The Decision-Making Analysis on End-of-Life Vehicle Recycling and Remanufacturing under Extended Producer Responsibility Policy

Syed Abdul Rehman Khan,Muhammad Tanveer,Haider Mahmood,Hafiz Muhammad Zia-Ul-Haq,Danish Iqbal Godil,George Thomas

doi:10.3390/su132011215

Abstract

This research develops a dual-cycle ELV recycling and remanufacturing system to better understand and improve the efficiency of the ELV recycling and remanufacturing businesses. For the flawless operation of this system, the researchers employed evolutionary game theory to establish a game model between original vehicle manufacturers (OVMs) and third-party recyclers with the government involved. This research presents evolutionary stable strategies (ESS) that could promote an ELV recycling and remanufacturing system. Results show that OVMs’ expected profit difference between choosing and not choosing authorization is crucial in their ESS. The licensing fee plays a part of OVMs’ expected profit difference. Based on the results, optimal ESS could be achieved when the OVMs’ expected profit difference between choosing authorization and not choosing authorization and the third-party recyclers’ profit when paying the licensing fee are both positive. Then, the two groups’ involvement in dual-cycle ELV recycling and the remanufacturing system can be ensured. This research implicates the government to devise appropriate reward and punishment strategy to encourage OVMs and third-party recyclers to collaborate for efficient recycling and remanufacturing systems. Particularly, the government is suggested to impose strict restrictions on OVMs to carry ELV recycling and provide support to promote recycling quantity standards. Hence, the ELV recycling and remanufacturing system would be strengthened, thus improving waste management which is crucial for both environmental and resource efficiency.

Highlights

The results show that original vehicle manufacturers (OVMs)’ evolutionary stable strategies (ESS) of authorization depends on the expected profit difference between choosing authorization and not choosing authorization
Results reveal that the licensing fee determined by the OVMs for third-party recyclers is crucial; it positively influences the OVMs to take the authorization strategy but negatively affects the third-party recyclers to pay the licensing fee
The results suggest that under extended producer responsibility (EPR) policy, the government could encourage the OVMs to do authorization by providing rewards when they choose to engage in the end-of-life vehicles (ELVs) recycling system

Summary

Introduction

China has dominated the whole world in terms of vehicle sales. Such rapid growth in vehicle sales has resulted in a substantial increase in the country’s total number of end-of-life vehicles (ELVs) [1]. China is currently facing a significant challenge of car recycling where a vast quantity of ELVs need to be disposed of or recycled. Dismantling such a large number of ELVs can cause severe pollution to the surroundings [2]. These ELVs can significantly contribute to efficient resource utilization and economic development through

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Results

Conclusion