In Guangzhou, recycling pays - but is it enough?
Firms to get subsidies to encourage processing of low-value waste items
Guangzhou announced this week that it will pay companies to process recyclable waste that has so little value that it is simply dumped in the city's fast-filling tips and incinerators.
Under the policy - the first of its kind in the country - the Guangzhou government will pay 90 yuan (HK$113) for each tonne of low-value recyclable waste processed. For now, the list of subsidised waste products covers glass, plastic and timber; but more will be added in the future.
The goal is to recycle a daily average of 1,400 tonnes of such waste this year, which would raise the household garbage recycling rate by 10 per cent. The government will build three waste transfer centres to separate the low-value waste from other garbage, with the first centre due for completion by next year.
The subsidy - which local environmentalists and recycling firms have long called for - may spell a good start in overcoming setbacks in a waste-sorting campaign the city launched more than three years ago.
Guangzhou's 13 million residents generate 20,000 tonnes of household garbage each day, the quoted Guangzhou Urban Management Committee director Wei Weihan as saying on Monday.
Of this, up to 6,000 tonnes is recycled, more than 3,000 tonnes is burned and the remaining 11,000 tonnes is dumped in the city's landfills. Wei says that about 4,620 tonnes - more than one-fifth of the daily total - is glass, plastic and wood waste.
But because of high operating costs and low prices, recycling such low-value waste is mostly a loss-making business.
"A tonne of glass is sold at 500 yuan, but recycling it costs more than 520 yuan, not to mention a value-added tax of about 100 yuan. So, recycling a tonne of glass means making a 120 yuan loss," a glass-recycling firm owner was quoted by as saying.
As a result, recycling firms avoid taking glass, plastic and wood products. Residents complain of waste collectors rejecting such items, defeating the purpose of the waste-sorting campaign.
With the government subsidy, however, companies will now have more incentive to accept such waste for processing, thus cutting down on the amount of garbage sent to the tips and incinerators.
The plan is to use the money saved from burning and burying such waste to subsidise the cost of recycling them. The 90 yuan-per-tonne subsidy is equivalent to the average cost of disposing of waste in landfills and incinerators.
But whether it will indeed attract firms to recycle low-value waste remains to be seen. Take the glass-recycling firm for example - a 90 yuan subsidy will cut its loss from 120 yuan to 30 yuan per tonne, but it remains a loss-making venture.
That's why the subsidy is only the first step in countering Guangzhou's waste problem.
The government could increase the subsidy by charging manufacturers a "product recycling fee" - much like the "polluter pays" producer-responsibility schemes in Hong Kong and elsewhere.
Lowering recycling firms' costs through better technology and economies of scale is crucial for their survival. So on top of the cash subsidy, the government could also give them support in infrastructure, technology and development, to encourage the industry's long-term sustainability.
