Press Release: 02. February 2012

Changes to regulations could save businesses £50 million, shows HP report

Forecasts show bills could rocket to £100m without urgent reform of opaque regulatory model

London, UK, Jan. 26, 2012 – HP today announced the findings of a new report indicating that UK businesses could save up to £50 million if UK Waste Electrical and Electronic Equipment Directive (WEEE) regulations were improved to ensure only the actual costs of recycling were charged to producers.

The study revealed that producers are paying around £50 million more to meet the UK WEEE regulations than the actual costs of recycling this material. Recent increases in commodity prices have sent the value of WEEE soaring to the extent that overall, there is now a positive net value in end of life electrical and electronic equipment, even taking collection costs into consideration. In 2010, it is estimated that producers were charged up to £50 million to demonstrate compliance, an annual figure that appears to have changed little since the WEEE regulations were introduced into UK law in January 2007.

HP is helping to drive improvements to IT sector sustainability including through research such as the HP WEEE report unveiled at the WEEE Thought Leader Summit, 2012, in Belgium today.

The HP report reveals that excessive prices continue to be charged for complying with UK WEEE regulations. A survey of producers indicated that there has been little change in the prices they have paid since the regulations began. The main reason for this, the report states, is that the market had settled into a convenient operating position at the expense of manufacturers and consumers.

The report analysed the value of WEEE to the recycling and reuse sectors and concluded that there should actually have been a net positive value for household WEEE in 2010. With compliance charges to producers at an estimated £40-50 million in 2010, the report concludes that there is a lack of transparency in the market that is allowing producers to be exploited.

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. Changes to regulations could save businesses £50 million.”

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

• Moving to an ‘allocation’ system. This gives producers direct control over collection and treatment unlike the current UK system which leaves it in the hands of up to 40 compliance schemes. German producers have seen their WEEE costs fall to zero under such a system, which was viewed as too costly for the UK when the WEEE regulations were developed.
• Addressing the lack of transparency. There are no market indicators to show actual costs of collection, treatment and recycling. There is no information published showing the obligations of the schemes or the amount of WEEE they are collecting. There is no reporting required on the amount of revenue raised for WEEE evidence and how it is used.
• Ensuring the WEEE Directive revision takes these findings into account. It may be that the UK needs to double collection levels. If the system allows producers to be charged for collection or recycling that is largely already happening, then industry could be footing an unnecessary annual bill in excess of £100 million.

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, that producers pay for waste where there is a cost, and that effective measures are in place to prevent waste from escaping by illegal export.”

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