China Securities Network News: Recently, the Ministry of Environmental Protection issued the "Regulations on Pollution Prevention and Control in the Processing and Utilization of Waste Plastics", which will be implemented on October 1, 2012.

The regulations specify the prohibited items in the industry, including "prohibiting the processing and utilization of waste plastics in residential areas", "prohibiting the use of waste plastics to produce plastic bags for food", and "prohibiting the recycling and utilization of waste plastic hazardous waste without a hazardous waste business license, including waste plastic packaging contaminated by hazardous chemicals, pesticides, etc., and discarded disposable medical plastic products (such as infusion sets, blood bags)". In addition, the "Regulations" also encourage "waste plastic processing and utilization distribution centers should establish a centralized recycling and treatment mechanism for residual garbage and filter screens generated by individual waste plastic processing and utilization households", "encourage waste plastic processing and utilization distribution centers to implement centralized park management for individual waste plastic processing and utilization households, and centrally treat waste water, waste gas and solid waste generated by waste plastic processing and utilization", and "encourage qualified waste plastic processing and utilization distribution centers to apply for the construction of national "urban mineral" demonstration bases and apply for pilot work on the construction of waste commodity recycling systems."

The management regulations will promote the standardized operation of the waste plastic industry, raise the industry entry threshold, thereby increasing industry concentration, and encourage leading companies with strength to build demonstration bases. Related listed companies include GEM (recycling and disassembling home appliance plastics into wood plastics), which is engaged in resource recycling. Other companies with urban mineral business capabilities include Yiqiao Resources, Dongjiang Environmental Protection, and Sound Environment; in addition, the new stocks Qiusheng Resources (recycled PET), Zhejiang Zhongcheng (food packaging film), and Dadongnan (food packaging film) in the field of waste plastic applications are also related to the industry.

Appendix:

Regulations on the Prevention and Control of Pollution in the Processing and Utilization of Waste Plastics

Article 1 These Regulations are formulated to implement the "Notice of the General Office of the State Council on Restricting the Production, Sale and Use of Plastic Shopping Bags" (Guobanfa [2007] No. 72) and the "Opinions of the General Office of the State Council on Establishing a Complete and Advanced Waste Commodity Recycling System" (Guobanfa [2011] No. 49), strengthen the prevention and control of pollution in the processing and utilization of waste plastics, protect the health of the people, ensure environmental safety, and promote the healthy development of the circular economy.

Article 2 The processing and utilization of waste plastics within the territory of the People's Republic of China must comply with the requirements of these Regulations.

The processing and utilization of waste plastics referred to in these regulations refers to the activities of sorting, cleaning, drawing and granulating waste plastics recycled in China (including industrial scraps, discarded plastic bottles, packaging materials and other plastic products, agricultural films, etc.) and various types of waste plastics imported from abroad with approval; as well as the activities of processing waste plastics into plastic recycled products or finished products.

Article 3 The processing and utilization of waste plastics must comply with the relevant national industrial policy regulations and the "Technical Specifications for Pollution Control of Waste Plastic Recycling and Recycling" to prevent secondary pollution.

It is prohibited to process and utilize waste plastics in residential areas. It is prohibited to use waste plastics to produce ultra-thin plastic shopping bags with a thickness of less than 0.025mm and ultra-thin plastic bags with a thickness of less than 0.015mm. It is prohibited to use waste plastics to produce plastic bags for food. It is prohibited to engage in the recycling and utilization of waste plastic hazardous wastes without a hazardous waste business license, including waste plastic packaging contaminated by hazardous chemicals, pesticides, etc., and discarded disposable medical plastic products (such as infusion sets, blood bags), etc.

If there are no sewage treatment facilities that meet environmental protection requirements, it is prohibited to engage in processing activities such as granulation of waste woven bags, washing of cylinder feet, deplating (coating) of waste plastics, and brine sorting.

Article 4 Waste plastic processing and utilization units shall treat the residual garbage and filters generated in the process of waste plastic processing and utilization in an environmentally sound manner; it is prohibited to hand them over to units or individuals that do not meet environmental protection requirements for disposal.

Open-air burning of waste plastics and residual garbage and filters generated in the process of processing and utilization is prohibited.

Article 5 Imported waste plastic processing and utilization enterprises shall comply with the "Solid Waste Import Management Measures" and the relevant regulations of the Ministry of Environmental Protection on the environmental protection management of imported solid waste and waste plastics that can be used as raw materials.

It is prohibited to import unwashed used waste plastics.

It is prohibited to transfer all or part of the imported waste plastics to units or individuals other than the utilization enterprises specified in the import license, including entrusting the imported waste plastics to other enterprises for cleaning.

The residual waste plastics generated during the sorting or processing and utilization of imported waste plastics shall be harmlessly utilized or disposed of; it is prohibited to sell the above-mentioned residual waste plastics directly without cleaning.

Imported waste paper processing and utilization enterprises shall harmlessly utilize or dispose of waste plastics in imported waste paper; it is prohibited to sell waste plastics in imported waste paper directly without cleaning.

Article 6 If an imported waste plastic processing and utilization enterprise finds that the imported waste plastics are prohibited from import by the state or do not meet the environmental protection control standards, it shall immediately report to the port customs, inspection and quarantine department and local environmental protection department and cooperate in relevant processing work.

Article 7 Waste plastic processing and utilization distribution centers shall establish a centralized recycling and treatment mechanism for residual garbage and filters generated by individual waste plastic processing and utilization households. Waste plastic processing and utilization distribution centers are encouraged to implement centralized park management for individual waste plastic processing and utilization households, and centrally treat wastewater, waste gas and solid waste generated by waste plastic processing and utilization.

Eligible waste plastic processing and utilization distribution centers are encouraged to apply for the construction of national "urban mineral" demonstration bases and to apply for pilot work on the construction of waste commodity recycling systems.

Article 8 Provincial environmental protection and commerce authorities shall organize verification and publish a list of qualified waste plastic processing and utilization enterprises; if problems are found during the verification, they shall be handled in accordance with the law and the results of the handling shall be announced to the public.

From January 1, 2013, enterprises that have not passed the environmental protection verification will not be approved to import waste plastics.

Article 9 These regulations shall be implemented from October 1, 2012.

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