Post a Comment
News and New Products
Making Electronics Recycling Cost Effective
By Jeff Chappell -- Electronic News, 4/13/2006
One of the key sticking points in electronics recycling has been who pays – the producer, the consumer, or some combination of the two? While Europe has mandated a producer-pays system that is in various stages of implementation, depending on the country involved, here in the United States, the state of Washington is the only state – so far – to legally mandate a producer-pays model, passing a comprehensive electronics legislation bill earlier this year. A handful of other states are considering similar legislation.
While many electronics companies have claimed that the costs involved in a producer-funded program will only get passed onto the consumer in the end, the Washington legislation had some notable backers in the industry, such as Hewlett-Packard Co. Its representatives have suggested that the costs passed along to the consumer under the Washington state program will be negligible.
Recycling in Europe the ERP Way
HP isn't a stranger to electronic products recycling. In Europe, HP is one of four companies participating in the European Recycling Platform (ERP). While Europe struggles with adoption and implementation of the Waste Electrical and Electronic Equipment (WEEE) directive, ERP, founded in 2002, says it already has a grip on a pan-European recycling program, implemented on a country-by-country basis. HP is one of the creators of ERP, along with partners Japan's Sony, home appliance supplier Electrolux and personal grooming products supplier Braun, both based in Europe.
ERP states that ultimately its mission is to ensure a cost-effective implementation of the WEEE directive. It plans to do this with a management and procurement program that meets the requirements of producers – its four founding companies, as well as other electronics makers – while being cost efficient, developing pan-European services and cross-border competition in the waste management service market.
ERP is already involved with a number of national programs in Europe, as well as companies ranging from distributors, which are considered the producers under some implementations of WEEE, to electronics makers based outside of Europe, such as Samsung. Overall, ERP is currently processing 25 percent of the electronic waste in Europe, according to Hans A. Korfmacher, director of strategy and planning for product take back services at Gillette GBU, Gillette being the parent company of Braun (and Gillette, incidentally, having been recently acquired by Cincinnati, Ohio-based Proctor and Gamble).
So how did ERP and its founding companies get such as jump on WEEE? By 2001, it was clear that WEEE was only a matter of time in Europe – "the train had left the station," as Korfmacher put it.
All four players had already seen what had happened with battery and packaging take-back initiatives in Europe, and had experience with what worked and what didn't. Producer responsible battery take-back programs were forerunners and consequently models for the WEEE directive in Europe. It was that experience that made the companies amenable to creating ERP and implementing its programs, Korfmacher suggested. "I think that's really the reason these four companies were able to do it," he said.
By the end of 2003 the ERP members had concluded that they would have to create their own pan European recycling program, that there was a possibility to outsource the actual collection and recycling operations, and that there were to be synergies and economies of scales to be had, according to Korfmacher.
In 2004, after a lengthy process, ERP contracted with two companies, France's Geodis and Germany's CCR Logistics Systems. Geodis specializes in reverse logistics and had already had experience with IT and copy machine companies; CCR was involved throughout much of Europe already, most notably in automotive waste management – it already had a large number of collection points and established waste streams.
Late in that year, ERP, along with its two contractors, began preparations to launch operations in nine European countries, countries that comprise 80 percent to 85 percent of its companies' business. It essentially split Europe into two pieces: Geodis would implement ERP's program in Ireland, the U.K., France, Spain and Portugal; CCR would tackle Poland, Germany, Switzerland and Italy. It was around this time that individual WEEE legislation started to come about in some of those countries, and ERP began applying for the necessary permits.
Currently, ERP and its contractors are operating take back programs in Ireland and Austria; in March, they received the necessary permits for Portugal, where they will shortly begin operations. ERP also expects to begin operations in Germany shortly, and in Poland later this summer.
Recycling: Treat it Like Any other Aspect of Business
What ERP member companies discovered with battery and packaging take-back programs, and what it is confirming in places like Ireland and Austria, is that by creating competition in the recycling industry, it is bringing down costs by fostering competition, according to Korfmacher. Therein lies the key to cost-effectively complying with WEEE, he added.
"One of the major learnings we have with all these operations is that due to the fact that we went into these countries to establish our system, we have created competition among compliance schemes," he said. In the past, such as with batteries, there might be one company operated by an industry consortium or trade group handling electronics waste take back and recycling. But in Austria, where there are now four competing operations in electronics recycling, electronics producer costs related to take back and recycling have dropped between 70 percent and 90 percent, depending on the product category, Korfmacher said. The cost of take back of a small electronic appliance dropped from 75 cents to 2 cents or 3 cents, for example.
"That was our major learning experience and what we believed in the beginning," he remarked. "It's like in a normal business, as soon as you have a competitor in the market, you start to improve your processes and cost."
While ERP's experience may bode well for Europe, for those outside, it begs the question, could that model be implemented elsewhere, such as in Asia or the United States? As Korfmacher remarked, electronics recycling is often a matter of politics as much as ecology and economics. While Europe may be culturally diverse, Asia is much more so, Korfmacher observed. China, Malaysia and Japan, for example, are very different markets; it might thus prove to be more difficult to develop an ERP style, pan Asian recycling program as a result.
And here in the U.S., as in parts of Asia, as many have observed, electronics recycling efforts are most often driven by environmental advocates, governments or the recycling industry itself, as opposed to the producers. And again, as others have observed before, it has to be cost effective for the producers, ultimately, if consumers aren't going to be the ones to bear the cost of recycling.
Any electronics take back program should create competition between recycling schemes, in order to foster appropriate and yet cost effective programs, Korfmacher suggested. "I believe it is a business aspect, and we should treat it like any other business, and as we know, in any other aspect, any thing that is going to be sustainable and successful has to be cost effective."
