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How does garbage become garbage?

Editor’s note: This article is from WeChat public account “Qingshan Capital” (ID: cyanhillvc), author Jin Yu.

On July 1 this year, Shanghai officially implemented the mandatory classification of domestic waste. Weibo hot search, friend circle “spit”, from the media to play the stalk, for a moment with Shanghai as a storm eye, the whirlwind of the national carnival. For the first time, most Chinese people officially contacted the concept of “garbage classification” and this way of life. More than 100 garbage sorting guides are on the App Store every day. In the past three to five years, various startup companies that have paid attention to relevant policies have also surfaced and screamed for the industry’s attention and self-financing.

It seems that a stone has stirred up thousands of waves. In fact, the water has already been undercurrent. Before capital and public opinion paid a lot of attention, change was already happening. 15 years of o2o wave, 17 years of foreign garbage banned import, 18 years of artificial intelligence + Internet of Things concept, plus 19 years of garbage classification enforcement, the last 5 years, 3 years, 1 year, entrepreneurs are mistakenly Mistaken, walking, and even running into the field. Before the new players, there are already three generations of waste recycling family, traditional packaging factories that negotiate environmental issues with the government, countless traffickers who drive three-wheeled automatic horns, and incineration with 2G as the main business model. Power generation listed company.

In the past three months, the vents of garbage sorting have not been counted, but the wind is not so strong. Wait until the smell is scattered, to write a bit of calm thinking, I hope to see carefully what is under the garbage.

To understand this slightly more complex industry, we must first make it clear: how does garbage become garbage?

三生三世

The domestic waste is basically an artificial product, which is a product of industrial production in the economy. The “predecessor” of garbage is a wide variety of goods.

When users think they have no use value, they become the “this life” of garbage. This is not expensive, old or new, as long as it is discarded, it enters the garbage dump. If it is treated in a different way, it may become a valuable renewable raw material, which also buried the foreshadowing of the recycling industry. Part of the purpose of waste sorting is to better distinguish and utilize recyclables.

There is no garbage that needs to be disposed of, and they are fermented, landfilled, and burned. The “next life” of rubbish, if not reused as a new commodity or raw material, becomes fertilizer, energy or dust.

The process of becoming garbage is the process of declining the value of goods, so the dismantling is more detailed, and we will get a complete “depreciation chain” involving multiple industries.

“Commodity-Garbage” Depreciation Chain

如如As mentioned above, the type of garbage is essentially equal to the type of all goods, and everything is actually a resource. Garbage-related industries can be divided into different stages along the decline in the value of goods from commodities to garbage. The more clearly the classification of goods before they become garbage, the higher the degree of reuse, the more likely the items will climb upstream in this devaluation chain, from garbage to recyclable resources, and the lower the cost of garbage disposal.

What is the classification?

The four classifications in Shanghai initially caused some confusion for the public. The words used for dry garbage, wet garbage, recyclables, and hazardous waste are from the point of view of the end of the industrial chain: the need for dry and wet separation, for other purposes, to improve efficiency; rather than the general public who throws garbage at the front end friendly. The most groove points are also concentrated on what kind of garbage is some wet and dry mixed items.

In general, wet garbage = kitchen waste, dry garbage = all garbage – kitchen waste – recyclables – hazardous goods, so the classification words appearing in the relevant provisions of Beijing have been optimized, renamed “food waste Garbage, “other garbage.”

The logic behind it is the purpose of garbage sorting and the economics of the industry chain. The treatment plant is concerned about the problem of dry and wet, because dry garbage is incineration power generation, adding wet garbage and harmful garbage, greatly reducing efficiency and increasing pollution. Not classified, except for the intermediate links being smashed, some recyclable, the rest are incinerated, landfilled, polluting the environment, wasting land, wasting recyclable resources; after sorting, all kinds of corresponding treatments, recoverable resources change As a result, the amount of garbage to be treated is reduced, the treatment efficiency is increased, and environmental pollution is also reduced.

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Foreign experience

Garbage classification originated from abroad, Europe and the United States are more mature and at the same time, but the starting point is for the economic benefits of environmental protection and resource reuse.

The United States has a large landfill and is currently based on landfill. Without land pressure, the efficiency is far less than that of Europe and Japan. Landfill 53%, incineration only 13%, recycling 25%, the remaining mainly compost. The classification mode is relatively simple, and generally only divided into two or three categories, such as “recyclable” and “non-recyclable”. 75-95 years is the golden year of the US waste incineration power generation industry, the birth of the leading enterprise CVA, throughAfter a series of mergers and acquisitions, the current production capacity is 55,000 tons/day, accounting for 2/3 of the annual incineration in the United States.

Japan has the world’s finest garbage classification model, stipulating up to dozens of categories. In 2000, a circular society (3R ​​principle: Reduce, Reuse, Recycle) was proposed. It is now one of the countries with the highest efficiency in waste separation and resource utilization. The proportion of incineration has reached 80% in the last century.

Europe is best done in the Nordic countries. For example, in Sweden, the deposit system is implemented for widely used cans, plastic bottles and beer bottles. The bottle deposit is included in the purchase, and the deposit can be retrieved after being put on a special recycling machine. The recovery rate of bottles, jars and cans is 93%, and the raw materials after compression and decomposition can make new bottles 1:1, leading the world. The biggest biggest destination is incineration and power generation. Sweden needs heating for 8 months in one year. The national waste disposal only accounts for 20% of the incineration plant. It is still trying to import garbage from neighboring countries.

Domestic history

Europe and the United States began to implement waste sorting at a per capita GDP of 10,000 US dollars. Most of the more developed provinces and cities in China already have this condition. However, there are differences in the structure of the people and the state of society. Measures cannot be directly copied. For example, Japan needs residents to bear 20-25% of the cost of garbage disposal. China is more likely to charge all residents by promoting environmental protection tax laws. Since 1999, there have been regulations on the disposal of domestic garbage in various places, and it has not been widely implemented so far. Foreign experience shows that the implementation and efficiency improvement of waste sorting must rely on legislative compulsory, policy preferences, subsidy guidance, and overall education from small to small.

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Where is the wind outlet

This is the “barren land” of entrepreneurs’ attention. Front-end clearing and back-end processing are basically the areas of government and large-scale heavy-asset traditional enterprises. The recycling part in the middle is scattered and scattered, and is filled by various self-employed and small companies. In recent years, frequent new policies have centered on two key lines, one is garbage classification and the other is foreign garbage import. Enterprises that have a large number of recycling concepts and waste classification concepts that began to appear in the past 17 years are basically derived from the regulations on waste paper in the foreign garbage import restriction policy.

In fact, since the beginning of 14 years, the recycling prices of various types of renewable resources have continued to fall. The enthusiasm of scavengers and self-employed households has gradually declined, and the difficulty of recycling is increasing. It is also based on this that there are two networks (urban sanitation). The network and the renewable resource network are organically combined, unified planning, and people/facilities/site sharing) are more urgent needs. At that time, almost no entrepreneurs would pay attention to the waste recycling industry, not to mention that there was no strongWaste classification of the policy. There are no gold mines here, only garbage dumps.

17 years ago, China imported more than 50% of the world’s waste paper and waste plastics every year. The countries with advanced waste classification are big sellers. The paradox that China is caught in the garbage siege but imports garbage at the same time is only because the “foreign garbage” has been classified. After the government’s attention, state-owned enterprises and listed companies entered the renewable resources industry in a big way, and the mergers and acquisitions occurred frequently. After 17 years, China’s imports of waste from developed countries fell sharply. In addition, 15 years later, the venture capital market itself prospered and even overheated. Kind of startup company.

Like education, this line has the nature of social services. It is supported by government policy guidance and financial subsidies. The profit is meager, and it is difficult to earn the “big money” in VC’s eyes. The influx of entrepreneurs is nothing more than two major goals: the industry has received much attention, the market value of the overall industrial chain has risen, and there are incremental markets; treasure hunt in the waste, and the supply of recycling market is in short supply. As for the skipping of the garbage disposal industry chain, but to do second-hand transactions, idle leasing business, because it is closer to the upstream of the devaluation chain, is a big topic that can be discussed separately, this article does not discuss. Here we look at the entrepreneurial situation in both the waste sorting and waste recycling.

Incoming Opportunity—Garbage Classification

• Clearing

The common spit of garbage sorting is: the front end is divided, and the next one is loaded, which is equal to white. In the future, the front-end clearing will inevitably have a big change, resulting in an incremental market. Shanghai’s short-term goal is to clear the transport trucks, collection points, transfer stations and distribution centers to the order of 800, 5000, 200 and 20 respectively, which is basically 50-100% annual growth, and the equipment also has room for upgrading and technological and technological innovation. Establish a complete collection and delivery system, with 46 pilot cities, there are tens of billions of markets.

The US Waste Management Company (WM) has experienced 50 years of development and mergers and acquisitions. Today, its market value is more than 50 billion US dollars, and its annual revenue is nearly 15 billion US dollars. 65% of its business is front-end garbage collection and transportation. However, in the United States and China, this industry is inseparable from government subsidies, and the expansion of heavy assets is slow, the overall profit rate is stable and meager, and it will continue to be highly concentrated through industry mergers and acquisitions. In the future, there will be more policies to accelerate the marketization of sanitation in China, but it does not seem to be a dish for start-ups.

Because of the greater policy dependence, large foreign companies are all industrial chains, and the chain is long to control risks. At present, more and more large-scale back-end garbage disposal enterprises in China have begun to deploy to the upstream sorting and clearing links in order to reduce operating costs and improve profitability. It is foreseeable that such an attempt is more likely to succeed than a startup.

There are also startups that want to do a complete intelligent collection system from the perspective of technological innovation. The intelligent hardware garbage bin collects garbage, and the underground pipeline is transported by air to the container of the nearby recycling station, and then the municipal sanitation is docked.Infrastructure. The idea is very good, but it is difficult to implement. It is analogous to the general infrastructure of water and electricity. The underground construction of the station is built on the ground. The required policy coordination and technical difficulty can be seen, but it is not excluded that the high-tech startups will appear in this field in the future. .

• Process

Incineration power generation is the best way and main development direction for waste reduction and resource treatment. The current incineration rate is less than 40% and is still at a low level. Land prices have generally risen everywhere, and the replacement of landfills by incineration has become increasingly urgent. The classification of waste brings incremental opportunities to incineration plants, but most of them are traditional large enterprises and local enterprises, which are not so open and transparent.

Although kitchen waste accounts for more than 60% of domestic waste, its recoverable value is relatively low. Although it can generate electricity from biogas, produce diesel, and produce feed, the industrial chain has little value added. Under the state’s support, it can be responsible for its own profits and losses. The incremental market after waste sorting is tens of billions of dollars, and it is also a traditional business with heavy assets.

There are also entrepreneurs who have made breakthroughs in technology. Look for higher incineration efficiency, process improvement; or find better biotechnology, use special bacteria to treat food waste, reduce costs and increase efficiency; or use food waste to feed insects that can be used as feed or protein raw materials, and sell to biological farming or Pharmaceutical companies. For the resource utilization of non-recyclable garbage, foreign governments continue to actively promote subsidies and preferential policies, and this will be the case in China. There are always opportunities for entrepreneurship in this area, but they are all oriented towards technological innovation and the short-term cash flow is unstable.

• Classification

Separate self-disposal, high time and psychological cost in the short-term, so under the policy enforcement, various types of enterprises that help to classify are generated:

The large AI bin of the collection point – currently equals the IQ tax. There are not enough technologies to directly and effectively distinguish dry and wet garbage, let alone four more detailed classifications. Visual identification alone is not comprehensive enough, and it is necessary to add dimensions such as temperature and humidity. At present, it is basically a concept in a business plan. Some products can realize some functions, but the requirements for delivery are very high. Before the launch, it is necessary to basically divide the products, and then the waste paper, the cans can be sorted, etc., but the manual sorting is required. p>

Home smart sorting trash can – equivalent to the logic of the former, but the application scenario is closer to pseudo-needs

Apps/applets for classification knowledge teaching–copying and pasting of texts, short-term drainage products, and winds are still dead.

Photo/scanning visual recognition tool app/small program – there is a certain amount of technical content, so the number is not as much as the former, but it is also endless. On July 1st, Shanghai administration, on July 4th, Taobao’s sweep has added AI to identify the garbage function, and can’t recognize the manual input training AI. This kind of hot spot – do the tool – change the flow –