China is currently the world’s largest vehicle consuming market, and the amount of the production and sales and possessing of vehicles have long maintained the top position in the world. With the increase the amount of production and sales of vehicles in China, the amount of waste vehicles is also increasing year by year. China has already basically built a relatively complete administration mechanism for vehicle collection recycling, and the related industries have already been formed.
In 2019, the Chinese government made the first amendment of the “Administration Measures for Collecting Waste Vehicles” issued in 2001. The amended “Rules” have changed from “mainly disposal” under the old measure to “consideration for both disposal and utilization, combination of disposal and utilization” of waste vehicles through measures such as system reform, simplification of licensing procedures, and elimination of the amount of collected enterprises and collection price restriction clauses, and have removed the legal obstacles that exist in the remanufacturing of vehicle parts, and the barriers to entry into vehicle collection and dismantling market through private investment. Through the means of commercialization, the recycling rate of waste vehicles was increased and at the same time the environmental pollution was reduced. After that, several Ministries such as the Ministry of Commerce issued the “Detailed Rules for Implementation of the Administration Measures for Collecting Waste vehicles” in 2020 to further promote the implement of the new “Measures”. At the same time, each province and city have also issued more relevant policies and plans based on extensive research and study, and summarization of work experience.
In recent years, new energy vehicles have developed rapidly as a conversion and upgrade and main goal of global vehicle industry, and as a choice of high quality of development strategy of Chinese vehicle industry. By the end of 2020, the amount of new energy vehicle possessed in China reached 4.92 million units, accounting for 1.75% of the total amount of vehicles. Among them, the amount of pure electric vehicles owned is 4 million units, accounting for 81.32% of the total amount of new energy vehicles. Currently, the new energy vehicles that were first put onto the market are entering the stage of collection and recycling Traction Batteries one after another, and in 2021, China issued new policies such as the “Technical Specifications of Pollution Control for Treatment of Waste Power Lithium-Ion Battery (Trial)”, the “Measures for the Administration of the Cascade Utilization of Traction Batteries for New Energy Vehicles” one after another to actively respond to related issues.
In the area of vehicle recycling, China’s policy is shifting toward “combination of disposal and utilization”, encouraging the recycling of waste vehicles and parts, and increasing the utilization rate of resources. At the same time, through the reform of “reducing barriers to entry in the market, promoting fair competition through fair supervision and providing highly efficient services”, it stimulates the vitality of the waste vehicles and parts recycling market and promote the rapid development of enterprises. At the same time, it emphasizes product liability of the manufactures of vehicle products, encourages waste vehicle collection activities by vehicle manufacturing enterprises, and further strengthens product liability of the manufactures of vehicle products through trial activities, improving the recycling level of vehicles from a point such as product design, the use of raw material, production and manufacturing. At the same time, the recycling of fuel cells generated in new energy vehicles is becoming more important.
Major policies, regulations and standards issued in recent years
The progress of the main laws, regulations and policies starting from the “Administration Measures for Collecting Waste Vehicles” issued in 2019 is as follows.
Table 1 List of major related policies related to automobile collection after April 2019
|Administration Measure for Collecting Waste Vehicles||April 2019||State Council|
|Guidelines for the construction and operation of Collecting Service Network of Traction Batteries for New Energy Vehicle||October 2019||Ministry of Industry and Information Technology|
|Detailed Rules for Implementation of Administration Measures for Collection of Waste Vehicle||August 2020||Ministry of Commerce, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of Ecology and Environment, Ministry of Transport and State Administration for Market Regulation|
|New Energy Automotive Industry Development Plan (2021-2035)||November 2020||General Office of the State Council|
|Implementation Plan for the Pilot of Extended Automotive Product Manufacture Responsibility||May 2021||Ministry of Industry and Information Technology, Ministry of Science and Technology, Ministry of Finance, Ministry of Commerce|
|Technical Specification of Pollution Control for Treatment of Waste Power Lithium-ion Battery (Trial)||August 2021||Ministry of Ecology and Environment|
|Measures for the Administration of the Cascade Utilization of Traction Batteries for New Energy Vehicles||August 2021||Ministry of Industry and Information Technology, Ministry of Science and Technology, Ministry of Ecology and Environment, Ministry of Commerce, State Administration for Market Regulation|
|Notice regarding the issuance of an implementation plan for the prompt promotion of comprehensive use of industrial resources||January 2022||Ministry of Industry and Information, National Development and Reform Commission, Ministry of Science and Technology, Ministry of Finance, Ministry of Natural Resources, Ministry of Ecology and Environment, Ministry of Commerce, State Taxation Administration|
Promotion of the development of the collection and dismantling industry of waste vehicles
In order to prevent safety problems caused by the operation of waste vehicles and assembly vehicles, before the implementation of the new “Administration Measures for Collection Waste Vehicles” in 2019, the waste vehicle collection industry was a special industry, and the collecting enterprises were under the system of the strict qualification certification and examination approval, were also subject to strict limitation of the number of the collecting enterprises. In order to accelerate the elimination of highly polluted vehicles and aging vehicles, support the formation of a sustainable mechanism for the disposal and renewal of vehicles, and at the same time meet the demands of circular economic development, in 2019, China enacted a new “Administrative Measures for Collecting Waste Vehicles”. After that, in 2020, China enacted the related detailed rules to further promote the implementation of the new “Measures”, promotes the development of the industry of the collection and dismantling of waste vehicles.
“Administration Measures for the collection of Waste Vehicles” issued by the State Council (April 22, 2019)
In order to implement the demands for the development of the circular economy and promote the development of the conversion and upgrade of the collection and dismantling of waste vehicles industry, the State Council amended the “Administration Measures for the Collection of Wasted Vehicles” and, on April 22, 2019, issued a new “Measurers”. As a result, the “Administration Measures for Collection of Waste Vehicles” issued in 2001 were abolished.
The new “Measures” were issued mainly regarding the following contents.
- Completion of corporate qualification certification and simplification of administrative processes
The States encourages vehicle manufacturing enterprises to engage activities to collect waste vehicles, no longer regulates the number of the enterprises of collecting vehicles, carries out “registration of enterprises prior to obtaining administrative permits necessary for business”, and at the same time, eliminates the demands for implementation of special industry administration of the industry of collecting waste vehicles.
- Strengthening safety, environmental protection, and supervision and administration
In the new “Measures”, new requirements for environmental protection regarding the existence of storage locations, equipment facilities, dismantling operation manuals, etc. in the enterprise, were added, and further clarified the responsibilities of the department of ecology and environment for supervision and administration during and after an incident, enhances the punishment for related illegal acts.
- Promotion of collection and recycling
The new “Measures” eliminated the compulsory remelting restrictions on the “five major parts” of dismantled vehicles, encouraged the development of recycling and remanufacturing.
“Detailed Rule for Implementation of Administration Measures of Collection of Waste Vehicles” issued by the Ministry of Commerce, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, Ministry of Ecology and Environment, Ministry of Transport, and State Administration for Market Regulation (August 2, 2020)
In order to regulate the collection and dismantling activities of wastes vehicles and strengthen the administration of the collection and dismantling of waste vehicles, based on the new “Administration Measures for Collection of Waste Vehicles”, August 2, 2020, seven Ministries such as Ministry of Commerce, National Development Reform Committee jointly issued the “Detailed Rules for Implementation of Administration Measures for Collection of Waste Vehicles”. The detailed rules are adapted to the needs of circular economic development and are mainly subdivided into qualification and administration, code of collecting and dismantling conduct, code of collecting and recycling conduct, etc. It completes qualification system and no longer regulates the number of collecting enterprises. It permits to sale “five major parts” of waste vehicles to remanufacturing enterprises, is increasing the collection value. In particular, it clarifies the systematic administration of collection and recycling of traction batteries for new energy vehicles.
- Strengthening related responsibilities of vehicle manufacturing enterprises
The States encourages vehicle manufacturers to engage activities of collection and dismantling of waste vehicles, and vehicle manufacturers bear responsibility for the manufactures in accordance with the relevant regulations of the States, shall provide collecting and dismantling enterprises with the related technical information such as the instructive manual of dismantling waste vehicles.
- Regulation of collection and dismantling activities
The collection and dismantling of waste vehicles by collecting and dismantling enterprises shall comply with the related requirements of the national standard “Technical Specifications for Waste Vehicles Dismantling Enterprises” (GB22128) and other laws and standards regarding environmental protection, and equip the management ledger of a solid waste, report relevant information on the dismantled products of waste vehicles as it is, decide on management plan on a hazardous waste, and store, transport, relocate and utilize hazardous waste in accordance with national regulations.
- Regulation of collection and recycling activities
The code of collection and recycling conduct clarifies the provisions regarding the collection and recycling of “five major parts”, traction batteries for new energy vehicle etc. As to the dismantling, collection, storage, transportation, and collection and recycling of waste traction batteries of waste new energy’s vehicles and other type of energy storages devices, safe management shall be strengthened through total process. Hazardous wastes shall be delivered to an enterprise with treatment capacity and dismantled, shall not be sold and resold.
- Strengthening Legal Liability
The “Detailed Rules” further clarify the punishment measures for various illegal acts. For illegal activities, not only an improvement order is issued, but a corresponding fine is levied. Criminal liability is pursued for those that make up a crime, as required by law.
Strengthening product liability of manufactures
Compared to developed countries in Europe and the United States, the extended product liability of manufactures system in China is slower in pace. In the “Dissemination Plan of the Extended Product Liability of Manufactures system” issued by the State Council in 2016, it was pointed out that the extended product liability of manufacturers system shall be implemented firstly in the products such as such as electronics, automobiles, lead-acid batteries and packages, and the goal was set out: “By 2020, we will basically form a policy system for the extended product liability of manufactures system, and by 2025, we will basically complete the laws and regulations related to the extended product liability of manufactures system.” The “Law of Prevention and Control on Environmental Pollution by Solid Waste” newly amended in 2020 also clearly points out that the States will establish a system for the extended product liability of manufactures for the products such as electrical appliances, lead-acid batteries, traction batteries for vehicles etc. In 2021, the “Pilot Implementation Plan of the Extended Product Liability for Manufactures of Vehicles Products” was issued. It states that the pilot program of the extended product liability of manufactures of vehicles system will be officially launched.
“Pilot Implementation Plan of the Extended Product Liability for Manufactures of Vehicles Products” jointly issued by the Ministry of Industry and Information Technology, the ministry Science and Technology, the Ministry of Finance, and the Ministry of Commerce (May 26, 2021)
In order to further seek to construct an implementation model for the extended product liability of manufactures of vehicle products system that is easy to spread and duplicate, and to improve the level of comprehensive use of resources, on May 26, 2021, the four Ministries such as the Ministry of Industry and Information Technology jointly issued this “Plan”. “Plan” points out that through
the pilot program, by 2023, the model collection level of waste vehicles has significantly improved, and the level of recycled resource utilization of waste vehicles has gradually improved, of which comprehensive utilization rate of resources reached 75%, recoverable utilization rate reached 95%, utilization rate of recycled materials for priority parts reached 5% or more.
The contents of the pilot program mainly include the construction of a collection system for waste vehicles and parts, the implementation of comprehensive utilization of resources, the implementation of green supply chain management, improvement of recoverable utilization rate of vehicles, the construction of implementation mechanism for information disclosure and share by vehicle industry manufacturers, strengthening of information disclosure.
Completeness of laws, regulations and standards systems related to the collection and recycling of traction batteries for new energy vehicles
As more and more traction batteries for new energy vehicles are gradually entering the recovery stage, the enactment of laws and regulations regarding the collection and recycling of traction batteries for new energy vehicles in China is also gradually accelerating. During the past year, China has individually established corresponding standards and regulations on pollution control and cascade utilization in the process of treating waste traction batteries. At the same time, legislation related to the collection and recycling of traction batteries is being rapidly promoted based on the “New Energy Vehicle Industry Development Plan (2021-2035)” issued by the State Council in 2020.
“Detailed Rules of Implementation for Administration Measures of Collection of Waste Vehicles” issued by the Ministry of Commerce, the National Development and Reform commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Ecology and Environment, the Ministry of Transport, and the State Administration for Market Regulation (August 2, 2020).
The “Detailed Rules of Implementation” clearly stipulate the collection and recycling of waste traction batteries. The “Detailed Rules” point out that collection and dismantling enterprises should carry out dismantling activities in accordance with relevant standards and regulations, record related information such as battery codes on related platforms. Dismantled traction batteries shall be delivered to the collecting service network of traction batteries constructed by a new energy manufacturer, or to a cascade utilization enterprise that meets the requirement regarding the cascade utilization and management of traction batteries and other enterprises that meet the requirements. At the same time, the “Detailed Rules” provide for punishment for violations of the corresponding provisions.
“New Energy Vehicle Industry Development Plan (2021-2035)” issued by the General Office of the State Council (November 2, 2020)
The “Plan” clarifies mid-term and long-term development goals and strategic tasks for new energy vehicles in China. It raises new demands for a sound institutional system for collection and recycling of traction batteries.
- Construction circulation utilization system with high efficiency for traction batteries
Complete circulation utilization system of collection, cascade utilization and recycling for traction batteries, and encourage joint construction and utilization of collection routes. Establish a circulation management system for sound traction batteries transportation and storage, repair and maintenance, safety inspections, suspension of use, collection and recycling, etc., and strengthen supervision and administration of the entire life cycle.
- Sound policy and regulation system
The “Plan” points out that the promotion of legislation of traction batteries recycling must be accelerated.
“Technical Specification of Pollution Control for Treatment of Waste Power Lithium-ion Battery (Trial)” issued by the Ministry of Ecology and Environment (August 7, 2021)
In order to implement “Law on Prevention and Control of Environmental Pollution by Waste Solid, adapt the environmental management requirements of waste power lithium-ion battery of the new era, the Ministry of Ecology and Environment issued this “Specification” on August 7, 2021. The “Specification” applies to pollution control in the treatment processes of waste lithium-ion battery, stimulates general requirements for the treatment of waste power lithium-ion battery, technical requirements for pollution control in the treatment process, control of elimination of pollutants, and environmental monitoring requirements and operating environmental control requirements etc. This “Specification” will be officially enforced from January 1, 2022.
“Measures for the Administration of the Cascade Utilization of Traction Batteries for New Energy Vehicles” (August 19, 2021) issued by the Ministry of Industry and Information Technology, the Ministry of Science and Technology, The Ministry of Ecology and Environment, the Ministry of Commerce, and the State Administration of Market Regulation
In order to strengthen the administration of the cascade utilization of traction batteries for new energy vehicles, and improve the level of resource utilization, on August 19,2021, five ministries
such as the Ministry of industry and Information Technology, the Ministry of Science and Technology, jointly issued this “Measures”. The “Measurers” raise specific requirements for the cascade utilization enterprises, the cascade products, collection and utilization, and supervision and administration.
- Requirements for the cascade utilization enterprises
The cascade utilization enterprises are encouraged to cooperate with enterprises such as the manufacturing of new energy vehicle, the production of traction batteries, the collection and dismantling, strengthen share of information, use the existing collection routes, use the collected traction batteries with high efficiency in the cascade utilization. Traction batteries manufacturing enterprises are encouraged to join in the collection and cascade utilization.
- Requirements for the cascade products
The design of the cascade products should adopt a structure and connection method that are easy to maintain, disassemble and dismantle for disassembling, dismantling and collection after disposal.
- Requirements for the collection and recycling
The cascade utilization enterprises are encouraged to work together to jointly construct and use a collection system to improve collection efficiency.
Future policy trends
China will continue to complete a system for the related laws, regulations and standards regarding a system for the extended product liability of manufactures, and the collection and recycling of waste traction batteries for new energy vehicles in the collection and recycling of vehicles.
Construction of a system for the extended product liability of manufactures for vehicle products
With the promotion and development of the pilot program of the extended product liability of manufactures for vehicle products, China is gradually establishing and disseminating a system for the extended product liability of manufactures that suits China’ s national circumstances. Based on the pilot program, the vehicle manufacturing enterprises can carry out related studies and actively prepare for appropriate measures. It is possible to seek to construct a new commercial operation model in collaboration with the upstream and downstream of the industrial chain. It is possible to actively carry out technological research and development such as green dismantling, high value-added utilization, and remanufacturing, and achieve core technologies. It is possible to expand recycled materials, use remanufactured products and used parts, and realize high value-added utilization of waste vehicle dismantling products.
Completeness of policy system related to the collection and recycling of new energy traction batteries
Regarding the recycling of new energy traction batteries, China has formulated appropriate plans for legislation, construction of a system, establishment of standards etc. In the next stage, China will promptly promote the collection and recycling of new energy traction batteries from the following aspects. First, it will promptly promote legislation of collecting and recycling traction batteries, complete supervision and management measures, and increase its binding force. It will strengthen the administration of the cascade utilization, implement a voluntary certification system for the cascade products. Second, it will complete a system for collection and recycling, strengthen the supervision and administration of sources jointly online and offline, and encourage related parties to fulfill their responsibility for source administration. Third, it will strengthen technological innovation, break down the technological bottlenecks that still exist, such as the agreement system of old batteries and automated dismantling, and continue to promote the issuance of a series of national and industry standards. Fourth, deepen the pilot model, innovate the commercial model, accelerate the construction of the cascade utilization model projects such as reserve power, and continue to foster core enterprises for the cascade utilization and recycling. Enterprises must pay close attention to the status of establishment of relevant policy regulationsand standards, and prepare appropriately on their own initiative.
 “Profound report of new energy vehicle industry in 2021” Changjiang Securities, 2021