China Galaxy Securities released a research report stating that the State Council has issued a notice on the "Comprehensive Solid Waste Management Action Plan" (hereinafter referred to as the "Plan"), which requires that by 2030, the annual comprehensive utilization volume of bulk solid waste reach 4.5 billion tons, the annual recycling volume of major renewable resources reach 510 million tons, and the capacity and level of comprehensive solid waste management be significantly improved. The firm recommends focusing on sectors with strong resource attributes, low marketization, and large market potential, such as metal recycling, waste oil and grease, and waste-to-energy incineration. China Galaxy Securities' main views are as follows: The State Council issued a notice on the "Comprehensive Solid Waste Management Action Plan" (hereinafter referred to as the "Plan"), requiring that by 2030, special campaigns for solid waste management in key areas achieve significant results, the historical stockpiling of solid waste be effectively controlled, the high incidence of illegal dumping and disposal be curbed, the annual comprehensive utilization of bulk solid waste reach 4.5 billion tons, the annual recycling of major renewable resources reach 510 million tons, and the capacity and level of comprehensive solid waste management be significantly enhanced. The "Plan" serves as a guiding document for solid waste management in the 15th Five-Year Plan period; solid waste management holds multiple values, including pollution reduction, carbon emission reduction, and increased resource and energy security. During the 14th Five-Year Plan period, China introduced multiple measures to strengthen solid waste management and develop a circular economy, achieving significant results. Issued at the beginning of the 15th Five-Year Plan period, the "Plan" continues to affirm the policy focus on the resource utilization of solid waste, further raises the utilization targets, and charts the course for the solid waste management industry during this period. The "Plan" focuses on the three main waste-generating sectors—industrial, urban, and agricultural/forestry—and promotes full-chain management of solid waste through measures including source control and reduction, standardizing collection, transportation and storage, enhancing the level of resource utilization, strengthening harmless treatment capacity, and implementing special campaigns in key areas such as illegal dumping and disposal of solid waste, environmental pollution risks from municipal solid waste landfills, construction waste, and historical solid waste stockpiling sites like phosphogypsum. The utilization of recycled metals holds strategic significance and has substantial market potential. In 2024, the domestic output of ten common non-ferrous metals was 79.19 million tons, with a compound annual growth rate of 6.4% from 2020 to 2024; correspondingly, the output of major recycled non-ferrous metal varieties in 2024 was 19.15 million tons, with a compound annual growth rate of 7.4% from 2020 to 2024, and its proportion of the total output of the ten common non-ferrous metals has remained around 24% in recent years, representing a crucial support for the supply of major metals. On the other hand, the utilization of recycled copper, recycled aluminum, and scrap steel typically saves over 60% of energy consumption and also has significant pollution reduction and carbon emission reduction effects, holding strategic importance for energy security and achieving dual carbon goals. The 14th Five-Year Plan for Circular Economy Development set targets for 2025, including achieving a 60% comprehensive utilization rate for bulk solid waste, a 60% comprehensive utilization rate for construction waste, utilization volumes of 60 million tons for waste paper and 320 million tons for scrap steel, an output of 20 million tons for recycled non-ferrous metals, and an output value of 5 trillion yuan for the resource recycling industry. It is expected that with the deepening implementation of the "Plan," the output value of the circular economy industry during the 15th Five-Year Plan period is likely to increase further. Risk warnings: Risks associated with policy implementation falling short of expectations, and risks of significant price fluctuations in related resource commodities.
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