This year, the country has initiated a new round of home appliance trade-in programs, with the improvement of the recycling and dismantling system for waste home appliances being one of the key and challenging issues. Currently, there is a lack of awareness and channels for consumers to properly dispose of waste home appliances, retailers barely make a profit from recycling waste home appliances, dismantling factories for waste home appliances struggle to make a profit, and the illegal private dismantling and refurbishing continue despite being banned, all of which still plague the development of the industry's circular economy.
On August 29, a reporter from First Financial Daily learned during a visit to the waste home appliance dismantling factory of Panasonic Eco Technology Center Co., Ltd. in Hyogo Prefecture, Japan, that this dismantling factory, established in 2001, operates based on Japan's Home Appliance Recycling Law. The technology for dismantling and processing has been continuously improved and has now become profitable. Domestically, leading home appliance companies such as Haier, Midea, TCL, Gree, and Changhong are also actively exploring new models for the recycling and resource reuse of waste home appliances. Some have built new recycling internet factories, while others have cooperated deeply with waste electrical and electronic product recycling and dismantling enterprises. Professional waste home appliance dismantling factories are also trying to establish and improve their own recycling channel systems.
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Compared to promoting consumption through trade-in subsidies, the recycling and processing of waste home appliances is a more difficult subject, requiring the resolution of a series of "blockages" such as the difficulty of recycling, the difficulty of making a profit from regular dismantling, and the difficulty of prohibiting illegal private dismantling.
How to promote the "from product to product" process of home appliances, making the waste-to-treasure process more environmentally friendly, economical, and sustainable? In addition to learning from Japan's experience and practices, it is also necessary to combine China's own situation and find a feasible path for the industrialization of circular economy.
Breaking the recycling difficulty and improving laws and regulations
Zhang Xiaoping, chairman of Jiangxi Siping Electric Appliance, told the reporter from First Financial Daily that the trade-in is now a hot promotional topic. If customers have old machines, they can offset the purchase amount. If there is no old machine, they can also enjoy benefits such as high-energy-efficiency products, but the discounts they receive will be less than those with old machines. The old machines recovered in the trade-in activities will be taken to local recycling stores (companies) for processing.
Some electrical appliance retailers told the reporter that in addition to the relatively high transfer price of old air conditioners, retailers generally sell old machines to recyclers at the price of recycling old home appliances. Therefore, after deducting the transportation costs, merchants basically cannot earn a price difference from recycling old machines.
"The 'collecting old' channel has always existed," said a person in charge of a domestic waste home appliance dismantling enterprise. Now the country's trade-in policy wants to transform the "collecting old" from small, scattered, dirty, chaotic, and poor channels into standardized channels. For example, selling a new TV has a gross profit of at least several hundred yuan, and there is a profit-driving force in the middle links of the circulation channel. In contrast, recycling an old TV only earns 20-50 yuan in the middle link, and the low residual value of old home appliances makes enterprises lack the driving force to improve the standardized recycling channel.
"At present, there are more than 200 million home appliances scrapped every year in the country, and the main participants in the home appliance recycling market are home appliance brand stores, mobile recyclers, waste recycling stations, online recycling platforms, etc. The recycling market is relatively dispersed," Haier Smart Home said in a written reply to the reporter from First Financial Daily.
A person from TCL Aobo (Tianjin) Environmental Development Co., Ltd. told the reporter from First Financial Daily that the recycling price of waste home appliances this year is slightly higher than last year. According to the category and model, the recycling price per unit ranges from tens of yuan to hundreds of yuan. The current blockage in the industry is first the imperfect recycling network. Most areas have not yet established a systematic recycling network, resulting in uneven distribution of recycling points and low collection efficiency. Many waste home appliances have not been effectively recycled; the second is the information asymmetry. Consumers lack understanding of the home appliance recycling process and lack the motivation and ways to send waste home appliances to regular recycling points.In the 1990s, Japan faced a similar challenge. At that time, dealing with discarded home appliances had become a social issue in Japan. On one hand, it was difficult to process because discarded home appliances contained harmful substances, and the incineration treatment capacity had reached its limit. On the other hand, the amount discarded was large, with discarded home appliances accounting for 15% of large garbage, and landfilling had also reached its limit. In addition, discarded home appliances contained reusable resources such as iron, copper, and aluminum, so Japan began to formulate a home appliance recycling law.
Japan promulgated the "Waste Disposal Law" in 2001 to promote the effective use of resources. For different industries such as home appliances, food, and automobiles, recycling laws were formulated separately. The "Home Appliance Recycling Law" of Japan was published in 2001 and implemented in April 2001, with target products including cathode ray tube televisions, air conditioners, washing machines, refrigerators, and freezers; when it was revised in April 2009, the target products were supplemented with flat-panel televisions and dryers. Mobile phones, DVDs, and others fall under the management scope of other small home appliance recycling laws.
The "Home Appliance Recycling Law" of Japan stipulates the respective responsibilities of manufacturers, sellers, and consumers. Consumers are responsible for paying the recycling treatment costs when discarding discarded home appliances; sellers have the obligation to recycle and transport discarded home appliances; manufacturers have the obligation to collect and reuse resources from discarded home appliances. At present, Japan has about 45 designated waste home appliance recycling factories and about 330 designated collection places (similar to logistics transfer centers for waste home appliances).
Xu Dongsheng, Vice Chairman of the China Household Electrical Appliances Association, believes that when enterprises sell new home appliances, they participate in the recycling of old home appliances, which can break down information barriers and is one of the more efficient methods at present. However, in the long run, a "one network" for recycling waste home appliances and other recyclable materials should be established. In some countries, the recycling network for recyclable materials is led by the government, while in other countries, the government entrusts professional recycling enterprises to operate. All regions in China should explore the establishment of a recycling network for recyclable materials that suits local conditions.
To break the difficulty of dismantling profits, rely on technological innovation.
From 2024, the state will stop collecting the waste electrical and electronic products treatment fund (hereinafter referred to as the "fund") from home appliance manufacturers. As a new policy to replace the fund, in April this year, the Ministry of Finance issued the "Waste Electrical and Electronic Products Treatment Special Fund Management Method (Draft for Comments)", proposing to establish a special fund (hereinafter referred to as the "special fund") to continue to support the treatment of waste electrical and electronic products, and temporarily continue to support the recycling and treatment of five types of products such as refrigerators, air conditioners, computers, televisions, and washing machines.
The person in charge of a dismantling enterprise said that they were worried that after the fund stopped collecting, the subsidies given by the state to dismantling factories would be reduced, and it is expected that this year's subsidies may be reduced by 50% compared to last year, so they are waiting and seeing this year whether to expand the amount of recycling and treatment of discarded home appliances.
Dong Mingzhu, Chairman and President of Gree Electric Appliances, said at the Gree Electric Appliances shareholders' meeting on June 28 that Gree Electric Appliances has six recycling resource bases, and the recycling resource business is currently at a loss, but it is valuable. After crushing discarded home appliances, resources such as copper and steel can be recycled and reused, and not necessarily all used by Gree itself.
In contrast, Panasonic's waste home appliance processing factory has achieved profitability. The factory was established in April 2001, with a registered capital of 400 million yen, covering an area of 38,857 square meters, with about 170-180 employees, processing four types of six categories of waste home appliances such as flat-panel televisions, washing machines/dryers, air conditioners, and refrigerators/freezers, with an average annual processing volume of about 900,000 units, and has accumulated more than 19.3 million units of waste home appliances.
It is the only waste home appliance dismantling factory in Japan that is managed and operated by a manufacturing company alone, with the goal of sustainable recycling manufacturing. Leveraging the advantages of direct management by the manufacturing company, the factory has developed recycling technology and designed products that are easy to recycle.There are various types of plastics, and the finer they are sorted and classified, the higher the value for reuse. Panasonic has developed technology that can simultaneously sort three types of plastics, with a system that uses near-infrared to sort and recycle PP, PS, and ABS (types of plastics), achieving a recycling purity of over 99%. This technological development will enable recycled resins to be more widely reused.
As recycling technology improves, Panasonic's recycling costs (the fees paid by consumers for the recycling and disposal of old home appliances) have gradually decreased. The processing fee for air conditioners has dropped from 3500 yen in 2001 to 900 yen in 2024, about a quarter of the original amount. The processing fee for refrigerators has decreased from 4600 yen in 2001 to 3400-4300 yen in 2024. The processing fee for washing machines has dropped from 2400 yen in 2001 to 2300 yen in 2024.
The recycling rate has also been continuously increasing. The legally mandated recycling rate in Japan (the proportion of the weight of recycled resources to the weight of old home appliances), from 2016 to the present, is 80% for air conditioners, 74% for flat-screen TVs, 70% for refrigerators, and 82% for washing machines; while Panasonic's recycling rates for these types of home appliances in 2023 have reached 94%, 87%, 81%, and 93%, respectively.
Japan also divides home appliance manufacturers into two groups, A and B, to promote the development of recycling technology and reduce recycling costs under a competitive mechanism. Panasonic, Toshiba, Daikin, Samsung Electronics, LG, and 13 other manufacturers belong to Group A, corresponding to 28 recycling plants. They use existing equipment from home appliance recyclers for recycling and process old home appliances in different regions. Hitachi, Mitsubishi, Sony, Sharp, Fujitsu, Haier, and 13 other manufacturers belong to Group B, corresponding to 15 recycling plants. They mainly rely on their own equipment for recycling and cooperate with logistics companies to transport old home appliances.
"The next focus should be on reuse," said Jiang Feng, the executive director of the China Household Electrical Appliances Association, at the 2024 AWE (China Household Electrical Appliances and Consumer Electronics Expo). Since China established a fund for the recycling and disposal of waste home appliances in 2012, it has basically established a recycling and disposal system for old home appliances. In February of this year, the State Office issued the "Opinions on Accelerating the Construction of a Waste Recycling and Utilization System," calling for further improvement of the recycling and disposal system for old home appliances. The next steps are, first, to use more recycled materials in home appliance products and packaging, and second, to use recycled materials at a high level, especially recycled plastics. Most are currently downgraded, such as plastics used in home appliances that can only be used for making some gardening products after recycling and processing. High-level utilization requires sorting to obtain purer materials, followed by cleaning and modification, which can be used to make the original products.
Crack down on illegal dismantling and guide recycling with a "master" consciousness.
Data from AVC (Aowei Yunwang) shows that in 2022, the theoretical scrapping volume of the Chinese home appliance market is about 70 million color TVs, over 50 million air conditioners, and about 30-40 million refrigerators and washing machines, while the proportion of formal dismantling is less than 40%.
In China, the cost of recycling and processing old home appliances used to require government subsidies to designated dismantling enterprises. This year, China has stopped collecting the waste electrical and electronic equipment processing fund from home appliance manufacturers and is preparing to establish a special fund for the processing of waste electrical and electronic equipment with a financial investment of 7.5 billion yuan. The specific implementation plan has not yet been announced.
In Japan, according to local laws, part of the cost of recycling and processing old home appliances is paid by consumers.
Japanese consumers pay fees to sellers and receive home appliance recycling coupons; sellers transport old home appliances to designated collection places; designated collection places then transport old home appliances to recycling plants. Sellers hand over the fees paid by consumers to the Home Appliance Product Association (AEHA) and the Recycling Coupon Center (RKC), which in turn pass these fees to the "Recycling Management Company" (Ecology Net). The Recycling Management Company pays fees to designated collection places, transporters, and recycling plants. Home appliance manufacturers assist recycling plants (such as informing them of which refrigerant the product uses) and extract usable materials at recycling factories. Consumers can check whether their discarded home appliances have been collected and processed at the Home Appliance Recycling Coupon Center (RKC) with their home appliance recycling coupons.In guiding consumers to properly dispose of waste household appliances, the perfection and enforcement of laws play a significant role, and producers also bear an indispensable responsibility. Companies such as Panasonic remind consumers that when disposing of waste household appliances, they should follow the "Household Appliance Recycling Law" and hand them over to appliance stores; they should not "illegally" use unqualified operators, including those who collect by driving around, on vacant lots, or by distributing flyers. Using such services may lead to illegal disposal by unregulated operators, improper handling of refrigerants, and even potential fires due to poor management.
At the inception of Panasonic's recycling plant, a visitor's channel was established, welcoming nearby schools and groups to schedule visits, and providing students with the opportunity to manually dismantle waste appliances. Since the plant is located near extensive farmland, Panasonic also regularly exchanges opinions with local residents, using their feedback for business improvements. By promoting the significance of resource conservation, efforts are made to coexist harmoniously with the local community.
China is also strengthening the producer responsibility system. This year, the state plans to establish a "special fund" that will provide policy incentives for household appliance manufacturers who build or control their own recycling and processing of discarded electronic products. In the calculation of processing quantities, each appliance can be counted as 1.1 units for the allocation of funds, with the implementation period from 2024 to 2028.
Haier Smart Home stated to First Financial Daily reporters, "The special fund will enhance the enthusiasm of household appliance companies for recycling and processing." On June 29th of this year, Haier Smart Home began construction of its second recycling interconnection factory in Gong'an County, Jingzhou City, Hubei Province. The Haier Green Recycling (Gong'an) Industrial Park, once completed, is expected to dismantle 2 million waste household appliances annually and recycle 100,000 tons of new materials per year. Haier's waste appliance recycling network has covered more than 2,800 districts and counties nationwide. Haier Smart Home is also building a big data platform for home appliance recycling, aiming to make the entire process of appliance recycling, dismantling, and resource regeneration transparent and traceable, laying the groundwork for the establishment of home appliance carbon footprint standards.
Currently, Midea has also established a recycling network covering all provinces in the country. Through models such as trade-in and replacement repair, Midea collects waste appliances from consumers, consolidates transportation, and then directly transports them to the disassembly factory of its partner, Green Cycle, bypassing middlemen such as small traders and recycling stations, optimizing recycling costs and preventing the flow into private dismantling channels. After nearly two years of exploration, the recycled plastic from waste appliances has been processed through crushing, cleaning, sorting, pelletizing, and modification to produce high-quality recycled plastic granules, which are re-used in Midea's washing machines, refrigerators, water dispensers, vacuum cleaners, and other appliances. This cooperative project has recycled over 1.5 million sets of waste refrigerators, washing machines, air conditioners, water purifiers, etc., in the past two years, and recycled high-quality plastic granules by 15,000 tons, bringing direct economic benefits of more than 250 million yuan.
Gree Electric Appliances has also signed agreements with partners this year, aiming to achieve the sale of 150,000 tons of recycled plastic by 2030 through cooperation.
TCL Aobo (Tianjin) Environmental Development Co., Ltd. is also expanding its processing capacity. The company's waste electrical and electronic equipment recycling and comprehensive utilization expansion project has been put into operation, with an additional annual processing capacity of 100,000 tons of waste electrical and electronic equipment; the next step will be to improve dismantling efficiency and product value, and to plan recycling stations for renewable resources. "The government should formulate clearer and more powerful policies in the recycling and standardized dismantling links, promote the use of recycled plastics, guide the establishment of widely covered recycling points, establish comprehensive sorting centers, and upgrade the hardware infrastructure for renewable resource recycling. At the same time, home appliance manufacturers should design products that are easier to recycle, retailers should participate in the construction of recycling networks, and dismantling companies should strengthen cooperation with raw material suppliers. In addition, strengthen publicity to raise public awareness of environmental protection and participation in the recycling of waste household appliances." TCL Aobo suggests.
"Learn from the mature experience of developed countries in the recycling of waste household appliances, establish relevant laws and regulations, and strengthen the popularization of knowledge about waste household appliances, so that waste household appliances can be turned into treasure or treated harmlessly." Liu Wenjie, the head of the Renewal Tide Working Group of the China Household Electrical Appliances Service and Maintenance Association, suggests expanding the scope of action enterprises for the recycling target responsibility system of home appliance manufacturing enterprises. Currently, only Haier, Midea, Gree, Hisense, TCL, Changhong, Xinfei, and Zhigao, eight enterprises have joined, and corresponding target responsibilities should also be clarified for foreign enterprises and small and medium-sized enterprises, and supervision should be strengthened.
Liu Wenjie also suggests that industry associations, in conjunction with home appliance companies, establish a national, unified, third-party platform for old appliance collection to improve convenient recycling channels; build a digital system for the entire chain of home appliances to ensure traceability and compliance of old machine flows; increase efforts to crack down on private dismantling and disorderly dismantling, and establish a long-term control mechanism; set up national-level circular model pilot cities; industry associations take the lead in drafting relevant standards for the circulation of second-hand home appliances, repair services for waste home appliances, and home appliance replacement with old ones; and strengthen publicity to enhance consumers' awareness of environmental protection.
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