Based on the ‘polluter pays’ principle, extended producer responsibility (EPR) maintains that responsibility for the sustainable and safe handling of products and packaging at end of life (EOL) should remain with producers (and importers and retailers), rather than being passed on to government, the public and the resource industry.

In the UK, the current producer responsibility rules for electrical and electronic equipment (EEE) require UK producers that place over five tonnes of EEE onto the market every year to sign up to a producer compliance scheme (PCS). Twenty-nine PCSs have been approved by the Environment Agency for 2016, and most sort out the collection of the waste electrical and electronic equipment (WEEE) directly, and every quarter producers pay their schemes for the recovery and treatment of a set proportion of the weight of material they put on the market.

But exactly how well does this system work? We canvassed a number of EEE producers to see what they think of producer responsibility in the UK, and what the future holds in a more circular economy.

Producer compliance schemes

Some critics have suggested that having a PCS as a middleman in the recovery process isolates companies from their waste products and the vagaries of the waste management sector, but our panel disagrees, highlighting the extra-curricular initiatives that most producers run alongside their EPR obligations.

Indeed, although a producer’s basic relationship with a PCS may be founded on simply the reporting of products placed on the market, followed by the payment of a resulting invoice, Jonathan Perry, Producer Responsibility Compliance Consultant at Dell, explains that there’s a lot more to the relationship than that. Producers also have a role in, amongst other things, supporting audits, discussing changes in legislation, discussing issues affecting the sector, reviewing scheme performance and providing input on government consultations.

Perry states that when an EEE producer picks a PCS, costs aren’t the only concern: “We are looking for schemes that are reputable, meet our policy requirements and recognise and support our views and positions as a producer. We like to view our relationships with schemes as more of a partnership, not simply a transactional engagement.”

Some producers have taken the role into their own hands. One example of this is the European Recycling Platform (ERP), which was founded by major electronics producers in response to the complex challenges posed by the WEEE Regulations. A pivotal reason producers justify their own schemes is to improve the quality of the waste treated on their behalf. Overall, the PCS system has been vital in developing relationships with local authorities, says Mark Dempsey, UK & Ireland Sustainability Manager and WEEE Programme Manager at HP, and has ensured the collection and proper recycling of WEEE returned to civic amenity sites.

Moreover, EEE producers aren’t restricted to simply recycling through the PCSs. Indeed, schemes run by producers we spoke to include: console repair schemes (Sony Computer Entertainment Europe (SCEE), evolved from a refurbishment programme); a free recycling programme that takes back any ‘like’ IT product upon purchase (Dell); and Design for the Environment (DfE) programmes (HP and others) that seek to improve ecodesign and help develop new processes to extend the life of materials.

More than 25 compliance schemes from across Europe, meanwhile, developed the WEEELabex project, which aims to create a set of standards for the collection, sorting, storage, transportation, preparation for reuse, treatment, processing and disposal of all kinds of WEEE. And PCS ERP’s recycling standard for the end- of-life management of IT and display equipment also recently received approval from the Electronic Product Environmental Assessment Tool (EPEAT), the global rating system that establishes the environmental credentials of products for consumers.

Changing legislation

But the developments that we’ve seen in the WEEE field of late don’t exclusively result from the producers and PCSs, as legislation has also played a significant role.

The biggest change recently has resulted from the 2013 UK WEEE Regulations, which transposed the EU’s WEEE Directive. Before 2014, all WEEE had to be allocated to a compliance scheme. Collectors could therefore sell evidence of collection to PCSs that needed to fulfill their obligations. This evidence trading system “resulted in the ‘ransom’ pricing for evidence”, says Dempsey, “with the cost to producers significantly greater than the true costs of collecting and treating WEEE”. The magnitude of this ‘evidence trading’ was estimated by producers in 2013 to be £56 million a year. The compliance fee, introduced in the 2013 regulations, has sought to reduce these costs and create a greater connection between producer fees and the real costs of recycling (for more on this year’s compliance fee, see page 14). Instead of being sanctioned when they haven’t met their requirements, PCSs can pay a top-up fee calculated by a government-approved mechanism, rather than shelling out over the odds to collectors. The government estimates that this reduced the costs by between £14-18 million in 2014, but Dempsey says that although the government should be commended for its work reducing red tape, there is still a way to go, with an estimated £38 million of excessive costs still being charged in the UK WEEE system.

On the positive side, the new system means that producers now have a greater idea of where their waste is going, according to Simon Eves, Head of Environmental Affairs at Panasonic: “In the past, the old WEEE system allowed simple trading of evidence. This meant that a PCS often had no knowledge of where the WEEE they were funding had been treated. This is now visible and schemes have more ability today than ever before to trace the WEEE under their control. This in turn gives more ability for producers to contribute to the standards followed by their PCS.”

In fact, Eves suggests that with the new WEEE legislation, the gap between producers and the waste management sector, “notably the physical recyclers”, has reduced. “It may still not be a direct relationship, but there should be the ability for the recyclers and PCSs with member obligations to have greater engagement than before, as intermediary third parties are less incentivised and able to [be involved] in the market. This can only help in enhancing the market place for WEEE recycling services at commercially viable rates.”

Cost disparity

All this is not to say that the system is flawless. Dempsey says that one disconnect in the system lies between the real costs of recycling and the costs that producers pay.

Kieren Mayers, Head of Environment and Technology Compliance at SCEE, agrees. He uses the example of mobile phones, which are placed on the market at a tremendous rate, but which rarely actually appear in the waste stream. Those that do get collected are worth, says Mayers, around £700 per tonne in revenue to the collector, leading him to wonder why producers are obligated to pay anything.

“I think the fact that the fees that you pay reflect an average of a big mix of equipment”, says Mayers, “[means] there’s no effort within the system by the policymakers or by anybody to make sure that the costs that producers pay are reflective of the products that they’re selling.”

Metal kettles and plastic kettles, for example, are included in the same waste stream but require different treatments. Indeed, if one of the main tenets of producer responsibility was to encourage producers to design EEE to be more resource efficient and sustainable, why are products that have been improved still lumped in the same stream with those that are expensive and cumbersome to treat?

And while most agree that the new system is an improvement on the old, there’s also a general feeling that further improvements are definitely possible. Both HP and Dell, for instance, expressed a desire to see a WEEE matching system implemented in the future. Under such a system, which is implemented in some European countries, those who collect WEEE are free to treat it directly, while absorbing any revenue and costs. Any collector or local authority that does not wish to treat WEEE would be distributed to PCSs through an algorithm, removing the ability of intermediary companies to hold onto the waste, and then sell it. (This was one of the options included in a consultation ahead of the new regulations that brought about the compliance fee.)

A report published by HP at the time of the consultation stated that introducing a matching system would save the UK between £35 million and £64 million, and Dempsey says that the approach offers “the best potential to reduce the cost of compliance to reflect true costs” as well as enabling “strategic coordination, combined with a competitive recycling and treatment market”. It’s not an isolated opinion, with the government noting in March’s ‘Cutting Red Tape’ review of the waste and recycling sector that several respondents pinned their colours to the matching mast.

Circular economy

Talk of improving the UK’s EPR system must, of course, be framed within the context of the European Commission’s Circular Economy Package, which aims to change the way resources are viewed in Europe.

Mayers says: “It’s going to increase the diversification of the environmental requirements, environmental laws, to increase the range of requirements you have to meet to get a product on the market if you’re covering all sorts of different things.”

One measure that will be especially welcome, judging from our producers’ responses, is the harmonisation of requirements across EU member states, leading to a more consistent approach to producer responsibility across Europe. Dempsey adds that proposals to differentiate costs based on the real EOL costs associated with products, taking into account their reusability and recyclability, should also be consistent: “This has the potential to provide economic incentives to improve product design to facilitate easy treatment and recycling. It is also very important that such criteria are harmonised to provide consistent incentives and rewards to manufacturers. These criteria can then be implemented through member states’ different EPR systems. It is important that differentiation of recycling costs should not create new administrative requirements... Additional administrative burdens are contrary to efforts to increase the competiveness of the EU and will act as a disincentive for differentiation of recycling costs.”

But with a fully-functioning circular economy, where products are designed with second, third and fourth lives in mind, and where modules can be removed and repaired easily and cheaply, would there still be a need for extended producer responsibility laws?

Going forward, legislation, says one, should be used as an ‘enabling framework’ that allows businesses to thrive while being responsible stewards for materials and products. As Perry points out, the circular economy is not just about improving how we manage waste and materials, but rather about reaching an enlightened stage where responsibility is ingrained in every stakeholder and embracing new business models centred around optimising resource management.

Eves agrees: “The real win will be where market economics drive business models that are more sustainable. While we may not notice it, there are already subtle changes taking place. Increasingly businesses are not buying products but paying for services (where the product is used in the delivery of the service). There are changes apparent in the consumer market as well. “In an ideal world”, he continues, “EPR legislation would not be necessary, but with changes in legislation affecting the nature of EEE being placed on the market as a likely result of circular economy thinking, it could be that EPR legislation increasingly becomes a back-stop with market forces being the primary driver of reuse and recycling of EOL EEE.”

The transition to a circular economy is already requiring policymakers to adapt their EPR systems. As commodity prices have risen, WEEE has (as a general trend) gone from being a cost to acquiring value. Because of this, more and more of it is being recovered outside the EPR framework. Studies across Europe have shown that around 35 per cent of WEEE is recycled by producer systems, but that an additional 45 per cent, on average, is being collected and recycled outside the EPR systems. According to Dempsey, ‘massive changes’ have taken place with collection and recycling increasingly being undertaken by private companies due to the increasing commodity prices. Trends suggest, he says, that the future will only bring higher commodity prices, despite short-term fluctuations and the current downturn, and it will be essential for member states to adapt EPR systems to take all flows of WEEE into consideration.

Eves offers an alternative view. He suggests that while the value of recyclate seemed to be on “an inexorable rise” in recent years, “it is clear that values of recycled materials have fallen significantly recently”. He suggests that this may well result in WEEE that has historically been treated outside of PCS control to flow back in.

Mayers, meanwhile, hopes that the circular economy model evolves so that producer responsibility systems become “less focused on collection and more focused on the materials end”, getting better, higher levels of recycling at the back end. “Ultimately,” he says, “that might become a source of materials for the wider industry, not necessarily that we’re buying ingots of pure recycled copper, but effectively we get clever at trading what we’ve got.”