A new municipal regulation on waste management in Shanghai that requires everyone from households to businesses to sort their trash into recyclable, kitchen, hazardous and residual waste — something required in many countries for years —  has boosted existing waste treatment business and will create new opportunities in the circular economy, China Daily reported.

In fact, waste is big business as 200 billion yuan (US$29 billion) in investment will be needed if the current trash-sorting program in Shanghai is to be implemented across China, according to a recent report by Orient Securities.

The report calculated a 7.56-billion-yuan market for Shanghai in the whole industrial chain — education, monitoring of garbage disposal, transportation, and construction of waste treatment facilities. It then projected the Shanghai model to the national level, and estimated the market size will be around 200 billion yuan.

China plans to set up domestic waste classification systems in 46 major cities by next year, and all the cities at prefecture level and above, about 300, should have similar systems to classify and dispose of trash by 2025.

As the trash-sorting program is implemented in Shanghai, more kitchen and food waste, which will demand proper treatment facilities, is being separated from residual waste.

The city now has more than 6,000 metric tons of kitchen waste every day, but the existing kitchen waste treatment facility can only process about 5,000 tons.

The administration is responsible for the city’s domestic waste management, and it aims to increase the capacity of waste treatment in Shanghai to handle more than 20,000 tons of residual waste through incineration and to utilize 7,000 tons of kitchen waste every day next year, the report said.

Hua Yinfeng, general manager at Shanghai Liming Resources Reuse Co., told local news portal Shanghai Observer: “All the people sorting trash have given us confidence to expand our plant.”

The company operates an organic waste treatment center in Pudong New Area that turns kitchen waste into electricity. Its current capacity is 300 tons of kitchen waste per day, and the plant expansion will allow it to process another 700 tons.

The plant uses correctly sorted organic waste to produce biogas, but when it started in 2017, about 30 to 40% of the waste it received contained other waste such as plastic bottles, construction trash and paper, which needed to be removed first to avoid lower efficiency during the anaerobic procedure.

China is in the sixth year of a “war on pollution” designed not only to clean up its skies, soil and water but also upgrade its heavy industrial economy and “comprehensively utilize” its resources, including waste, Reuters reported.

Improving recycling rates is crucial to China’s strategy, and cities are trying to figure out what to do with the heaps of trash clogging up rivers or buried in hazardous landfills.

Huang Rong, deputy secretary general of the Shanghai government, said more than 70% of residential districts should be compliant with the new trash sorting rules by next year, Reuters reported.

“We are just starting out and we are getting ordinary people used to the new system, so we don’t want to make it too complicated,” he told reporters.