China’s Environmental Industry Outlook for 2024: Key Focus Areas and Initiatives

In 2024, the environmental protection industry is honing its focus on critical ecological and environmental issues, as evident from this year’s Two Sessions discussions. Five recurring topics have commanded sustained attention, encompassing rural sewage treatment, the establishment of green and low-carbon benchmark sewage treatment plants, pathways for achieving low-carbon energy conservation, intensified efforts in atmospheric management, and the persistent challenge of fraud by third-party environmental protection agencies.

1. Rural Domestic Sewage Treatment: Bridging the Gap between Equipment and Operation

The topic of rural domestic sewage treatment took center stage once more during this year’s sessions. Huang Miansong, a member of the National Committee of the Chinese People’s Political Consultative Conference and general manager of the Smart Environmental Protection Division of Beijing Capital Environmental Protection Group, advocated for its inclusion in central and provincial ecological environment protection inspections. Despite advancements in municipal water treatment technology, rural sewage management faces multifaceted challenges, with only 31.50% of rural areas benefiting from adequate domestic sewage treatment. Technical complexities, inadequate infrastructure, and funding deficits contribute to operational inefficiencies. Moreover, regulatory ambiguities and a lack of professional management exacerbate the situation.

The recently issued “Guiding Opinions on Further Promoting Rural Domestic Wastewater Treatment” underscores the need for tailored approaches adaptable to local conditions and emphasizes the importance of economical and sustainable solutions. This document provides crucial insights into tackling key challenges in rural sewage treatment, paving the way for more effective and comprehensive environmental management strategies.

2. Green Low-Carbon Benchmark Sewage Treatment Plants: A Vital Step in Pollution and Carbon Reduction

The construction of green and low-carbon benchmark sewage treatment plants emerged as a significant focus during this year’s sessions. Over the past decade, rapid advancements in sewage treatment have been accompanied by substantial costs, driven by immature technology and a relentless pursuit of outcomes, leading to high energy and material consumption and substantial greenhouse gas emissions. As the imperative for carbon neutrality gains traction, sewage treatment facilities must transition towards environmentally sustainable practices.

In 2023, the National Development and Reform Commission, along with the Ministry of Housing and Urban-Rural Development and the Ministry of Ecology and Environment, issued the “Implementation Opinions on Promoting Synergetic Efficiency of Pollution Reduction and Carbon Reduction in Sewage Treatment” (Fagaihuanzi [2023] No. 1714), outlining ambitious targets. By 2025, the plan aims to establish 100 green and low-carbon benchmark sewage treatment plants nationwide, prioritizing efficient energy resource recycling. This initiative represents a critical starting point for synergizing pollution and carbon reduction efforts in sewage treatment.

The concept of a “green low-carbon benchmark sewage treatment plant” underscores two essential aspects: green practices and carbon reduction. Key requirements include stringent assessment criteria for carbon emissions and a focus on energy self-sufficiency within sewage treatment operations. Moreover, the initiative emphasizes resource recycling, leveraging organic matter and vital elements like nitrogen, phosphorus, and potassium from sludge for reuse. These goals elevate the technical and operational standards for sewage treatment facilities, driving towards a future marked by low-carbon and environmentally sustainable practices.

3. Resource Recycling: Paving the Way for Low-Carbon and Energy-Saving Transformation

Premier Li Qiang emphasized the importance of ecological and environmental protection during the two sessions, setting a goal to reduce energy consumption per unit of GDP by about 2.5% by 2024. With the introduction of the dual carbon strategy, low carbon and energy conservation have become imperative for the country’s development, presenting new opportunities for the environmental protection industry. Within the context of low-carbon energy conservation, sectors like resource recycling and regeneration offer expansive market potential.

In February, the General Office of the State Council issued “Opinions on Accelerating the Construction of a Waste Recycling System,” aiming to establish a comprehensive waste recycling system covering all sectors by 2025, with an annual output value target of 5 trillion yuan. With over 60 billion tons of accumulated bulk solid waste and an annual increase of more than 5 billion tons, effective waste treatment is paramount. Establishing a robust waste recycling system will facilitate collaborative carbon reduction through material substitution, process optimization, fuel diversification, energy efficiency improvements, and product recycling. Despite current challenges in waste recycling, establishing a comprehensive system is inevitable in the context of carbon neutrality.

4. Preparing for Extreme Weather: Advancing Atmospheric Management Efforts

Despite decades of progress in atmospheric governance, our country continues to face challenges requiring persistent action. Premier Li Qiang’s executive meeting of the State Council in November underscored the need for continuous improvement in air quality, outlining a five-year plan that emphasizes low-carbon transformations across key industries, energy sectors, and transportation systems.

Minister Huang Runqiu highlighted the intensifying impact of extreme weather events on atmospheric quality during last year’s environmental summary. The onset of a new El Niño cycle brought heightened temperature fluctuations and increased frequency of severe weather, including 17 large-scale sandstorms in the first half of the year alone. These events significantly impacted air quality, with the national average PM (2.5) rising by 1.1 micrograms/cubic meter.

Looking ahead, governance efforts will intensify, as demonstrated at the 2024 National Ecological Environmental Protection Work Conference. Minister Huang Runqiu outlined key objectives for the year, focusing on PM2.5 control, enhanced source control, multi-pollutant collaboration, and regional pollution governance. Increased supervision and targeted interventions in critical areas will strengthen air quality improvement initiatives and regulatory oversight.

5. Combatting Fraud by Third-Party Environmental Agencies: Persistent Challenges and Regulatory Responses

In recent years, the issue of fraud by third-party environmental protection agencies has remained a prominent topic during the annual two sessions. Minister Huang Runqiu revealed that over the past three years, the Ministry of Ecology and Environment has investigated and penalized 2,260 such agencies for illegal activities, resulting in 193 cases being criminally prosecuted and 457 typical cases publicly exposed.

Despite stringent crackdowns, third-party environmental agencies continue to engage in fraudulent practices. The underlying causes include a chaotic market environment with varying quality levels, exacerbated by the lack of qualifications and professional training among industry players. Additionally, profit-driven motives foster collusion between testing agencies and pollutant-discharging companies, leading to data fabrication and manipulation.

Minister Huang Runqiu reaffirmed a commitment to rigorous regulatory actions, pledging sustained efforts to combat fraudulent activities. Enhanced supervision through big data and artificial intelligence technologies will bolster regulatory capabilities and ensure a more robust defense against fraud in the environmental monitoring sector. As regulatory measures and technological advancements progress, the industry is poised to evolve toward greater standardization and maturity.

Evolution of the Environmental Protection Industry in the Era of Carbon Neutrality

The environmental protection industry has reached a level of maturity under its previous development logic. However, with the introduction of the “dual carbon” goal, the industry’s development trajectory has undergone a significant shift. This shift has given rise to emerging environmental sectors such as new energy, resource recycling, and energy conservation. These trends will be highlighted at the upcoming World Environment Conference [Industrial Energy Saving and Environmental Protection Exhibition], where over 4,000 brand exhibitors will showcase cutting-edge technologies in water treatment, waste management, and energy efficiency solutions.

To navigate these new tracks effectively, companies must adopt a new development logic focused on high-quality growth to propel further progress in the environmental protection landscape.