Trade-off between remanufacturing and recycling of WEEE and the environmental implication under the Chinese Fund Policy

China is the second largest producer of waste electrical and electronic equipment (WEEE) in the world. To manage WEEE, the Chinese government has enacted a series of laws and regulations, the most important one being the Chinese Fund Policy. In an industry regulated by disposal fees and subsidies included in the fund policy, companies facing higher manufacturing costs may consider engaging in WEEE collection and recovery. This study considers a manufacturer with a WEEE recycling qualification, which combines remanufacturing and recycling to treat WEEE and sells remanufactured products under its brand name. A stylized model is applied to characterize the optimal solutions for the manufacturer and analyze the effects of the fund policy on the manufacturer's collection and recovery decisions. Furthermore, this study investigates the environmental impact of the product using a life cycle analysis-based (LCA-based) approach and characterizes the conditions under which the recovery of WEEE increases the environmental impact of the fund policy. The results herein show that applying for recycling qualifications is always profitable for the manufacturer, and the profits increase as the subsidy increases and the disposal fee decreases. However, high disposal fees or subsidies may have adverse effects on the environment. Low remanufacturing costs and high remanufacturability are not always conducive to the environment, especially for the products with high environmental impact in usage.