.

Local governments must earnestly implement the relevant policies outlined in the Opinions on Promoting the Industrialization of Urban Sewage and Waste Treatment (Jitouzi [2002] No. 1591) and the Notice on Implementing the Urban Domestic Waste Treatment Charging System to Promote the Industrialization of Waste Treatment (Jijia Ge [2002] No. 872) (both issued with the approval of the State Council) to advance the industrialization of urban domestic waste treatment.

During the reform process:

• Financial and tax departments must formulate policies such as low tax burdens and zero fees for waste treatment enterprises within a certain period;

• Labor and social security departments must develop supportive policies (e.g., early retirement and reemployment assistance for sanitation workers) to ensure the steady progress of reform.

Cities that have completed sanitation system reform must fully open the investment, construction, operation, and service markets for harmless urban domestic waste treatment. They should encourage enterprises of various ownership types and foreign-funded enterprises to participate in the construction and operation of harmless waste treatment facilities, establish and improve market access and concession systems, and optimize the competitive mechanism of the waste treatment market and the operational mechanism of enterprises.

(VI) Improve Laws, Standards, and Strengthen Supervision

The Law on the Prevention and Control of Solid Waste Pollution and the Regulations on the Administration of Urban Appearance and Environmental Sanitation will be revised as soon as possible to incorporate harmless urban waste treatment into the legal management framework. The Ministry of Construction, together with relevant departments, will accelerate the formulation of laws, regulations, standards, and technical specifications for:

• Market access and concession management for urban domestic waste treatment;

• Market-oriented operation of waste treatment;

• Waste collection, transportation, and treatment.

Investment authorities and sanitation departments at all levels must strengthen supervision over the construction of urban domestic waste treatment facilities—especially during the construction phase. They should formulate management measures for project supervision and acceptance, and fully implement the tendering and bidding system, construction supervision system, and lifelong responsibility system for project quality.

Newly built waste treatment facilities must meet quality standards and harmless treatment requirements to ensure investment and environmental benefits. For facilities that fail to meet harmless treatment requirements:

• Investment authorities at all levels shall not approve the project;

• Land and resources administrative departments shall not accept land use applications;

• Environmental protection administrative departments shall not approve environmental impact assessment reports;

• Financial institutions shall not provide credit support.

Environmental protection departments shall formulate (or revise) pollution control standards suitable for national conditions, strengthen supervision over the harmless operation of waste treatment facilities, ensure that waste is disposed of harmlessly, and prevent secondary pollution.