On 16 October 2024, the Ministry of Commerce of China (“MOFCOM”) released a Notice on Strengthening the Supervision and Administration of Recycling of End-of-Life Motor Vehicles. The notice was jointly formulated by MOFCOM, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Ecology and Environment, the Ministry of Transport and the State Administration for Market Supervision based on the Measures for the Management of End-of-Life Vehicle Recycling (“Measures”) and the Notice by the Ministry of Commerce and Other 13 Ministries and Commissions of Issuing the Action Plan for Promoting Trade-ins of Consumer Goods on 29 September 2024. It involves four aspects of the regulations in terms of qualification identification and qualification improvement of end-of-life vehicle recycling enterprises (“ELV enterprises”), severe punishment for illegal recycling, and strengthening organization implementation.
Regarding the qualification identification of ELV enterprises, the notice requires that local competent departments shall conduct the on-site acceptance and review of qualifications by the provisions of the Measures; shall optimize the industrial layout and recycling system to assist the owner in selling vehicles and strengthen the monitoring of demolition and dissolving capacity; and shall release the use of regional disassembly production capacity promptly, and submit it to MOFCOM through the system of National Automobile Circulation Information Management Application Service. According to the notice, the ELV enterprises without the qualifications or serious illegal recycling shall be revoked. In addition, the notice states that it encourages automobile manufacturers to engage in the recycling business, and assume the responsibility of manufacture.
The notice proposes that ELV enterprises can improve their qualifications and service by the following methods:1. Carrying out refined disassembly and digital transformation, use the online trading platform to connect the industrial chain, and then expand the scale of ELV sales;2. Standardizing the disassembly business of new energy vehicles;3. Allowing ELV enterprises to sell the five major assemblies of ELV to the prescribed automobile parts and components re-manufacturing enterprises that meet the Notice Regarding Issuing the Interim Measures for the Regulation and Administration of Automotive Parts Remanufacturing;4. Supporting enterprises to actively extend the expansion of downstream industrial chains, such as remanufacturing steel, non-ferrous metals, and components;5. Promoting more service models including on-site vehicle collection.
To combat illegal recycling and disassembly, the notice proposed that from October to December 2024, local departments of competent business, public security, ecological environment, transportation, and market supervision shall carry out a three-month crackdown action on illegal recovery and dismantling. The focus of the action is the recycling and disassembly of ELVs by enterprises without qualifications, selling ELVs and assembly vehicles, buying and selling, forging and altering the Certificate of ELV Recycling, and excessive pollution and illegal disposal of solid waste. In addition, the notice also emphasizes that local governments must eliminate old vehicles that meet the standards of compulsory scrap; strictly investigate and punish motor vehicle maintenance operators repairing ELVs; and increase the investigation and punishment of illegal acts of driving motor vehicles that have reached scrapped standards.
Finally, the notice emphasizes that relevant local departments should strengthen cooperation through information sharing and joint law enforcement, and submit a summary report to MOFCOM before 10 January 2025. When there are adjustments to the law enforcement responsibilities of relevant departments, the local government should be responsible for coordinating the connection between law enforcement and supervision.
In conclusion, the notice helps guide ELV enterprises to standardize their ELV recycling, ensure the implementation of the old-for-new vehicle policy, and meet the needs of the development of China’s new energy vehicle industry.
Regarding the qualification identification of ELV enterprises, the notice requires that local competent departments shall conduct the on-site acceptance and review of qualifications by the provisions of the Measures; shall optimize the industrial layout and recycling system to assist the owner in selling vehicles and strengthen the monitoring of demolition and dissolving capacity; and shall release the use of regional disassembly production capacity promptly, and submit it to MOFCOM through the system of National Automobile Circulation Information Management Application Service. According to the notice, the ELV enterprises without the qualifications or serious illegal recycling shall be revoked. In addition, the notice states that it encourages automobile manufacturers to engage in the recycling business, and assume the responsibility of manufacture.
The notice proposes that ELV enterprises can improve their qualifications and service by the following methods:1. Carrying out refined disassembly and digital transformation, use the online trading platform to connect the industrial chain, and then expand the scale of ELV sales;2. Standardizing the disassembly business of new energy vehicles;3. Allowing ELV enterprises to sell the five major assemblies of ELV to the prescribed automobile parts and components re-manufacturing enterprises that meet the Notice Regarding Issuing the Interim Measures for the Regulation and Administration of Automotive Parts Remanufacturing;4. Supporting enterprises to actively extend the expansion of downstream industrial chains, such as remanufacturing steel, non-ferrous metals, and components;5. Promoting more service models including on-site vehicle collection.
To combat illegal recycling and disassembly, the notice proposed that from October to December 2024, local departments of competent business, public security, ecological environment, transportation, and market supervision shall carry out a three-month crackdown action on illegal recovery and dismantling. The focus of the action is the recycling and disassembly of ELVs by enterprises without qualifications, selling ELVs and assembly vehicles, buying and selling, forging and altering the Certificate of ELV Recycling, and excessive pollution and illegal disposal of solid waste. In addition, the notice also emphasizes that local governments must eliminate old vehicles that meet the standards of compulsory scrap; strictly investigate and punish motor vehicle maintenance operators repairing ELVs; and increase the investigation and punishment of illegal acts of driving motor vehicles that have reached scrapped standards.
Finally, the notice emphasizes that relevant local departments should strengthen cooperation through information sharing and joint law enforcement, and submit a summary report to MOFCOM before 10 January 2025. When there are adjustments to the law enforcement responsibilities of relevant departments, the local government should be responsible for coordinating the connection between law enforcement and supervision.
In conclusion, the notice helps guide ELV enterprises to standardize their ELV recycling, ensure the implementation of the old-for-new vehicle policy, and meet the needs of the development of China’s new energy vehicle industry.