aura light blv ge lighting narva osram philips lighting havells sylvania weee directive review: in...

Aura Light • BLV • GE Lighting • NARVA • OSRAM • Philips Lighting • Havells Sylvania

WEEE Directive Review:

In search of sustainable solutions

Content

Who are we

Lamps are different with regard to WEEE

ELC preferred WEEE solutions

WEEE Directive review topics: in search of sustainable solutions

Closing remarks

We represent the leading lamp manufacturers in Europe 95% of total European production

50 000 employees in Europe

€5 billion European Turnover

We are an international non profit-making association under Belgian law with a secretariat in Brussels

We are a flexible, light & efficient lobby organisation

We promote efficient lighting practice for the advancement of human comfort, health and safety

We were created in 1985

Who are we?

Havells Sylvania

Who are we?Members

The collection and recycling of Lamps is considerably different from all other WEEE products due to:

Fragility

Hazardous waste regulation

Low weight

High volume of > 700 Mio (WEEE relevant) lamps(1) per year POM

Also due to these characteristics collection and recycling costs are significant in relation to product prices.

Lamps are one of the few components separately included in WEEE legislation

(1) Estimation by ELC for the European market including Norway and Switzerland

Lamps are different, and require specific WEEE solutions


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Situation Netherlands after 3 yrs

Best case estimation

Lamp recycling costs are 10-80% of cost-price versus other WEEE: few %


A level playing field for (collective) schemes that will

Fulfill the full legal responsibility in a financially sustainable way

Reach current and future targets

Develop Eco-efficient solutions as to successfully integrate financial concerns of its participants and the environmental goals

Provide a sustainable infrastructure for collection and recycling

Operate in a level playing field

Guarantee confidentiality of market data

Inform all stakeholders adequately

ELC preferred WEEE solutions

A level playing field for (collective) schemes that will

Fulfill the full legal responsibility in a financially sustainable way

Reach current and future targets

Develop Eco-efficient solutions as to successfully integrate financial concerns of its participants and the environmental goals



Guarantee confidentiality of market data

Inform all stakeholders adequately

ELC preferred WEEE solutionsObserved Risks

ELC preferred WEEE solutionsLevel playing field

Death/BankruptcyCradle Life

Accreditation Guarantees

Allocation between schemes

Financing of WEEE (Art 8)

Individual Producer Responsibility, provisions and guarantees

Definition of Producer

'Producer' under EU / national law, Put on the Market

Household vs. Professional

Definition of weight

Target setting

Accreditation of schemes


Guarantees

WEEE Directive review topicsIn search of sustainable solutions

Financing of WEEE (Art 8) Individual Producer Responsibility, provisions and guarantees

Definition of Producer 'Producer' under EU / national law, Put on the Market

Household vs. Professional Definition of weight Target setting Accreditation of schemes Allocation between schemes Guarantees


Producer obligations with regard to the financing of WEEE

Financing of historic household waste (Art 8.3)

Collective obligation via collective scheme

Obligation // market share in current period

Financing of new household waste (Art. 8.2)

Individual Producer Responsibility (IPR) Can be fulfilled individually or via a collective scheme

WEEE Directive review topicsFinancing of WEEE

(Article 8.2. EU WEEE Directive)

WEEE Directive review topicsFinancing new wasteConcerns arising from Art 8.2

Individual Producer Responsibility (IPR) Aim

To encourage the design and production of electrical and electronic equipment which take into full account and facilitate their repair, possible upgrading, reuse, disassembly and recycling

But

Is, within the scope of the other objectives of the WEEE Directive, IPR the right financial driver?

Will IPR support increased separate collection rates as well as sustainable financing of WEEE?


IPR a financial driver to design for better recycling? NO The financial driver does not exist

Commonly required payback times in the electronics industry for investments are short: max 2-3 years

Products sold now will return on average in 6-10 years Highly unlikely that design projects will start due to financial incentive

aimed at ease of recycling

Practical impossibility to identify and sort WEEE (esp. for WEEE lamps) per individual Producer

Leading to no incentive to design for better recycling for the Producer Necessitating collective collection and recycling of WEEE

Not all Producers under WEEE have an impact on design Only manufacturers have an impact on the design of the product, not

importers, in many cases also not private brand owners


Eco-design should be regulated in Energy Using Products (EUP) or in Restriction on Hazardous Substances (RoHS) legislation

IPR a financial driver for increased (separate) collection rates? NO

IPR will provide an incentive to Producers to minimize collection so as to minimize costs (no collection, no costs).

Lack of financing will result in efforts not to collect any orphan waste (which can never be fully avoided)

IPR does not ensure increased collection rates


IPR triggering substantial risks? (1/2) YES

IPR will increase the risk for externalization of costs to society, e.g. orphan waste (which can never be fully avoided)

IPR directly leads to huge increases in environmental and financial costs, without adding any value to either the environment, society or the Producers

IPR is only possible if the EEE can be tracked and traced on a Producer individual level from the cradle to the grave (marking not sufficient, esp. not for small items on which no details can be put)

IPR requires Producer specific collection, which is practically impossible due to the need to identify and sort millions of WEEE lamps at Producer individual level

IPR is an incentive for increased illegal import and free-riding E.g. due to the difficulty to track an EoL product back to the Producer and due to the

increase in costs


IPR triggering substantial risks? (2/2) YES

IPR may trigger Producers to leave the market at the moment the (actual) financing obligation for new waste kicks in, i.e.

A number of Producers may decide to "leave" the national WEEE market ("leaving": sales will take place from abroad into the national market):

While creating new "Producers" (e.g. the local distributors) having no financing obligations (yet), since they do not fall under the provisions of the law for financing the waste resulting from products POM between 2005 and the moment they became "Producer" under WEEE)

Thereby creating a potentially huge amount of orphan waste (i.e. waste lacking a Producer responsible for financing)

IPR will decrease the ability of various stakeholders (especially Government) to monitor and control compliance with the WEEE Directive


These risks should trigger a big concern for public authorities, collective schemes and sustainable producers.

How to manage these concerns?

Different options can be developed, there is however only one sound solution beneficial to all stakeholders

Introduction of solidarity (collective financing responsibility) amongst Producers for new waste

This requires the Amendment of Art. 8.2 Introduce a collective financing obligation for new waste on

the basis of the market share of the Producers existing on the market in the period that the waste arises








Target setting



Guarantees


Issues with the implementation of the EU Directive definition of "Producer" into national legislation

The definition of "European Producer" is not implemented in the Member States (resulting into "national Producers" only)

This is amongst other things caused by the insecurity of national governments in their ability to control Producers from outside of their national territory

Drastic increase of number of importers (subsequently considered the "national Producer") reduces control

European Producers cannot register in all countries

End users can source “cross border” avoiding responsibility

Establishment of trade barriers / limited free movement of goods E.g. difference in burden for buyers when sourcing from a company able to

assume Producer responsibility versus from a company not able to assume Producer responsibility

WEEE Directive review topics Definition of 'Producer' (current)

The ‘Producer’ means any person, established in the EU who, irrespective of the selling technique used, including by means of distance communication in accordance with Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts (1):

i. Sells for the first time electrical and electronic equipment in the EU,

ii. Resells under his own brand electrical and electronic equipment supplied by other manufacturers, a reseller not being regarded as the ‘producer’ if the brand of the producer appears on the equipment, as provided for in sub point (i), or

iii. Resells in the Member State, where it has an establishment, electrical and electronic equipment, upon acquisition from a producer, which has not fulfilled its legal obligations in the Member State where the reselling takes place.

iv. Buys for own use as a professional end user, electrical and electronic equipment, from a producer, which has not fulfilled its legal obligations, in the Member State where the electrical and electronic equipment is used, or from a supplier outside the EU.

WEEE Directive review topicsDefinition of 'Producer' (suggested)

Need for definition of 'Put on the Market' in accordance with objectives of the Directive

Split put on the market definition between

Product/manufacturing related directives like RoHS: should be represented by the date stamp on the product.

Directives triggered by the location where the product will be used: First sales of EEE in the territory of any member state by an EU based Company (which should then register as a 'Producer' in the respective member state of first sale).

WEEE Directive review topicsDefinition of 'Put on the Market'







Target setting



Guarantees


The sales channel (B2B or B2C) does not define the nature of the WEEE as household (and comparable) or non household waste

The distinction for EEE to be used either in households or non households is very ambiguous. Similar products ('dual use') should be treated according to the same rules. Therefore all dual use products should be reported as household products and Producer responsibility following suit.

WEEE Directive review topicsHousehold vs non household

For Dual use products, taking away the differentiation between household and professional would close loopholes and improve

control drastically


IPR, provisions and guarantees





Target setting



Guarantees


Lamps are different with regard to other WEEE Individual weights for lamps can not be checked by a statutory

auditor due to the vast number of code numbers (>6000) and as such leave ample room for fraudulent activity

Weight of the lamps is not a environmental differentiator (lighter does not mean more environmentally friendly or better recyclable)

Therefore, to avoid abuse Lamps weight should be a defined as an average weight per

country (to be applied by all schemes)

Total weight should be calculated as 'units x average weight', and not 'Σ of the individual weights'

WEEE Directive review topicsDefinition of weight

Amount of household waste collected should not be limited to waste collection via municipal collection sites only. All collection of household waste (or waste from dual use products), regardless of the collection channel, should be taken into account when determining % collected rates.

Alternative financing schemes for non household products create a risk for opportunistic behaviour and externalization of costs if not rigorously controlled and clear responsibilities defined

WEEE Directive review topicsHousehold vs non household







Target setting



Guarantees


Need for challenging yet realistic targets

Targets per category

No externalization to other categories

Targets to be defined as % of historic POM

Lamps are durables (not fast moving consumer goods) requiring the benchmark for targets to be the "historic POM" rather than the current or previous year POM

This issue is especially important in fast growing markets

WEEE Directive review topicsTarget setting







Target setting



Guarantees


Need for sound accreditation rules, applicable to both individual

and collective schemes, allowing for financially sustainable schemes

Including Legal format requirements, a.o.

Not for profit (no payment of dividend or other to shareholders, etc.) Business plan requirements, a.o.

Sustainable financing covering for / based on full Producer responsibility

Full geographic coverage for collection Information and communication planning

Penalties for non compliance, a.o. loss of accreditation / fines

Guarantee requirements In case of dissolution of the scheme (for details see last review topic: "Guarantees")

WEEE Directive review topicsAccreditation of schemes







Target setting



Guarantees


Allocation of financing obligation according to the WEEE Directive (Art 8.3)

Meaning that the total cost for collection and recycling of all WEEE belonging to the same category should be financed by the cumulative market share of all Producers across the different schemes!

Collective financing obligation is not limited to the collective of Producers belonging to the same scheme!

WEEE Directive review topicsAllocation between schemes


However, due to the fact that the wording of the WEEE Directive is not specific enough with regard to the financing obligation for household historic waste

A number of financing models are currently applied by a variety of schemes, which in most cases do not allow the sustainable implementation of the obligations they have taken over from their participating Producers

Governments accredit schemes which do not have a sound and sustainable financial plan allowing compliance with the letter and the spirit of the WEEE Directive


Financing models currently applied in the market: which is sustainable? – which is compliant with all obligations?

Level I: Basic assumptions with regard to which quantity needs to be financed in a given period

M1: Number of products that are expected to come back on basis of average lifetime of the product

M2:Number of products that are expected to come back via the developed collection channels

M3: Number of products that are expected to come back via the own collection channel

M4:Number of products that come back through the own collection channel

M5:Number of products that come back through all the established collection channels


Looking at the financing models existing in the market we observe that

Only one financing model for historic household waste, i.e. model I 'financing based on the number of products that are expected to come back in the measurement period based on the average life time of the product' allows full compliance with all Producer obligations under the WEEE Directive.

All other financing models do not allow for full compliance with the spirit and the letter of the WEEE Directive

As such, only the fee reflecting the full financing obligation of Producers can be used as a basis for allocation of the financing obligation across all Producers according to their market share in the measurement period.

Examples of existing allocation schemes

(Producer) Individual allocation per container (Germany)

No optimization of infrastructure possible

Not suitable for smaller countries due to organizational effort and costs

End of year clearing of collected quantities (Austria)

Triggers a continuous shift of quantities to the next years because the collection network can not / should not be diminished by the scheme making higher collection efforts

Sale of certificates (UK)

Increases the price unnecessarily

Likely to leave some regions un-serviced

Clearing on basis of actual cost incurred: actual collection efficiency is significantly lagging on the cost incurred (currently not used)



Calculation example for allocation in accordance with collective financing obligation and the letter and spirit of the WEEE Directive

A B CalculationPOM 120 80 (1)Market share % (POM) 60% 40% (2) = (1) / sumtotal of (1)Collection % (of total collection) 80% 20% (3)Coverage POM 133% 50% (4) = (3) / (2)Fee 0,25 0,10 (5)Undercovered units 40 (6) = (100%-(4)) x (1)Settlement amount 10 (7) = (5) of scheme that overcollected x (6)

Scheme

Benefits of proposed allocation mechanism: Market driven: scheme with best collection performance sets the

pace

Clearing mechanism does not offer an incentive to limit collection to any scheme

Fee of best performer is benchmark for clearing: best optimum between cost level and performance (collection rate)

No incentive for Producers to join a cheap but non-performing scheme

Supports a level playing field for both Producers and schemes








Target setting



Guarantees


Guarantees for future waste

If the obligation for future waste would also become a collective obligation as suggested earlier, guarantees no longer would be required

i.e by amending art. 8.2., introducing a collective financing obligation for new waste on the basis of the market share of the Producers existing on the market in the period that the waste arises

In the absence of the collective obligation for future waste, guarantees for future waste

Should be required for individual schemes

Should not be required for collective schemes provided these schemes have a sustainable financial planning (need for sound accreditation rules)

WEEE Directive review topicsGuarantees

Individual schemes – guarantee requirements In addition to the guarantees mentioned in the WEEE Directive, the

individual scheme should name as a beneficiary a scheme authorized for the relevant collection and recovery category, which will contractually perform the take-back and treatment of WEEE for the producer in the event of his insolvency or withdrawal from the market.

Individual guarantees are and can not be controlled The level of guarantees is not defined in the Directive (return rate?) When the guarantees are not with a 3rd party, the reserves are not

secured in case of bankruptcy Suggestions for the Beneficiary:

Control via a central EU specialised, financial enforcement body; Define return rate so that the guarantee level can be estimated; Distribution of the guarantee to all participating schemes in accordance with their market share.

WEEE Directive review topicsGuarantees

Our suggestions will create an environment in which the market will be able to

Fulfill its responsibilities in a financially sustainable way

Reach current and future environmental targets

Successfully integrate the environmental challenges into their respective business strategy

Maintain competiveness in the market



Closing remarks

WEEE Directive review topics

Back up slides

How to manage these concerns? Different options can be developed

Oblige Producers to pay now the NPV of the future fee Activate the actual financial responsibility for future waste for producers today to guarantee the waste management of tomorrow (i.e. pay now the NPV of the future fee )

This sounds as a very simple solution. however this will Not remediate or mitigate most of the aforementioned concerns Further increase number of illegal import (estimated for the EU at > 12%

today) Further decrease competitiveness of producers that are aiming to comply

and reach the collection and recycling targets Distort financial markets (provisions) Not prevent opportunistic behavior to avoid application of the law Not mitigate the increased environmental and financial costs


Support for a mandatory visible fee

Effective tool against free riders Minimizes costs: no mark-up for WEEE costs through the supply chain Increases transparency Builds ongoing consumer awareness

Historic waste still needs to be financed also after 2011 Future waste will also need financing and consumers have a key role to

play in enabling financial and environmental sustainable solutions

Ensures the competitiveness of European Producers (WEEE costs only paid once, i.e. in the member state where the EEE becomes waste)

WEEE Directive review topicsVisible fee

aura light blv ge lighting narva osram philips lighting havells sylvania weee directive review: in...

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