Three Turning Points about How China is Promoting Recycling

17/01/2019

How does China deal with its own waste? In many ways, China is already an innovation superpower. Here three relevant turning points

 

China generates more waste than any other country. Last year State Council banned the import of foreings waste. As result, the decision created ripple effects in global recycling markets in 2018. US and UK markets were unable to meet domestic recycling demands, and Southeast Asian countries were overwhelmed with sharp increases in waste imports diverted from China.

China is already the world’s largest trash generator, but at the same time, PRC is leading global shift to renewable energy. Plus China is the leading force in the global digital economy. It has the world’s largest e-commerce market, consisting of 42% of global transactions, and the largest mobile payment market, with a transaction value 11 times that of the US.

These three pole positions make China the best place in the world to innovate digital solutions for waste, were digital market, hi-tech and policy are going straightforward one point: promote recycling.

 

 

 

1. Using WeChat to increase recycling in communities

Several Chinese start-ups are working via WeChat to creating more value from recyclables, on disrupting the consumer recycling space. Among these, XiaoHuangGou (XHG), which translates to “Little Yellow Dog”, is one of the most well-funded, raising $164 million in a Series A funding round in 2018

XHG operates smart trash bins which accept paper, plastics, metal, textiles and glass, and rebates residents directly to their WeChat wallets based on the weight of their trash and the ongoing market rate of the recyclables. XHG then employs its own team of garbage collectors to deliver the segregated waste to a recovery facility for further processing.

 

 

2. Funding clean technology and electric vehicles, is China leading the cleantech innovation?

Now, ever half of world’s new solar capacity is in China. Beijing is  pushing investments in renewable energy, last year they have gown at a record pace as countries look to move away from fossil fuel-based power production to eco-friendly generation.

According to UN, last year, global investment in renewables exceeded $200 billion, since 2004, the world has invested about $2.9 trillion in green energy sources. In total, solar power drew investment worth $160.8 billion, up 18 percent year-on-year , and China is the forefront of this solar boom, adding some 53 gigawatts of capacity, equivalent to more than half the global total.

PRC’s total investment in renewables — at a record $126.6 billion —  let Beijing became the largest investor in renewable energy. China has faced an uphill battle transitioning from coal, which is used to generate roughly three-quarters of its power, according to the International Energy Agency.

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3. Reducing waste in e-commerce sector

E-commerce is one of China’s fastest-growing industries. Food delivery apps, such as Meituan, Ele.me and Baidu Takeout made 34 million daily deliveries on average, in the first half of 2018. It’s easy to understand the environmental impact of packaging from those apps.

In response to increasing pressures to cut packaging waste, Alibaba-backed Ele.me established in its HQ in Shanghai a sustainability lab, called RELAB, to drive innovative solutions. One of RELAB’s most successful initiatives has been the introduction of a “No Chopsticks” option on the Ele.me app.

According to data, it has saved 43 million pairs of chopsticks just during last autumn. After the integration of “No Chopsticks” function, the RELAB team experienced a 5-7x increase in users opting out of receiving utensils.

Although still in early development, Ele.me’s efforts is an important case study in how digital platforms can make waste reduction as convenient as ordering food. Thanks to this “eco-friendly policy”, Ele.me total revenue significantly increased. But it’s all China’s food delivery industry to boom. Accoring to data it will rocket from 100 billion yuan in 2016 to 700 billion yuan in 2020, growing 62% annually. Implementing waste reduction strategies now will be crucial to managing the industry’s environmental impact as it grows.

 

The combination of digital economy spread and top-down policy targets, such as a 35% recycling rate for household waste by 2020, is creating opportunities for technology-driven waste solutions in China. In many ways, China is already an innovation superpower. It was one of the first countries to discuss a shift to a circular economy, back in 2002. The country now seems poised to use its innovation engine to make the circular economy vision possible.

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