Although Chinese government has input a lot of financial and administrative resources to resolve the problem of “swill-cooked dirty oil”, its policy effect is not so ideal.Meanwhile , a series of challenges such as defec-tive institutional design of kitchen waste recycling and weak regulatory capacity.This paper argues that its overlook on technological innovation and industrial policy have partially led to its policy failure on this issue .Also, this paper summarizes impact factors from the perspectives of technological innovation , industrial policy and government regula-tion.A series of feasible policies include promoting business technological innovation capacity , offering financial sup-ports to industrial development , establishing a long-term plan on kitchen waste recycling and quota system for biodiesel using.Finally, it argues Chinese government should combine its regulatory policy with its technological innovation and industrial policy to achieve its dual policy goals between food safety governance and circular economy development .