Journal of the Air & Waste Management Association

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Management and Performance of Taiwan’s Waste

Recycling Fund

Kuo-Shuh Fan, Chun-Hsu Lin & Tien-Chin Chang

To cite this article: Kuo-Shuh Fan, Chun-Hsu Lin & Tien-Chin Chang (2005) Management
and Performance of Taiwan’s Waste Recycling Fund, Journal of the Air & Waste Management
Association, 55:5, 574-582, DOI: 10.1080/10473289.2005.10464647

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TECHNICAL PAPER
Management and Performance of Taiwan’s Waste Recycling
Fund
Kuo-Shuh Fan
Department of Safety, Health, and Environmental Engineering, National Kaohsiung First University
of Science and Technology, Kaohsiung County, Taiwan, Republic of China
Chun-Hsu Lin
Environmental Management Division, Institute of Environment and Resources, Taipei, Taiwan,
Republic of China
Tien-Chin Chang
Institute of Environmental Planning, National Taipei University of Science and Technology, Taipei,
Taiwan, Republic of China
ABSTRACT
Taiwan’s resource recycling program was formally estab-
lished in 1989, starting with the mandatory recycling of
polyethylene terephthalate bottles. The number of man-
datory regulated materials was extended to 8 categories
with 27 items by 2002. Because of false data reporting,
financial scandal, lack of transparency of the system, and
the demand from parliament, the recycling policy has
gradually changed from entirely privatized to being na-
tionalized. Currently, the structure is built on six main
bodies: fund management committee, consumers, indus-
tries responsible, recyclers, fee reviewing committee, and
auditing agents. The industries that are responsible sub-
mit a fee, which is set by the fee reviewing committee, to
the waste recycling fund (WRF), which is operated by the
fund management committee. The auditing agents rou-
tinely check the responsible industries by documentation
review as well as on-site counting to ensure that the fee is
correctly submitted. The WRF provides initiatives to col-
lect and dispose of the end-of-life products. The fund is
split into a trust fund and a nonbusiness fund to deal with
IMPLICATIONS
As a newly industrialized country, Taiwan’s experience in
resource recycling provides a good model for other coun-
tries, especially for those that are at the beginning or plan-
ning stages. In the early stages, government participation
would reduce the resistance from outside groups and make
the integration and construction smoother. However, as the
system matures and all participating sectors are well edu-
cated, privatized operation can develop a sustainable and
free enterprise recycling industry.
574 Journal of the Air & Waste Management Association
ISSN 1047-3289 J. Air & Waste Manage. Assoc. 55:574 –582
Copyright 2005 Air & Waste Management Association
the collection, disposal, and treatment of the listed mate-
rials. The latter deals with the supporting works and en-
sures that the system runs effectively. The ratio of trust
fund to nonbusiness fund is 80 –20%. It is no doubt that
the current practice achieves some improvements. House-
hold waste has been reduced by 22%. And, most impor-
tantly, the benefit-to-cost ratio was as high as 1.24. How-
ever, similar to other state-owned systems, the resource
recycling program has been criticized for false reporting
from the responsible industries, a rigid system, and com-
plicated procedures. To build a sustainable enterprise, the
recycling program should be privatized as the recycling
market and operating procedures are well established and
fully mature.
INTRODUCTION
Because of the shortage of landfill sites and incineration
facilities, resource recovery and reutilization has been
introduced worldwide to help solve for the ever-
increasing amount of household and industrial wastes
in the last 20 years. To implement the recycling system,
the concept of extended producer responsibility has
been adopted by most countries. The manufacturer is
responsible for the waste management, which is shared
by either substantial implementation or financial con-
tribution.1,2 Although the goal and basic elements for
recycling are the same, the operation and infrastruc-
tures vary in each country. It is difficult to discuss and
compare systems without indicating national background,
legislative system, public attitude, and political situation.
For example, Germany has successfully developed a dual
system of recycling.3 The packaging industries and
Volume 55 May 2005

related sectors collectively form the DSD organization
(Dualest System Deutschland GmbH) to implement their
responsibility. All members of DSD have to apply the
green dots, the recycling mark. The fee calculation for the
green dot is based on packaging material, volume, weight,
and the amount of the sale. In France, there are 15 inde-
pendent common organizations, three of which are for
packaging wastes, as opposed to Germany where there is
just one (DSD).4 In addition, the French municipal gov-
ernment assists the common organizations in collecting
the wastes based on contract. It substantially reduces the
treatment fee paid by industry. Korea has a different struc-
ture. The government has organized the Korea Resources
Recovery and Reutilization Cooperation (KORECO) to im-
plement the recycling duty for responsible industries.5,6
This is a typical model of sharing of responsibility by
financial contribution. The theory of shared responsibil-
ity has been adapted in the United States.7 The responsi-
bility extents from manufacturer to end user of the prod-
uct. However, each state has its own measures. For
example, residents are encouraged to sort household
wastes to avoid higher garbage fee.5,8 Packaging industries
are required to pay treatment fees to the state or be
banned from selling certain materials based on the degree
of environmental damage.9 The tool of deposit-refund
system involving consumers, retailers, and manufacturers
is also applied for certain beverage containers in some
states.7 As a comparison with other countries, in general,
the U.S. system is voluntary and has less governmental
involvement.
In Taiwan, recycling was first included in the Waste
Disposal Act in 1987. Since then, the articles included in
that Act have been revised nine times. The last two revi-
sions in 1998 and 2002 made a clear switch, moving the
system from privatization toward nationalization. This
study analyzes and evaluates Taiwan’s experience in four
aspects: system evolution, current structure, establish-
ment and performance of the waste recycling fund (WRF),
and issues for sustainable management.
SYSTEM EVOLUTION
As in many other societies in the world, resource recovery
in Taiwan was undertaken by individuals and small en-
terprises long before the government intervened with
rules and regulations. Since mandatory recycling of poly-
ethylene terephthalate (PET) bottles became law in 1987,
the market entered a new era. However, because of false
data reporting, financial scandal, lack of transparency of
the system, and the demand from parliament, the recy-
cling policy has gradually changed from an entirely pri-
vatized enterprise to the current state corporation. There
are four stages in this evolution.10
Volume 55 May 2005
Fan, Lin, and Chang
Stage 1 (January 1989 –March 1994)
Based on the spirit of Waste Disposal Act amended in
1987, the responsible industries collaboratively formed
common organizations to implement the rules on recy-
cling of their products. The system was entirely self-man-
aged by the industries. This phase was also called a period
of privatization. On the other hand, the role of govern-
ment was (1) promulgation of the regulations, (2) an-
nouncement of the annual recycling rate for each regu-
lated item, and (3) supervision the entire recycling
system. At that point in time, a total of 17 items had been
mandated to be collected; they consisted mainly of bev-
erage containers, tires, lead-acid batteries, and lubricant
oil. At the same time an equivalent number of organiza-
tions were established by the industries to take care of
these items. This model was similar to the system being
used in the Netherlands. Both had a self-managed ruling
body and fund. The major difference was that the regula-
tions were too specific and there were too many indepen-
dent small systems in Taiwan.
In this 5-yr period, system integration, facilities mod-
eration, financial independence, and environmentally
sound management were the major achievements.
Stage 2 (April 1994 –December 1996)
This stage is characterized by the attempts of the govern-
ment to get involved in the recycling business in response
to increasing complaints of a lack of transparency of the
system and false data reporting. A nonprofit, government-
supported organization, the Reduction, Recycling, and
Reuse Foundation (3R Foundation) was established in
1994. All the board members were government nomi-
nated. To break into the recycling business was one of the
major functions of the 3R Foundation. The foundation
was successful in obtaining a contract with the vehicle
industry to handle the recycling of abandoned vehicles. A
new shredding plant for vehicles with capacity of 40
tons/hr was built by the fund, and two more were pro-
posed. An integrated system linking vehicle collectors,
dismantlers, and the shredder plant was organized. City
environmental bureaus as well police stations were also
contracted with the 3R Foundation to clean abandoned
vehicles off the streets.11 Other responsible industries
were approached by the foundation to discuss the possi-
bility of handling their regulated items. However, efforts
by other interest groups as well as by parliament made the
effort unsuccessful.
Stage 3 (January 1997–June 1998)
Although this stage lasted only 1.5 yr, it was the turning
point in this evolution. Because of the increasing scandals
of the collaborative organizations, the entire structure was
Journal of the Air & Waste Management Association 575
Fan, Lin, and Chang
dismissed and overhauled by the amended Waste Dis-
posal Act. Items to be recycled were regrouped into eight
categories, namely containers, tires, pesticide containers,
lubricant oil, lead-acid batteries, vehicles, home appli-
ances, and communication products. Meanwhile, eight
committees were set up by the government, one for each
category, as managing bodies.12 The board members were
picked from the responsible industries, consumer groups,
and experts in the field by the Taiwan Environmental
Protection Administration (TEPA). Although these com-
mittees were under the supervision of TEPA, they were
independent as far as management of their budget, per-
sonnel, and the operation of the business.
Stage 4 (July 1998 –Present)
Nationalization of the system is completed in this stage.
Because of further demand from the parliament, TEPA
centralized the eight committees that were established in
Stage 3 and organized the Resource Recycling Fund Man-
agement Committee (managing committee) to govern
the whole recycling program. The system is also finan-
cially self-supported by the WRF, which is set up under
the government account. The responsible industries are
mandated to deposit a fee to the fund. The staffing, the
budget, and the WRF all are included in the government
system and are totally supervised by the parliament. Up to
this point in time there are 28 items in eight categories
under the mandatory recycling program.13
CURRENT FRAMEWORK
The current structure is built on six main bodies: manag-
ing committee; consumers; responsible industries; collec-
tion and treatment agents; Collection, Disposal, and
Figure 1. Framework of resource recycling.
576 Journal of the Air & Waste Management Association
Treatment Fee Reviewing Committee (fee reviewing
committee); and auditing agents. In this framework the
fee reviewing committee is an ad hoc unit that sets rea-
sonable fees for the responsible industries to submit. The
auditing agents are judicial third parties contracted by
the managing committee to scrutinize the submitting
of the fees and subsidiary applications. Figure 1 summa-
rizes the relationship of these six bodies. In the material
flow, the end-of-life products manufactured by the re-
sponsible industries are collected and transported to recy-
clers via salvage operators, retailers, or municipal garbage
collection teams, and finally sent to treatment facilities
for disposal and remanufacturing. In the cash flow, the
responsible industries submit the collection, disposal, and
treatment fee (CDTF), set by the fee reviewing committee,
to the WRF, operated by the managing committee. The
auditing agents routinely check the responsible industries
by documentation review as well as on-site counting to
ensure that the fee is correctly submitted. The industry
will be warned, fined, or even trailed in court, if fraud is
detected. The major expenditure of the WRF is to subsi-
dize the collection and treatment system. Similar to the
auditing of the CDTF, the managing committee contracts
other judicial third parties to check the work and practices
of the collection and treatment agents. Individual count-
ing, mass balance, 24-hr closed-circuit television monitor-
ing, and other techniques are adopted to verify the
claims. The subsidy is calculated based on the actual
amount approved by the auditing agent and the per unit
subsidy. To make sure the auditing is functioning prop-
erly, all auditing schedules are announced via the Internet
in advance. Non-governmental organizations (NGOs) or
Volume 55 May 2005

individuals are welcome to supervise and examine the
auditing procedure. The auditing system is designed with
strict reporting, auditing, and reconfirmation via docu-
mentation and administration control to minimize incor-
rect subsidizing.
Figure 2 illustrates the organization chart of the man-
aging committee. The board consists of 22 members
drawn from government departments, NGOs, responsible
industries, and experts. The administrator of the TEPA is
the chairman of the board. This design indicates the im-
portance of resource recycling and the close relationship
between the managing committee and the TEPA. There
are five major divisions in the managing committee. The
comprehensive planning division deals with administra-
tive work, educational programs, and plant certification.
The responsibilities of the inspection and management
divisions are to work closely with the contracted auditing
agents to ensure that the fee is paid properly and that the
subsidy applications are correct. The container and goods
divisions are responsible for the effective management of
the cash flow as well as the material flow of the regulated
items. The controller and the accounting offices are
merged with the main body of the TEPA, instead of being
an independent division. In total, there are 79 staff mem-
bers in the organization.
WRF Operation
In recycling systems, the fund plays the pivotal role. It
provides momentum to move the system, especially for
those materials with low-end value. The concepts of ex-
tended producer responsibility and front-end disposal
charge are commonly adopted to fill the fund nationwide
(e.g., Germany, Netherlands, France, Sweden, Japan, Ko-
rea).1,4,6 The former states that the producers take the
Figure 2. Organization chart.
Volume 55 May 2005
Fan, Lin, and Chang
responsibility and the latter indicates the fee is charged as
the product sold instead of collected as waste. The Tai-
wanese Waste Disposal Act also clearly states that the
responsible industries of the regulated products must pay
the mandatory collection, disposal, and treatment fees.14
The responsible industries are defined as the producers,
importers, and retailers of the products. The financial
operation of WRF including income resourses and expen-
ditures is discussed as follows.
Income Resources
The major income of the WRF comes from the fee paid by
the responsible industries. Also, a small portion of the
fund comes from the interest earned by the fund deposit.
The fee reviewing committee is responsible for the fee
setting. It consists of 15 members from government,5
responsible industries,2 consumers,3 and experts.5 The fee
is reviewed and amended annually. However, adjustment
can be made anytime as new items or emergency cases are
raised. Since the operation of the committee in 1998, a
consensus for the calculation of the fee has been reached
after extensive debates and public participation. The cal-
culation is formulated as follows:
CDTF ⫽ 共B ⫹ C ⫹ D ⫹ E ⫹ F兲/Q 共1兲 (1)
where CDTF is the collection, disposal, and treatment
fees; B: Costs for the collected materials (collection cost ⫹
average treatment cost ⫺ average selling price of the new
material produced ⫹ collection incentives ⫹ extra weight
for unfriendly product); C: Cost for the recyclables not
collected but disposed of in landfills or incinerators (i.e.,
equivalent cost for municipal solid waste management);
D: Environmental cost for items neither recy-
cled nor disposed of in waste treatment facil-
ities; E: Expenditures for auditing, manage-
ment, research, development, training, and
others; F: WRF (deficit or surplus)/(years to
balance); Q: Estimated amount to be sold.
It is clear that this equation is based on
the principle of “pay as you go.” In normal
conditions, the CDTF is balanced on an an-
nual basis for items with a short life cycle
such as containers, dry batteries, and lubri-
cant oil. However, it also allows a reasonable
reserve for items with a long life cycle such
as vehicles, home appliances, tires, and
communication products. However, beyond
the equation, tolerance of adjustment from
the industries as well as the public is included
in the final consensus. After carefully deliber-
ating each factor in the formula, the FY 2002
CDTF was approved as shown in Table 1.
Journal of the Air & Waste Management Association 577
Fan, Lin, and Chang

Table 1. Collection, disposal, and treatment fees in FY 2002. Table 2. Fee calculations for aluminum cans, paper cartons, and washing
machines.
Items Feea
Aluminum Paper Washing
Containers Factors Cans Cartons Machines
Steel cans 2.64
3.43 (with non-stay pull-tab) Q in kg or set 17,340,000 15,000,000 446,000
Aluminum cans 1.3 B in NTD/kg or set 1.9 5.34 387
1.69 (with non-stay pull-tab) (Collection rate)a (95%) (60%) (85%)
Glass bottles 1.56 C in NTD/kg or set 3.69 3.69 3.69
Tetra Paks 6.9 (Collection rate)a (5%) (30%) (10%)
Paper carton 3.94 D in NTD/kg or set 7.8 7.8 7.8
PET 11.87 (Collection rate)a (0%) (10%) (5%)
20.28 (complex material) E in million NTD 2.8 9.3 16.5
PVC 19.55 F in million NTD 14 (surplus) 10.5 (deficit) 5.9 (deficit)
25.24 (complex material) CDTF in NTD/kg or set 1.34 (1.74)b 6.41 380
PP/PE 9.39
a
12.21 (complex material) Based on the projected sell. bAdditional 30% for the cans with non-stay
PS (unfoamed) 9.39 pull-tab.
12.21 (complex material)
PS (foamed) 37.29 basis of total volume and weight collected. Because the
Dry-cell batteries 12–56 calculated values of aluminum cans and washing ma-
Containers for pesticides 0.35 (imported raw material)
chines are within 5% of the 2001 fees, which is the set
0.83–1.55 (imported products)
tolerance range for rate adjustment, the 2002 fees re-
Vehicles 643 (cars), 96 (motocycles)
mained the same as that of the previous year. As to the
Lead-acid Batteries 1.90
Tires 7 (␾ⱕ10”), 33–270 (␾⬎10”)
paper cartons, the 2002 fee, 3.94 NTD/kg, was less than
Lubricant oil 0.3 NT/l the calculated value, 6.41 NTD/kg, because of a compro-
Home Appliances mise with the responsible industry. It is not difficult to see
Television sets 441 (⬎25”), 284 (⬍25”) that the environmental factor plays a dominant role in
Washing machines 378 the fee calculation. Those items with an environmentally
Refrigerators 714 (⬎250 kg), 462 (⬍250 kg) unfriendly design have a higher fee than others. In the
Air conditioners 305 cases of iron and aluminum cans, the fee is 30% higher for
Communication products those cans on which the pull-tab does not stay attached
Notebook computers 52
after opening. In addition, for items containing complex
Motherboards 40.5
material or heavy metals exceeding the limits (e.g., plastic
Monitors 147
containers and dry batteries), an extra weight factor of up
Printers 58–108
Peripherals 6.5–40.5
to four times is added to the fee calculation.
Fluorescent tubes 23.98
Expenditures
Notes: PET ⫽ polyethylene terephthalate; PVC ⫽ polyvinyl chloride; PP ⫽ The WRF is split into eight accounts: containers, vehicles,
polypropylene; PE ⫽ polyethylene; and PS ⫽ polystyrene. aNTD/kg for tires, lead-acid batteries, lubricants, pesticide containers,
containers, batteries, and lubricant oil and NTD/set for others. home appliances, and communication products, based on
Because of the complexity of the fee calculation, alumi- the fee collected from corresponding industry. These ac-
num cans, paper cartons, and washing machines are se- counts are operated independently, although some com-
lected and illustrated in Table 2. Based on the annual mon expenditure is shared, such as, for example, admin-
survey of the local recycling market, the costs of purchas- istration, education, and training. The expenditure is
ing, collection and treatment, and secondary materials allocated to two sub-funds, trust fund and nonbusiness
can be obtained. As to the environmental cost, it is obvi- fund.
ously difficult to evaluate. The expenditures for cleanup
activities of remote areas is adapted instead. That averages Trust Fund. The main function of the trust fund is to
around 7.8 New Taiwan Dollars (NTD)/kg for beach and subsidize items that deal directly with collection, disposal,
mountain cleanup programs. The expenditures for man- and treatment of the mandated materials. The incentives
agement and supporting projects, item E in eq 1, shares provided to consumers for taking back the listed items are
2.8, 9.3, and 16.5 million NTD mainly calculated on the also included in this category. The organizations or agents

578 Journal of the Air & Waste Management Association Volume 55 May 2005
 Fan, Lin, and Chang

applying for subsidy must meet both the facility require-
ments and the environmental standards as set by the
managing committee. A list of subsidy rates is promul-
gated and reviewed annually to reflect the market varia-
tion. The amount of trust fund in the total expenditure
increased from 70% initially to the present 80%. Accord-
ingly, the ratio for the nonbusiness fund decreased to
20%. This indicates that more and more of the total
budget goes toward direct incentives, subsidies for mate-
rial collection and treatment, and less for management
and administration. This development ensures the system
moving toward a healthy structure. It is generally ac-
cepted that 10 –12% is a reasonable overhead figure for a
mature system.
Nonbusiness Fund. Expenditures other than direct subsi-
dies are under this category. The nonbusiness fund deals
with programs that support the system and that make it
run effectively. The main involvement includes the fol-
lowing:
1. Educational programs;
2. Auditing of the fee submission (as submitted by
the responsible industries);
3. Auditing of the subsidies (as applied for by the
collection and treatment agents);
4. Promotion and support for collection, disposal,
and treatment programs for recyclable materials,
and the utilization of the secondary materials;
5. Administrative and operational duties of the
managing committee; and
6. Research, development, and training programs.
However, because of the criticism and demands for
more effective management of the WRF, the pressure for
cuts to the nonbusiness fund is increasing, and that forces
the system to sacrifice the research and development
projects.
PERFORMANCE OF THE WASTE RECYCLING
FUND (WRF)
The current system has been implemented for almost 6 yr
since July 1998. The structure is approaching steady. Al-
though some weaknesses are revealed, the achievement is
extraordinary. It is assessed from two perspectives: Initia-
tive and prevention.
From the Perspective of Taking the Initiative
The living environment, waste reduction, and resource
reuse are directly benefited by the program. Meanwhile, a
coherent recycling system is developed.
Reducing Waste Production and Improving the Environment.
In 2002 alone, almost 1.27 million metric tons of recy-
clable materials were collected on the island of Taiwan.
Of that, 716,000 metric tons were regulated items and
555,000 metric tons were nondesignated items such as
newspapers and cloth, which accounted for 1.3% and
59% of growth, respectively, in 2001.15 Because of the
success of the national recycling program, the net
household waste produced per capita per day was re-
duced from 1.143 kg in 1997 to 0.895 kg in 2001, or a
22% reduction.16

Table 3. Amounts of recyclable materials processed in Taiwan1,2

Year

Category 2002 2001 2000 1999 1998

Containers 281,891 245,885 226,579 187,264 126,668

(67.14%) (67.22%) (56.00%)
Containers for pesticides 961 886 738 665
(68.95%) (57.20%) (75.59%)
Vehicles 542,594 530,351 503,702 533,761 186,638
(42.80%) (46.80%) (46.90%)
Lead-acid batteries 32,856 36,257 31,688 30,334 26,286
(62.81%) (64.17%) (68.06%)
Tires 103,747 119,034 100,283 94,648 56,630
(68.08%) (90.58%) (73.05%)
Lubricant oil 9,411 12,328 11,996 13,023 8008
(8.66%) (7.84%) (8.96%)
Appliances 1,300,035 1,848,757 985,548 1,155,270 416,413
(35.12%) (60.66%) (29.09%)
Communication products 1,701,338 1,247,946 946,518 485,975 138,528
(68.84%) (74.87%) (111.55%)

Note: Vehicles, appliances, and communication products are counted by set. Others are counted by metric tons. Numbers in parentheses are recycling rates.

Volume 55 May 2005 Journal of the Air & Waste Management Association 579
Fan, Lin, and Chang

Another significant contribution is the substantial
removal of waste scattered in remote areas and isolated
islands. Although the quantity collected is not significant,
the visual improvement to the environment is in many
cases dramatic.
Increasing the Reuse of Resources. Table 3 summarizes the
amounts collected and treated for the designated items. In
general, it gradually increased over the past 5 yr, although
tires and appliances had a sizable increase in 2001. The
decrease in lubricant oil collected might be a result of the
deregulation schedule started in 2004. However, several
problems still exist. For example, as far as the recycling
rate is concerned, the PET bottles were sometimes col-
lected at a rate as high as 110%.15,16 These numbers are
highly suspicious, as incorrect claims from recyclers and
false fee submission are grounds for criticism. On the
other hand, the recycling rates for unfoamed PS, Tetra
Paks, and paper containers are still at low levels and need
to be raised drastically.
The plastic flakes or chips from the sorted, shredded,
and washed plastic bottles are hot on the market. The
smashed and grounded powder from colored glasses are
used as an additive in bricks and road pavement.17 Shred-
ded ferrous and nonferrous scraps from vehicles and
home and electric appliances are high grade materials for
smelters.18 Rubber powder and energy-containing prod-
ucts such as fuel, solvent, and gas are generated from
waste tires via girding and pyrolysis. Cement kilns are also
authorized to use waste tires as auxiliary heat supplement.
Nevertheless, the used parts dismantled from vehicles,
home appliances, and communication products are pop-
ular in the second-hand market.
Establishing a Win-Win Recycling Framework. The recy-
cling system is open and welcomes any individual and
firm to join as long as the standards are met. Via the
Internet or telephone, the recycling program provides
easy access to the general public as well as the recycling
industry regarding any related information.13
So far, there are 620 recycling industries, which in-
cludes 523 collectors and 97 modern treatment plants,
that are certified to join the system and entitled to apply
for subsidies. Among the collectors, 220 of them are col-
lecting end-of-life automobiles and motorcycles. Among
the treatment plants, the majority (58 of them) process
waste containers.
Creating a High Level of Economic Profits. In 2001, the WRF
spent 6.375 billion NTD for subsidies, administration, and
related activities. The direct economic benefits from waste
reduction and resource reuse amounted to 7.26 billion
NTD. This figure is based on the savings from municipal
waste reduction at 3.69 NTD/kg that accumulates 2.23
billion NTD and on the profit from selling the regenerated
products that counts for 5.03 billion NTD. Roughly, the
overall benefit-to-cost ratio was as high as 1.14. Table 4
presents the benefit/cost calculation for these eight cate-
gories. The reduction in the operation of vehicles, and
recycling of pesticide containers, appliances, and commu-
nication products was financially in the red. It is under-
stood that over subsidy was the main reason. There is no
indication that the benefit-to-cost ratio has to be over 1
for recycling programs. Actually, extra incentives are re-
quired for items with low-end value or high treatment
cost, such as pesticide containers, styrofoam, and dry
batteries. If the benefit from reducing environmental
impact is further taken into account, the ratio should

Table 4. Benefit/cost analysis of Taiwan’s recycling program

Expenditure Benefit

Collection Non-Business Business Garbage Sell of Net Benefit/

Category (Metric Tons) Fund Fund Reduction Recyclables Profit Expenditure

Containers 245,332 581 2288 905 2639 675 1.24

Containers (pesticides) 886 7 31 3 7 ⫺28 0.26
Vehicles 252,669 155 846 311 590 ⫺100 0.90
Lead-acid batteries 38,899 19 69 144 243 299 4.40
Tires 123,498 86 458 456 1256 1168 3.15
Lubricant oil 9558 13 21 35 61 62 2.82
Appliances 83,830 207 1111 309 196 ⫺813 0.38
Communication
products 11,760 81 383 43 32 ⫺389 0.16
Subtotal 766,432 1149 5207 2206 5024 874 1.14
Total 766,432 6356 7230 874 1.14

580 Journal of the Air & Waste Management Association Volume 55 May 2005

increase even higher. There is no doubt that resource
recycling is a more than worthy business from both an
economic and environmental point of view.
The Side of Prevention
The other achievement of this recycling system under the
current WRF operation is prevention of fraud. To ensure
the obligations of responsible industries are fulfilled and
claim from recyclers are correct, authorized auditing and
certification teams are dispatched. The achievement is as
follows.
For the Responsible Industries. In 2002, a budget of 78.5
million NTD was spent on 13 projects for the fee audit-
ing, including the prosecution of offending companies.
For the 7,000⫹ manufacturers and importers registered,
sales records were scrutinized and reclassified more
than 40,000 times. Approximately 1,500 on-site audit-
ing activities were completed. During those audits
around 600 million NTD of unpaid fees from 900 man-
ufacturers/importers was detected. In addition, 145
cases of illegal fee submissions were filed in recent
years, accounting for 480 million NTD. Of them,
around one third were settled with the promise by
offenders to clean up their act and back pay the unpaid
fees. The others were sent to court. Because each audit-
ing project traced the previous records, it is conserva-
tively estimated that overall, illegal practices amount to
approximately 10% of the WRF each year, although
there are fluctuations among individual items being
scrutinized.
On the Auditing Recyclers. The amount of 154 million NTD
was spent on 14 auditing projects. Those audits were meant
to ensure recycling subsidies were fairly distributed based on
the actual recycling volumes as claimed. Because of the strict
rules, auditing procedures, and heavy penalties, the recyclers
handle their applications carefully. The amount rejected was
decreased to around 5%.
ISSUES FOR SUSTAINABLE MANAGEMENT
It has been a long and difficult journey over the past 15
years. The system was caught in the middle of a tug of war
between responsible industries and environmental groups
as well as pressures from parliament. However, all of these
experiences are transformed into positive assets to create
a better recycling system. With all the efforts that have
gone into this system it can be said that the resource-
recycling venture in Taiwan has finally reached a mature
level. However, as far as the actual WRF management and
system operation, there still remains room for improve-
ment. The most critical issue is how to plan and manage
Volume 55 May 2005
Fan, Lin, and Chang
the fund more effectively. Suggestions for further im-
provements are as follows.
Simplification of the Administrative Process. The processes
of declaration and registration are far too complicated
and cumbersome for manufacturers, importers, and
recyclers alike.19 Simplified regulations and processes
should not only attract more participants to the system,
but also enhance the accuracy of reporting because of the
low auditing cost and more frequent checks on both the
industry and the recycler.
Setting the Goals of Material Re-Use Rates. In addition to
pursuing higher recycling rates, promotion of material
re-use should be a priority. Short- and long-term goals for
re-use rates should be set so that recyclers can gradually
improve their collecting, sorting, and treating processes
to meet these goals. Most important is the need for the
responsible industries to start with aggressively develop-
ing and introducing more environmentally friendly prod-
ucts into the market.
Development and Exploration Markets for the Generated Prod-
ucts. Because of a lack of markets and the high cost of
resale, stockpiling of some of these secondary raw mate-
rials causes bottlenecks in the recycling system. More
effort and more incentives are required to develop the
market for these materials. Meanwhile, deregulations on
the utilization of certain recycled materials are urgently
required as well. Providing clear guidelines on the use of
secondary materials will guarantee a smoother circulation
of material flow.
More Research and Development on Innovative Technologies.
Improving existing technology as well as developing and
introducing cutting edge technologies are an indispens-
able part of maintaining market competitiveness. Any
reduction of the budget will damage the integrity of the
system, and will set Taiwan back in international compe-
tition regarding future developments. It is urgent to in-
crease this budget and set a minimum percentage for
research and development to ensure motivation and the
ability to compete.
Privatization of the Recycling System. The contemporary
trends in international society and the spirit of the
Waste Disposal Act focus on producer’s responsibility
for the collection, disposal, and treatment of end-of-life
products. However, the present situation is that produc-
ers merely have to pay a fee and are exempt from any
other obligations in this regard. The responsibility of
management and implementation should be returned
Journal of the Air & Waste Management Association 581
Fan, Lin, and Chang
to the responsible industries instead of being shoul-
dered by the government. In addition to setting the
rules, monitoring the system, and resolving conflicts,
government could do more auditing to ensure the mis-
takes in stage I do not happen again. For a matured
system, privatization will not only improve efficiency
and cut down the fees, but budget deficit will not occur
because the system is operated by the responsible in-
dustry itself.
ACKNOWLEDGMENTS
The authors thank Li-Ling Chen, Chi-Pu Cheng, Jui-Hao
Wong, and Shou-Chien Lee of the Taiwan Environment
Protection Administration, Wen-Ling Chiu of Institute of
Environment and Resources, and Xue-Ru Huang of NK-
FUST for their contribution in information sharing and
data management.
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About the Authors
Kuo-Shuh Fan was the chief technical advisor in Taiwan for
the Taiwan Environment Protection Administration and the
CEO of 3R Foundation. Currently, he is the chairman of the
fee reviewing committee of the WRF in addition to being an
associate professor in the Department of Safety, Health,
and Environmental Engineering, National Kaohsiung First
University of Science and Technology. Chun-Hsu Lin is the
deputy head of Environmental Management Division, Insti-
tute of Environment and Resources, Taipei, Taiwan. Tien-
Chin Chang was the CEO of the container managing com-
mittee before the system nationalization. Currently, he is an
associate professor at the Institute of Environmental Plan-
ning, National Taipei University of Science and Technology,
Taipei, Taiwan. Address correspondence to: Kuo-Shuh
Fan, Department of Safety, Health, and Environmental Engi-
neering, National Kaohsiung First University of Science and
Technology, Kaohsiung County, 824 Taiwan, Republic of Chi-
na; e-mail: ksfan@ccms.nkfust. edu.tw.
Volume 55 May 2005