Industrial symbiosis (hereafter IS) has been hailed as a win-win solution to our industrial pollution problems, but such projects have frequently failed. The present research set out to explore the dynamics and causal mechanism of IS development and to discover the causes of its failure. It studied forty-nine IS-based projects and the IS development history of seventeen firms in the sugar refinery Industry, Chongzuo City, China. The main research question was: Why did many IS-based projects in the sugar refineries often fail? It followed a qualitative research strategy and employing the research design of “multiple (embedded) case studies.” Empirical data were collected through semi-structured interviews and archival research. They were analysed to identify the answers to the research questions.

From the data analysis have emerged six key findings: the implicit project process model for carrying out waste utilisation and IS development, the critical success factors for the success of IS-based waste utilisation projects, the historical trajectory of IS evolution at the firm and network levels, the conditions for the successful evolution and expansion of IS ecosystems, the underlying dynamics generating IS ecosystems, as well as the root causes of frequent failure in IS development.

Based on the research findings and the theorisation thereof, the present research has come to the conclusion that the emergence, evolution and development of IS in the sugar refinery industry in Chongzuo City were initiated and shaped by the focal firms’ diversification strategy to utilise their waste resources. The root causes of the IS failure lay in the collapse of the firms’ waste utilization businesses and the unresolved conflict between the internal rigidity in the IS networks due to the tightly coupled manufacturing processes and the incoming external uncertainties through various interfaces of the businesses with their environment, particularly the changing by-product markets.