The chaos in lead-acid battery recycling stems from two major issues.

　　Editor's Note

　　As pollution-control initiatives continue to advance across various regions, the environmental issues arising from the interim storage and handling of waste lead-acid batteries have become increasingly prominent, drawing significant attention from relevant national authorities and gradually placing them high on the government’s priority regulatory agenda. The Ministry of Ecology and Environment, along with the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Ministry of Housing and Urban-Rural Development, have successively introduced key regulations and policies, including the "Law on the Prevention and Control of Environmental Pollution by Solid Waste," the "Implementation Plan for Extending Producer Responsibility," the "Implementation Plan for Domestic Waste Sorting," and the "Pilot Work Plan for the Collection and Transfer Management System of Waste Lead-Acid Batteries." Yet, as the saying goes, "The ideal is perfect, but reality remains stark"—there is still a considerable gap between actual practices and the stringent requirements set forth by these systems.

　　  Given this, the author, from the perspective of industry practitioners and based on years of hands-on experience, has identified the two major challenges in the waste lead-acid battery recycling process, along with corresponding solution measures, for reference.

　　In China, approximately 6 million tons of lead-acid batteries are scrapped annually, a figure that continues to rise year by year. Although the recycling rate is relatively high, significant environmental pollution still occurs throughout the processes of collection, storage, disposal, and reuse.

　　The primary issues contributing to this problem fall into two main areas: First, improper collection, transfer, and temporary storage have led to incomplete storage facilities, inconsistent documentation, inadequate ledger records, and failure to properly handle transfer manifests—resulting in a range of environmental pollution problems, such as unauthorized acid dumping, illegal dismantling, uncontrolled material flows, and illicit smelting operations. Second, an incomplete tax compliance system has given rise to gray-market profit chains, leading to issues like tax evasion, fraudulent invoicing, and artificially inflated pricing.

　　The temporary storage stage remains outside the system.

　　Difficult to regulate without checks and balances

　　The fundamental reason why illegal recycling has long dominated the recycling market, leading to severe environmental pollution while squeezing legitimate and compliant recycling enterprises out of their niche, lies in the fact that the collection and temporary storage of waste lead-acid batteries remain outside the regulatory framework—making them difficult to oversee and effectively control.

　　Some reputable recycling companies are gradually clarifying their strategies and accelerating the construction of standardized transit and temporary storage facilities for waste lead-acid batteries, thereby establishing a new, streamlined recycling system. Provinces such as Sichuan, Shaanxi, and Zhejiang have introduced rigorous standards for the collection, transit, and temporary storage of waste lead-acid batteries. These measures ensure clear records of inbound and outbound inventory, strict control over transfer manifests, compliance of transportation vehicles with regulatory requirements, and orderly distribution of products to certified secondary lead enterprises—creating a positive, self-sustaining cycle.

　　However, without a unified policy to support them, most provinces can only rely on their own interpretations of the policy, resulting in uneven levels of support, diverse implementation standards, and leaving the interim storage and management of waste lead-acid batteries still highly precarious.

　　The industry is looking forward to the introduction of

　　"Administrative Measures for the Management of Permits for Operating Hazardous Waste"

　　Last November, the "Administrative Measures for Hazardous Waste Operating Permits (Draft for Soliciting Opinions – Revised Version)," reviewed and approved by the former Ministry of Environmental Protection, for the first time included waste lead-acid batteries within the scope of hazardous waste operating permit categories. It clearly stipulates that operators handling waste lead batteries must obtain the necessary permits, specifying both the permitted scope of operations and the basic requirements for acquiring these licenses.

　　The draft plays a crucial role in addressing current issues in the recycling of waste lead-acid batteries, primarily through three key aspects.

　　First, the government now has a legal basis for enforcement. Before lead-acid batteries were included within the scope of hazardous waste operation permits, the recycling of these batteries in many provinces, cities, and municipalities was essentially an underground activity—operators could easily set up operations in any vacant, secluded location, making it difficult for the government to exert control from the source. The draft provides local governments with policy-backed guidelines, mandating that all lead-acid battery recycling enterprises obtain the necessary licenses to operate. Once licensed, their facilities must meet strict regulatory standards, their transport vehicles must comply with specified requirements, and the transfer process—including the use of unified manifest forms—will ensure full traceability. This comprehensive system places these operations firmly under institutional oversight, enabling effective management right at the source.

　　Second, practitioners now have policy support for evidence-based operations. As environmental protection requirements become increasingly stringent, specialized recycling companies dealing with waste lead-acid batteries are urgently in need of standardized practices—but they’ve been struggling due to the lack of appropriate policy backing. The draft legislation finally provides the much-needed framework, enabling industry players to turn their vision of orderly operations into reality. As one executive from a professional recycling company put it: "We genuinely want to operate in a regulated and sustainable manner, but without supportive policies, the government often remains unresponsive. It’s frustrating—while we’re actively contributing to environmental protection, we can’t help but feel anxious about the future. Clearly, this isn’t a long-term solution."

　　Third, the draft clearly articulates the concept of using market mechanisms to manage the market, providing the right approaches and methods. The recycling of waste lead-acid batteries is an integral part of the nation's urban mineral resource development initiative. Given the large number of stakeholders involved, it is relatively challenging for the government alone to maintain centralized control. Only by leveraging market forces to regulate the market can we accurately identify the industry's inherent weaknesses, pinpoint the root causes of existing problems, and ultimately deliver targeted solutions that effectively address the issues at hand.

　　The key to resolving the collection and temporary storage standards for waste lead-acid batteries has been successfully identified: the draft revision of the "Administrative Measures for Operating Permits of Hazardous Wastes," which is currently seeking public input. It is recommended that the Ministry of Ecology and Environment promptly issue the official document, enabling the waste lead-acid battery recycling market to move forward in a more orderly, environmentally friendly, and sustainable direction.

　　Collection of Waste Lead-Acid Batteries

　　The tax chain is incomplete.

　　The "tax dilemma" in the recycling of waste lead-acid batteries stems from their unique product characteristics. As 85% of these batteries are produced by private entities, businesses cannot claim input tax credits. Meanwhile, the remaining 15%, though sourced from waste-generating companies like China Mobile and China Unicom, are mostly treated by enterprises as sales of fixed assets—resulting in the issuance of only standard VAT invoices, which again cannot be deducted. This situation has left the entire secondary lead industry in a state of severe hardship.

　　Currently, the tax burden for general industrial enterprises in China ranges between 2% and 4%, while for standardized secondary lead enterprises, it soars as high as 11.9% (this figure reflects the tax rate after a 30% immediate refund). In other words, for every ton of secondary lead recycled and processed, companies are required to pay around 2,000 yuan in taxes. Such a high tax burden directly puts standardized secondary lead enterprises at a competitive disadvantage in the market, making the "bad money driving out good" phenomenon particularly evident.

　　Even worse, in an attempt to gain a competitive edge, they've come up with a "secret weapon": instead of issuing invoices to dealers or individual buyers as required when selling new batteries, they're "fully leveraging" these invoices—using them as input credits to offset taxes on sales of used batteries. While this may seem reasonable at first glance, it’s actually a deliberate misrepresentation of the facts, blatantly violating tax laws and enabling tax evasion. Currently, lead recycling companies are required to pay a 17% tax on every ton of lead recovered from waste lead-acid batteries. Given the annual output of 2.2 million tons of recycled lead—and assuming an average annual lead price of 16,500 yuan per ton—the nation stands to lose approximately 5.3 billion yuan in tax revenue each year solely from this one measure.

　　It is suggested to set up tax incentives for the renewable resources industry.

　　The country should establish tax incentives for the renewable resources industry through top-level design, implementing taxation at the recycling stage and integrating this环节 into the broader system management framework. While strengthening regulatory oversight, this move will genuinely streamline the various links within the circular economy’s industrial chain. First, a fixed, low-tax-rate support policy will be adopted for enterprises engaged in the recycling of waste lead-acid batteries, with a value-added tax rate set at 3%. Second, for companies involved in the disposal of waste lead-acid batteries—specifically, those producing recycled lead—a "collect-and-refund" support mechanism will be implemented. Recycling enterprises will be allowed to offset their input taxes based on sales invoices issued by these disposal firms. After applying such offsets, an additional 80% of the actual VAT paid will be refunded promptly, providing robust financial assistance to the industry.

　　There are three major advantages to streamlining the VAT chain for recycled lead-acid batteries.

　　First, it has not only streamlined the tax burden for enterprises involved in waste lead-acid battery recycling, stabilizing their tax base, but also achieved a unified tax rate across the national waste lead-acid battery recycling industry, ensuring tax fairness, preventing false invoicing, and facilitating easier regulatory oversight—while simultaneously supporting businesses and fostering sustainable growth.

　　Second, it has alleviated the heavy tax burden on standardized secondary lead-producing enterprises, enabling them to grow stronger and larger, thereby making a significant contribution to the nation's efforts in reducing heavy metal pollutants and enhancing the comprehensive utilization of resources.

　　Moreover, establishing a comprehensive VAT tax chain system demonstrates the nation's commitment to encouraging the recycling and reuse of renewable resources, thereby fostering healthy growth in the renewable resources industry. Once the lower tax rate is fully implemented, it will not only address the challenges facing the lead recycling sector but also resolve issues across other domestic renewable resource industries.