Some commentators say difficulties in the way the money is given out could be an issue for DEFRA. The fund is thought to be subject to regulation by the European Commission under state aid legislation because it will act as a form of subsidy to companies carrying out the fridge recycling work.
Comments by a DEFRA spokesman this morning revealed the 40m will be allocated in the form of a grant.
“We can’t give money to a private company in excess of 100,000 euros as this contravenes EU law. We will have to allocate the money through local authorities, but until we have agreed a process forward with manufacturers, recyclers, reprocessors, retailers and local authorities, we are not sure how this will be distributed.”
Retailers are now to discuss among themselves and with DEFRA as to how any take-back scheme could operate. They are thought to be keen to avoid taking on the paperwork needed to cover old fridges collected when new ones are delivered. One source said: “This could turn into an administrative and bureaucratic nightmare and our supply chain is not designed to handle this.
Graeme Carus, business development manager of EMR said: “We welcome the 40m and some clarity in connection with how reprocessors will be paid. We would like some confirmation and clarity of the link between fridge processors and the payment vehicles.” EMR is to open a fridge processing unit in London shortly.
During yesterday’s announcement, Mr Meacher said 40m would be dedicated for the current financial year towards clearing the stockpiles of old fridges dumped at local authority sites. The House of Commons Environment Committee recently said the debacle will cost the taxpayer 40m. There is expected to be around 900,000 fridges stockpiled in the UK at the moment.
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