Environment Agency proposals to tighten up the rules on how WEEE compliance schemes operate have brought out concerns over how last-minute deals on evidence are undermining the UK system.
The issue centres around the way the UK operates its recycling evidence process for the recycling of waste electrical and electronic equipment. Under the system, almost 40 compliance schemes which have members who are required to fund WEEE recycling have to calculate at the beginning of each year how much electrical equipment their members are going to sell.
And, following on from the estimate, a forecast is produced as to the tonnage and type of WEEE the compliance scheme has to either collect itself or have collected on its behalf from another scheme.
In a consultation document published earlier this year, the Agency said it was looking to improve the accuracy of how the compliance schemes calculate their recycling obligation and set actual triggers for when they must tell the Agency if their collection plans or obligation has changed. At present the schemes only have to tell the Agency if there is a material change to their plan but the Agency has now set specific parameters for when it needs to be notified.
These moves have been welcomed as a step in the right direction by schemes, but they have revealed underlying concerns over how the UK WEEE system makes last-minute deals on evidence inevitable. This is because schemes do not know their final obligation until after the compliance year is over.
The situation is further complicated by the government making it clear to the Agencies that actual regulatory change to address the situation is not feasible until the recast of the European WEEE Directive is complete.
The proposals are outlined in a document entitled Proposed changes for improving assessment of operational plans, published by the Agency and its counterparts in Scotland, Wales and Northern Ireland.
Over-estimating
The document is thought to have been issued in response to concerns that some schemes are over-estimating how much WEEE recycling evidence they will need to meet their members obligations. This would mean that schemes concerned may seek to sell the surplus at artificially high marginal trading prices, to schemes who find they have a shortfall of evidence at the end of the year.
As much as 40% of all WEEE recycling evidence is understood to be allocated at the end of the year.
On the other hand, industry sources have indicated that some may be claiming in their initial plans for meeting their obligations that they need less evidence than they actually do.
One over-collecting scheme told letsrecycle.com this could create a cash-flow issue for them if they had to collect WEEE for 12 months without payment and claimed it would stifle the market by removing any incentive to collect more WEEE.
The issues are not, however, thought to relate to differences between Electrolink and REPIC: it was these two schemes conflicting approach to evidence collecting and trading which acted as a precursor to the 2009 judicial review.
Viable plans
The aftermath of that legal challenge saw the government introduce a requirement for all schemes to have viable plans in place as part of their operational plan, outlining how they plan to meet their members recycling obligations.
This can be through directly collecting waste electrical and electronic equipment from civic amenity sites and/or making contractual agreements with other schemes for surplus evidence. Schemes must predict their obligation based on previous years figures.
But, in its proposals, the Agency acknowledges that schemes have issues over how these plans are submitted, assessed and then delivered by schemes.
And, to address this, they make proposals which include:
Reminding schemes that any balancing of evidence at the end of compliance period must be done on existing agreed terms and conditions, including price and pricing mechanisms.
Outlining actual set changes in a schemes obligation that are deemed to constitute a material change, which gives a scheme 28 days to submit updated viable plans for meeting its obligation. The triggers are proposed as a 500 tonne or 20% change in the obligation or collection for a specific category of WEEE and a 10% change against the previous years overall category obligation for the UK.
Changing the forecasting system used by schemes to estimate how much EEE their members will put on the market and therefore how much they will need to collect. The Agencies outline plans to try to establish an improved approach which is either generic or product/WEEE specific in essence, ensuring all schemes start from the same place.
These plans were discussed a meeting of WEEE compliance schemes in July 2011. While attendees are understood to have agreed on the need to stop people charging extortionate prices for evidence, agreement on how to achieve this is thought to have been harder to obtain.
Flexibility
While some schemes favour certainty, with all evidence changing hands within the limits of viable plans, others are known to support more flexibility in the system, moving away from fixed prices for evidence which they claim are artificially high.
There are also concerns that tightening up the system could limit the movement of members between schemes and stifle innovation by preventing schemes from collecting more WEEE than required.
The plans were welcomed by Philip Morton, chief executive of REPIC, who told letsrecycle.com: REPIC welcomes the suggestion to strengthen the viable plan process and agrees with the agency that all Producer Compliance Schemes should use the same base data for WEEE and EEE.
REPIC also welcomes agency proposals to robustly police the process and take action against schemes that deliberately flout the rules.
His sentiments were echoed by Barry Van Danzig, chief executive of Electrolink, who said: What we want is a properly ordered system that works for the good of everybody and eliminates the opportunity for people to withhold their obligation or evidence for the purpose of commercial gain.
Theres nothing wrong in what the Environment Agencies are proposing in that document. On the basis of the discussion we had I think it will all work.
Tinkering
Graham Parkin, managing director of compliance services for Wastecare, the UKs largest WEEE scheme in membership terms, also described the Agency proposals as common sense but cautioned that they were tinkering with a flawed system.
He said that 90% of compliance schemes would be able to come to agreements over evidence without the administrative burden of a viable plan, but said the requirement was just because of a handful of schemes.
Mr Parkin said that, for Wastecare, we agree prices commercially with all the other schemes we deal with, but, he added: I am aware that, when there is a set of rules, some people push it for personal gain.
Valpak
Commenting on the situation, Duncan Simpson, director of marketing at Valpak, highlighted how the changes in variables such as the amount of EEE sold during the year could impact on schemes viable plans, and how the way obligations are calculated made last minute changes inevitable.
You cant help that some of the things change, he told letsrecycle.com, but stressed that, where possible Valpak would rather have agreements in place for its obligation sooner rather than later.
As such, Mr Simpson warned against the rules for viable plans being made too strict or too prescriptive, which he said made it nigh on impossible to work.
Instead, he emphasised the importance of accurate data to stay on top of any changes in viable plans. The starting point should always be that the management of data is as accurate as you can get it, he said.
A spokeswoman for the Environment Agency told letsrecycle.com: “We’reworking together withallthe schemesto improve the system.We’ve had a great response toour proposals and are currentlyworking through alarge number of detailed responses. We’re aiming topublishrevised final guidance in September.”
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