The Circular Economy Law will strengthen producers’ environmental responsibilities

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The much-anticipated \"Circular Economy Law (Draft)\\" was submitted for review as scheduled at the 29th meeting of the 10th National **** Congress, which concluded recently. According to the plan of the National **** Conference, the \"Circular Economy Law (Draft)\\" will undergo its second and third reviews at the National **** Conferences to be held in October and December this year respectively. Relevant officials expect that this law is likely to be enacted during the current ** term in office. 　　It is understood that this draft is structured around the principles of reduction, reuse, and resource recycling, with key elements including the establishment of a total amount control system to curb resource waste and pollutant emissions ； Establish a producer-centered extended responsibility system ； Strengthen the management of enterprises with high energy and water consumption ； Strengthen the regulation and guidance of industrial policies ； Strengthening incentives and legal responsibilities, etc. Among them, the producer-centered extended liability system is the most noteworthy. 　　Extension of producer responsibility For manufacturing enterprises, the Draft Circular Economy Law clearly stipulates the extension of producers’ responsibilities, which has the most direct impact on them in the future. It is reported that after the enactment of the Circular Economy Law, the National Development and Reform Commission and the Ministry of Environmental Protection will also jointly establish a catalog of products and packaging materials subject to mandatory recycling. 　　The so-called extension of producers’ responsibilities requires companies to recycle the products and packaging they manufacture that are included in the mandatory recycling list. If the company cannot carry out the recycling itself, it must fund third parties to do so. If a company produces products that cannot be recycled nor treated in an environmentally safe manner, it should be punished. 　　Regarding penalties, the draft stipulates that a fine of up to 1 million yuan may be imposed on those who fail to recycle the equipment and materials that are required to be phased out. If products and packaging subject to mandatory recycling are not recycled, the responsible party may be ordered to make corrections within a specified time frame, and shall be fined an amount equal to one to three times the cost of recycling and disposal. If the issue is not resolved by the deadline, or if the disposal process does not comply with legal requirements, the relevant authorities will assign a qualified entity to carry out the disposal. The costs associated with this disposal shall be borne by the responsible entity, which will also be fined an amount equal to three to five times the cost of recovery and disposal. 　　“Requiring companies by law to recycle products and packaging can have an immediate effect. ”Professor Liu Jiejiao, deputy director of the Industrial Organization Section at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, believes that after so many years of development, and once industrial products have gone through a period of use, a large number of them will inevitably end up as waste. The most typical ones are home appliances, electronics, and electric bicycle products. 　　“Due to the severe situation regarding energy and environmental protection in recent years, **companies are paying increasing attention to the circular economy. ”Liu Jiejiao believes that the introduction of the Circular Economy Law meets the needs of the current situation. The development of a circular economy initially originated within enterprises, for example, within a corporate group, the waste from one subsidiary company was used as input for another subsidiary company. A start like this is relatively easy. “And now there are issues regarding further development: how should waste be recycled among different companies? This involves not only technology but also issues such as interests and mechanisms, therefore legislation is needed to address it. ” 　　Will there be increased production costs? The reporter learned that the National Development and Reform Commission has already formulated the \"Regulations on the Recycling and Treatment of Used Home Appliances and Electronic Products,\" under which used home appliances such as televisions and refrigerators will fall under recycling regulations. 　　Sources familiar with the matter say that this regulation “is highly likely to be introduced within this year.” ”Related to this is a special fund for the recycling of used home appliances; once established, this fund will charge domestic home appliance manufacturers and retailers a certain percentage fee based on their production and sales volumes, to support the proper operation of enterprises engaged in environmental protection-related processing. This regulation can be regarded as a good supplement to the extended producer responsibility in the Circular Economy Law. 　　After the EU began requiring the recycling of home appliances last year, Chinese electrical appliance exporters had to re-register in the EU, meet its requirements, and use certain new components. Experts estimate that this EU regulation will increase the production costs of power export companies in China by at least 5% to 8%. 　　How much impact will the introduction of these regulations have on the costs of home appliance manufacturers? Tao Hongzhi, an engineer in charge of structure and standardization at Lenovo Group, believes that small businesses cannot afford the costs associated with establishing a recycling system, but for large companies like Lenovo, a comprehensive domestic recycling system already exists, so the challenges involved in carrying out recycling operations are not significant. He believes that what affects Lenovo is the special fund for recycling and disposal; “Lenovo holds nearly 40% of the domestic market share, so it has to pay the most.” 　　“Mandatory recycling will have an impact on the costs of small and medium-sized enterprises in the short term. ”Liu Jiejiao believes that, given the current state of industrial organization, in the long term, the pressure on small and medium-sized enterprises is likely to not be very significant. 　　He expects that the products listed in the mandatory recycling catalog are not closely related to small and medium-sized enterprises; for example, home appliances and batteries are mostly produced by large companies, with many small and medium-sized enterprises supplying goods to these large firms – it is a business transaction between companies, so there is no issue of recycling in such cases. At the same time, many small businesses today have a limited sales scope, being confined mostly to local sales; the costs associated with recycling are not high, and such businesses can easily carry out recycling through home delivery services and their own sales networks. “The recycling of products does not incur significant additional costs for businesses; the key lies in the processing process. Small and medium-sized enterprises can easily sell the recycled materials to companies that have the capacity to process them. ” 　　Some experts say that the Circular Economy Law imposes higher requirements on enterprises’ technical capabilities; producers need to consider how to recycle products most economically once they become waste, which in turn affects the enterprises’ production processes, equipment, and design concepts. 　　Companies should actively engage in recycling. “Companies have the motivation to recycle.” ”Liu Jiejiao believes that, against the backdrop of rising raw material prices, companies have an increasing incentive to recycle. For example, the value of reusing packaging is certainly higher than its value when sold to a waste recycling facility. “Making good use of the recycling network can indeed be profitable; some metals found in used home appliances can be processed simply to serve as raw materials. ”Tao Hongzhi believes that establishing a recycling system is beneficial for companies, and leveraging environmental protection can also enhance their image. 　　Forcing product streams to enter social recycling networks will result in those products not being reused in environmentally friendly ways. At the same time, some enterprises engaged in environmental treatment cannot operate on a large scale due to the lack of a stable supply of products. As early as 2005, China’s first pilot project for harmless recycling was established; however, since many used home appliances were collected by mobile waste recycling companies, this company faced the problem of not having enough materials to process once it started operating. 　　“Social recycling networks and corporate recycling are not contradictory; to some extent, they can even complement each other. ”Liu Jiejiao believes that corporate recycling is aimed at those specific products, namely products subject to mandatory recycling. Social recycling is aimed at those small types of waste. He believes that laws can be used to strengthen regulations and set higher requirements for private recycling; however, for products with high levels of certain harmful substances, such as batteries, clearer rules are needed to compel companies to carry out recycling. For example, it should be specified how much money companies should pay consumers for each battery they recycle. This would not only encourage consumers to bring their batteries to recycling points but also urge companies to fulfill their own recycling responsibilities. Furthermore, companies should also take more proactive measures. For example, businesses and consumers can sign recycling contracts at the time of purchase and sale, allowing consumers to benefit by having lower prices for the products ； Trade-in program ； The recycling of large packaging can be done at the time of delivery, etc. 　　As for the handling of materials after recycling, Liu Jiejiao suggested that the Circular Economy Law should set forth more requirements, as improper handling of these materials after recycling can still have an adverse impact on the environment, thereby rendering recycling meaningless