NPC Deputy advocates for increased recycled aluminium usage to boost sustainability within the industry

"The economic and social benefits of recycled aluminum are significant," said Li Xiehua, a deputy to the 14th National People's Congress (NPC) and Deputy Party Secretary and General Manager of Chinalco Advanced Manufacturing Co., Ltd. The company is lauded for its significant contributions to the automotive sector, particularly in pioneering aluminium alloy materials for lightweight components in new energy vehicles. This innovation aligns with global efforts towards energy efficiency and reducing carbon emissions.

Importance of recycled aluminium

Li emphasised the stark contrast in energy consumption between manufacturing and recycling new aluminium. Producing a tonne of new aluminium requires a substantial 13,000 kilowatt-hours of electricity, whereas a mere 600 kilowatt-hours are needed for a tonne of recycled aluminium. Moreover, the carbon emissions from recycled aluminium are only about 5 per cent of those associated with primary aluminium production.

Aluminium is ubiquitous in everyday items such as kitchenware and smartphones, playing a pivotal role in vital sectors like aerospace, automotive, and construction. Fuelled by economic and societal advancements, its increasing demand challenges meeting carbon emission reduction targets. Nevertheless, embracing recycled aluminium offers a pragmatic solution to surmounting these challenges.

China's recycled aluminium sector holds growth potential

The Chinese government has implemented various fiscal and tax incentive measures to promote the extensive utilization of recycled resources. One such initiative is the Catalogue for the Comprehensive Utilization of Resources Products and Services VAT Incentives (2022 Edition).

Drawing on over three decades of experience in the aluminium industry, Li believes that the current criteria for qualifying for incentives on recycled aluminium are overly restrictive, with the mandated recycled content being set too high. As a result, numerous large companies find it challenging to meet these standards to benefit from tax rebates for resource utilization.

Over the past year, Li has been actively advocating for advancing and enhancing the aluminium smelting and processing sector. He has submitted proposals to the Chongqing Regulatory Bureau of China's Ministry of Finance, based on professional analysis, aiming to broaden the inclusion of recycled aluminium resources in the catalogue of value-added tax (VAT) preferences for comprehensive utilization of resources, products, and services.

Highlighting insights from his analysis, Li pointed out that developed countries such as the United States, Japan, and Germany have already surpassed China in recycled aluminium production. This presents a notable growth opportunity for China, where the output of recycled aluminium currently falls below the global average.

Industrial parks dedicated to recycled aluminium

Chongqing boasts industrial parks dedicated to recycled aluminium in districts like Bishan, Jiangjin, and Qijiang, collectively utilizing 1 million tons annually. However, the industry grapples with price fluctuations and rising costs, necessitating policy support such as tax incentives.

Li proposes expanding the types of recycled aluminium eligible for VAT incentives, along with reducing the required proportion of recycled aluminium in raw material inputs. This adjustment, he argues, would enable more enterprises to benefit from the policy, further encouraging the adoption of recycled aluminium and guiding the industry towards sustainable development practices.