China’s Circular Economy Blueprint: Policies, Innovations, and Market Potential
China Resource Recycling Group Established in Tianjin: A National Team Enters the Circular Economy Field
The circular economy industry in China has gained significant attention with the establishment of the China Resource Recycling Group in Tianjin. This “national team” is set to propel the circular economy into the spotlight once more.
The Scale of the Circular Economy Industry
How large is the circular economy industry? The planned annual output value is expected to reach 5 trillion yuan next year. In February this year, the State Council’s General Office issued the Opinions on Accelerating the Construction of a Waste Recycling System, aiming to establish a preliminary system by 2025, covering various domains and processes of waste recycling. Provinces like Shandong, Henan, Guangdong, Shanxi, and Sichuan have released action plans to accelerate the development of a nationwide circular economy, demonstrating significant progress.
China’s circular economy is transitioning from being dominated by recycling businesses to becoming a high-tech-driven new industry. The role of the circular economy has shifted from merely addressing resource and environmental issues to driving China’s economic development. The circular economy market is poised for rapid expansion.
Technology and Industrialization Are Needed
During the Circular Economy Forum co-hosted by Shanghai Climate Week and the China ESG Alliance, NIO’s ESG Head Guo Yuzhu shared the company’s practices: “Apart from using PCR recycled plastics and bio-based leather for car interiors, we collaborate with upstream suppliers to melt and reuse aluminum scraps from decommissioned vehicles through technological processes.”
A report by the United Nations Environment Program and the International Solid Waste Association suggests that adopting circular economy models globally could reduce urban solid waste from over 4.5 billion tons to less than 2 billion tons by 2050. Recycling could save $135 billion annually, prevent the consumption of virgin resources, and significantly reduce related carbon emissions.
The China Circular Economy Association predicts that during the 14th Five-Year Plan period, the circular economy will contribute 30% to China’s carbon reduction, reaching 35% by 2030.
The circular economy promises significant economic output. Data indicates that the global recycled plastics market size was $51.1 billion in 2023 and is projected to grow to $107.13 billion by 2032, with a compound annual growth rate of 8.6%. In China, the waste plastic recycling rate stands at around 30%. Companies like Incom Recycle and Kingfa Sci & Tech have reported year-on-year increases in revenue and net profits in Q3 of this year, reflecting this trend.
High-tech Environmental Protection has noted that its solid and hazardous waste resource utilization business is scaling up, aiming to enhance the capacity utilization rate of its resource sector projects to drive further performance improvements. Feinan Resources, which recorded year-on-year growth in Q3, has successfully transformed its business model from single-metal resource recycling to multi-metal resource recycling, producing resources like zinc and tin ingots.
The Urgent Need for a Circular Economy System in China’s “Three New Trends”
China’s circular economy is critical for addressing the rapid turnover of “three new trends”: wind turbines, photovoltaic systems, and electric vehicle batteries. The Chinese Wind Energy Association (CWEA) reports that 100,000 kilowatts of wind turbine installations were retired in 2023, with 44.73 million kilowatts expected to be retired by 2030. By 2050, global photovoltaic waste is projected to reach 80 million tons, with 20 million tons coming from China. Similarly, 580,000 tons of electric vehicle batteries were retired in 2023 in China, highlighting the need for robust recycling systems.
Challenges and Opportunities in Recycling
Although the recycling industry shows promise, it faces hurdles such as underdeveloped recycling technologies and inconsistent standards. According to Du Huanzheng, Director of the Ecological Civilization and Circular Economy Research Institute at Tongji University, the circular economy is evolving into a new, high-tech industry: “We are entering a new era where responsible profitability must also solve environmental problems. Scaling and industrializing the circular economy require substantial technological support.”
Qinghe Circular Economy and Carbon Neutral Research Institute’s President Jiang Nanqing noted the need for scalable, systematic industry frameworks to integrate circular economy practices into all product life cycles. This aligns with the mission of the newly established China Resource Recycling Group, tasked with building a nationwide functional recycling platform. Its business scope includes offline resource recovery networks, recycling of consumer goods, and managing waste batteries and retired wind and photovoltaic equipment.
Policy Development to Support the Circular Economy
To advance the circular economy, top-level policies have been introduced. In February, the State Council’s Opinions on Accelerating the Construction of a Waste Recycling System laid out goals for 2025. Furthermore, the Opinions on Accelerating the Comprehensive Green Transition of Economic and Social Development, issued recently by the CPC Central Committee and the State Council, aims to establish a green, low-carbon, and circular development economic system by 2035.
In March, the State Council released the Action Plan for Promoting Large-Scale Equipment Upgrades and Consumer Goods Replacement. Recycling was highlighted as one of the four core strategies. National Development and Reform Commission Vice Chairman Zhao Chenxin emphasized the development of reverse logistics systems and extended producer responsibility.
Practical Applications in Recycling and Public Engagement
Nike: Move To Zero
Consumer goods brands like Nike have adopted circular practices by recycling old shoes into materials for eco-friendly sports facilities, demonstrating how businesses can integrate environmental goals into their operations. Similarly, companies like Pantene and Proya have partnered with logistics platforms like Cainiao for empty packaging recycling, showcasing innovative recycling initiatives.
Experts suggest promoting transparency in the circular economy supply chain and integrating carbon credit mechanisms, subsidies for waste reduction, and green procurement practices. Extending green product certifications and introducing digital certification technologies can facilitate the global recognition of recycled products, paving the way for the rapid development of the circular economy.
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#RecyclingInnovation
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