Environmentalists in China, however, are opposed to incineration. They argue that hazardous emissions, such as the toxic dioxin, are an inevitable consequence once an incineration plant is put into use. Dioxins have been known to damage people's overall health, especially to residents near incineration plants.

As a result, a number of proposed incineration projects in China are on hold.

The city of Panyu, South China's Guangdong province, announced its plan to build an incineration plant in 2009, but the location of the project is still under discussion because residents do not want an incinerator in their backyard.

Chen Zefeng, chairman of Zhongde Waste Technology Co, one of the pioneers in China's incineration industry, said public disagreement will not be a problem in the long run as more and more people become familiar with the technology.

"Incineration technology is a well-developed technology," Chen says. "All the emissions are able to meet a safe standard if you really understand it."

Chen claims that public opinion on incineration plants has changed a lot in the past two to three years.

"Three years ago, we had to go to local governments and try very hard to convince them to use incineration. But now they come to us, they know there is no better option," says Chen, who adds that dozens of cities have asked to work with the Germany-listed company.

Chen says Zhongde has nine waste incineration projects in China and aims to expand aggressively in the next 10 years.

"Available land for landfills is not only very few but also expensive due to rapid urbanization. Plus, power can be generated from waste-to-energy plants which will suit China's increasing demand for energy," he says.

 

An incineration plant will begin operations in Tianjin in June. Liu Haifeng / Xinhua

At Beijing Gaoantun Waste-to-Energy Company, for instance, 198 million kilowatt-hours of power was generated from 750,000 tons of solid waste in Beijing's Chaoyang district last year.

The company, located on the East Fifth Ring Road, is the only household waste incineration plant in Beijing, treating more than 50 percent of the garbage from 4 million residents in Chaoyang district every day.

"Using incineration to treat garbage is a way to reuse those seemingly useless stuff. The garbage can turn into power and even the sludge can be reused in the construction industry," says Wang Xiaoguang, general manager of the company.

Wang says that people will have to deal with garbage as long as they live in the world, which makes garbage management an enduring industry.

Investors seem to agree. Hou Yuxuan, an analyst of the environmental protection industry with Shenzhen-based CIConsulting, says that investment in the incineration industry was around 50 billion yuan in 2010.

Hou says that figure will jump to 70 billion yuan a year by 2015.

Hou says that the rising level of investment is a result of increasing demand and more subsidies from local governments along with preferential policies from the central government.

The central government, for instance, offers an extra 0.25 yuan for each kWh power generated by waste-to-energy plants. It also offers tax breaks for garbage treatment facilities.

Many investors have flocked to the industry due to these perks offered by the government.

For Mora, the main challenge to Veolia in China is the so-called fly-by-night companies.

"A lot of people are getting themselves involved in this business because they believe they could make good and fast money at the expense of the environment," Mora says.

But some industry insiders say that unreasonably low bidding price and cutthroat competition are the main hurdles of the industry.

Chen Zefeng, chairman of Zhongde, does not believe the problem will haunt the incineration industry in the long run.

"China's incineration industry is still emerging. With the promising development of the industry, I am more worried about the shortage of talent as more companies enter into the business," he says.