Industry News
2026-10-18Introduction: Shandong Province recently issued the "Action Plan for Comprehensively Building a Water Conservation Institutional and Policy System (2026–2030年)", which explicitly sets the goal that by 2030年, the province's urban reclaimed water utilization rate will reach 60%, and the utilization volume of unconventional water will reach 25亿 cubic meters or more, promoting close alignment between the upgrading of wastewater treatment plants and the allocation and utilization of reclaimed water. The plan also deploys multiple institutional innovations, including water budget management pilots, water price and water resource tax reform, and contracted water conservation management. Reclaimed water will be priced through negotiation between supply and demand parties in accordance with the principle of "high quality, high price".
Policy Highlights: Setting Hard Targets for Reclaimed Water
As a major economic province with a population of over 100 million and per capita water resources of less than one-sixth of the national average, Shandong has long faced pressure from tight water supply and demand. The action plan issued this time incorporates the development and utilization of unconventional water sources into the unified allocation of water resources and the layout of modern water network construction, and establishes a reserve bank of key projects. The targets in the plan directly related to the wastewater treatment and reclaimed water reuse industries include:
- Urban reclaimed water utilization rate 60% — by 2030年, the province's urban reclaimed water utilization rate will reach 60%, a substantial leap from the current level, and reclaimed water will become an important component of the urban water supply system;
- Unconventional water 25亿 cubic meters — by 2030年, the province's unconventional water utilization volume will reach 25亿 cubic meters or more, covering multiple water sources such as reclaimed water, desalinated seawater, mine water, and brackish water;
- Clear allocation priorities — increase the allocation of reclaimed water to chemical industrial parks and high water-consuming enterprises, and give priority to the use of standards-compliant reclaimed water for urban greening, municipal miscellaneous uses, and ecological landscapes.
The plan also requires promoting close alignment between the upgrading of wastewater treatment plants and the allocation and utilization of reclaimed water, improving production and transmission facilities, compiling relevant technical guidelines for reclaimed water utilization, advancing the construction of a measurement and monitoring system for unconventional water, and establishing a monitoring information sharing mechanism for reclaimed water.
Institutional Innovation: Water Budget, Water Price, and Contracted Water Conservation Advance Together
Unlike previous policies that focused on engineering construction, this plan places institutional development in a prominent position, attempting to remove, at the mechanism level, the bottlenecks that leave reclaimed water "applauded but not widely adopted".
In terms of water budget management, Shandong will issue institutional documents such as the "Measures for Water Budget Management of Shandong Province (Trial)", explore the establishment of mechanisms for water budget preparation, review, execution, supervision, and evaluation, promote the realization of water budget management across all regions, all water sources, all industries, and all users, and build a province-wide informatized platform for water budget management, encouraging localities to explore water volume storage, water rights trading, and water conservation incentive mechanisms in conjunction with pilots.
In terms of price mechanisms, the plan proposes improving water price policies, refining the cost supervision and review of water pricing for water conservancy project supply and the mechanism for determining regional comprehensive water prices, implementing tiered residential water prices and progressive surcharges for non-residential water use exceeding quotas, and implementing differentiated tax rate policies for water resource tax — granting water resource tax reductions to taxpayers whose industrial water use efficiency reaches the advanced value of the national water use quota. Most critically, unconventional water will be priced through negotiation between supply and demand parties under government coordination in accordance with the principle of "high quality, high price", opening a channel for market-based pricing of reclaimed water.
In terms of contracted water conservation, the plan requires promoting the application of contracted water conservation management across all scenarios, including leakage control of water supply networks, water conservation retrofits of public institutions, industrial water recycling, agricultural water-saving irrigation, and the development and utilization of unconventional water; promoting model contract texts; cultivating service providers of integrated water conservation solutions; and exploring combined models such as "contracted water conservation management + agricultural water price reform" and "contracted water conservation management + water rights trading".
Impact on the Wastewater Treatment and Reclaimed Water Reuse Industry
Industry analysis believes that the implementation of Shandong's plan will bring market opportunities in three aspects. First, upgrading and advanced treatment: to make effluent quality meet the requirements for industrial and ecological reuse, wastewater treatment plants need to implement upgrading centered on advanced nitrogen and phosphorus removal and membrane filtration, and demand for related process packages, membrane modules, and equipment will grow steadily. Second, transmission and distribution networks and intake facilities: the transmission pipelines, booster pump stations, and smart intake facilities for reclaimed water from "plant" to "user" are the physical prerequisite for increasing the utilization rate, and pipeline network investment will become a focus of a new round of construction. Third, operation and service formats: the all-scenario promotion of contracted water conservation means that more water utility projects will be handed over to professional companies for operation under a "pay-for-performance" model, and enterprises with comprehensive capabilities in technology, capital, and operation will obtain long-term service contracts.
In addition, the plan explicitly states that the "Implementation Plan for the Development of the Seawater Desalination and Comprehensive Utilization Industry of Shandong Province" will be issued, promoting the allocation and utilization of desalinated seawater in coastal industrial parks, encouraging coastal steel, petrochemical, and chemical enterprises to increase direct seawater utilization, and a dual-driven unconventional water pattern of "reclaimed water + seawater desalination" is taking shape in coastal areas.
Conclusion
From 60%'s reclaimed water utilization targets to a package of institutional arrangements including water budgeting, quality-based pricing, and contracted water conservation, Shandong is providing an "institutional model" for water resource conservation and intensive use at the provincial scale nationwide. For wastewater treatment enterprises, the policy dividend window has opened: whoever can first build end-to-end capabilities across "upgrade and retrofit—pipeline network transmission and distribution—performance-based operation" will gain the initiative in this round of water conservation industry upgrading.
About TIANYI TECH: TIANYI TECH (TIANYI LIMITED) focuses on the fields of wastewater treatment, reclaimed water reuse, and water environment governance, providing municipal and industrial clients with full-chain services including process design, equipment integration, engineering general contracting, and smart operation. The company continuously tracks global water treatment policies, technologies, and market dynamics, and is committed to helping customers achieve efficient water resource utilization and sustainable management with reliable solutions. For more information, please visit the company website www.tianyitech.hk.
Source: Shandong Province's "Action Plan for Comprehensively Building a Water Conservation Institutional and Policy System (2026—2030年)" and local government public information (2026年10月)
