CONF: ELV - new driving force for China's resource recycling

"National supportive policies, technology upgrades, and the gradual retiring of new-energy vehicles will bring great potential to this sector," He told delegates at the National Steel Scrap Conference 2025 held by Mysteel in Haikou city, South China's Hainan, over November 10-12.

During January-October, some 8.4 million ELVs across China were scrapped and recycled, already exceeding the 7.9 million units for the whole of 2024, according to CRRA statistics.

Such rapid growth was largely fueled by broad subsidies under the automotive trade-in policy from China's Ministry of Commerce (MOFCOM), which significantly boosted market turnover, as Mysteel Global reported.

During the first 10 months of this year, MOFCOM's vehicle trade-in information platform received more than 10 million applications for vehicle renewal subsidies, according to data released by the ministry.

The ELV scrapping and processing capacity has been expanding steadily with the boom in ELV recycling demand, He stressed. By the end of October, the total number of vehicle dismantling and recycling companies in China reached 1,947, posting a marked rise of 10.8% compared to the end of last year, CRRA data showed.

With the industry continuing to expand, vehicle dismantling and recycling companies are striving to improve operational efficiency and economic performance, with a focus on optimizing their business models and resource allocation, according to He.

However, currently development of the ELV recycling industry is still hindered by various factors, including inadequate capacity utilization and over-reliance on a single business model, He warned.

"By the end of last year, China's total ELV dismantling and scrapping capacity reached some 25 million units per year, but the actual capacity utilization rate was just around 40%," He illustrated. "So far this year, the rate has been even lower than that," he added.

Meanwhile, most recyclers have no capability to thoroughly separate and process the dismantled materials before selling them to scrap traders or steelmakers, leading to very low value addition to their products, he explained.

In this context, auto dismantlers should strengthen collaboration with both upstream and downstream partners to build a more integrated recycling network, He suggests. The government should also enhance market oversight to foster a more transparent circulation system for recycled resources, he mentioned.

"A large-sized and mature recycling company can play a leading role in promoting efficient integration and utilization of local scrap resources," an official from a steel scrapyard in East China's Zhejiang told Mysteel.

"We operate both an auto dismantling plant and a scrap processing company that is qualified by the Ministry of Industry and Information Technology," the official said. "This makes our yard a central processing hub for many smaller local scrap dismantlers, who send us their materials for further processing and deliveries," she explained.

"Besides, our company also runs 4S stores, where we can directly provide car replacement service for consumers and, in turn, broaden our sources of ELVs," she added. "This enables us to establish a closed-loop system," she commented.

The government and industry organizations should guide recycling companies in exploring collaboration mechanisms to curb vicious competition, standardize the market, and achieve sustainable development, He stressed.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com