From waste to worth

China is transitioning from energy-intensive wastewater treatment to carbon-negative biorefineries for a circular economy

With the implementation of China's 15th Five-Year Plan (2026-30), the paradigm of green and high-quality development has evolved from a conceptual vision into a strategic imperative. Central to this strategy is the circular economy, which entails the transition from the conventional linear "take-make-dispose" model to a closed system of circulation, thereby converting waste into valuable resources. In the field of wastewater treatment, what starts as an energy-intensive burden is transformed into a carbon-negative resource hub that offers a replicable model for global environmental governance.

For decades, China's wastewater industry has been centered on pollutant removal — an energy-heavy process that generates large volumes of sludge requiring disposal. Turning treatment plants where wastewater varies in volume, quality, pollutant levels and recovery potential into "resource factories" requires targeted designs and tailored solutions. For example, wastewater from food processing and breweries is rich in organic matter that produces biogas and recovers valuable proteins, while papermaking wastewater contains fibers and lignin for recycling and power generation. In the case of municipal wastewater treatment, the most foundational node of urban water circulation, the organic-rich matter can be purified through advanced treatment into reclaimed water for industrial cooling, landscape replenishment and car washing.

The 15th Five-Year Plan has set the policy direction. Across China, pioneering projects are already demonstrating what is possible. China's latest national blueprint has now provided clear policy direction for this transition. A leading example is Tianjin's Zhangguizhuang plant, one of China's largest integrated urban water-recycling facilities. It treats up to 450,000 cubic meters per day, with 100 percent of its reclaimed water supplied for industrial cooling, municipal use and river-flow augmentation. The plant achieves threefold full utilization: All reclaimed water goes to industry, communities and river replenishment; all sludge is processed into nutrient-rich soil for landscaping; and on-site solar panels and water source heat pumps contribute to measurable cuts in the plant's operational carbon footprint. This "triple-utilization" model — water reuse, sludge-to-soil conversion and energy recovery — exemplifies the circular transformation envisioned in China's 15th Five-Year Plan.

Not all circular transformations require new chemistry; sometimes they require rethinking the interface between infrastructure and the city. Hangzhou's Yuhang Phase IV plant is a fully buried municipal wastewater treatment facility — its tanks, screens and blowers entirely below ground level. Above the fully buried plant, an ecological park of more than 50,000 square meters opens to the public for walking, exercise and relaxation. The plant has a design capacity of 150,000 cubic meters per day, with a reclaimed water reuse rate exceeding 96 percent, supplying local river flow augmentation and urban greening. What was once an unwelcome neighbor has become a green urban space where residents enjoy their leisure time, demonstrating that circular water thinking can simultaneously deliver resource efficiency and livable, people-centered urban space. Together, these two cases show that China's circular water transition is not only a technical achievement but a social one, turning former liabilities into community assets and proving that green infrastructure can be both high-performing and welcomed in the heart of the city.

While some cities focus on energy self-sufficiency or ecological integration, others — especially in China's arid northwest — must prioritize water security itself. Yinchuan, capital of the Ningxia Hui autonomous region, receives barely 200 millimeters of rainfall annually against around 1,600 mm of evaporation, with per capita water availability below one-half of the national average. There, reclaimed water is not a luxury but a necessity. Yinchuan's No 1 Reclaimed Water Plant supplies over 40 million tons of reclaimed water each year, primarily for ecological flow augmentation in the city's canals and rivers, and for industrial cooling. By closing this urban water loop, the plant provides a crucial link in the city's water-security architecture — turning what was once waste discharge into a lifeline for an arid, rapidly urbanizing oasis city.

Other cities have made their own breakthroughs. Chongqing's Luohuang Sludge Treatment Center gasifies sludge into steam, producing around 130,000 tons per year — equivalent to saving 17,000 tons of standard coal. Zhejiang's Haining Dingqiao plant upgraded its technology, increasing its treatment capacity by 75 percent while cutting energy use by 54 percent, marking China's transition from "following" to "leading" in wastewater treatment technology.

These achievements show that there is no one-size-fits-all model for "resource factories" — every place can find its own way forward based on local conditions.

However, they also raise a harder question of how to scale. For now, China operates thousands of municipal wastewater plants, most of which were designed for pollutant removal, not resource recovery. Retrofitting them requires not just technology, but aligned incentives — revised discharge permits that reward energy and nutrient recovery, green financing mechanisms that make retrofits bankable, and technical standards that allow modular solutions to be adapted to local conditions.

Beijing illustrates how a megacity can close the urban water-energy loop at scale. Its municipal wastewater source heat pumps heat and cool approximately 1.6 million sq m of space, displacing fossil-fuel heating and cutting carbon emissions by an estimated 50,000 tons a year. Complementing this, Beijing's Gaobeidian Sludge Treatment Center produces around 20 million cubic meters of biogas annually, which can generate electricity, supply heat or power equipment, turning sludge into a fully utilized resource stream. It effectively embodies the 15th Five-Year Plan's vision of a circular urban water-energy nexus. The next frontier of China's circular water transition should be systematic deployment.

China's experience shows that wastewater treatment plants can simultaneously become energy stations, fertilizer plants and reclaimed water factories. Starting with the first batch of benchmark plants, China is forging its own distinctive path toward wastewater resource recovery. This not only supports domestic energy security, carbon neutrality goals and the circular economy, but also offers a replicable Chinese model for global environmental governance.

The author is an associate professor at the School of Environment at Beijing Normal University.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.