Being part of the REPIC team has been a fantastic journey and there have been some real milestones over the last 12 years. Having been involved in the wider conversation about making the UK WEEE system fairer – as well as having seen our membership steadily grow over the years - and playing a part in a number of international WEEE Forum initiatives, has been very rewarding.
Out of everything that’s happened in the industry, the most seismic has to have been the re-shaping of the WEEE regulations. First introduced in 2006, the original WEEE Regulations were put in place to reduce the amount of electrical and electronic goods going to landfill and improve recovery and recycling rates of these products.
However, the system encountered various problems as a result of inherent flaws in these original regulations. In particular, the origin and treatment of WEEE was neither clear, nor auditable for the stakeholders involved. It soon became clear that a ‘must buy’ market for WEEE evidence was causing a distorted marketplace where WEEE evidence notes were excessively traded at ridiculous prices - often not reflective of the true costs that producers should pay. It became a case of “I’ve got it - you need it - and here’s the price”.
Changes made to the new system by the then Department of Business Innovation & Skills (BIS) – the removal of the ‘must buy’ approach, the introduction of a clearer audit trail, as well as a move to collect a known tonnage target for WEEE - have all had a sweeping impact.
This fairer, more transparent system has helped to stimulate equilibrium for the market. Unlike the early days, PCSs are now not incentivised to over-collect and more and more WEEE collectors are seeking to partner directly with the PCS that needs and funds WEEE, rather than an intermediary scheme that doesn’t.
The elimination of evidence trading has also brought about change – and a large price correction in the market - helping to ensure that the costs producers now pay is more reflective of the true cost of WEEE recovery and recycling, a key goal set out by BIS.
Over the last couple of years it’s been interesting to see the part that the ‘safety valve’ within the system – the compliance fee – has played to keep things on track.
Set annually by the secretary of state the fee has been introduced to prevent PCS from intentionally over collecting WEEE beyond their target, to ultimately sell on at a higher cost at a later date. The caveat is that the secretary of state decides whether or not the fee is charged introducing a ‘fog’ in the system.
The Goldilocks level
So far it seems to be working – set at the “Goldilocks” level - not too high - not too low, but just right for prevailing market conditions in any year. Too high and market prices for WEEE treatment or evidence could rise simply on sentiment, too low and PCSs could choose to under collect and pay a fee leading to a surplus in the market and the possibility of unaligned local authority designated collection facilities (DCFs).
The great thing about being part of this industry is that it’s fast moving and the status quo frequently changes – there’s never any place for complacency. This year we’ve seen the introduction of a voluntary producer compliance scheme balancing system (PBS) for the redistribution of WEEE. The created PBS system ensures that all surplus WEEE held at DCFs can be centrally managed via a “black box”. Participating schemes are required to bid for collection, with the best bid winning. The system’s independent administrator then ensures costs are shared out confidentially, depending on market share per stream, between all participating PCS.
What this new system is doing is taking away the immediate danger currently faced by all PCSs, namely the risk of being inundated with WEEE they don’t need, while at the same time supporting those LAs site without a contracted WEEE collection partner. It’s early days, but so far so good.
There will be plenty of new ideas on the horizon. With Brexit there are certainly challenges to be faced - but experience is a wonderful thing and REPIC is in a very strong position for the days ahead.
Mark Burrows- Smith
In his new role as CEO of REPIC, Burrows-Smith discusses his thoughts about the next chapter for REPIC – and the wider WEEE industry. He looks at some of the potential challenges and opportunities that lie ahead.
Brexit, or now more correctly termed ‘EU Exit’, continues to dominate most discussions, but we have to move beyond the headlines. All EU Exit means is that we now have to face up to the options that are before us. 25% of all EU legislation is environmental – a significant amount. Going forward the questions are clear: Which bits do we want and which bits will we have to keep, ensuring that trade barriers are minimised? The really interesting part of this is how we can now do better; can we develop a more sustainable waste, and particularly, recycling industry that generates sufficient returns to both attract investors and make infrastructure investments?
Debra has already intimated that in the world of extended producer responsibility (EPR) we potentially have both a clean sheet of paper - with which to shape the future - while retaining the aims and objectives of the EU Circular Economy package. These aims have the potential to significantly reshape the recycling industry and with it the traditional waste management sector. For instance, do we re-define what is waste? Where does product refurbishment fit in? Equally, what about whole component recovery?
Direction of travel
In its fullest extent, EPR will draw product manufacture and sale closer to the control of products once discarded. This is nothing new, producers and manufacturers have lived with EPR for many years and long ago accepted their responsibilities by funding the recycling of their discarded products. But, the direction of travel continues as producers and retailers see their environmental responsibility increasing - and by increasing - read greater funding (or subsidy). This responsibility has to come with the basic authority of producers and retailers to manage EPR costs.
Commercially, commodity markets are key; the better the return from material sales, the less subsidy that is required. This is a tough nut to crack, however, when commodity cycles seem to be a constant feature and quality demands are rapidly changing. Looking forwards, REPIC will have a significant part to play in ensuring continual investment in reprocessing infrastructure to ensure merchantable products continue to be produced. This is in our long-term best interests.
Last, but not least, waste crime is increasingly an issue. Producers and retailers sell whole products and it would not be unreasonable to expect the return of whole products, fair wear and tear excepted, for responsible, legitimate recycling. This doesn’t happen; the harvesting of components is rife and frequently damages the integrity of the product. This affects both the environment, from pollution events such as oil leakage, and ups the amount of subsidy required in dealing with ‘waste’ with less inherent value.
There is nothing particularly new in these challenges; EPR and the risks and rewards around recycling will continue to drive innovation, however the structures and processes that deliver the desired outcomes, both legislative and commercial, look set to change. Undoubtedly interesting times ahead and, as always, REPIC is looking forward to playing an active role in the important conversations about the future of the UK WEEE industry.