Nine trade associations in the electro-technical sector have written to central government, urging it to adopt a new way of operating waste electrical and electronic equipment (WEEE) compliance fee mechanisms.

The Joint Trade Association (JTA) – comprising AMDEA, BEAMA, BTHA, EEF, GAMBICA, LIA, PETMA SEAMA and techUK – submitted the proposal to the Department of Business, Innovation & Skills (BIS) in response to its call for proposals on potential compliance fee mechanisms.

The call forms part of the government’s working on the revised Waste Electrical and Electronic (WEEE) Regulations, which establish a system of household WEEE collection targets for producer compliance schemes (PCSs). Under this law, PCSs that fail to achieve collection targets may choose to pay a compliance fee in order to meet the cost of their financing obligations.

The compliance fee is intended to discourage PCSs from collecting WEEE ‘significantly above their targets and then seeking to sell that surplus at excessive prices to PCSs that are short of their target amount’.

JTA proposal details

The JTA has revealed that it has submitted proposals for a WEEE compliance fee mechanism for the 2014 compliance period.

The JTA proposal recommends that the government introduce:

• different compliance fees for each WEEE stream;
• fees based on the average direct cost of transport and treatment for each stream;
• weighted averages, so that PCSs with small tonnage collections do not distort the fee calculation;
• a requirement for only those PCSs needing to use the fee to supply cost data (instead of mandating all PCSs to provide data);
• a fee escalator, so that PCSs that narrowly miss targets pay a fee close to the weighted average cost, while those that collect nothing would need to pay double the weighted average; and
• no fee for all large household appliances due to their inherent ‘positive value’.

The proposal outlines that the following methodology (developed by economics consultancy group FTI) should be used to calculate compliance fees:

Where fn is the total fee for the relevant stream for the PCS in question (in GBP); kn is the weighted average net cost of collection for the stream (in GBP per tonne); tn is the PCS’s target for the stream (in tonnes); and cn is the amount of the stream of WEEE collected by the PCS (in tonnes).

The JTA also proposes that accountancy firm Mazars performs as the administrator of the fee.

Proposal is ‘economically robust’

The Chairman of the JTA and Technical Manager at the Association of Manufacturers of Domestic Appliances, Richard Hughes, said: “The compliance fee is an important element of the new WEEE system. It acts as a safety valve, ensuring that where a PCS has not fully met its target through collections during the compliance period, it has a legitimate alternative route to compliance.

“The methodology proposed by the JTA increases the compliance fee the further a PCS is from its target. This is designed to ensure collection of WEEE is encouraged as the main route to compliance and creates a fair, balanced market.

“Using FTI, a professional economics group, gives us confidence that the JTA proposal will be effective at encouraging compliance by collection, is economically robust, and meets all the key requirements laid down by BIS.”

Simon Eves, Deputy Chairman of the JTA, Chairman of the Environment Strategy Council at techUK, and Head of Environmental Affairs at Panasonic UK, added: “The JTA [has] worked closely with three producer led PCSs in the development of this proposal. Those PCSs have cooperated with FTI, independently providing data, to road test the proposed data collection and calculation mechanism. This has verified that the methodology is sound.

“Our proposal also provides a streamlined process, operated by Mazars, to distribute compliance fee funds to local authorities.”

A final decision on government’s chosen compliance fee methodology is expected in February 2015.

Read more about the compliance fee mechanism call or the WEEE Regulations.