The Recycling Economy Promotion Law, which comes into effect on January 1 2009, represents a significant step forward to an energy-saving and environmental-friendly society.

The law follows the "three Rs" (reduce, reuse, recycle) principle. The first R means reducing resource consumption and waste generation in the process of production, circulation and consumption. The second R means reusing waste and repairing, renovating or reproducing waste as products or components; and the last R directly using (recycling) wastes as raw materials or in waste regeneration.

Efficiency
The law also supports and encourages the use of high-efficiency and energy-saving products. Enterprises in the industries of electricity, petrol processing, chemical, steel and nonferrous and construction materials will be urged to use clean coal, coke and gas rather than fuel oil.

Pursuant to this law, industrial enterprises are required to apply advanced or appropriate water-saving technology and equipment, set up and implement a water-saving plan and control water consumption in the production process.

The law encourages the use of reclaimed water for urban road cleaning, greening and landscaping wherever possible, and states that waste heat and pressure should be used by enterprises with reclaiming technologies.

Energy-, water- and other resource-saving products should be used in restaurants, entertainment enterprises and hotels to avoid the waste of resources and environmental pollution.

Label. Catalogue and Tariffs
The energy-efficiency label will be another effective way to implement energy conservation. China has issued four catalogues of products with energy efficiency labels in the last four years.

The most recent catalogue covers six types of products, including computer monitors and photocopiers, and from March 2009 any products on the list that do not meet the specified standards of energy efficiency will not be allowed to be manufactured, sold, or imported into the Chinese market.

In addition to these rules and mechanisms, the government will issue a further catalogue of restricted one-off consumables and impose unfavourable tariffs and policies on exporting them.

Packaging
Excessive packaging is also being targeted. Product packaging standards will be enforced and enterprises should pay special attention to their product packaging design to avoid violation of applicable compulsory standards.

Liabilities. Recollection Duty
Modern manufacturers' responsibilities now extend to the re-collection and disposal of abandoned products. The central government will publish a catalogue of mandatory re-collection of products and packaging.

If products or packaging your company makes or uses are listed in the catalogue, you will have to collect the waste products or packaging for reutilisation (if possible) or for bio-safety disposal.

Manufacturers may entrust a third party, such as a distributor, to collect waste products or packaging.

High Energy or Water Consumption
Firms that are big enough and on the list of key enterprises with high energy or water consumption will be under the close scrutiny of the government of the relevant level.

In the Energy Conservation Law, which came into effect in April 2008, China already outlined a special monitoring and management system for high-energy-consuming enterprises. The Recycling Economy Promotion Law applies a similar mechanism to firms with high water consumption.

Challenges and Incentives
The law includes a series of incentives, such as the set up of special funds, tax incentives, financial programs with priority for recycling projects, and the implementing of government procurement policy to encourage the recycling economy.

Provincial and local governments have positively responded to the new legislation. Several indicators of the recycling economy will be included in assessments of local officials' performance. Therefore, some local governments have already enacted local incentive measures.