At a glance: Four ministries released an implementation plan for an extended producer responsibility trial for the car industry. Set to run for two years, the pilot will demonstrate how to efficiently manage resources throughout the whole product life cycle. Under the terms of the plan, by 2023 participating firms are expected to:
- Recycle 75 percent of the materials and parts of scrapped cars
- Use no less than 5 percent recycled materials in the construction of core components for new vehicles
- Design new cars to be at least 95 percent recyclable
Foreign owned companies operating in China are eligible to participate in the pilot, with applications open until August 31.
MERICS comment: Extended producer responsibility (EPR) laws require manufacturers to ensure the reuse, recycling or recovery of their products at the end of their lifetime. China introduced an EPR for e-waste in 2012, but its extension to the automobile industry is overdue. As of 2020, only a third of China’s end-of-life vehicles are being recycled. Yearly scrap car volume is set to balloon in the coming years due to increased car ownership. As Beijing seeks to set the country on a green development pathway, expanding the EPR system is a must.
The pilot scheme will likely be quickly converted to a mandatory policy. According to a State Council notice from January 2017, the EPR system laws and regulations for the car industry are to be complete by 2025. Should they participate in the pilot scheme, foreign firms could gain a head start on their competitors in China and influence the shaping of the final policy.
Further regulation of the industry will impose higher compliance costs on firms, yet European manufacturers stand to benefit from their experience in designing and producing cars so they can be efficiently dismantled, reused and recovered. The targets set in the implementation plan are similar to the current EU requirements for end-of-life vehicles, whereby at least 85 percent of the weight of scrap vehicles must be reusable or recyclable and 95 percent reusable or recoverable.
Policy name: Notice on the Automotive Product Extended Producer Responsibility Pilot Implementation Plan (四部委关于印发汽车产品生产者责任延伸试点实施方案的通知) (Link)
Issuing bodies: MIIT, MOST, MOF, MOFCOM
Date: June 9, 2021