e-Waste Profiteering Costs UK Firms £50 Million Per Year

UK businesses are charged £50 million over the odds to have their electronic waste disposed of, because e-waste regulations fail to consider the value of raw materials that can be reclaimed from tech trash, says a report from HP.

Recent increases in commodity prices have sent the value of e-waste soaring to the extent that overall, there is now a positive net value in retired electrical and electronic equipment – rather than paying for recycling, businesses should be paid for their electronic waste, says HP. However, the recycling system is so “opaque” that companies removing waste electrical and electronic equipment (WEEE) can continue to charge high prices for compliance with the European Union’s WEEE Directive.

Profiteering from the WEEE regulations

UK companies disposing of electronic waste (referred to as “producers” in WEEE circles) were charged around £40-50 million in 2010 to have that waste disposed of in compliance with the regulations. According to the HP report, The Cost Impact of Profiteering Within the WEEE  Directive the lack of transparency in the market lets waste processors exploit the producers.

WEEE Directive (WEEE) regulations have just been improved to mandate that more material should be recycled. However, the rules still don’t reflect the true value of the waste materials in the cost of recycling, and are therefore flawed, the document said.

“Commodity values and excess treatment capacity have driven down the cost of processing WEEE over the last three years to a point where the net cost of collecting and treating WEEE has become better than cost neutral,” the document said. However, Producer Compliance Schemes manage waste at a fixed cost: “The benefit of reduced cost by waste management operators has notbeen passed back to PCSs and producers.”

Dr Kirstie McIntyre, head of environmental compliance at HP in Europe, Africa and the Middle East explains: “Under current UK regulations producers are not charged the actual costs of recycling. Instead prices are agreed between producers’ compliance schemes and waste management companies acting on behalf of municipalities. This hidden and complex price setting means that whilst the actual costs of recycling have fallen, the costs charged to producers have remained the same.”

The HP report indicates that possible solutions to the UK collection crisis include:

• Giving producers direct control over collection and treatment, as happens in Germany. The current UK system leaves it in the hands of up to 40 compliance schemes.
• Addressing the lack of transparency. At the moment, there are no market indicators to show actual costs of collection, treatment and recycling. There is also no information published showing the obligations of the schemes or the amount of WEEE they are collecting.

Dr McIntyre concludes, “The WEEE Directive was created as part of the concept of producer responsibility. However, producer responsibility was based on waste being a cost. In this new era when waste has a value, policy should instead focus on ensuring all waste is properly treated and reported.”

As well as undervaluing the waste when it is removed, current WEEE procedures also fail by overlooking the possibility of re-using retired electronics, thereby keeping it out of the waste stream completely, observers have said.

Even given the opportunity for profit which HP has flagged up, waste processors are often caught illegally exporting e-waste to developing countries. This trade leads to illness and death amongst those processing the waste.