China’s Green Tech Market: Opportunities for Whom?

For most manufacturers, China’s anti-pollution drive is setting up costly and time-consuming “green tape”. But for green tech companies, it’s opening up fields of opportunity.

To reach its environmental objectives, China will require an estimated public and private expenditure of over US$450b annually over the next four years. The new Environmental Protection Tax, in particular, will boost spending on monitoring equipment and clean technologies, as it requires public and private entities to monitor and reduce their emission of solid, air, water, and noise pollutants.

The question is – will there be room for foreign companies in this flourishing market? There’s no doubt that the Chinese government is hoping to empower domestic green industries. Renewable energy, for instance, is also strongly encouraged under the “Made in China 2025” programme.

 

But international players can also expect to see gains. As the clock ticks for China to meet the ecological targets set forth in the 2016-2020 13th Five Year Plan (13th FYP), it will inevitably rely on foreign green technologies that are not yet locally available. The government is well aware of this – in 2017, it issued guidelines to boost foreign investment in green technologies, especially for manufacturing applications.

Nevertheless, market access continues to vary greatly by region, product, and industry. International players have only a 2% share of the wind power market, for instance, whereas their participation in the wastewater treatment industry is much larger. A detailed analysis is, therefore, necessary to gauge potential for your particular service/product and identify the best route to market.

Here is an overview of two of the sectors where the outlook for international players is particularly promising.

 

Wastewater Treatment

Key drivers:

  • The revised “Water Pollution Prevention and Control Law” (effective as of 2018) has increased emission-related penalties and forced businesses to monitor water pollutants.
  • China’s 13th FYP set concrete water-related targets to be reached by 2020, e.g. increasing wastewater treatment rates from 92 to 95 percent in urban areas and from 20 to 50 percent in rural regions.

Key sectors:

  • Municipal: two thirds of China’s wastewater discharge is municipal. Local governments are under growing pressure to improve and expand treatment facilities.
  • Industrial: 25% of China’s discharged wastewater is industrial. Demand for in-house water treatment technologies will grow among manufacturers, as wastewater disposal becomes a key cost driver in China.

Key technologies in demand:

  • Advanced filtration / membrane separation system
  • Water disinfection equipment
  • Wastewater treatment chemicals
  • Advanced piping/ pipe coating materials
  • Monitoring equipment

 

Solid waste management

Key drivers:

  • Insufficient waste processing capacity: China recycles 5% of its construction waste (compared to 90% in Europe) and can only process 60% of its industrial hazardous waste.
  • The new Environmental Protection Tax raises the cost of solid emissions. The tax rate on solid waste can reach up to US$160/MT. Hazardous waste is taxed most heavily.
  • In 2016, the “National List of Hazardous Waste” was expanded from 362 to 479 items, reflecting new research findings and more refined waste type definitions.

 

Key sectors:

    • Industrial parks: the demand for hazardous waste disposal plants in China’s industrial parks is set to grow, as manufacturers seek easy access to centralised waste disposal facilities, and as the government actively encourages industrial transfer away from densely-populated areas.

Key technologies in demand:

      • Hazardous waste (including medical and chemical) treatment and disposal
      • Hazardous waste handling equipment
      • Smart sorting and collection system
      • Recycling process expertise
      • Brownfield site remediation equipment
      • Recyclable fibers and degradable plastics

Contact us at contact@fiducia-china.com if you’re looking to tap into China’s green tech market. We can support you with:

    • Market analysis
    • Go-to-market strategy
    • Competitor benchmarking
    • Partner search and due diligence
    • Location analysis

 

 

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