China’s sewage-treatment industry generates 22 million tonnes of sludge every year. What happens to it?
To dispose of 500 tonnes of toxic sludge in the south China city of Guangzhou, all you need is a hired boat and a little money for petrol. Within a couple of hours, you can discharge your load – containing heavy metals, pathogens and bacteria – into the river without the authorities being any the wiser, and turn a tidy profit of 80,000 yuan (US$12,600).
It isn’t only Guangzhou. In Beijing, a group of citizens concerned about the sludge siege has created a map of “sludge piles”. If the coordinates of the 30 or so landfill sites around Beijing’s suburbs are plotted and linked up, a “Great Wall” of toxic sludge can be seen encircling the city.
And in Shenzhen, another metropolis in the south, the substance has already caused havoc: huge quantities of buried sludge at Xiaping solid-waste landfill put so much pressure on the groundwater table that, in 2009, the sludge came bursting up from underground, flowing into a nearby river and, at its deepest, reaching waist-level.
Cities and provinces including Guangdong, Zhejiang, Beijing, Shanghai, Guizhou, Ningxia and Chongqing, and stretching as far west as Urumqi, have all, to varying degrees, been troubled by toxic sludge.
High profits, weak regulation
China’s sewage-treatment sector is increasingly bogged down by this embarrassing problem. Where does it come from?
A market report on the “treatment and disposal of toxic sludge”, published on the website chinawater.net, explains that by late 2010 China’s urban sewage-treatment capacity had reached 34.3 billion cubic metres, equivalent to the volume of the Three Gorges Reservoir. The dewatered muck spat out by this “reservoir” each year is close to 22 million tonnes – of which 80% is untreated toxic sludge. Such a large amount of sludge poses an even greater threat to China than the rubbish dumps rapidly surrounding its cities.
That isn't even the full picture. “The 22 million tonnes only refers to the amount of toxic sludge left over from the treatment of urban household sewage,” explained Wang Hongchen, professor at Renmin University’s Environmental Sciences Department. “It doesn’t include most sludge from the industrial wastewater produced by China’s thousands of economic and industrial development zones. And the situation there is hardly cause for cheer.” Among the industries operating in these zones are petrochemical, smelting, tanning and dyeing factories, all of which use dangerous substances that contribute to the harm.
“Profits to be made through unauthorised discharge of toxic sludge are too high, while penalties for breaking the law are too low,” said Xu Qing, a longtime employee of the state water authority. Xu believes that, with large profit margins and weak regulation, there will always be people willing to take the risk and break the rules.
Toxic sludge is a concentrate of pollutants from the sewage treatment process. If dumped untreated – or only lightly treated – there is a relatively high risk of secondary pollution to the soil, atmosphere and local water resources. Heavy metals from the sludge can seep into groundwater, and from there become part of the food chain, making their way to the kitchen table. Unless this is dealt with in a scientific manner, the damage will be irreparable, and affect generations to come.
This grave situation is partly the result of urban sewage plants prioritising wastewater treatment over sludge treatment. Since the 11th Five-Year Plan (2006-2010), China’s sewage treatment industry has developed quickly, and its capabilities have advanced to levels comparable with the United States. In some countries, toxic sludge accounts for nearly half of infrastructure investment for sewage treatment, but in this respect China lags behind.
China first started to become aware of its toxic sludge problem towards the end of the 9th Five-Year Plan (1996-2000). And it has been gradually waking up to the task of dealing with it since. Wang Kaijun was one of the main drafters of China’s trial policy on sludge treatment and disposal, released in 2009, and he believes a craze for toxic sludge disposal is now starting to take hold. Since 2011, over 70% of discussions at the Thematic Meeting on the National Water Treatment Industry have been related to toxic sludge. The market is being flooded with technologies, new and old. “Now the crucial question is not whether the technology is out there, but what technology to use and whether or not local government is prepared to act,” said Wang.
Government determination is crucial if this situation is to be resolved. China’s sewage treatment plants were constructed very fast because their existence – or not – were one of the indicators used to assess the performance of local officials. But for sludge treatment, the incentives aren’t so clear. “Unless there are clear assessment standards, linked to achievements, I fear we will struggle to get these toxic sludge disposal systems up and running within the 12th Five-Year Plan period.”
Investors chase the stink
Towards the end of 2010, the Ministry of Environmental Protection issued a notice demanding that all newly constructed sewage-treatment plants, plus those renovating or expanding, establish toxic sludge treatment facilities alongside those for wastewater. Existing plants, meanwhile, were given two years to get the right technology in place. This was a clear policy signal: sludge treatment is expected to become a new growth point in the environmental protection industry.
Venture capital groups have responded quickly. Over the past year, Sequoia Capital, Lenovo Investment, Tsing Capital, Qi Ming Venture Capital, DT Capital Partners and Keytone Ventures have all made preparations to enter the sludge treatment industry. Many companies have already started the chase: going from one Chinese city to the next to visit the sludge-treatment plants emitting their stinking fumes.
There are still many obstacles blocking these investors. Firstly, this is business that has to be conducted in cooperation with the government. The revenue for sludge-treatment firms comes primarily from an allocated state budget. “Payment always has to be discussed in great detail. The relationship an enterprise has with the government decides its ability to get contracts,” said one investor from Tsing Capital. “The government won’t let you profit too much from this either – your return is limited.” A more immediate obstacle is the instability of existing sludge treatment companies, which lack sustainable sources of revenue.
Firms involved in toxic-sludge treatment have problems with their business models and supply chains too. For a long time, China’s industrial wastewater and household sewage have been mixed together before treatment. As a result, the sludge produced tends to contain heavy metals, making it difficult to use as compost. This has led to the establishment of a number of sludge-treatment projects which use expensive foreign technology to “clean” the sludge. But even when it’s clean, there isn’t anywhere to put it: the Ministry of Agriculture prohibits the use of this treated “organic fertiliser” on farmland. It can only be used for soil in urban “green spaces”, landfills or roadbeds, which makes it is impossible to form a complete supply chain.
There are currently three main treatment methods: anaerobic digestion, aerobic fermentation and incineration, all of which have their pros and cons. But there’s no single method that’s cheap, fast and space-efficient at the same time as providing safe and effective treatment. Investors consider it too risky to gamble on any one line, and hear constant mutterings about the different available technologies, and the disputes between their various proponents.
The policymaking set-up is also troublesome. Although the government has issued a high volume of documents on sludge treatment since 2010, most of them have been about technical guidance or minor policy details. Under the current, highly fragmented administrative system, it is unclear which department is really in charge of the sludge-treatment industry. Responsibility falls between the Ministry of Environmental Protection, the Ministry of Agriculture and the Ministry of Housing and Urban-Rural Development, among others. Core policy decisions on the industry’s overall development are not getting made.
It may be early days yet, however. In the forthcoming 12th Five-Year Plan for the sewage-treatment sector, China is expected to set out plans to establish additional wastewater treatment facilities with investment value of 421 billion yuan (US$66 billion). Of this, 31.2 billion yuan (US$4.9 billion) is earmarked for facilities to treat and dispose of toxic sludge.
“The pivotal question is not how much is to be invested, but who is going to put forward this 31.2 billion yuan,” said Zhu Wei, professor at Hehai University’s School of environmental sciences, who has been researching sludge-treatment technology for many years. Who will pay for sludge treatment and disposal services?
Some think this should be funded by an increase in water prices – that society should bear the cost. It’s estimated that adding an extra two jiao (US$0.03) to the current price of water as a sludge-treatment surcharge would ignite the industry overnight. But raising the cost of water is a sensitive move and one that wouldn’t be easy to implement quickly.
Other methods involve compromise. Sludge-disposal firms could approach local government with a bid for public finances, but that model would be unlikely to allow the industry to develop on a large scale. And all this leaves the sector in something of a knot. “Until the funding is sorted, it will be impossible for this industry to move forward,” said Zhu.
Yang Dazheng, Lü Minghe and Xie Dan are reporters for the Southern Daily group, which first published this article. It is edited and published here with permission.
Homepage image by 何波7804