Developing biomass energy could help to solve problems which limit the sustainable development of human society. These problems include environmental degradation and resource depletion. Using the stochastic frontier analysis model, we conducted an empirical analysis of technical efficiency for the recycling industry and the factors that impact it in 20 provinces in China. We found that technical efficiency is at a moderate level. There are large gaps in efficiency among the eastern, central and western regions. Technical efficiency is highest in the eastern provinces. Ownership structure and technical efficiency exhibit a significant inverted "U" shaped correlation. While urbanization does not affect technical efficiency, economic, industrial and education levels do have a positive impact on it. Based on the results of our study we have proposed a number of policies to promote the development of the recycling industry.