Hidden safety hazards and environmental risks: Tracking the chaos of scrapped car dismantling

Reprinted from: Xinhua News Agency

Xinhua News Agency Jinan, March 25 – Topic: Tracking the Chaos of Scrap Car Dismantling

Xinhua “Xinhua Focus” Reporter Wang Yang, Wang Huan

On one side are legitimate car dismantling companies “with no cars to dismantle,” and on the other side are rural small workshops controlling many scrap car sources, reselling parts for profit, with booming business… Recently, the chaos in scrap car dismantling in a certain area of Shandong has attracted attention.

“Xinhua Focus” reporter investigation found that such industry chaos has appeared in many places. Illegal small workshops and intermediary collection agencies not only disrupt market order but also hide safety hazards and environmental risks.

Where have the scrap cars gone?

According to relevant departments, from 2024 to 2025, the national recovery of scrap cars will reach 17.67M units, with an average annual growth rate of 45.8%.

What is the proper process for scrapping a car?

The Ministry of Commerce’s official website shows that vehicle owners should hand over their scrap vehicles to motor vehicle recycling and dismantling companies, which issue a recycling certificate, collect the vehicle registration certificate, license plate, and driving license, and promptly handle deregistration with the public security traffic management department, then transfer the deregistration certificate to the vehicle owner.

However, in practice, there is a underground industry chain involving intermediaries and small workshops during the process from vehicle owner to recycling and dismantling companies.

Liu Yulong(, who uses a pseudonym), has been engaged in scrap car recycling for over a year. He usually acquires scrap cars nearby through friends’ introductions, social media advertising, and other channels. “I drive a tow truck to pick up cars from individuals. Sometimes I also collect cars from auto repair shops, car dealerships, and 4S shops, then send them to dismantling points.”

The dismantling point Liu Yulong refers to is a small workshop that privately recycles and dismantles scrap vehicles. A small yard with a few workers can constitute a workshop. They typically remove valuable parts such as engines, steering mechanisms, transmissions, front and rear axles, and chassis, then resell them for profit.

Recently, a reporter visited a scrap car dismantling and recycling workshop in Shandong that was shut down. The workshop was established in October 2023 and has six employees. The owner does not have the qualification to recycle and dismantle scrap cars.

A local street official said that during the inspection, about 20 cars were piled on site, with no environmental protection equipment such as exhaust or wastewater treatment devices, or safety protective facilities. Due to unregulated operations, oil leaks seeped into the ground.

Some parts flow into illegal channels, posing as “original factory parts” or “new parts,” suspected of manufacturing and selling counterfeit or inferior products. The disorderly sale of scrap car parts also hides safety risks.

According to a typical case released by the Supreme People’s Procuratorate on March 14, Zhang and others purchased parts from a scrap car recycling and dismantling company in Chongqing and illegally assembled vehicles. After grinding and stamping vehicle information, tampering with and resetting vehicle systems, and forging registration documents, they registered the vehicles in different locations and sold them in more than ten provinces and cities, posing serious safety hazards.

In addition, the dismantling process easily pollutes the environment, and parts containing heavy metals also risk polluting water and soil.

In a case reported by the Dalian Municipal Ecology and Environment Bureau in December 2025, law enforcement officers found that the soil inside a small workshop was contaminated and blackened, with a strong oil smell. The involved parties took no preventive measures, leading to waste engine oil and brake fluid polluting the site’s soil.

Where did the useful parts of the dismantled scrap cars ultimately go?

Several heads of recycling and dismantling companies said that the state implements a qualification recognition system for scrap vehicle recycling companies. Units or individuals without qualification cannot issue relevant recycling and deregistration certificates to vehicle owners. Therefore, scrap cars dismantled by small workshops are still sold to qualified companies, but profit margins for legitimate companies are very limited.

Why is it difficult to eradicate chaos in small workshops?

A local commerce official explained that legitimate companies bear rigid costs such as environmental impact assessments, hazardous waste disposal, site seepage prevention, equipment, and labor, and can only profit from scrap metal, with a car collection price of about 2,000 yuan per ton. In contrast, small workshops, without environmental, safety, or tax expenses, profit from reselling parts, with collection prices exceeding 3,000 yuan per ton.

Shandong Huaju Automobile Parts Remanufacturing Co., Ltd. is a relatively large scrap car dismantling and recycling enterprise. The company’s leader, Zhang Juntao, estimated that the total investment in construction was about 40 million yuan, with about 5 million yuan spent on environmental facilities alone, including wastewater treatment stations, dust removal equipment, and ground seepage prevention. Once operational, they face expenses such as employee wages, electricity, labor protection supplies, equipment and building depreciation, land rent, and annual taxes.

On the other hand, high costs mean low returns. Wang Buyun, an expert from the Ministry of Commerce’s qualification recognition expert pool for scrap vehicle recycling and dismantling enterprises, said that detailed dismantling of traditional fuel vehicles can multiply the value of reusable parts. However, many valuable parts are intercepted or stripped by “yellow cattle” (middlemen), leaving only scrap metal processing, with residual value only a few thousand yuan.

Additionally, Liu Leqiao, an expert from the Ministry of Commerce’s qualification recognition expert pool, said that legitimate companies are mostly located in suburban areas with low land prices. Vehicle owners find it inconvenient to deliver cars, as they are far away, costly to visit, and the process is cumbersome and time-consuming, resulting in lower purchase prices. Illegal operations, with high mobility, door-to-door collection, and full-process agency services, precisely target vehicle owners’ desire for convenience and higher prices.

According to relevant policy documents, local industry regulation involves multiple departments. The commerce department supervises industry activities, the public security organs oversee security and ticketing, the ecological environment department is responsible for environmental protection, and the Development and Reform Commission, Industry and Information Technology, Transportation, and Market Regulation departments each have their responsibilities.

Several local officials said that small workshops are highly clandestine, with low illegal costs, making them difficult to detect in routine supervision. Moreover, they are often located in rural-urban fringe or remote areas, sometimes in rented or private yards, with no evidence or reports, making enforcement difficult.

How to promote transformation and upgrading?

In the future, a large number of old cars in China will face renewal and elimination. Interviewees suggest that the scrap car dismantling and recycling industry should develop in line with the circular economy, promoting high-quality development and truly turning scrap cars into valuable resources.

“To address industry chaos, relying on individual efforts alone is insufficient.” Lawyer Chen Guanwen from Shandong Rizhong Law Firm suggested establishing a cross-departmental joint law enforcement mechanism. Led by local governments, regular special operations should be carried out to create deterrent effects. Technologies such as drones and satellite remote sensing should be used to conduct comprehensive inspections in key areas like rural-urban junctions and remote forests. Data sharing among departments should be improved to enable alerts, comparisons, and interceptions of abnormal vehicles.

A local commerce official believes that enforcement should be strengthened to squeeze illegal operations, continuously crack down on illegal dismantling and downstream illegal refurbishing and sales networks; illegal enterprises should be “exposed,” and those with serious violations should have their qualifications revoked; road enforcement should be intensified to strictly investigate scrap car backflows, license plate switching, and vehicle assembly, with traceability and source verification.

“Industry value chains need to be reconstructed; we cannot stay at the low level of ‘selling by weight.’ Profits should shift from ‘dismantling quickly’ to ‘using well,’ for long-term development.” Liu Leqiao said that the next step is to cultivate a group of industry leaders, promote direct cooperation between car manufacturers and dismantling companies, develop the automotive remanufacturing industry, and set an example.

Industry insiders say that many developed countries have established extended producer responsibility systems, where car manufacturers are responsible for recycling and reuse obligations for dozens of vehicles sold per 100 cars. It is recommended to guide the industry toward refined dismantling, promoting high-value component recycling; building regional trading platforms for reusable parts, allowing legitimate companies to increase profits legally and narrow profit gaps.

To address resource waste and efficiency dilemmas, some leading companies are seeking breakthroughs at the back end of the industry chain. Zhang Juntao said that, based on estimates, a small car can be disassembled into about 36 kg of rubber, 70 kg of plastic, and 100 kg of aluminum. Compared to rough dismantling, this “thorough extraction” mode significantly enhances resource value.

Experts believe that from a broader perspective, recycling and reuse of waste products and equipment require coordinated efforts across various fields, combining policies, markets, technology, and society; encouraging enterprises to invest heavily in independent innovation, deepening integration of industry, academia, research, and application, strengthening key technology development, and exploring new business and management models.

Editor: Wu Jiahong