The Internet + business in the garbage has been there for a long time, the cake is big, it's hard to eat it!

After more than a month of living in a variety of paragraphs, the people of Shanghai have finally adapted to the classification of garbage. Next, it's time for the people of Beijing and 46 other cities to be put to the test. Failure to separate garbage in the right way risks breaking the law, as well as a fine of 50 yuan to 200 yuan.

Shanghai's average daily garbage removal is around 26,000 tons, according to Shanghai News. This means that if it were piled up, it would take almost two or three weeks to pile up a Shanghai Center.

From the end of May, a number of districts in Shanghai have begun to pilot the classification of household garbage placement, limited to two time slots per day, mostly concentrated in the morning 7-9 am, evening 5-8 pm, divided into red, blue, brown, black four-color garbage cans, corresponding to the four categories of hazardous garbage, recyclable garbage, wet garbage and dry garbage. Neighborhood committees and volunteer teams take turns on duty to guide residents to put out their garbage.

After sorting, where does the garbage go?

According to the statistics of the Ministry of Housing and Construction, in 2017, the national municipal domestic waste removal amounted to 215 million tons, with a compound annual growth rate of 5% from 2010-2017.The report of the Prospective Industry Research Institute shows that the food waste in China's domestic waste accounts for the largest proportion of food waste, which is about 50%, with an additional 10-25% of recyclable waste, 20% of dry waste, and the remaining 5% for hazardous waste.

Waste separation includes four major segments: drop-off, collection, transportation and disposal.. Generally speaking, after the residents will be classified and put the domestic garbage, the community property is responsible for the brief storage, and then by the sanitation for collection, through the special garbage trucks transported to the garbage transfer station for screening, compression, and then transported to all kinds of specialized waste disposal plant.

Landfill is still the most important disposal method for domestic waste in China. The advantage of landfilling is its low economic cost. Among them, simple landfills are very prone to residual bacteria and viruses, and garbage leachate can also cause pollution of groundwater resources. Sanitary landfill is a harmless disposal, but it covers a large area and has a long transfer distance. With land resources becoming increasingly tight and the threat of "cities surrounded by garbage", "de-landfilling" and "garbage resourceization" have become the development trend of garbage disposal.

It is worth noting that waste incineration power generation has developed rapidly in recent years. According to Polaris environmental protection network data, in 2017, China's domestic waste incineration treatment accounted for 43.84%. Prospective Industrial Research Institute data also shows that, compared with the landfill, the same amount of domestic waste treatment, incineration plant covers an area of only 1/20-1/15 of the landfill. the decomposition of domestic waste in the landfill usually takes 7-10 years, and incineration only takes about 2 hours to be processed. It takes only about 2 hours for incineration to complete the treatment, and the reduction can be up to 90%. Compared with coal power generation, incineration of 1 ton of domestic waste is equivalent to a reduction of carbon dioxide emissions of 208-283kg.

China Circular Economy's calculations show that, on average, more than 300 kWh of electricity can be generated from each ton of waste incinerated.For every five people who produce domestic waste, incineration can generate enough electricity to meet the daily electricity needs of one person.

For the treatment of organic waste (food waste), the U.S. Environmental Protection Agency (EPA) first pushed composting. Food waste can be fermented to form organic fertilizer, to achieve the waste resources. However, waste composting requires a large site, relatively long time, and because of the consumer's fertilizer habits, organic fertilizer is not as good as chemical fertilizer market sales. In the past, food waste was easily burned together, and the optimal treatment path for food waste after waste classification is still to be explored.

Garbage classification of the "Internet +" business

One of the deeper aspects of garbage classification is recyclable garbage. According to the China Renewable Resources Recycling Industry Development Report (2018) released by the Ministry of Commerce, in 2017, the national waste paper recycling volume was 52.85 million tons, an increase of 6.5% year-on-year; the waste plastic recycling volume was 16.93 million tons, a year-on-year decrease of 9.9%.

Waste paper can be recycled to make recycled wrapping paper and can also be used to make furniture. The documentary film "Green City" on the whole process of domestic waste treatment in Shanghai shows that 34,000 milk cartons can make a four-person desk. According to the data of Changbao.com, after the waste plastic bottles are recycled, through crystallization and drying or degradation, about 80% will be used in the textile industry, which is called recycled fiber within the industry, and is the main raw material of the chemical fiber industry. Many of the clothes, towels or quilts we use every day of our lives come precisely from plastic bottles.

In many areas, the collection of recyclable waste is undertaken by a group of scavengers. With very low operating costs, almost negligible equipment costs and depreciation, they collect recyclables door-to-door or from dumpsters and sell them to scrap yards.

Recently, the policy of garbage classification has been tightened, Alipay has launched a small program "easy to throw" in Shanghai, online reservation, door-to-door recycling, limited to recyclables, according to the weight of the calculation, you can get the corresponding ant forest energy. For the 996 office workers, reluctant and inconvenient to go out of the crowd, on behalf of the garbage may be a good choice.

Under the soul torture of "what kind of garbage are you", all kinds of "garbage disposal" and "intelligent sorting" ideas are also endless. In fact."Internet + garbage recycling" entrepreneurial road has many pioneers, but the business model has never seen run through.

As the previously largest smart recycling startup for renewable resources, Little Yellow Dog had received 1.05 billion yuan of Series A financing from Zhongzhi Group in June 2018, with a post-investment valuation of 6 billion yuan. The specific business of Little Yellow Dog is to place smart garbage cans in neighborhoods and office buildings, etc., and users choose the type of recyclable garbage to put in the interactive interface, weigh it and then categorize it for pricing, which can be withdrawn in the APP. After the recycling equipment is full, the staff will transport the garbage to the sorting organization. At its peak, Little Yellow Dog had more than 3 million registered users, covering 33 cities nationwide. Due to the controlling shareholder Tang Jun's surrender due to the Group Loan Network thunderstorm, Little Yellow Dog is in the process of bankruptcy reorganization.

Also do "Internet + garbage recycling" again life, the business has changed several times, from door-to-door recyclable garbage, expanding to e-commerce, and then expanding to home services, and ultimately because of the difficulty in making a profit in 2017 closed down.

Xia Fan, founder of re-life, said in an interview with Southern People Weekly that "the 'self-built recycling personnel system + door-to-door service' model of to C, the cost of a door-to-door service is a minimum of 6 to 7 yuan, and the customer unit price of the collection of waste may not be as high as this level." Coupled with the high cost of operation, logistics, warehousing, personnel remuneration and other costs and expenses, the pressure on profitability is not insignificant.

In contrast, Idle Bean Recycling, which specializes in to B business, is in a much better situation. Idle Bean regularly recovers waste cartons and cardboard from corporate customers, and then transports them to its own baling plant, where the waste paper is compressed and sold to paper mills for recycling. Its customers include large supermarket chains, office buildings, hotels and many Internet e-commerce companies. Idle Bean's founders have said that the company has been fully profitable since the second quarter. The most recent round of funding came in October 2018, when Idle Bean Recycling secured 100 million yuan in Series C funding from the China-US Green Fund.

Garbage disposal industry chain, will the cake be re-divided?

Taking an overview of the domestic and foreign countries, the income of the entire industrial chain of waste disposal comes from three parts, namely, government subsidies, the waste disposal fees paid by residents and the income from the reuse of waste resources.

Garbage disposal, as part of sanitation, belongs to the housing and construction sector, itself with public service attributes, and industry characteristics of heavy and slow, many links rely on government subsidies.

The main mode of environmental protection industry BOT (Build-Operate-Transfer) projects, most of the regions for the treatment of garbage subsidies, that is, garbage disposal service fees in the 60-80 yuan / ton. Waste incineration power generation subsidies are based on the 2012 Development and Reform Commission documents, tons of garbage on-line electricity is not more than 280 degrees can enjoy the national tariff subsidy policy of 0.25 yuan / degree.

The second major source of income from garbage disposal is the disposal fees paid by residents. The United States has implemented a garbage metering and charging system, which is currently in effect in 1,200 cities, and each household pays a garbage disposal fee ranging from about $40 to $50 per month according to the local government's implementing regulations.

China's residents have yet to pay for waste disposal, and both waste disposal fees and power generation subsidies are paid for by the government. Renmin University of China released the "Beijing municipal household waste incineration social cost assessment report" shows that Beijing unit of household waste incineration subsidies for 325 yuan / ton, incineration electricity price subsidies constitute incineration plant received income and subsidies of about 20%.

Producer-pays system for household waste may be on the way to arriveOn June 25, Minister of Ecology and Environment Li Ganjie said that the system for preventing and controlling environmental pollution by urban and rural household garbage will be improved, a system for classifying household garbage will be implemented, and a system for charging for the disposal of household garbage will be stipulated in accordance with the principle of "producer pays".

Waste resource utilization brings revenue to the industry, and one of the most important sources is waste-to-energy incineration.According to the data of the Prospective Industry Research Institute, in 2018, China's municipal waste incineration treatment volume was about 95.2 million tons. According to the calculation of Founder Securities, the average gross profit margin of listed companies with waste incineration as the main industry is 40.59%, and the net profit margin is 23.46%.According to the calculation of the feed-in tariff of 0.6 yuan/degree, waste incineration power generation generates about 14.2 billion yuan of income per year, and the net profit is about 3.3 billion yuan.

Waste with high water content and low calorific value, which affects combustion efficiency, is the biggest challenge facing incineration. And garbage classification can separate wet and dry garbage from the source, and improve the calorific value. According to Everbright Securities research report estimates thatAssuming that the waste classification process can completely separate all food waste, the power generation capacity of tons of waste can be increased by nearly 20%, about 48-64 kWh of electricity, which can add 2-3 billion yuan to the whole industrial chain every year.

However, this year's two sessions on the proposal of the National People's Congress, suggesting the abolition of incineration power generation subsidies, that the subsidy policy stimulates the construction of waste incineration plant, disguised as encouraging the source of garbage indulgence, incineration of recyclables, etc., is not conducive to the development of a green circular economy. Another voice believes that the investment in waste incineration plants in hundreds of millions of dollars, and China's garbage classification is currently not doing enough, mixed garbage with low calorific value, high moisture, temperature control difficulties, the need for better technology, but also means high investment.

In addition, waste classification has given rise to specialized sanitation equipment and wet waste storage and transportation markets. According to Everbright Securities, the incremental market for wet waste storage and transportation and recycling network reaches 3.6 billion yuan per year in 2019-20, based on 46 cities.

On the one hand, the implementation of waste classification may increase the income of the industrial chain by billions of dollars. Will all these profits remain in the hands of downstream disposal enterprises, or will they partially flow to the upstream and midstream putting, collection and transportation links, or partially be paid to the Treasury? On the other hand, whether the government subsidy for waste incineration power generation will be regressive, or even canceled, we have to wait for boots on the ground.

After the implementation of garbage classification, the whole industrial chain of how the cake will be distributed again, I am afraid that it will take time to see.