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Some Learning’s from the establishment of the first pan-European WEEE Compliance Scheme. Hans A. Korfmacher, Vice President External Relations, ERP Director Environmental External Relations Gillette GBU, P&G PSI Conference, San Francisco 30th May, 2007. Thanks for the opportunities. - PowerPoint PPT Presentation
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Some Learning’s from the establishment of the first pan-European WEEE Compliance
Scheme
Hans A. Korfmacher, Vice President External Relations, ERP
Director Environmental External Relations Gillette GBU, P&G
PSI Conference, San Francisco30th May, 2007
ERP 6-2006
Thanks for the opportunities
I would like to thank all the people involved in the development of ERP in the last five years.
Thanks to the innovative power and creative spirit of the different ERP teams in many European Countries, the energy and confidence of the founding and member companies to support the new pathways with financial and human resources, it was possible to create and discover a new pathway to operate take back structures. The great work and investment of the General Contractors to ERP enabled the success of implementation and paved the road.
This presentation is made with the purpose to share the experiences of five years innovation with those, who face the same or similar challenge on WEEE related subjects and who have the desire of continuous sustainability for the benefit of consumers, the society , the environment and the economy.
ERP 6-2006
Agenda
1. ERP Mission & Objectives
2. WEEE Take Back Scheme Options
3. ERP Organisation, Business Model and Achievements
4. Key Learnings
5. Sustainable Waste Resource Management
ERP 6-2006
ERP Mission
The activities we start now will impact
companies for a long time.
We need maximum flexibility to enable
best business practice and to allow mistakes
to be corrected.
ERP 6-2006
Scope of EU WEEE Directive
All electrical appliances which could end up in a municipal waste stream or which are non-industrial, but professional equipment and who need electricity to performe their primary function:■ 10 product categories such as
Large Domestic Appliances (LDA) = dish washers, washing machines, oven, heater
Cold Appliances = fridges, airconditioner, freezer Small Domestic Appliances = hairdryers, toothbrushes, shavers,
coffemaker etc. IT and Telecom= PCs, server, monitore, telefone, fax, all
assecories etc CE= Audio, Video, TV Gardening, Toys, Sports, Medical, Control devices, automatic dispenser
ERP 6-2006
Treatment & Recycling
Households Transport
Municipalities / Retailer
Reportingto Government
Responsibility of producer
Monopolistic
Consortium(national *)
very often run by associations
WEEE Take Back Process from Private Households
Operational alternatives: old- fashion way
National Monopolistic Consortia are less efficient and
Have no interest to improve process, service and cost.
ERP 6-2006
Treatment & Recycling
Households Transport
Municipalities / Retailer
Reportingto Government
Responsibility of producer
Monopolistic
Consortium(national *)
very often run by associations
WEEE Take Back Process from Private Households
ERP-Take Back System
WEEE-Take Back System B
WEEE-Take Back System A
Competition between Compliance Schemes makes the
market forces available for continues improvement of
process, services and prices.
Operational alternatives: innovative way
ERP 6-2006
0 €
50 €
100 €
150 €
200 €
250 €
300 €
350 €
400 €
FY
199
9
FY
200
0
FY
200
1
FY
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FY
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3
FY
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FY
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5E
stim
atio
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€ / t
End of ‚
Green D
ot‘ Monopoly
Example: Packaging Take Back Cost in Germany
ERP 6-2006
Scope: 10 countries, 5 WEEE categories, 480.000 tons
*
Conclusions:
A pan-European take back system increases competitive pressure to all compliance schemes with the result
Reduction of operational cost: > 30%
Reduction overhead cost: 70-80%
Conclusions:
A pan-European take back system increases competitive pressure to all compliance schemes with the result
Reduction of operational cost: > 30%
Reduction overhead cost: 70-80%
Business Case Analysis 2004 by Accenture
ERP 6-2006
ERP outsources all operational activities to two “General Contractors”.
ERP General Contractor achieve always the best competitive price (per country/ product group).
ERP applies and holds license to be a registered “WEEE Compliance Scheme”.
In order to maintain competition between take back system ERP will never be dominant in any market.
ERP WEEE Compliance Schemecreated in November 2004
as a branded, totally outsourced, first everpan-European WEEE compliance scheme.
ERP Principles
ERP 6-2006
ERP Service in ALL Europe
Agent Model operated byOne-WEEE Service
ERP affiliated country Operated by NERA
France
Spain
UK
Geodis Operation
CCR Operation
Germany
Austria
Italy
Poland
Ireland
Portugal
European Recycling Platform as first ever pan-European Take Back System established.
2006: 7 countries in operation, > 800 User companies, > 100.000 t WEEE processed.
Limited company based in Paris.Shareholder: P&G Braun, Electrolux, HP, Sony
2007: All Europe in operation, > 1000 User companies, > 200.000 t WEEE processed.
ERP 6-2006
ERP Board
GCs
Coordination office (BRU)
Other vendors
Umberto Raiteri
Christophe Pautrat
CEO
COON. Magaraggia
Country G.M.s
CFO
Management Structure
ERP 6-2006
Key Learnings
I. Products with value are managed by the market and don‘t need compliance schemes.
ERP 6-2006
Value is managed by the market
■Large Domestic Appliances are managed by the market (scrap dealers and shredder companies) and compliance schemes are de-facto not involved.
> 90% of LDA in Germany are sold by the municipalities to scrap dealers for approx 100 €/t
> 95% of LDA in Spain are managed by the metal industry
E-Waste contains significant material resources, which establish a value in the global raw material market. With establishment of
Competitive market structures – limited administration, technology,recycling capacity, infrastructure -
the market enables effective and competitive recycling take back operations financed out of the material value.
E-Waste contains significant material resources, which establish a value in the global raw material market. With establishment of
Competitive market structures – limited administration, technology,recycling capacity, infrastructure -
the market enables effective and competitive recycling take back operations financed out of the material value.
ERP 6-2006
Waste Resource Strategy
■ Waste with a value follows the money
Metal: global steel market demand has created a situation of selling metal scrap material (cars, washing machines, etc) > 100 $/ton.
GSM have a value of > 2$/pc due to precious metals and Co in Li-Ion-battery
PC and Laptop, Copy machines have high re-use value – which needs to be certified
Silveroxid button cells (watches) have high value due to Ag
Political and operational objective should be to set rules, which allows to increase value of material and allow to manage waste with
market instruments.
Political and operational objective should be to set rules, which allows to increase value of material and allow to manage waste with
market instruments.
ERP 6-2006
Waste with Value
Households
e.g.•Cars•LDA•Computer•Copiers•GSM•Li-Ion battery
Collection
Production
Quality Control
FinanceValue pays
for the processFree market
Sustainable Waste Resource Management
ERP 6-2006
Key Learnings
II. Professional and sufficient recycling capacities in a competive recycling industry are necessary to achieve sustainable performance.
ERP 6-2006
Competitive Recycling Capacity necessary
■ Example Fridge Recycling France has had no fridge
recycling operations in 2006. All fridges had to be exported to other countries to ensure propper CFC recovery: concequence: high cost for fridge recycling 2006: 260 €/t
■ Germany has sufficient recycling capacity with competition between recycling companies: consequence: low cost with high quality for fridge recycling:
130 €/t
Only when sufficient recycling capacities - which enableeffective and competitive recycling - are available inthe market, take back operations can be effective.
Only when sufficient recycling capacities - which enableeffective and competitive recycling - are available inthe market, take back operations can be effective.
ERP 6-2006
Key Learnings
III. Some E-Products contain environmentally critical substances. The management of these requires quality management with legislative
frame conditions.
ERP 6-2006
Management of critical substances
■Removal of CFC from fridges is important to protect the climate.
■CRT glasses contain hazardous substances, which need to be removed and treated.
■Rechargeable batteries contain relevant substances (Cd, Co, Pb) which requires management
Quality control and enforcement are important to achieve sustainable performance of take back operationsand to have same market condition for all players
Tide quality control mechanism with regulative backing is importantto manage critical substances in E-Waste.
Quality control and enforcement are important to achieve sustainable performance of take back operationsand to have same market condition for all players
Tide quality control mechanism with regulative backing is importantto manage critical substances in E-Waste.
ERP 6-2006
Management of critical substances
■The Restriction of Hazardous Substance Directive (RoHS) requires not to use certain critical substances. ■This enables to develop further markets for the recovery of „clean E-
Waste“. ■To design products, which fit best into integrated waste management
structures using market forces, is an incentive for producers.
To ban substances where technically possible is a goodapproach to „clean“ products and future E-Waste and to move
towards „sustainable products“.
It would be good to achieve same RoHS conditions around the globe.
To ban substances where technically possible is a goodapproach to „clean“ products and future E-Waste and to move
towards „sustainable products“.
It would be good to achieve same RoHS conditions around the globe.
ERP 6-2006
Waste Resource Strategy
■ Its important to implement a strategy that increases the value of waste
Waste need to be „cleaned“ from materials, which decrease value of waste.
Infrastructure need to be developed in order to enable the recovery of value from waste
■ Hazardous materials need to be kept out of stream by Ban and substitutiuon Seperate collection of materials, in which substances can not be
substituted
ERP 6-2006
CFC containg products
■CFCs and similar cooling agents in refridgerators, airconditioners and other cooling appliances have a significant impact on climate.
■CFC containing products need to be seperatly collected and treated in order to seperate, recover and minimize emissions of CFS.
Large quantities are available for collection (fridges, airconditioners)
■Sustitution of CFCs is technical standard. Promotion can be done by awarding „non collection obligation“ or public procurement.
ERP 6-2006
Hg, Pb, Cd- Management:
■Limit use of Hg, Cd, Pb in same applications as the EU RoHS Directive and Battery Directive ( e.g. Appliances, fluorescent & energy saving lamps, switches, thermometer, temperature control devices, button cells, rechargeable batteries)
■Create „Hg containing product waste“ , „Pb- containing product waste“ and „Cd-containing product waste“ stream“ with mandatory seperate collection in the responsibility of producers.
■Promote sustitution of heavy metals by awarding „non collection obligation“ or public procurement to those producer and products, who have „cleaned“ their products based on the principle of individual producer responsibility.
ERP 6-2006
Individual Producer Responsibility (IPR)
■WEEE Directive stipulates, that each producer shall be responsible for the take back of its own products – sold after 8-05- only.
■Such individual producer responsibility is important to promote design changes towards sustainable product design, as it will allow to use „natural“ market forces. It provides producer with better designed products and competitive advantage.
ERP promotes the principle and the development of the IndividualProducer Responsibility. IPR requires development of
new innovative processes.
We ask all countries to focuss on IPR concepts and to help to eliminate the virus of „collective systems“.
ERP promotes the principle and the development of the IndividualProducer Responsibility. IPR requires development of
new innovative processes.
We ask all countries to focuss on IPR concepts and to help to eliminate the virus of „collective systems“.
ERP 6-2006
Households
GovernmentalControl
Collection
Ban of substances or separation of Waste Streams
e.g.A) Hg products •Hg button•Hg thermom.B) BulbsC) Pb-productsD) Cd-productsE) Hazardous Chemicals
Production
Finance Producer Responsibility
Sustainable Waste Resource Management
ERP 6-2006
Key Learnings
IV. Logistic Optimization is key in the process to increase efficiency of process and minimize
transport and transport emissions.
ERP 6-2006
Collection Optimization
■Seperate collection of items such as paper, wood, plastic, oils, appliances, batteries, tyres, .... Creates significant transportation emission, which can outblance the environmental benefit from the resource recovery.
■Collection of waste from consumer and households needs to be optimized to generate high quality of material stream and large quantities (Integrated Waste Management).
■Municipalities and Retailer play an important role in the collection process of such „integrated materials stream“ in order to generate large quantities.
Municipal drop-of center , retail out-lets, gasoline stations and other location, to which citizen travel by car „naturally“ are ideal drop off point to minimize transport efforts (CO2 emissions) and to consolidate material streams
ERP 6-2006
Integrated Waste Collection
■ Examples for material streams to be collected together:
Fe/Zn waste: Fe-scrap, Zn plated products, Alkaline batteries, washing machines, cars
Cu waste: Cu containing metal scrap Paper/ Cardboard Plastics: seperated or mixed Bio-Organic: gardening, food
■With increasing raw material demand the market price of the collected material will finance major part of collection and recovery.
■ Integrated Waste Management Systems are best to be operated by or on behalf of public waste authorities.
ERP 6-2006
Households
Collection
Integrated Waste Streams
e.g.A) metal scrap•Appliances•Alkalines•Metal productsB) PlasticC) PaperD) Organic
Production
Way of treatmentDepend on local technology
Finance
Sustainable Waste Resource Management
Value pays for the process
Free market
ERP 6-2006
Key Learnings
V. Competition between take back schemes ensure continues improvement of service
levels, high quality and best price
ERP 6-2006
Take Back Schemes
■Take Back Schemes are only necessary for those type of products, which are not handled by
Market drive process Integrated Waste Management Structures
■Regulations / Laws are necessary to regulate the producers take back obligations and the collection responsibilitiy of municipalities and retailer, the compliance obligations, registration and reporting of producers.
■Regulations should promote the competition between take back schemes and not intervene in the financing mechanism.
ERP 6-2006
ERP has create Competition between Take Back Schemes
Number of Take Back SchemesCountries
> 10 expectedUK
8 systems Spain
2 systemsPortugal
2 systemsPoland
7 expectedItaly
2 systemsIreland
> 20 service systemsGermany
3 systemsFrance
4 systems Austria
ERP 6-2006
Competition to drive cost down e.g Austria
Q205 Q305
0.10 €
0.50 €
avg
. co
st p
er k
g
sold
Austria 1
Austria 2
ERP Austria
0.30 €
Q405
Austria 3
* For Small Appliances < 50 cm
0.20 €
0.40 €
0,14 0,16
0,16
0,11 0,098
Q106 Q306
0,075
Q107
ERP 6-2006
Key Learnings
VI. Financing process should follow market conditions and should not be centralized.
ERP 6-2006
■Any centralized funding, trading, commercial price fixing process limits / destroys the competition between compliance schemes and needs to be avoided:
Central fixed fees per unit sold (e.g. Ireland, France) block the full competitive dynamic between schemes.
State fund systems, where producer pay a fee to the government create only administrative burden and provide no efficiency.
Governments should not be involved in price finding, as they slow down market dynamic.
Financing
ERP 6-2006
Key Learnings
VII. Legislation is required to define the same conditions for all producers who need to be
identified (registered) and whose compliance is monitored.
ERP 6-2006
■ If take back for certain products becomes mandatory, registration of producers is key to ensure same market conditions for all producers.
■ Registration organizations should be independent from take back organization (avoid conflict of interest) and should have power for enforcement (penalize non-performing producers)
■ Each producer’s obligation should be based on a weight related market share.
■ Producer or their compliance scheme need to report their compliance performance (collection tonnage, recycling targets)
Registration
ERP 6-2006
Summary : Sustainable Waste Resource Strategy
■Waste is a potential resource for raw materials.Waste with value follows money flow.
■ Value of waste needs constantly to be improved to maximize resource production.
■ Hazardous materials need to kept seperately to enable waste resource recovery.
■ Collection operations needs to be optimized to generate good quality and high quantity of waste resources.
■ All operations should follow competitive and market principles.
■ Competition between compliance schemes is best management practise.
ERP 6-2006
Products with Value
Households
e.g.•Cars•LDA•Computer•Copiers•GSM•Li-Ion battery
GovernmentalControl
Collection
Integrated Waste Streams
Ban of substances or separation of Waste Streams
e.g.A) metal scrap•Appliances•Alkalines•Metal productsB) PlasticC) PaperD) Organic
e.g.A) Hg products •Hg button•Hg thermom.B) BulbsC) Pb-productsD) Cd-products
Production
Way of treatmentDepend on local technology
Quality Control
FinanceValue pays
for the processFree market
Producer Responsibility
Value pays for the process
Free market
Sustainable Waste Resource Management
ERP 6-2006
Waste Resource is strategic global capital
■Global demand and lack of new sources for resources make waste a strategic global capital (such as crude oil).
Limitation of Resources is a limitation of industry production.
■Political objective should be to promote and develop innovative technlogies and creation of new companies / markets for resource recovery from waste.
Export of waste into developing countries is a loss of capital Intelligent solutions need to be developed with universities,
technology centers etc.
ERP 6-2006
Waste Resource Policy Development
■Up to now waste was a cost factor to the public. Governmental stratgies have been to impose cost via industry to consumer and to claim tax reduction program (which never happened).
■To become a „sustainable waste resource country“ governments need to shift focus towards „mining the resource opportunities“.
■Producers role needs re-definition in order to promote design of products, which fit into a „sustainable waste resource strategy“. The old „European Producer Responsibility“ of making producer only a „money transfer station“ is not sustainable.
ERP 6-2006
Key Learnings
Final Recommendation:It took 4 years to develop and implement
operational structures of ERP. It is important to be flexible, because mistakes will be made.
ERP 6-2006
■Website: www.erp-recycling.org
Thank You !Thank You !