I started reporting on the Chinese scrap industry six years ago, and I think that I wrote my first story claiming that China’s long-awaited laws on the recycling of e-scrap (computers, monitors, etc) were imminent, shortly after SARS, in July 2003. Since then – off the top of my head – I’m fairly certain that I’ve reported the imminent approval of the laws at least five times, with the most recent instance being a May 2008 article in Scrap, in which I claimed – based upon extensive reporting! – that the approval would “come in the first half of 2008.”
Wrong again … the State Council gave its approval for the very long-awaited regulation on August 20, 2008. For those who don’t recall – that was one of the last days of the Olympics, and so – in China and abroad – the law went all but unnoticed. Xinhua covered it, but so far as I’ve been able to determine – other than the always excellent China Environmental Law Blog – no English language news source or blog (including blogs and organizations supposedly concerned with China’s e-waste problem) felt the law was worth covering.
I strongly disagree, and this post – long delayed due to my own Olympics coverage and post-Olympics travel – will attempt to explain why.
But first, let me step back. There were many reasons for the delay in the legislation (sometimes known as ‘China’s WEEE’ the Waste Electrical and Electronic Equipment Law – after the EU’s WEEE regs), but perhaps the most important is the simple fact that China already has a massive e-scrap processing industry supported by local governments throughout the country. And, like it or not, most of this industry uses various degrees of environmentally unsafe processing techniques that are highly profitable, and which employ many, many people. Despite the claims of leading environmental groups, most of the material processed in these facilities is not imported, but is instead generated within China (one of the world’s largest and leading PC and electronics markets). Unlike the US, EU, and Japan, which have developed – and are implementing – high-tech solutions to the high-tech trash problem, China’s e-waste problem has grown more quickly than home-grown technology can handle. Without proper technology, much less the administrative and financial means to deploy that mythical technology nationwide, regulators and state-owned industry participants in China’s recycling industries, were at an impasses as to how to handle this massive, environmentally damaging, industry and situation.
That’s not to say that they weren’t trying. In 1998, in a little noticed or known move, the State Council authorized and funded the China Recycling Development Corporation. The mission of the company, as outlined to me when I traveled with two representatives in January, was to seek out technologies and methods appropriate to China’s labor, technology, and waste generating circumstances. And, for the last ten years, they have done just that.
Among their most important findings was that – without a little help – environmentally sound recycling of electronic waste could never compete with the illegal, environmentally damaging – and, as a result, highly profitable – methods of recycling electronic waste typified by the notorious e-scrap processing centers in Guiyu and Taizhou. These towns – well known from international exposes – nonetheless existed with the full knowledge and tacit support of Chinese local and national governments for years. As it was explained to me by a source who knows something of this situation: “The foreigners criticize Guiyu but they never give us any suggestions or help in finding an alternative.” From the perspective of Chinese officials working on the e-waste problem, the foreign environmental groups who were so key in exposing e-scrap processing in China, were all but useless to China. What, precisely, did they suggest that China do to handle all of the e-waste it was generating on its own? And why were they only interested in the e-waste being imported into China? Why didn’t they ever focus on the e-waste being generated in Chinese daily life? “If they cared so much,” one source told me. “They would help us work out technology sharing.”
Two years ago, in one of the more notable failed attempts at setting up an e-scrap processing system, Beijing approved four sites to serve as pilot projects (including one operated by Haier) for technologically advanced e-scrap processing. The best technology was procured, and best practices were instituted. But there was a problem: the “green” e-scrap recyclers couldn’t afford to compete for e-scrap with the quasi-legal workshops in places like Guiyu and Taizhou. That is to say: you could make a whole lot more money cooking a circuit board over acid to extract gold than you could processing that same circuit board in an advanced factory designed to extract materials in the safest manner possible (operating in Europe and Japan). So, somewhat predictably, these four pilot projects failed for lack of material to recycle. At the end, in fact, the situation was so desperate that some pilot participants inquired as to whether they could obtain permission to import e-scrap in violation of China’s international treaty obligations.
And so the draft regulation was delayed again.
Despite the fact that the draft law was approved by the State Council, there’s still quite a bit of uncertainty about how it will be implemented (the law outlines principles, not specifics). We do know that the rule outlines requirements that producers either recycle their old products or make provisions for them to be recycled, much like regulations recently passed and implemented in the EU. If implemented correctly, this has the potential to change the flow of e-waste to small polluting workshops, and back toward large-scale manufacturers (and it is an absolute wonder to me that international environmental groups aren’t celebrating, much less reporting, this development) It also requires the licensing of electronic waste recyclers, though the actual provisions for that licensing are unclear at this time. But unquestionably, the most important provision – at least for those of us who’d like to see environmentally unsound e-scrap processing become a thing of the past – is the creation of what Xinhua calls a “special fund” to subsidize proper e-scrap recycling.
As outlined to me back in January by CDRC, this subsidy will be paid out to licensed recyclers on a per unit basis. So, for example, RMB 8 might be paid out for the proper recycling of a black and white television (this was a number that someone suggested to me six months ago), thus helping to narrow the gap between the price that an illegal, environmentally unsound workshop can pay, and that which can be paid by a licensed, environmentally-secure facility.
If the subsidy is paid out uniformly, then – theoretically – the illegal workshops will slowly close in favor of the legal ones, if only because they no longer can compete for domestically generated e-waste. Of course, there’s quite a bit of “theoretically” in there (theoretically: the money will be enough; there’s enough political backing to continue paying it out for years; corruption won’t seep into the distribution; local governments will finally abide, etc.). But what’s encouraging here – what’s really, truly encouraging – is that the central government is going to commit serious money to combating this very serious problem – and not just talk. Success, if it comes, will take time. But after years of debating how to do this, it’s especially gratifying to see that the central government has finally recognized that success is going to require becoming more profitable than the illegal workshops, as well as more green.