Global Composting Industry Accelerates, How China Breaks the Mold?

The global composting industry is developing at a high rate with a compound annual growth rate of 12.3% (2024 data), with Germany and Japan having the most mature systems:

Germany: home composting prevalence rate of 68%, organic waste recycling rate of more than 90%

Japan: legislation for mandatory composting of food waste, with 2,000+ community composting centers covering the whole country

China: composting treatment rate of less than 20%, but the policy end is clearly ramping up (2025 target) China: 46 key cities have full coverage of waste categorization

Chapter 1 German model: policy-driven + industry chain closure

1.1 The world’s toughest Organic Waste Ban

Organic waste banned from landfills since 2005

New regulation in 2023: supermarkets must provide recycling points for compostable packaging

Penalty: up to 5,000 euro fine for mixing and discarding food waste

1.2 Two-Track Recycling System (DSD Green Dot Label)

Firms pay a disposal fee based on the weight of the packaging (30% fee reduction for compostable packaging) Enterprises pay treatment fee based on package weight (30% reduction in fee for compostable packages)

Result: 92% of compostable packages go to professional treatment facilities

1.3 Implications for China

✅ Policy recommendations:

Pilot “tax incentive policy for compostable packages” in Pilot Free Trade Zones (FTZs)

Establish a DSD-like Extended Producer Responsibility (EPR) certification

Chapter 2 Japanese practice: fine management + community participation

2.1 From the Food Recycling Law to local ordinances

Tokyo Metropolitan Government regulation: food waste composting rate of food establishments must be ≥70%

Osaka innovation: tracking garbage bags with RFID chips, reducing subsidies for violators

2.2 Operation model of community composting centers

Profitability:

Government subsidy (40% of revenue)

Sale of organic fertilizer (RMB 30/kg, purity ≥95%)

Fee for composting courses (annual fee of about 600 RMB for household users)

2.3 Implications for China

✅ ✅ Landing solution:

Property company to install “smart composting cabinets” (code delivery points for redemption)

Drawing on the “food factory + community” co-construction model

Chapter 3: China’s Current Situation and Breaking Points

3.1 Policy: Key Signal in 2024

NDRC’s “14th Five-Year Plan” for Circular Economy Development includes composting as a key project

Shenzhen Pilot: Failure to Properly Classify Compostable Waste Wastes Included in Individual Credit

3.2 Market Pain Points

❌ Lack of Awareness: 68% of consumers can’t tell the difference between “Compostable” and “Biodegradable”

❌ Lack of Facilities: Industrial Composting Plants only account for 7% of Waste Disposal Facilities

❌ Cost inversion: traditional plastics are still 30-50% cheaper than PLA

3.3 Three Strategic Opportunities

? To C market:

Develop “Home Composting Kit” (with certified garbage bag + fungus + tutorials)

Jitterbug e-commerce data shows that GMV of related products grows by 400% per annum

? To B market:

Develop customized “cost-equal PE compostable lunch boxes” for takeaway platforms. Compostable lunch box”

Case: A brand reduced cost by 22% by improving PLA formula

? To G market:

Bidding for the construction of “Waste Separation Intelligent Cloud Platform” (government budget usually exceeds 5 million/project)

Chapter 4 Suggestions for Action: How to seize the track

4.1 Product Strategy

Required action: Get OK Compost HOME certification (180% annual increase in search popularity)

Innovation direction:

High-temperature-resistant PHA straws (solving the pain point of PLA softening)

Self-degradable express delivery stuffing with composting bacterial agent

4.2 Marketing Approach

Content grass-roots: Shooting the “7-Day Composting Challenge” short video (Xiaohongshu pop model) )

Data empowerment: Add the “Carbon Reduction Calculator” tool to the independent website

4.3 Capturing Policy Dividends

Focus on the three major documents to be issued in 2024:

Measures for the Management of Labeling of Biodegradable Products

Measures for the Management of Subsidies for Urban and Rural Waste Separation

Green and Low Carbon Product Certification Catalog