China's Electronic Appliance Giants to Take On Recycling

China’s home appliance giants are entering the environmental protection industry, as the government is to issue regulations for the recycling of discarded electronic appliances. Yesterday TCL Group founded an environmental protection investment company jointly with Guangdong-based O’meet Group. Haier and Changhong have already established recycling centers for discarded electronic appliances in Shandong and Sichuan, respectively.

Chinese consumers buy tens of billions of dollars worth home appliances yearly, most of them to replace older models, which are then trashed. On average, they discard over 5 million TV sets, about 5 million washing machines, and about 4 million refrigerators, among other appliances, every year for a total more than 15 million throwaways.  

TCL Chairman Li Dongsheng says the recycling of discarded home appliances would help to relieve tight resource supply in China, reduce environmental pollution, and reduce companies�costs and improve competitiveness of domestic products at the same time.

Overseas environmental barriers are an important reason for TCL’s entry into the environmental protection industry. According to the Waste Electrical and Electronic Equipment (WEEE) directives issued by the European Union, home appliance exporters to the EU must pay 3% to 5% of the total price of their exports for the recycling and treatment of electronic waste. TCL overseas business manager Shi Weiyi says, according to WEEE, Chinese air conditioners exported to European Union are charged an extra $25 to $30 per unit. However, if Chinese companies take discarded air conditioners back to China, they won’t need to pay this fee.

At present, China bans the importing of discarded home appliances to prevent domestic companies from illegally retreading them and selling them on as new ones. The largest discarded product recycling and treating company, O’meet, has been licensed to import discarded home appliances, but is only allowed to disassemble them, not to retread and sell them.

"Whether TCL’s joint venture will bring overseas discards back to China and treat them at home is still unknown," said Shi Weiyi, saying currently the joint venture aims to deal only with domestic electronic waste.

Changhong started a home appliance recycling project in 2006. It has been granted nearly 6 million yuan in support from the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the government of Sichuan Province. Its first CRT TV recycling line will be finished by the end of the year. Haier has also set up an electronic appliance recycling center in Qingdao.