Investigation on the dismantling industry of waste electrical appliances and electronics: low profits and long subsidy period

  Data Map: Workers carefully disassemble waste household appliances and classify parts. Song Lichao

  BEIJING, Beijing, December 9 (Qiu Yu) China has become the world’s largest producer of discarded electrical and electronic products. According to the data of the Ministry of Industry and Information Technology, at present, the annual scrap of major electrical and electronic products in China exceeds 200 million units, weighing over 5 million tons. There are more and more used mobile phones, computers and color TVs. What about the disposal of these wastes?

  The green recycling rate of waste electrical appliances has been greatly improved.

  While the amount of electrical and electronic scrap is increasing, the number of products that have undergone standardized scrap treatment is also increasing.

  According to the White Paper on Recycling and Comprehensive Utilization of Waste Electrical and Electronic Products in China in 2015 issued by China Household Electrical Appliances Research Institute (hereinafter referred to as the White Paper), from 2010 to 2015, "four machines and one brain" — — The theoretical scrap of televisions, refrigerators, washing machines, air conditioners and computers increased from 58.54 million to 124 million.

  During this period, the green recovery rate of "four machines and one brain" increased from 32.75% to 60.29%. The so-called green recovery rate refers to the ratio of the actual dismantling capacity of qualified enterprises to the theoretical scrapping capacity of the year.

  Among all kinds of waste electrical and electronic products, the amount of disassembly of refrigerators and washing machines has increased significantly.

  The 2016 Annual Report on the Prevention and Control of Environmental Pollution by Solid Waste in Large and Medium-sized Cities (hereinafter referred to as the Annual Report) issued by the Ministry of Environmental Protection shows that in 2015, the dismantling of TV sets decreased by 7.9% year-on-year, while the dismantling of refrigerators and washing machines increased by 110.9% and 93.9% year-on-year, respectively.

  "In the past, the refrigerator was not easy to disassemble because the equipment level was not high. In recent years, major enterprises have begun to transform their equipment, the automation level of refrigerator disassembly has been greatly improved, and the amount of disassembly has also come up. "Chen Pingli, an insider with disassembly qualification, said that the increase in the amount of disassembly of washing machines is mainly due to the adjustment of national policies.

  Data Map: A "green washing machine" produced from waste recycled plastics. Song Lichao

  More than 100 enterprises are qualified for illegal dismantling.

  A number of scrap buyers in Beijing revealed that some electrical and electronic products they bought would be sent to small workshops for disassembly.

  "Illegal dismantling of waste electrical and electronic products still exists, and the degree of illegal dismantling of different products is different." Tian Hui, director of the Electrical Recycling Technology Research Institute of China Household Electrical Appliances Research Institute, told reporters that the number of illegal dismantling of waste TV sets has been small, and most of them have been dismantled by qualified enterprises.

  Chen Pingli said that small workshops have no environmental protection investment and treatment measures. After dismantling, they will sell valuable parts and throw worthless things around, which may produce hazardous waste and pollute the environment.

  Enterprises should be qualified to dismantle waste electrical and electronic products. According to the Annual Report, at present, 109 enterprises are listed in the subsidy list of the Waste Electrical and Electronic Products Disposal Fund.

  China Quality Certification Center, as a third-party organization, conducts technical review on the dismantling qualification of enterprises. The staff of the center said that they would conduct field visits to each enterprise.

  "Enterprises should standardize the management processes of waste electrical and electronic products, disassembly products and hazardous wastes," the staff member said, and enterprises should also have strict control measures for pollutants such as waste gas, waste water, solid waste and noise generated during disassembly.

  Comprehensive price trend chart of recycled plastics from January 2014 to November 2016. Source: Zhuo Chuang Information

  Falling commodity prices reduce industry profits

  "Low profit" is a common problem faced by waste electrical and electronic dismantling enterprises.

  "Dismantling products contain iron, copper, aluminum, plastics, etc. In recent years, commodity prices have dropped sharply, which has depressed profits," said a person in charge of a dismantling enterprise.

  Taking recycled plastics as an example, according to Zhai Qiuping, an analyst at Zhuo Chuang Information, the price of recycled plastics has been declining all the way since 2014, with a year-on-year decline of 27.49% at the end of 2015. However, in 2016, recycled plastics began to bottom out.

  "The dismantling of waste electrical and electronic appliances is an environmental protection industry, not a profiteering industry, so it needs state fund subsidies," said the person in charge of the above-mentioned enterprises. In addition, compared with some developed countries, there is still a certain gap in the management and technical level of dismantling enterprises in China. Only by constantly transforming equipment and improving the level of deep processing can we make a profit.

  Tian Hui said that from the current point of view, there are great differences among 109 dismantling enterprises, and they are still developing and changing, and there are also some listed companies.

  According to the "White Paper", in 2015, the level of capacity utilization of different enterprises was quite different. Some enterprises had a capacity utilization rate of more than 100%, while others had a capacity utilization rate of less than 20%. Some enterprises with insufficient financial strength have stopped production for a long time or even throughout the year, and some enterprises have been merged and reorganized.

  Data Map: On April 8, 2013, electronic waste was everywhere in Guiyu Town, Shantou, Guangdong Province. China News Agency issued Hong Jianpeng photo

  Enterprises report that the fund issuance cycle is long.

  According to the Administrative Measures on the Collection and Use of Waste Electrical and Electronic Products Disposal Fund (hereinafter referred to as the Measures) implemented in 2012, the state subsidizes the recycling of waste electrical and electronic products.

  In March this year, on the basis of "four machines and one brain", nine products, such as mobile phones and water heaters, were also included in the scope of fund subsidies, thus increasing the number of products that can be subsidized to 14. However, industry insiders said that at present, the state has not yet issued a policy to specify the specific subsidy amount for nine new products.

  On the time of fund issuance, many dismantling enterprises reported that the issuance cycle was long.

  "The fund was first issued in the first quarter, and then it was extended to two or three quarters, one year and nearly two years." Chen Pingli said that enterprises lost their "hematopoietic function" and had to borrow from banks to obtain liquidity and pay high interest.

  He said that many companies are now limiting the amount of dismantling, otherwise they will not be able to operate normally. "Everyone is very difficult, but whoever is stronger will last longer."

  Data map. China News Service reporter Li Bo photo

  Expert: The fund policy needs further adjustment.

  The issuance of fund subsidies shall follow the procedures stipulated in the Measures. After the enterprise declares, it will be audited by the provincial environmental protection department and reported to the Ministry of Environmental Protection. After verification by the Ministry of Environmental Protection, it will be submitted to the Ministry of Finance, which will finally pay the funds.

  "Some enterprises didn’t get subsidies after one year or even nearly two years of declaration, because the time of declaration in different provinces is different, and the Ministry of Environmental Protection has to make unified publicity in batches, so enterprises that declare early need to wait for a long time." Tian Hui explained that it takes time to go through the process from the review and publicity of the Ministry of Environmental Protection to the allocation of funds by the Ministry of Finance.

  She said that the imbalance between the amount of funds collected and the amount of subsidies is also the reason for the long distribution cycle. At present, the operation of the fund adopts the mode of "producers pay money and dismantlers get subsidies". The sales volume of "four machines and one brain" has not changed much, but the number of dismantlers has reached more than 70 million units per year. "The amount of subsidies required for dismantling is large. If all of them are distributed, the fund pool will be affected."

  How to solve the above problems? Tian Hui said that the fund policy needs further adjustment, and the pilot work of extending producer responsibility of electrical and electronic products initiated by the Ministry of Industry and Information Technology in 2015 provided support for the adjustment.

  It is understood that the core of the extended producer responsibility system is to encourage producers to implement product source control and green production by guiding product producers to take responsibility for recycling and resource utilization after product abandonment, so as to maximize resource utilization efficiency in the whole product life cycle.

  "Now producers and dismantlers are two independent subjects. In the future, we hope to establish a system to link them and encourage producers to take certain responsibilities," Tian Hui said. (Some characters in the text are pseudonyms) (End)