China has increased the subsidy for recycling e-waste — discarded electrical and electronic devices — by more than 300 percent year-on-year as it phases out the importation of overseas waste, which decreased last year by 12 percent.

Industry insiders have warned of the challenges the country faces to fill the gap resulting from the solid waste import ban. Still, the ban has increased the price of some domestic waste and is likely to create huge market opportunities for domestic recycling businesses.

The current policy for e-waste, in which the government collects funds from manufacturers to subsidize recycling, should be extended to other waste with high recycling costs and potential to pollute, experts said. The government also needs to draft preferential policies for junk dealers to help them overcome unfavorable operating conditions, they said.

According to a reform plan released in July by the State Council, China will phase out imports of solid waste that can be replaced by domestic resources by the end of 2019.

Since the end of last year, imports of 24 categories of solid waste, including plastics, textiles and unsorted paper, have been banned. The ban on another 16 types of solid waste, including scrap cars and boats, will take effect on Dec 31. Sixteen additional types of waste material, such as stainless steel and wood, will be banned at the end of next year.

Previously, many Chinese companies turned to imported waste as their raw materials because domestically collected waste had no advantage in quality, quantity or price, even though there is a large amount of waste generated in the country that needs sorting and recycling, according to Wen Zongguo, an expert on circular economy at Tsinghua University. Circular economy is a method of environmental sustainability in which recycling plays a major role.

Wen said the ban on imports will help greatly to promote the development of domestic trash recycling as solid waste importers turn to domestic sources.

The import ban has resulted in soaring prices for some domestic trash. Wang Chao, a plastic waste dealer in Beijing since 2004, said the price for plastic waste has gone up by 1,000 yuan ($157) to about 2,800 yuan per metric ton since imports of plastic waste were banned last year.

The State Council’s plan also said the amount of solid waste recycled in China would increase to 350 million tons by 2020, up from 246 million tons in 2015.

Subsidies paid for e-waste recycling rose by about 2.8 billion yuan in 2017 to almost 3.6 billion yuan this year, according to the Ministry of Ecology and Environment.

China began to offer subsidies for e-waste recycling with funds from manufacturers in May 2012. The total subsidies the ministry had handed out to e-waste recycling in the first five years after the subsidy fund was established stood at 10.7 billion yuan, which had helped with the recycling of almost 300 million pieces of e-waste, according to statements released last year by the Ministry of Environmental Protection, which in March became the Ministry of Ecology and Environment.

The subsidy for dismantling one TV set, for example, is 85 yuan. The statements also said China has 1,766 enterprises with a combined 300,000 employees processing imported solid waste, and that the country imports a total of almost 45.8 million tons of solid waste a year.

“It’s a very good method to extend the responsibility of the manufacturer to recycling. With manufacturers being the subsidy providers, it makes the recycling sustainable,” said Mao Da at the China Zero Waste Alliance, an environmental NGO.

He said, however, that China has been slow in extending the system to the growing amounts of other waste with high recycling costs and potential to pollute. Though the central government had planned to include another three types of waste last year, including motor vehicles, lead-acid batteries and paper-based composite packaging, no detailed policy has been published so that the subsidy could be put into practice.

China enacted a law on circular economy in 2009, offering a legal basis for mandatory recycling. Yet no list of waste that falls into mandatory recycling categories has yet to be published, Mao said.

He also said market mechanisms have failed to play an effective role in the recycling of waste with high value because of inadequate government support.

“The local governments have failed to give enough importance to the waste recycling industry. The recycling businesses are prone to be driven out to make way for ... other businesses.

“Many junk dealers have to change the location of their businesses frequently and are hesitant to invest to improve their sites and buy equipment. This is why many of the locations look dirty and disordered,” he said.

Wang, the plastic waste dealer, said he has had to move five times, largely due to local government campaigns to phase out low-end industries. His shop collected more than 300 tons of plastic waste a month last year.

Du Kui, who works at Guangli Fuyuan, a recycling company in Beijing, said recycling businesses often have been considered as a low-end industry by local government, even though the central government has called for the increase of waste recycling. The industry also lacks a technical standard to ensure ordered development, said Du, a 10-year industry veteran.

Mao said the government should draft preferential policies to support waste dealers, granting them fixed business sites so that they will invest in infrastructure to create more orderly operations.

Zhou Jinfeng, secretary-general of the China Biodiversity Conservation and Green Development Foundation, said junk dealers currently play an important role, especially in sorting waste, because the government’s waste sorting and recycling measures are ineffective.

He said a trial in Beijing that received good financial backing placed trash bins classified by type of waste placed in some communities. But it has failed to generate good results and people just throw their waste into any bin they find without caring what type of trash it is for.

“Instead of investing a lot in setting up classified trash bins, it may be better to subsidize the junk dealer and the junkman, who sort waste to make a living, to promote recycling, which is more practical and effective under current conditions in China,” he said.