Yes WEEE Can: Designing Effective WEEE Systems

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1 Yes WEEE Can: Designing Effective WEEE Systems Mark Dempsey

2 European WEEE Systems Single compliance system Sweden Belgium Luxembourg Greece Estonia Malta Cyprus Netherlands Norway Switzerland Competitive compliance system Denmark Ireland Italy France Austria Germany Finland Portugal Spain Slovenia Slovakia Poland Lithuania Latvia Hungary UK 2

3 Monopoly System Household >> No choice >> No competition Municiapl Collection Centre Retail Collection Centre Producer Responsibility Organisation (PRO) Producer A B C D E Recycling Facility Recycling Facility Recycling Facility 3

4 Household Competitive System Municiapl Collection Centre Retail Collection Centre >> Multiple schemes provides choice and competition Compliance Scheme 1 Compliance Scheme 2 Compliance Scheme 3 Compliance Scheme 4 A B C D E F G H I J K L M Recycling Facility Recycling Facility Recycling Facility 4

5 Competitive market for WEEE Perchards report in 2007 shows the contrast between monopolistic and competitive take-back structures WEEE fees per product sold Average Monopoly Average Competition Cooling Washing Machine Blender Notebook DVD player CRT Monitor Detailed Report: 5

6 The Economic Costs of Monopoly Schemes Equipment type Flat screen monitor Laptop Desktop Small IT (DVD drive) Consumer AIO printer Average weight / unit sold 4.00 kg 2.00 kg 6.00 kg 0.30 kg 7.00 kg Average Monopoles (Netherlands, Switzerland, Norway, Sweden) Average Competition (Germany, UK, Spain, Italy, Austria) Cost difference % 604% 576% 744% 422% 6 Source: HP benchmarking November 2012

7 0.50 Austria 1 Austria Take back cost trend: 2006 Monopoles Belgium (0,45) 0.40 Norway (0,38) Austria 2 Netherlands (0,273) 0.30 Sweden / Switzerland (0,22 0,21) 0.20 ERP Austria Austria 3 0,16 0,16 0, ,11 June July Aug Sept Oct Nov Dec Jan 7 * (33% display-products 67% other IT products ) (Government asked schemes to price in /kg sold)

8 Key Messages Competition has helped create effective and efficient WEEE systems 8

9 Measuring All WEEE Flows

10 There are massive flows of WEEE outside the producer owned WEEE systems. Consumer 18.5 kg Waste Bin 2kg (13.5%) Municipal Collection Point Retail Collection Point Reuse and Installers 3.6kg (19.5%) Municipal Leakage 2.5kg (13.5%) Take-Back System (on behalf of producers) 5.7kg (30.8%) Recycling 14.8 kg 80% Retailers 3kg (16.2%) Retailers (uncertain) 1.7kg (9.2%) Data Source: Witteveen & Bos (2008) Onderzoek naar complementaire afvalstromen voor e- waste in Nederland (ICT Milieu, Netherlands) 10

11 WEEE Flows in Poland Only 29 % of WEEE generated is given to official WEEE recycling system 11

12 WEEE Flows in Germany Only 29% of WEEE is going to producers schemes 12

13 WEEE FLOWS IN THE NETHERLANDS Only 36% of WEEE is going to producers schemes Not available for collection Export EEE 2.7Kg Put on the market 26.5 Kg WEEE Generated (excl. export UEEE) 21 Kg (79% of EEE POM) Waste Bin! (2.3Kg 11%) Not identifiable 2-2.4Kg (9-11%) TB system 7.5Kg (36%) Complementary 6.6Kg (31%) Not yet identified but likely recycled Kg (8-13%) Of which Illegal Export Kg (2-4%) Recycling Certain: 14.1Kg - 67% (53% POM) Likely: Kg - 75% - 80% 13

14 WEEE FLOWS IN EUROPE SOME EXAMPLES WEEE has a value. Collection and treatment makes business sense Copper I Aluminium I he is back... Steel I Gold I

15 Costs (billion ) Ignoring All WEEE Flows could cost producers an extra 4.6 billion increasing the total costs of the WEEE Directive to 10.2 billion. Gross Costs of WEEE collection and treatment 12.0 Commission Impact Assessment states that costs will be 5.6 billion in Commission forecast 65% target will increase costs by 1.2 billion to 6.8 billion. 8.0 Inflation in costs comparable to the UK would see costs explode to 10.2 billion. 6.0 The total additional cost for no benefit to the environment would be 4.6 billion. 4.0 Baseline costs Option (4) costs Option (4) costs plus 36% inflation Option (4) costs plus 50% inflation

16 Key Messages All WEEE Flows should be measured as there are massive complimentary flows of WEEE 16

17 Combining Competition and Coordination

18 UK System It is this trading of WEEE evidence and the must buy requirement on schemes in order to meet their financial obligations that have created the excess costs. (BIS Impact Assessment para 29) There is no incentive for a PCS to offer a lower price to attract new members even where it has surplus WEEE, since it can always sell surplus evidence to deficit PCSs who must buy at the given price to meet obligations or face criminal sanctions. With prohibitively high switching costs, the producer is said to be locked-in to the supplier...where switching costs for a producer are prohibitively high, the situation can be modelled as a monopoly where there is increased risk of price discrimination. (BIS Impact Assessment para 37) 18

19 Comparison of net value vs evidence charge Producers are paying 60m more to meet the UK WEEE Regulations that the actual costs of recycling this material 19

20 The options to change the UK system would bring significant reductions in net costs compared to the existing system. Each of the alternative options would, therefore, represent a deregulatory measure. (see BIS Consultation para 71) 20

21 WEEE Matching Service Producer Compliance Scheme Receives sales data WEEE Matching Service Registers DCF sites with WMS Designated Collection Facility Determines market share Classifies DCF sites Creates match between DCF and PCS Producer Compliance Scheme Designated Collection Facility Independent collection Recycling Facilities 21

22 Both Producers and Local Authorities could benefit 64 million Producers 41 million DCFs 16 million If Local Authorities could keep the value of WEEE they collect they would receive an estimated million 22

23 Key Messages A WEEE Matching Service would marry competition with coordination of the WEEE system 23

24 A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.

25 Key Messages Competition has helped create effective and efficient WEEE systems All WEEE Flows should be measured as there are massive complimentary flows of WEEE A WEEE Matching Service would marry competition with coordination of the WEEE system 25

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