New Growth for Environmental Equipment Industry in the 15th Five-Year Plan

The industry's main business income reached 4.68 trillion yuan. The number of companies exceeded 15,000. Export value hit a record high. The self-sufficiency rate of equipment in air, water and solid waste treatment was over 90%. China's waste incineration capacity accounted for 65% of the world. The technical level of the equipment has reached international advanced standards. However, the industry also faces serious challenges. Traditional areas have overcapacity. Profit margin dropped from 8.2% in the 13th Five-Year Plan period to 6.9%. The share of loss-making companies is rising. During the 14th Five-Year Plan period, China's environmental protection equipment manufacturing industry achieved steady growth in scale but faced pressure on profits.

As the first year of the 15th Five-Year Plan begins, how can the industry break the dilemma and find new paths for high-quality growth amid the structural conflict between scale and profit? In the next five years, going green and smart will no longer be a choice. It will be a rule for companies to survive. A number of Chinese environmental protection equipment groups with global competitiveness are growing in this transformation.

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Glory and Pressure: From Scale Expansion to Profit Pressure

Data shows the 14th Five-Year Plan period was key for China's environmental protection equipment manufacturing industry to grow from big to strong. By the end of 2025, the industry had 15,000 companies, including 4,600 large and medium-sized ones. This was an increase of over 50% compared with the end of the 13th Five-Year Plan period. Many excellent companies stood out. There were 261 listed companies, 319 specialized and new "Little Giant" companies, and 616 supporting enterprises in the National Encouraged Major Environmental Protection Equipment Catalogue.

More importantly, industrial capital has made deep investments. 41 central state-owned enterprises entered the environmental protection industry. 27 provinces and cities set up provincial environmental protection groups. This shows the environmental protection industry has a much higher position in national strategy. Especially in water treatment and solid waste treatment, state-owned capital has brought advantages in capital, resources and markets. But it also made competition fiercer in some traditional areas.

Data shows during the 14th Five-Year Plan period, the industry's main business income had a compound growth rate of -1.09%. Its estimated income in 2025 was 900 billion yuan, down 3.58% year-on-year. Average profit margin dropped from 8.2% in the 13th Five-Year Plan period to 6.9%, and further fell to 5.28% in 2025.

The industry faces many problems: shrinking demand, rising costs, lower profits, less investment, talent loss and weaker expectations. Traditional markets for water, air and solid waste treatment are almost saturated. New markets have not fully opened up. This caused structural overcapacity. At the same time, the industry's overall manufacturing level still falls behind advanced manufacturing. Green manufacturing and smart manufacturing are still at an early stage.

Policies and Markets Work Together to Create New Growth Engines

In March 2025, three ministries including the Ministry of Industry and Information Technology issued the Opinions on Promoting the High-Quality Development of the Environmental Protection Equipment Manufacturing Industry. This set the direction for the 15th Five-Year Plan period.

Many policies were released at the end of the 14th Five-Year Plan period. They included revised equipment catalogues, updated standards and industrial innovation catalogues. This showed a forward-looking strategy. Support shifted from general guidance to specific fields. It especially focused on fixing weaknesses in the five industrial foundations: basic materials, parts, technology, software and platforms. Key tasks included low-carbon transformation of traditional equipment, treatment of new pollutants, new solid waste treatment and use of first-set equipment.

Besides, Chinese environmental protection equipment will make historic progress in going global. Exports are expected to exceed 23.5 billion US dollars in 2025. By 2030, exports may double to 40 billion US dollars, nearly 30% of the industry's total output value. Complete equipment for ultra-low emission coal-fired units, large waste incineration grates and high-value recycling lines for used lithium batteries will perform well in markets along the Belt and Road and around the world for their low cost and advanced technology.

Building Three Pillars: From Innovation Center to Smart Manufacturing Upgrade

To reach these goals, capacity building is the foundation. Wang Yining said during the 15th Five-Year Plan period, the industry must build an innovation system supported by manufacturing innovation centers, public pilot platforms and intelligent upgrading.

First, build a national-level innovation center for environmental protection equipment manufacturing. Use the "company + alliance" model. Bring together leading companies, universities and research institutes. Focus on developing key common technologies and cutting-edge technologies and putting them into use for the first time. The goal is to basically fix industrial chain weaknesses by 2027 and achieve self-control by 2030.

Second, build open and high-level pilot platforms. Focus on key weak areas such as high-performance membrane materials, VOCs treatment and new pollutant testing. Leading companies will build and open pilot platforms. They offer one-stop services including research, testing and verification. This will greatly cut costs and risks for small and medium-sized companies.

Third, fully push forward smart manufacturing and green manufacturing. Environmental protection equipment must first go green and smart. Use digital twin, artificial intelligence and industrial internet technologies. Improve the whole life cycle of equipment from design and production to operation. Focus on developing environmental robots, smart operation equipment and remote diagnosis systems.

With targeted policies, market drive and system upgrading, China's environmental protection equipment manufacturing industry will get through the transformation period. By the end of the 15th Five-Year Plan period, we will see a bigger industry. We will also see a stronger strategic new industry with higher added value and more global influence. It will not only support a Beautiful China. It will also become a new name card for green "Made in China" going global. It will contribute Chinese solutions and wisdom to global ecological progress.