Low consumer acceptance hinders recycled materials promotion; policy incentives and constraints are required.(2)
Expand scenarios and incentivize production on the consumer side.
The terminal of recycled materials lies at the consumer end. Consumers’ awareness and acceptance of low-carbon products directly affect their willingness to pay for such products, thereby forming a stable and sustainable "green premium" through market mechanisms.
According to the survey, the acceptance of recycled materials and low-carbon products in the European market is significantly higher by comparison. European consumers generally have a strong awareness of environmental protection, and are more inclined to understand and recognize concepts such as "100% recycled materials" and "green premium". They are also more willing to pay a certain premium for environmental value. In contrast, consumers in the Chinese market’s perception of recycled materials is still limited to concerns over "whether performance will decline" and "whether quality will deteriorate", resulting in a generally low acceptance of product premiums.
This discrepancy is particularly evident in the structure of the automotive consumer group. As we understand it, a considerable proportion of mainstream car owners in China are currently people over 40 years old. This group of consumers focuses more on vehicle reliability, safety and durability, while their understanding of recycled materials is often inadequate. They may even instinctively equate concepts such as "recycled" and "circular" with "reduced quality", "second-hand" and "low-grade". Against this cognitive backdrop, persuading consumers to pay an extra premium for recycled materials or low-carbon attributes is inherently confronted with significant psychological and market resistance.
Therefore, the current market perception of recycled materials remains at a relatively preliminary stage. The environmental value of recycled materials has not been fully understood and recognized, and consumers are not yet ready to pay for low-carbon value. Taking recycled aluminum as an example, Li Bo stated that automobile manufacturers are still relatively vague when promoting products made with recycled materials. This reflects that end consumers still have concerns about the use of recycled materials in products related to safety and health. As a result, the terminal market generally does not prioritize green, low-carbon, and recycled materials in its promotion efforts, and consumers are also generally unwilling to pay for the low-carbon recycling concept.
In the long run, the transformation of consumers' mindset cannot be achieved overnight; instead, it is closely tied to the development stage of the entire automotive industry ecosystem. Li Jiquan, Head of Carbon Management and ESG at XPeng Motors, holds the view that as the used car market matures progressively and the full-life-cycle management of vehicles becomes more widely adopted, consumers will increasingly recognize that an automobile itself is a "recyclable asset", and the use of recycled materials does not necessarily equate to diminished performance.
From the production end to the consumer end, only when recycled materials are repeatedly verified in practical use, circular utilization becomes the industry norm, and their value and reliability are gradually accepted by the market, can the "green premium" of low-carbon products be truly established through market mechanisms.
At the initial development stage, the government needs to establish green consumption scenarios and encourage the production of green products. For instance, low-carbon products should be prioritized in fields such as official vehicle procurement. Similar to the early measures of promoting new energy vehicles to replace fuel-powered vehicles through vehicle purchase tax reductions, exemptions and subsidies, consideration can be given to providing per-vehicle subsidies for vehicles incorporating a certain proportion of recycled materials, so as to raise consumer awareness and gradually cultivate purchasing habits.
Some local governments have already launched pilot programs. For example, Wuhan offers policy subsidies for projects utilizing recycled materials. However, in Shanghai, existing circular economy subsidies still mainly support fixed-asset investments on the manufacturing side, with relatively few direct incentives targeted at end consumers.
Huang Yanxiang, CEO of Carbon Metrics Technology, pointed out that similar to the current national subsidy policy, green consumption should also adopt an approach that combines incentives with constraints. Low-carbon products should be provided with encouragement and rewards; for products that fail to meet the requirements, reasonable constraints and hierarchical management should be implemented to guide the market to achieve a "good money drives out bad money" effect, and promote the continuous upgrading of products toward low-carbonization.
Source: The Paper
