The government should improve policies and formulate measures to better regulate the network for recycling lead-acid storage batteries, a major source of lead pollution, according to a policy research report released in Beijing on Wednesday.

"China is the biggest producer, consumer and exporter of lead-acid storage batteries in the world. More than 2.6 million metric tons of waste lead-acid storage batteries are generated in China every year, but less than 30 percent are reclaimed and processed under official standards," said Shen Xiaoyue, a senior engineer from the Policy Research Center for Environment and Economy, a think tank affiliated to the Environmental Protection Ministry and the main producer of the report.

The proportion of such batteries reclaimed in developed countries is usually more than 95 percent.

Lead that leaks into the environment without proper treatment poses significant health threats, especially to children, said Pan Xiaochuan, a professor at Peking University’s School of Public Health.

It can destroy children’s nervous systems, leading to cognitive problems, attention deficit disorder and anemia, said Pan.

At least 10 lead poisoning scandals took place across China from 2007 to 2009, with more than 6,000 children suffering excessive blood lead levels.

"A major source of lead pollution some 20 years ago in China was printing, but as the technology has upgraded, the contribution of waste lead-acid storage batteries has become increasingly prominent," Pan said.

Almost 900,000 tons of waste acid containing lead from lead-acid storage batteries entered the environment untreated from 2008 to 2012, polluting the air, water and soil, said Cao Guoqing, deputy secretary-general of the China Battery Industry Association.

There are already tight restrictions on the recycling, storage and disposal of lead-acid storage batteries, one of 49 types of hazardous waste under special regulation. However, poor management results in chaos in practice, the report said.

"Of the 40-some companies qualified to handle hazardous waste nationwide, only five are authorized to transport and dispose of waste lead-acid storage batteries," Cao said. "But more than half of the waste batteries go to illegal dealers, polluting the environment after they are dismantled haphazardly."

Yang Xiaoming, another senior engineer from the Policy Research Center for Environment and Economy, said the main problem is not the small number of legal recyclers, but the huge price difference between legal and illegal dealers, which prompts most waste batteries to be sold to the latter.

"The purchase price offered by illegal dealers can be as high as 7,000 yuan ($1,150) per metric ton, but if my price is higher than 4,000 yuan per ton, I’ll start losing money considering the 200-million-yuan investment I spent on equipment and running costs," said Wan Xuejie, deputy general manager of Shanxi Jitaly Science and Technology Co.

The company is one of the national pilot projects to promote standard recycling of waste lead-acid storage batteries.

The business of collecting waste batteries nationwide and recycling them remains unprofitable, said Wan.

Beijing Eco-island Science and Technology Co, the only qualified battery collector in Beijing, encounters similar problems.

Built to treat 20,000 tons of waste batteries a year, the company can only access 7,000 tons to recycle.

In March 2013, five ministries issued a document that said the rate of standardized recycling of waste lead-acid storage battery would reach 90 percent by 2015.

"With good policy guidance and a legal framework, achieving such a high rate is possible, when everybody in the system is better off. The system in China is not working for anyone right now except for those who operate illegally, so it’s time to act," said David Lennett, senior attorney of the Natural Resources Defense Council, an international environmental NGO headquartered in New York and the other producer of the report.

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