Market Analysis of the Environmental Monitoring Sector in the Core Construction of “Smart Environmental Protection”

　　Since the concept of “smart environmental protection” was first introduced, numerous countries and cities have progressively advanced the development of smart environmental protection initiatives, achieving notable results while each adopting distinctive approaches. Overseas efforts in this area began earlier; for instance, the revitalization of New York’s Hudson River and the eutrophication-monitoring platform developed by the Florida Oceanographic Research Organization both offer valuable lessons in terms of innovative solutions, technological applications, and management mechanisms. These examples provide significant insights for further progress.

　　Over the past three decades, China’s environment has become highly vulnerable due to a largely reckless development model. The traditional, extensive growth approach—focused on incremental expansion—has proven inefficient and underutilized, often characterized by ecological degradation and excessive resource consumption. Faced with these severe environmental challenges, conventional environmental management models are no longer adequate, and information silos remain a prominent issue. Consequently, China has increasingly prioritized the intelligent transformation of environmental protection, with a current emphasis on environmental monitoring.

　　Environmental quality monitoring is the foundation of environmental governance and protection; it involves the analysis and surveillance of environmental pollutants to provide qualitative or quantitative descriptions of the state of environmental quality. Environmental monitoring is typically classified in two ways: by monitoring object and by monitoring purpose. From the perspective of the entities conducting monitoring, the environmental monitoring industry is divided into three main segments: environmental quality monitoring (primarily air and water), pollution-source monitoring, and other types of monitoring (soil, noise, radiation, emergency response, etc.). Among these, environmental quality monitoring is mainly carried out by environmental monitoring stations at various levels, while pollution-source monitoring is primarily conducted by monitoring systems operated by major polluting enterprises. At present, China’s system of environmental monitoring stations at all levels is relatively well established, having developed a comprehensive monitoring network that extends from the central government down to provincial, prefectural, municipal, and township levels, resulting in a relatively stable market. In contrast, pollution-source monitoring still has considerable room for growth in both coverage and depth of monitoring, offering substantial potential for market expansion. Specifically, the pollution-source monitoring sector currently holds the largest market share, followed by the environmental quality monitoring sector.

　　Although China’s smart environmental protection initiatives started somewhat later, the country’s environmental monitoring sector is now in a phase of rapid development, with online environmental monitoring systems undergoing large-scale deployment and expanding their coverage. According to incomplete statistics, there are currently about 200 enterprises nationwide engaged in environmental monitoring services, most of which are involved in the research, development, manufacturing, installation, and operation— including system integration—of online automatic monitoring systems for exhaust gases, wastewater, ambient air, and surface water. Among these, roughly 120 companies produce online exhaust-gas monitoring systems, while approximately 80 specialize in online wastewater-monitoring systems. Sales revenue in the environmental-monitoring-instrument industry has grown steadily year by year, increasing from RMB 1.584 billion in 2005 to RMB 19.644 billion in 2014.

　　On the other hand, the environmental monitoring industry in China exhibits a high degree of market concentration. Due to the relatively high technological barriers to entry, there are currently just over 200 companies engaged in environmental monitoring in China. High-end analytical instruments are predominantly dominated by foreign firms such as Siemens of Germany, while domestic enterprises mainly operate in the mid- and low-end segments of the market. In 2014, the top ten companies in China’s environmental monitoring sector recorded combined sales revenue of RMB 3.77 billion, accounting for 61.8% of total industry sales—a share that has remained around 60% over the past five years. As a result, a clear leader–follower structure has essentially taken shape, with corporate mergers and acquisitions emerging as the primary strategy for expanding market share, albeit a rather limited approach.

　　Driven by policies, regulations, and oversight, the environmental protection industry has experienced unprecedented rapid growth, particularly since the start of the 13th Five-Year Plan period, as public demand for environmental protection continues to rise. Environmental monitoring, as a key sub-sector of the environmental protection industry, boasts market potential approaching RMB 100 billion. The environmental monitoring value chain is broadly segmented into upstream hardware, software, and testing reagents; midstream monitoring instruments and systems; and downstream instrument maintenance and equipment operation. With the introduction of policies promoting the socialization of environmental monitoring services, the market is gradually opening up to private-sector players, prompting industry firms to shift their business focus from selling monitoring equipment to delivering comprehensive environmental monitoring services.

　　Environmental monitoring is merely one component of smart environmental protection; the comprehensive development of smart environmental protection requires even greater effort and dedication. The 2017 China International Smart Environmental Protection Application and Development Summit Forum, to be held in Shanghai on April 20–21, 2017, will provide an opportunity for all…

　　A platform for mutual exchange has been provided (SEPS2017). This year’s summit is themed “Environmental Protection in the Big Data Era,” exploring how smart environmental protection can be leveraged and applied under the new normal to advance the goals of environmental monitoring and conservation during the 13th Five-Year Plan period. The event is expected to draw 350 guests, including representatives from government environmental protection departments, research institutions, key pollution-discharging monitoring enterprises, technology and equipment firms, academic experts, and the media.