Game-based system dynamics simulation of deposit-refund scheme for electric vehicle battery recycling in China

Abstract

In order to promote efficient recycling of electric vehicle (EV) batteries, a unique deposit-refund scheme was implemented in Shenzhen, China to levy recycling fees on EV sales and subsidize the retailers who collect used EV batteries. So far, no research has been done to analyze the effect of the deposit-refund scheme on EV battery recycling. In this paper, the effect of the current deposit-refund scheme in promoting recycling is explored and some improvement suggestions are proposed. The results show that: 1) the current deposit-refund scheme can increase the collection rate of used EV batteries. However, the effect is very limited. 2) The subsidy fund is at surplus under the current collection subsidy level. In order to further promote the collection of used EV batteries, the collection subsidy could be increased within a certain range. 3) With continuous progress in recycling technology and gradual enhancement of consumers’ environmental awareness, collection subsidy level can be decreased to avoid the deficiency of collection subsidy fund while maintaining the collection rate at similar level.