Recycling research on spent fluorescent lamps on the basis of extended producer responsibility in China

Abstract

Mercury is a physiological toxin released by spent fluorescent lamps (SFLs) and is considered a serious pollutant. As the world’s largest producer of fluorescent lamps, China suffers from SFL pollution because of inefficient recycling and management of SFLs. Drawing upon the most successful practices worldwide, this paper suggests the recycling of SFLs on the basis of the extended producer responsibility (EPR) system in China. Manufacturers and importers are the main parties responsible for the take-back, recycling, and disposal of SFLs in the EPR system. In view of the situation in China and to address the objectives of the EPR system, this paper recommends the implementation of a third-party take-back mode for small- and medium-scale enterprises and of a take-back mode for large enterprises to be carried out by original equipment manufacturers. This paper suggests an extended responsibility fund to finance and support the SFL recycling system and discusses in detail the different recycling network systems and fund flows of the two take-back modes. By conducting a case study, the authors determine that the subsidy rate for SFLs that a recycling company can obtain from the extended responsibility fund for recycling and disposing of lamps can be set at $1.35/kg. The authors also predict the levy level that fluorescent lamp manufacturers must submit.

Implications:

For policymakers, a proper and effective way to manage and recycle spent fluorescent lamps (SFLs) is necessary. The recommended system and the predicted number values of the subsidy rate and levy level can be the basis in practice. For people, the proper management measures will reduce exposure from SFLs effectively, especially the risk of exposure to mercury. For society, the measures can help increase resource utilization rate. For manufacturers, an effective extended responsibility fund will motivate them to improve processing technique and green design.

Introduction

Fluorescent lamps are an energy-saving light source whose light is produced by passing an electric current through mercury vapor. Fluorescent lamps consume 2–5 times less power and have a service life 8–10 times longer than incandescent lamps (Khan and Abas, 2011).

Most lighting products contain many harmful substances that have different effects on the environment and on human health (Welz et al., 2011). Fluorescent lamps emit ultraviolet light (UV) and may pollute the environment with mercury and phosphorus if disposed recklessly (Fenton et al., 2013; Vahl et al., 2013). The United States has identified mercury, lead, and bismuth as the most poisonous elements found in lamps; specifically, the toxicity weights of mercury, lead, and bismuth are 5, 0.1, and 0.01, respectively (Chen, 1996).

Mercury-containing fluorescent lamps can be categorized into three types based on shape: compact fluorescent light (CFL) bulbs, long tubes, and circle and U-shaped lamps. The mean mercury content in fluorescent lamps produced in China is 30 mg in long tubes and 10 mg in circle lamps and CFLs (Wang et al., 2012). These values are considerably higher than the limits established by the European Union Restriction of Hazardous Substances (RoHS) Directive (European Parliament and the Council of the European Union [EUPC], 2003a). Since 2006, the annual output of fluorescent lamps in China has exceeded 3 billion (Liang and Ye, 2008a), reaching 4.7 billion in 2007 (Ye and Liang, 2008b) and hovering between 3 billion and 4 billion in recent years. The annual amount of mercury in fluorescent lamps is approximately 60 tons, with each lamp having an average content of approximately 20 mg. If large numbers of scrap fluorescent lamps are mishandled, the toxic mercury released will cause serious harm to the environment and the human body (Hu and Cheng, 2012). Spent fluorescent lamps (SFLs) account for approximately 20% of the mercury input in the municipal solid waste (MSW) in China (Cheng and Hu, 2012). On November 1, 2011, the Chinese government officially announced a national roadmap toward the phasing-out of incandescent light bulbs (National Development and Reform Commission [NDRC], 2011). Market demand for fluorescent lamps as an alternative to incandescent bulbs will remain high in China for years to come. Consequently, a larger wave of SFLs is expected to appear in solid wastes for several years. To date, researchers have not yet identified a nontoxic element that can act as a substitute for mercury in fluorescent lamps. Humans utilize a large number of fluorescent lamps; thus, different ways to effectively recycle and dispose of SFLs should be explored.

Under the traditional management mode, most SFLs in China end up in landfills or incinerators as general household garbage (Shang and Ma, 2007). In Beijing, approximately 70% of SFLs are directly sent together with household garbage to landfills or incinerators every year (Zheng, 2010). A small number of waste lamps are recycled by peddlers, who usually discard the rest of the scrap parts after removing useful parts or after extracting metals. The amount of products that end up with informal peddlers reaches more than 30% (Jin, 2010). In 2007, several major lighting companies began recycling their own products; thus, a small percentage of the SFLs are returned to the original manufacturers through the sales channels. However, the recycling rate of this part is as small as 1% (Wang and Zheng, 2010). Figure 1 summarizes the current situation of SFLs in China.

Figure 1. Flow chart of the state of SFL recycling management in China.

Landfills and incineration have been the traditional and dominant means of MSW disposal in China. The mercury in fluorescent lamps buried in landfills can be released into the surrounding environment through leachate leakage and landfill gas emissions. According to surveys, 0.5 mg of mercury underground can contaminate 180 tons of water and soil or pollute 300 m³ of air (Langford and Ferner, 1999). A recent study has shown that broken SFLs continuously release mercury vapor for over 10 weeks (Li and Jin, 2011). As discussed in Goonan (2006), breakage in landfills and incinerators is 100%, which results in a release of 30% of the mercury from mercury-containing lamps. By contrast, recycling recovers 97% of the mercury and only 2% of lamps break during transportation to recyclers. The release of hundreds of tons of mercury and its compounds from fluorescent lamps because of the continuous disposal of SFLs in landfills or incinerators can significantly affect the environment and ecosystems.

This study aims to identify a proper and effective way to manage and recycle SFLs in China. The value of scrap fluorescent lamps is low, whereas the cost of recycling is high. This study also determines which one among the main parties (i.e., manufacturers, consumers, recyclers, and government) responsible for SFL disposal will incur the highest cost for recycling SFLs. It considers the current situation of waste fluorescent lamp management in China and the foreign managerial experience with electric and electronic waste equipment (Tojo, 2001; Khetriwal et al., 2009; Niza et al., 2014). Finally, this paper proposes applying extended producer responsibility (EPR) to manage SFLs in the form of legislation.

Application of EPR Worldwide

Vast amounts of end-of-life products are discarded by users because of the lack of responsible parties for the take-back, recycling, and final disposal of these products. The accumulation of discarded products results in large resource waste and environmental contamination. EPR was first defined in 1990 as a principle that promotes the total life cycle environmental improvements of product systems by extending the responsibilities of manufacturers to the entire life cycle of their products (Lindhqvist, 2000).

Since its proposal, the EPR principle has been adopted by numerous countries worldwide. The theory has been further optimized within its implementation. Although EPR identifies the post-consumer-stage management of a product as the primary responsibility of producers, the scope of EPR involves the entire life cycle of a product. Stakeholders, including producers, sellers, and users, are the important parties in the SFL product chain and should share the responsibility in disposing of SFLs.

Many countries and regions have applied EPR theory in the field of SFL management on the basis of regional characteristics to realize take-back, processing, and recycling (Silveira et al., 2011; Hickle, 2013; Lifset et al., 2013).

In the European Union, the main basis of SFL environmental management is the Waste Electrical and Electronic Equipment (WEEE) Directive 2003 (EUPC, 2003b) and the RoHS Directive (EUPC, 2003a). The core concept of the WEEE Directive is that both manufacturers and importers are obligated to collect and recycle electrical waste, including SFLs. The WEEE Directive required producers to have at least 80% SFL recovery rate. The retail price of each lamp now includes a small levy that will be used to pay for recycling systems. Member states of the European Union also formulated their own recovery plans and set up relevant recycling facilities to help end users dispose of scrap equipment at no extra costs.

In 2006, Germany passed a law requiring manufacturers to dispose SFLs and retailers to take back the lamps. Almost all discarded fluorescent lamps in Germany are recycled through community recycling programs. Scattered household waste lamps gathered from collection points in communities are shipped to a sorting center by a transport company. After sorting, household waste lamps are sent to a pretreatment plant for processing. Recycling fees are paid by the community, which charges collection fees from residents. The transportation, dismantling, disposal, and landfill costs starting from the collection points are borne by manufacturers. In addition, 8000 collection sites (Yang, 2013) are distributed in supermarkets, pharmacies, electronics stores, and communities throughout the country, and 20 recycling plants are available (Asari et al., 2008). The success of this recycling system is partly due to the availability of an adequate collection and recycling infrastructure.

Austria has an 80% lamp recycling rate (Silveira et al., 2011), and 40 companies are involved in recycling SFLs to remove glass and ferrous metals (Rhee and Park, 2013). At the time of purchase, customers must pay two deposit fees: one is refundable if the used lamp is returned, and the other is utilized to finance the recycling system. This model motivates citizens to return their used lamps while ensuring that funds are available to implement and operate the recycling system (Asari et al., 2008).

The United States has an SFL recycling rate of approximately 23% (Silveira et al., 2011). Maine passed the first law to adopt the EPR system for household fluorescent light recycling in 2009. The law mandates a producer-financed statewide household SFL collection and recycling program that is free for private citizens. The accurate household SFL recycling rate for the entire state of Maine is unknown, but available evidence shows that the recycling rate of the state is very low. One primary factor for the low recycling rate is the inconvenience of the collection system, that is, the distance from individuals to a collection point is too far and few collection points are available (Wagner, 2011). After Maine enacted the first EPR statute for SFLs, Washington followed suit in 2010 and Vermont in 2011 (Wagner, 2012). In Vermont, lamp distributors and wholesalers established a reverse distribution system through take-back programs.

Taiwan adopted an EPR system for eight categories with 27 items, which include SFLs (Fan et al., 2005; Lu et al., 2005; Wen et al., 2009). The Environmental Protection Administration of Taiwan (EPAT) carries out the recycling program that involves the stakeholders (U.S. Environmental Protection Agency [EPA], 2012). In the program, community residents are required to separate waste at community waste collection sites. Private sector recyclers/collectors gather and recycle waste (including SFLs) from households. Local governments provide public collections of recyclables from communities and finance local collection sites. EPAT operates a committee-managed recycling fund comprising collection, disposal, and treatment fees paid by manufacturers and importers (Fan et al., 2005). As a result, Taiwan currently has an 80% lamp recycling rate (Silveira et al., 2011).

The above examples show that different regions have adopted various recycling approaches and systems according to their situations. Some systems require users to return lamps to retailers, some oblige users to send lamps to collection points, and some impose recycling fees. Most countries and regions have achieved high recycling rates because of the EPR concept. Producers are the responsibility subject. Sellers and users also share certain responsibilities and costs. The availability of an adequate collection and recycling infrastructure is an important condition for achieving a high recycling rate.

In Mainland China, the total recycling rate of household SFLs is less than 1% because no feasible recycling systems or effective take-back measures are available (Wang and Zheng, 2010). Table 1 summarizes the experience in SFL management of different regions.

Table 1. Main experience in SFL management of different regions

Region	Recycling Rate	Main Experience
Germany	Almost 100%	Adequate collection and recycling infrastructure.
Austria	80%	Customers must pay two deposit fees.
United States	23%	A free collection and recycling program financed by producers with insufficient collection points. Distributors and wholesalers establish a reverse distribution system.
Taiwan	80%	Community residents, private collectors and recyclers, and local governments all participate in the recycling program. A fund is established to deal with the collection, disposal, and treatment of SFLs.
China	1%	An EPR approach has not been adopted to manage SFLs.

In 2011, China issued a decree regarding the EPR system; this decree is known as the Regulations on the Recycling and Disposal of Waste Household Appliances and Electronic Products (RRDWHAEP; Executive Order 551 of the State Council of the People’s Republic of China). With approval from the State Council, the National Development and Reform Commission, the Ministry of Environmental Protection, and the Ministry of Industry and Information Technology jointly issued the Waste Electrical and Electronic Products Processing Directory (First Batch). Only five categories of products, namely, TV sets, refrigerators, washing machines, air conditioners, and microcomputers, are listed in the First Batch. This limited number is due to high social ownership, large waste quantity, serious environmental pollution, high recycling cost, and difficult processing.

Considering the successful EPR systems worldwide and the current management of the five electric and electronic waste products in China, this paper proposes the recycling of SFLs on the basis of the EPR and the addition of SFLs to the Waste Electrical and Electronic Products Processing Directory (Second Batch). This paper also recommends that optimal take-back modes be selected and recycling network systems be established within the Chinese EPR system.

Comparison of Take-Back Modes in China

Three main approaches are available when implementing EPR (Spicer and Johnson, 2004): original equipment manufacturer take-back (OEMT), producer responsibility organization take-back (PROT), and third-party take-back (TPT). In the OEMT mode, original equipment manufacturers take physical and economic responsibility for their products. Each company manages its own demanufacturing and recycling facilities, wherein their products are disassembled for remanufacturing and recycling. In the PROT mode, manufacturers are grouped as an alliance to assume physical and economic responsibility for SFLs. In the TPT mode, manufacturers entrust private companies to recycle and dispose their (the manufacturer’s) fluorescent lamps. Manufacturers need to pay a fee or subsidy to the private recycling company to ensure that their products are disposed of in an environmentally responsible manner and in compliance with EPR legislation. The specialized recycling company must follow strict examination and approval procedures enforced by state environmental protection authorities and submit evidence that the lamps have been recycled in compliance with legal environmental regulations.

Table 2 shows the merits and demerits of the three EPR approaches in China. Liu and Mei (2006) pointed out the difficulty of founding a producer responsibility organization that is a nongovernmental group in China. To date, China still lacks a PROT recycling mode. For OEMT-managed demanufacturing, logistics account for 70% of the recycling costs (Spicer and Johnson, 2004). As mentioned above, the recycling and operational costs are high, reaching 89.1% of the total cost in the case study section. The vantage points of the TPT mode are that lamp enterprises choosing this mode only bear the lowest logistics cost and financial risk, which are passed on to the third party. In the TPT mode, manufacturers can allocate sufficient energy into improving production and sales performance while streamlining their organizational structure. Most lighting manufacturers in China are small- and medium-sized enterprises that lack the resources to build independent reverse logistics systems for themselves. Until 2013, only three professional SFL recycling companies in China have been set up (Yang, 2013). In view of this situation in the fluorescent lamp market and the increasing maturity of professional recycling companies, hiring a third-party recycling company is undoubtedly the best choice for small- and medium-sized enterprises and importers to address the objectives of EPR in China.

Table 2. Comparison of three approaches to EPR and the case in China

Mode	Advantages	Disadvantages	The Case in China
OEMT	It makes full use of recycled products and materials. Feedback is assured.	Producers have to bear huge risks.	Some large-scale lamp enterprises in China already have their own demanufacturing facilities and lamp-processing company.
PROT	This mode can save on recycling cost and can be conducive to technology sharing.	As competitors, achieving trust or cooperation between enterprises is difficult.	Until now, such a recycling pattern remains lacking in China.
TPT	Both logistics cost and the risk for producers are the lowest.	It requires an effective transfer of knowledge related to design of the product.	Some other electronic products in China, such as computers, are recycled and disposed by independent dismantling plants.

Large-scale lamp manufacturers in China have their own demanufacturing facilities and can afford the high recycling and operational costs. For such manufacturers, the OEMT mode is the best option because of the material cost savings, expertise, specialization, and assured feedback of the approach. Lamp manufacturers who employ this mode can use valuable recycled materials instead of virgin materials, such as precious metal and rare earth, to save an average of 50–90% of raw material costs and 75% of energy costs (Cui and Forssberg, 2003). Demanufacturing and processing knowledge are easily accessible to the designer. In addition, information flows in both directions because internal design-based data can be used to aid demanufacturing. The opportunities for closed-loop reuse and recycling are likely enhanced through an OEMT-managed system. This approach will push manufacturers to innovate and eco-redesign their products with environmentally friendly materials.

Extended Responsibility Fund and Recycling Network Systems

An extended responsibility fund

According to the EPR concept, manufacturers are responsible for waste management, which is shared through either substantial implementation or financial contribution. The Provisions on the Collection, Use, and Management of the Waste Electrical and Electronic Products Processing Fund (Caizong [2012] No. 34) was jointly issued by the State Council, the Ministry of Finance, the Ministry of Environmental Protection, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, and the Administration of Taxation on the basis of the RRDWHAEP. The fund is used to subsidize dismantling plants for discarded appliances, such as subsidies of $13.64 (the USD–yuan exchange rate is at 6.2296) for a TV set and $12.84 for a refrigerator.

Fan et al. (2005) believed that Taiwan’s experience in resource recycling provides a good model for other countries, especially for those at the beginning or planning stages. Considering the experience of Taiwan and other regions as well as the existing fund in China, this paper proposes an extended responsibility fund for SFLs. This fund is contributed by manufacturers and importers of fluorescent lamps depending on their market share. It supports the SFL recycling system through rewards, subsidies, and payouts. The fund also allows manufacturers and importers to internalize expenses into the prices of lamps and to pass the waste management costs to users. China will temporarily encounter difficulties in setting up a producer responsibility organization created voluntarily by manufacturers and importers to manage the funds and operation of the SFL recycling system (Liu and Mei, 2006). Currently, we have considered merging the extended responsibility fund for SFL recycling into the Waste Electrical and Electronic Products Processing Fund. The fund will be collected and managed by the existing fund managing committee set up by the government. In the early stages, government participation will reduce the resistance from outside groups and make the integration and construction smoother. The managing committee will also be put in charge of subsidy distribution to the registered recyclers and of monitoring their environmental performance. Aside from the direct subsidies for the expenditures of take-back, recycling, and disposal of waste lamps, administration spending is also included in the serviceable range of the fund. The latter involves programs that support the system and ensure its effective operation. The ratio of administration spending to the fund is at most 20% (Figure 2).

Figure 2. Proposal: Financial and recycling system.

SFLs belong to social-source hazardous waste, mainly produced by households, offices, and the tertiary industry. Most exhausted fluorescent lamps are dumped into landfills because of the lack of a feasible and effective recycling system. This practice is not conducive for the centralized collection and disposal of SFLs and may even lead to a lack of materials for recycling enterprises. Therefore, building efficient recycling networks to improve collection rates is the main objective for the recycling and disposal of SFLs. Figure 2 shows the proposed financial and recycling system in this paper. In this system, manufacturers and importers are responsible for the recycling and processing of waste lamps, and vendors and users share the responsibility to take back lamps.

Recycling network system in OEMT mode

Large enterprises that choose to implement the OEMT mode pay fees to the fund management committee depending on their product’s market share and receive subsidies from the fund depending on their actual amount of recycled lamps. Recycling network systems in the OEMT mode can also operate the same way producers implement the “trade old in for new” system by adding a label on the packages and setting up a recycling network similar to the sales network. Figure 2 shows the recycling network system in the OEMT mode.

Retailers give a discount or privilege to motivate consumers to return the SFLs when purchasing a new one. Similarly, wholesalers who return used lamps collected from retailers to the manufacturers are given a rebate or subsidy by manufacturers depending on the quantity of lamps returned. Manufacturers then ship SFLs to their own processing company for dismantling and recycling, and report their handling capacity to the fund management committee. The subsidy is calculated based on the actual amount checked by the committee and the subsidy rate.

Consumers are the starting point of recycling in the OEMT mode. The reasonable incentive rebate is the key to encouraging consumers to give their waste lamps back to formal recycling systems instead of informal peddlers or discarding them as general household garbage. The rebate must be set high enough to encourage participation but not so high as to burden the manufacturers. The privilege must exceed typical prices paid by the informal peddlers for SFLs because the aim is to re-route waste lamps from informal peddlers to formal recycling systems. The numerical value of the rebate will not be discussed in detail here. Nevertheless, future studies can use the case wherein consumers who traded in their home appliances in 2009 and 2010 in pilot provinces of China received 10% rebate of the original product price, and most of the waste home appliances flowed back to retailers (Yu et al., 2010). For the numerical value of rebates or subsides that other stakeholders such as retailers and wholesalers can obtain in the OEMT recycling system, we may follow The Freight Subsidy Method to Home Applicable with Old Change New issued by the Ministry of Finance in August 2009.

Recycling network system in TPT mode

A waste reverse logistics model generally consists of collection sites, collection center, dismantling/crushing center, and centralized recycling plant (Fleischmann et al., 1997). A recycling network of SFLs is built based on this model to implement collection, shipping, storage, and handling. Used fluorescent lamps from residents are gathered in collection sites and then shipped to the collection center. After preliminary classification and selection, lamps are sent to the dismantling/crushing center for crushing and physical separation. SFLs are disassembled into several parts (e.g., lamp holders, glass, and metal). Reusable components are reused directly after repair or sold to the secondary market. Other materials are transported to the recycling plant or to a third-party service provider for pollution-free disposal. Currently, Chinese mainstream waste treatment enterprises merge a dismantling/crushing center with a centralized recycling plant. The SFL recycling network consists of three parts: collection sites, collection center, and recycling plant (Figure 2).

The first step in recycling SFLs is to separate fluorescent lamps from general household garbage to prevent waste lamps from going into landfills. Special collection bins need to be set up at the collecting sites to sort the collected SFLs. The use of fluorescent lamps is larger in urban areas than in rural areas; thus, cities with large amounts of SFLs can be chosen as pilot areas to set up temporary collection sites. Wagner (2012) examined the concept of convenience collection in an EPR system. The average distance from a house to a collection point is less than 1 km for high convenience, 8 km for medium convenience with multiple locations, and more than 8 km for low convenience within one location. To make participation in the EPR system convenient for residents, this paper suggests setting up collection sites near urban communities, office buildings, or hotels where fluorescent lamps are frequently used. Assuming that the standard distance from an individual to a collection site is approximately 1 km, the average setting density should be every 3.14 km².

SFLs need special packing because fluorescent lamps are high in social ownership, light in weight, easy to break, and contain heavy metals such as toxic mercury. These characteristics make SFLs difficult to transport. Thus, the transportation radius of SFLs is small. This paper suggests the construction of regional centralized recycling plants in key cities or developed provinces to ensure that the collection amount keeps up with the demand and to prevent facilities from becoming idle. Collection centers can also be set up in relevant districts and counties. On the basis of population size, the number of recycling plants in different provinces ranges from 3 to 5, and the number of collection centers in each district/county ranges from 1 to 3. For small areas with massive amounts of SFLs, lamps can be shipped directly from collection sites to third-party recycling plants. In the TPT mode, the recycling plants should cooperate with certified transportation companies to conduct professional transportation of SFLs in accordance with the regulations of the Transfer and Manifest Regulation of Hazardous Waste.

Small- and medium-scale manufacturers and importers that have opted for the TPT mode need to pay the corresponding fees to the extended responsibility fund committee and ensure that the contaminant information of the products is within the controllable scope. Producers need to establish two-way information communication mechanisms with third-party recycling enterprises through the managing committee. The course of SFL recycling covers collection, transportation, and processing. In the TPT mode, the forms of enterprise involved may include the following: transportation companies, recycling companies (collection and transportation), processing companies, and recycling–processing enterprises. Faced with multiple and complex enterprises that require subsidies, this paper recommends that recycling–processing enterprises directly receive subsidies and that other enterprises be subsidized via indirect feedback to simplify the subsidy distribution. After acquiring subsidies from the fund, recycling–processing enterprises can then resupply recycling and transportation companies in market-oriented ways. The recycling expenses of waste lamps gathered from the collecting sites/centers and the shipping expenses paid to transportation companies are both paid by a recycling–processing enterprise, that is, the third party.

Selecting the recycling–processing enterprise as the object of direct subsidy does not mean that a recycling company or “collection and transportation links” is not important. On the contrary, the collection rate directly affects the recovery rate, and it is the assurance of quantity of the SFL source. Transportation guarantees the timely processing of waste lamps. Therefore, the amount of indirect subsidies to collection and transportation links should principally be more than 30% of the total subsidies the third party received from the extended responsibility fund. The specific operation method is that the transportation company sells the collected waste lamps to a third-party company, who needs to provide sales invoices that indicate waste lamp information, such as specification, type, quantity, and price. Then, the third party directly pays the subsidy cost to the shipping company on the basis of lamp type and quantity. Analogously, the transportation company needs to pay subsidy cost to the community when collecting waste lamps from community collection sites.

Subsidy and Levy Issues, With a Case Study

The contradiction in the SFL recycling industry in China is that the value of waste lamps is low, whereas the recycling costs, purchase costs of professional facilities, and operation costs are high. Recycling companies usually cannot profit in the short term, and thus cannot survive in the long term. With the EPR system, manufacturers and importers have to pay recyclers directly or indirectly, thus incentivizing recyclers to invest in new technology and equipment while ensuring that their own products are disposed of in an environmentally friendly manner. The specific fees manufacturers should pay depend on the recycling and processing costs, processing speed, and other factors. In this paper, the payment of producers is an indirect form of subsidy. Therefore, the amount of subsidies the recycling–processing company collects from the extended responsibility fund per unit lamp is a key issue.

To ensure that recycling companies are profitable and SFLs are handled effectively, this paper proposes that the subsidy rate should be determined according to the cost of recycling and processing per unit lamp and according to the principle that recycling companies can make a reasonable profit.

The two main income sources of SFL recycling–processing companies are sale proceeds of recycled products and subsidies from the extended responsibility fund. Thus, a profit model of a recycling–processing company can be constructed as follows:

1

where P is the recycler’s expected profit, T is the subsidy rate, R is the revenue per unit, Q is the handling capacity per year, and C is the total cost per year.

The total cost C is calculated based on recycling costs, transportation costs, and operating costs:

2

Therefore, the subsidy rate of per unit lamp can be calculated as follows:

3

Surveys found that the profit margin of dismantling enterprises that received subsidies from the Waste Electrical and Electronic Products Processing Fund was set at 8% in China (Yu, 2010). To ensure a reasonable level of profit, the recycler’s anticipated profit can be forecasted referring to this profit margin, which is P = 0.08C.

China has no proprietary recycling system for SFLs, with all recycling systems in operation imported from foreign companies, such as Balcan from the United Kingdom, WEREC from Germany, and MRT from Sweden. The Balcan system has been heavily promoted in recent years, enjoying a sizable market share in foreign countries. This system has been designed to be as versatile as possible and to be capable of accepting all types and sizes of whole and precrushed lamps. With a large handling capacity and low maintenance cost, the Balcan system is suitable for future use in the waste fluorescent lamp market in China. With the support of Shanghai Balcan Engineering Ltd., this paper conducts a case study that sets up recycling–processing enterprises with Balcan lamp recycling system MPC4000 as the core processing equipment. The medium numerical value can represent the industry average to a certain extent. Thus, the background condition of the recycling–processing enterprise we selected and designed is medium size with medium service distance. The enterprise covers an area of 3500 m² and a factory building area of 1500 m². Its workforce consists of at least 9–11 employees, including 2–4 workers, 2 delivery drivers, 1 manager, 1 accountant, and 1 security staff. SFLs are hazardous wastes and easy to break, resulting in a small transportation radius and high transportation cost. The range of recycling and transportation system in the case study is 200 km, and the transportation cost is $80.25 per ton. The main processing processes of MP4000 include two phases. The first phase involves break-up and separation. The second phase involves distillation and disposal of mercury. Tables 3 and 4, list the capacity (Balcan, 2013) and cost of the SFL recycling–processing enterprises. The processing capacity is the average data from Balcan MPC4000 specification (Balcan, 2013). The construction cost, logistics expenses, and labor cost are obtained based on the typical value after the market survey and statistical analysis of the China Statistical Yearbook on Construction (National Bureau of Statistics [NBS], 2011), China Transport Statistical Yearbook (NBS, 2010), and China Labor Statistical Yearbook (NBS, 2012), respectively. For instance, the average annual wage in urban areas of East China where it is more developed was $8667 per capita (i.e., $722 per month) in 2011 (NBS, 2012). The equipment and energy costs in Table 4 are practical data from Shanghai Balcan Engineering Ltd. Table 3 shows that the annual handling capacity Q is 960,000 kg of lamps at low efficiency, 1,920,000 kg at general efficiency, and 3,840,000 kg at high efficiency. Table 4 shows the annual C_recycling, C_{transportation}, C_operating, and total cost C at different efficiency levels. The corresponding expected profit P at different levels can then be calculated in accordance with the quantitative relation that P is 0.08 times of C. On the basis of the market assessment of Shanghai Balcan Engineering Ltd., the average sale proceeds of lamps is approximately $112 per ton after sorting and recycling. Thus, the revenue per kilogram, R, is $0.112. Substituting these data into eq 3, different subsidy rates can be calculated at different levels of efficiency (Table 5).

Table 3. Capacity of recycling–processing enterprises

Parameter	Low Efficiency	General Efficiency	High Efficiency
Crushed lamps/hour^a	3500	3500	3500
Weight equivalent tons/hour^a	1	1	1
Working hours per day	4	8	16
Working days per year	240	240	240
Annual capacity (lamps)	3,360,000	6,720,000	13,440,000
Annual capacity (tons)	960	1920	3840

Note: ^aData from Balcan MPC4000 specification (Balcan, 2013).

Table 4. Costs of SFL recycling–processing enterprises (USD)

		Cases
Project Cost	Details	Low Efficiency	General Efficiency	High Efficiency
Lamp recycling systems MPC4000	Including installation, training, and maintenance	1,248,000	1,248,000	1,248,000
Land and building infrastructure	Medium size	802,500	802,500	802,500
Spare cash of operation	—	481,500	481,500	481,500
Budget aggregates	—	2,535,900	2,535,900	2,535,900
Recycling costs	Recycling costs per ton	1,100	1,100	1,100
(Crecycling)	Recycling costs per year	1,056,000	2,112,000	4,224,000
Transportation costs	Transportation costs per ton	80.25	80.25	80.25
(Ctransportation)	Transportation costs per year	77,040	154,080	308,160
Operating costs	Depreciation per year	62,400	124,800	124,800
(Coperating)	Staffing costs per year^a	58,800	69,336	77,760
	Power consumption of separation equipment per year (10 kWhr)^b	2,490	5,190	9,980
	Power consumption of distillation equipment per year (40 kWhr)^b	1,200	8,012	16,024
	Miscellaneous fees^c	16,000	51,400	102,700
	Spare and accessory parts of the system	8,025	16,050	32,100
	Total operating cost per year (without interest income)	148,915	274,788	363,364
Total cost per year (C)		1,281,955	2,540,868	4,895,524

Notes: ^aThe wage is $722 per month per employee, with 8 working hours a day. It respectively needs 2, 3, and 4 workers, as well as other employees, in the three cases. ^bAfter glass and metal are separated, 1–3% (in weight) of the mercury-containing substance remains. The distillation equipment processes 0.4–0.7 tons of mercury-containing substance each time, consuming 360 kWhr electricity. Power consumption figures listed above are from actual survey data in the operation of lamp recycling systems. The electricity is $0.208/kWhr. ^cThe cost of the raw material is not included.

Table 5. Subsidy rates for SFLs ($/kg)

	Low efficiency	General efficiency	High efficiency
T	1.30	1.35	1.22

The subsidy form is suggested to be normalized for easy operation. By comparing the subsidy standards calculated above, we deemed the reasonable subsidy rate should be set at $1.35/kg. The working hours have a general level of efficiency and are reasonable. A short working time causes waste of human resources and idle equipment, whereas a long working time will speed up equipment depreciation because of the heavy workload. In addition, most SFL recycling enterprises in China are in a state of inefficient operation. If $1.35/kg is adopted as the subsidy rate, then this rate will serve as an incentive for recycling enterprises. Consequently, the recycling rate of fluorescent lamps will be improved and recycling systems will be optimized.

The level of subsidy rate is related to the recycling rate of SFLs. In Taiwan, the current recycling fee rate is $1.03/kg (the exchange rate for USD to NTD is at 30.0650) for waste light bulbs/tubes. The subsidy rate increases to $1.33/kg when the recycling rate of mercury (R_Hg%) is above 35% and decreases to $0.67/kg when R_Hg% is between 20% and 35% (EPA, 2012). On the basis of the Taiwanese experience, the recycling rate can reach 35% when the subsidy rate is $1.35/kg. However, given that China is still in its infancy in SFL recycling, and only large cities and developed provinces are chosen as pilot areas in the short term, this paper suggests that the overall recycling goal be set at approximately 20% with comprehensive consideration.

The annual demand for fluorescent lamps on average is 3.5 billion (approximately 1 million tons). An estimation of the demand and recycling rate reveals that approximately 700 million (about 200,000 tons) lamps are recycled every year. Taking into consideration the high efficiency state of recycling enterprises, the total number of recycling enterprises should therefore be preferably capped at 52 to ensure that enterprises have enough waste lamp sources. Therefore, environmental protection authorities need to license recycling companies after a strict examination and limit the number on the macroscopic regulation.

If subsidy rate is set at $1.35/kg for recycling and disposing SFLs, the extended responsibility fund needs $0.27 billion a year. With the additional 20% administration fee, the aggregate demand of the fund is forecasted to be as much as $0.34 billion. The capacity of the fluorescent lamp market has been stable in recent years. From the perspective of the fund’s balance of payments, the reasonable levy level that lamp manufacturers should submit to the fund managing committee should not be less than $0.34/kg. The collection of the fund must conform to China’s national conditions. On the one hand, it should meet the aggregate demand of the subsidy; on the other hand, it cannot exceed the fiscal capacity of fluorescent lamp manufacturing enterprises, so that it remains advantageous to the healthy development of the industry.

With the development of the SFL recycling industry, the size of recycling companies will expand and the cost of environmental protection will decrease. At the same time, recycling rates are expected to rise steadily along with rising public environmental awareness and expanding recycling system developments. All these efforts will exert a positive effect on the recycling and disposal of SFLs. Therefore, the levels of subsidy and levy should be dynamic. Specifically, the levels of both should be adjusted and updated every 2–4 years to guarantee the rationality of the subsidy and levy rates.

Conclusion and Outlook

Considering the successful experiences of other countries, this paper proposes to recycle SFLs on the basis of the EPR system to solve the environmental pollution caused by the fluorescent lamp industry in China. Manufacturers and importers are designated as the main parties of recycling responsibility.

With the current situation in China, the OEMT mode is determined to be the best option for large-scale enterprises that have their own processing companies to address the objectives of EPR. Meanwhile, the TPT mode is considered suitable for small- and medium-scale enterprises and importers.

Two types of recycling network systems with regional centralized recycling plants in key cities and provinces are analyzed. An extended responsibility fund for SFLs is proposed to finance and support the recycling system as soon as possible. Through a case study, we determined that the rational rate of subsidy for SFLs that a recycling company can obtain from the fund per unit lamp is $1.35/kg. We also predicted that the levy level that fluorescent lamp manufacturers need to submit should not be less than $0.34/kg. These two rates should be updated after several years.

This paper provides Chinese policymakers with the following suggestions: Add fluorescent lamps that contain mercury to the Waste Electrical and Electronic Products Processing Directory (Second Batch) and further refine The Provisions on the Collection, Use, and Management of the Waste Electrical and Electronic Products Processing Fund to protect environmental resources as well as to ensure the sustainable development of the national economy.

Acknowledgment

The authors would like to thank Shanghai Balcan Engineering Ltd. for their data support and assistance with this study.

Additional information

Notes on contributors

Lihong Peng

Lihong Peng is an associate professor in College of the Environment and Ecology, Xiamen University, Xiamen, People’s Republic of China.

Yejun Wang

Yejun Wang is a postgraduate student of Environmental Management in College of Environment and Ecology, Xiamen University, Xiamen, People’s Republic of China.

Chang-Tang Chang

Chang-Tang Chang is a professor in Department of Environmental Engineering, National I-Lan University, I-Lan City, Taiwan, People’s Republic of China.