[Chinese Mainland] Shandong Issues Action Plan for Water-Saving Institutional and Policy System Across Five Departments: 44 Measures Implemented, Urban Reclaimed Water Utilization Rate to Reach 60% by 2030

Key Highlights: 2026年9月28日, the Shandong Provincial Department of Water Resources, the Department of Industry and Information Technology, the Department of Housing and Urban-Rural Development, the Department of Agriculture and Rural Affairs, and the Administration for Market Regulation have jointly issued the "Shandong Province Action Plan for Comprehensively Building a Water-Saving Institutional and Policy System (2026–2030年)". The plan, with four aspects, 20 key tasks, and 44 specific implementation measures, specifies that by 2030年 the province's urban Reclaimed Water utilization rate shall reach 60%, the utilization volume of unconventional water shall reach more than 25亿 cubic meters, and requires that the proportion of unconventional water utilization in chemical industrial parks shall be no less than 35%.

I. "Build the Framework in One Year, See Results in Three Years, Establish the System in Five Years"

Shandong is one of the provinces with the tightest water resources in China — its per capita water resources availability is less than one-sixth of the national average, yet it must support approximately 7% of the nation's population, 5% of its cultivated land, 8% of its grain, and more than 7% of its GDP. Uneven spatial and temporal distribution and heavy reliance on diverted water are the realistic backdrop of this development challenge.

The Plan earnestly implements the "Opinions on Comprehensively Building a Water-Saving Institutional and Policy System" issued by the Ministry of Water Resources and four other departments. Combining Shandong's actual conditions, and centering on the institutional and policy systems for the three major fields of agricultural water-saving and efficiency enhancement, industrial water-saving and emission reduction, and urban water-saving and loss reduction, it proposes four aspects and 20 key tasks, and lists 44 specific implementation measures in the form of an appendix. The overall approach is "build the framework in one year, see results in three years, establish the system in five years", with the goal of basically forming a water-saving institutional and policy system compatible with Shandong's water security assurance requirements and green, low-carbon, high-quality development by 2030年.

In terms of task distribution, the three major fields each account for 5 tasks: the agricultural side includes improving the agricultural water-saving irrigation system, strengthening agricultural water metering and monitoring, enhancing the effectiveness of agricultural water price reform, building an agricultural water-saving market mechanism, and developing agricultural water-saving technical services; the industrial side includes strict water quota management, strengthening industrial water metering, promoting wastewater recycling, improving the water rights trading mechanism, and accelerating the development of the water-saving industry; the urban side includes carrying out water budget management pilots across the board, deepening water price and water resource tax reform, comprehensively implementing contract-based water-saving management, improving the unconventional water utilization system, and advancing water-saving society construction with high quality.

II. Reclaimed Water Provisions: From "Priority Use" to "Hard Targets as a Forcing Function"

The section "Improving the Unconventional Water Utilization System" in the Plan is the most directly relevant part of this document for the Reclaimed Water industry:

• Incorporation into unified allocation — Incorporate the development and utilization of unconventional water into unified water resource allocation and the layout of modern water network construction, and establish a reserve bank of key projects for unconventional water development and utilization
• Linkage between upgrading standards and reuse — Promote close linkage between the upgrading and renovation of wastewater treatment plants and the allocation and utilization of Reclaimed Water, and improve production and transmission facilities
• Pressure on key users — Increase the allocation of Reclaimed Water in chemical industrial parks, high water-consuming enterprises, and other such entities
• Priority for municipal scenarios — Urban greening, municipal miscellaneous uses, ecological landscapes, and other such scenarios shall give priority to the use of Reclaimed Water that meets standards
• Quantified targets — By 2030年, the province's urban Reclaimed Water utilization rate shall reach 60%, and the province's unconventional water utilization volume shall reach more than 25亿 cubic meters
• Price mechanism — Promote the pricing of unconventional water according to the principle of "high quality, high price", with prices negotiated between supply and demand parties under government coordination
• Technical support — Compile relevant technical guidelines for Reclaimed Water utilization, advance the construction of an unconventional water metering and monitoring system, and establish a Reclaimed Water monitoring information sharing mechanism

Supporting the quantified targets is a set of hard constraints already clarified earlier: the proportion of unconventional water utilization in chemical industrial parks shall be no less than 35%, and for projects that meet the conditions but fail to reasonably utilize unconventional water, no new water withdrawal permits shall be approved. This means that Reclaimed Water is no longer a water-saving option that is merely "better to have", but is directly tied to water withdrawal permit approval as a precondition.

III. Finance and Industry: Turning Water Saving from an Administrative Requirement into an Economic Choice

The Plan also sets out 5 tasks in "strengthening policy support and implementation safeguards", with the focus on completing the commercial loop for water saving.

• Water-saving financial services — Deepen government-bank-enterprise cooperation in the water-saving field, promote "water-saving loans," "water abstraction loans," and "water rights loans," and guide financial institutions to develop products such as green credit, green insurance, green bonds, and green asset-backed securities. As of the end of 2025年, the province's "water-saving loan" balance had reached 54.2亿 yuan, a year-on-year increase of 85.1%
• Fiscal and tax policies — Implement policies for upgrading water-using equipment and trade-in of water-using products in key sectors; implement water resource tax reduction policies for taxpayers whose industrial water efficiency reaches the advanced value of the national water quota
• Technological innovation — Guide enterprises to join forces with universities and research institutes to establish water-saving technology innovation centers, build the Shandong Provincial Key Laboratory of Water Network Dispatch and Efficient Utilization of Water Resources, and promote the deep integration of the Internet of Things, artificial intelligence, and Digital Twin with the conservation and intensive utilization of water resources
• Contracted water management — Promote the full-scenario application of contracted water management in areas such as water supply network leakage control, water-saving renovation of public institutions, **industrial water recycling**, agricultural water-saving irrigation, and development and utilization of unconventional water, and implement models such as "contracted water management + agricultural water price reform" and "contracted water management + water rights trading"

IV. Two Implementation Cases: Heat Sources and Pipe Networks

Shandong's Reclaimed Water practices have already produced two different pathways.

The first is "Reclaimed Water + Energy." The Qingdao Licun River Reclaimed Water Clean Energy Utilization Project (Phase I) has been put into operation, becoming the province's first project to connect a reclaimed water heat source to the main heating network, providing heating for buildings of more than 120 square meters. The project adopts "sewage source heat pump + heating network return water heating" technology, utilizing more than 2100万 tons of Reclaimed Water annually and producing more than 50万 gigajoules of heat annually. The water quality is unaffected after heat extraction and continues to be used for river channel replenishment, achieving "multi-purpose use of one water and cascade utilization."

The second is "pipe networks following industry." Binzhou has laid out Reclaimed Water plants around key Industrial Parks and simultaneously laid dedicated pipelines so that Reclaimed Water reaches enterprise gates directly. The city's industrial unconventional water utilization jumped from 400万 cubic meters in 2020年 to 4000万 cubic meters in 2025年, a tenfold increase in five years.

These two cases precisely respond to two long-standing "hurdles" in the industry: first, water "can be produced but not delivered" — mismatched pipe networks lead to "Reclaimed Water without users, and users without Reclaimed Water"; second, water "has an advantageous price but a cold market" — in the industrial sector, water fees account for a low proportion of expenditures, pipe network investment is large, and the payback period is long, making it difficult to form scale effects through market self-regulation alone.

V. Three Insights for the Industry

First, upgrading and renovation and Reclaimed Water allocation are being forcibly "bound" by policy. The Plan explicitly requires "promoting close alignment between the upgrading and renovation of sewage treatment plants and the allocation and utilization of Reclaimed Water," which will change the past situation in which upgrading and reuse were two separate matters, and is clearly favorable to solution providers with integrated delivery capabilities in "upgrading + advanced treatment + pipe networks."

Second, chemical Industrial Parks are the most certain incremental market. The unconventional water allocation ratio of 35% is a hard indicator and is directly linked to new water abstraction permits. Park wastewater recycling, quality-based treatment, and Reclaimed Water Reuse systems will enter a period of concentrated release.

Third, metering and monitoring will become new rigid demand. From water budget management pilots and full-area water abstraction metering to "establishing a Reclaimed Water monitoring information sharing mechanism," policy is building management precision on data, and demand for online water quality/quantity monitoring, Digital Twin, and Smart Water information platforms will rise simultaneously.

According to the requirements of the Plan, all departments must refine measures according to the division of tasks and fully complete construction tasks by the end of 2030年12月. For a province that "supports more than 7% of GDP with 1% of the country's water resources," this document is both a construction blueprint for water-saving governance and a market map for the Reclaimed Water industry over the next five years.

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