WEEE compliance fee proposals published

Proposals were submitted by: Joint Trade Associations, with input from compliance schemes including ERP, Recolight and Repic; compliance scheme Valpak; and a joint proposal from Advantage Waste Brokers, Dataserv Group, DHL WEEE Compliance, Veolia WEEE Compliance, Electrolink, WeeeCare and WE3 Compliance.

BIS has published the full proposed methodologies for each of the three submissions, and is seeking views from producers, WEEE recyclers, local authorities and compliance schemes on which, if any, of the proposals should be adopted for the 2015 compliance period.

BIS can choose to use the compliance as part of the revised WEEE regulations, which came into effect from January 2014.

The regulations establish a system of household WEEE collection targets for producer compliance schemes. Should a scheme fail to meet its collection targets, it can pay a ‘compliance fee’ to meet the cost of its members’ obligations.

The fee is determined after the end of each compliance year, and schemes will not learn how much they will be required to pay through the fee until after every scheme has submitted its final evidence.

JTA’s proposal was used by BIS to set the WEEE compliance fee for 2014 and involved a sliding scale that set a higher fee for schemes the further they are from their target. This is calculated by taking into account the average cost of transport and treatment for each stream.

‘Manipulation’

Of the three proposals published today, the ‘seven scheme’ proposal, submitted jointly by Advantage Waste Brokers, Dataserv Group, DHL WEEE Compliance, Veolia WEEE Compliance, Electrolink, WeeeCare and WE3 Compliance is based on the same ‘escalator’ principle as in 2014.

However, in their outline of the proposals, the seven schemes criticised the 2014 methodology, which they claimed was open to “manipulation by those PCS intending to use the fee as an alternative means of compliance.”

As such, the proposal submitted by the schemes comprises a base compliance fee multiplied by an escalator which would increase the fee by certain percentages depending on the degree of shortfall in any particular stream against PCS collection target.

“This is to reflect the fact that a PCS which largely meets its target but is short by a small tonnage has made a significant contribution whereas a PCS which collected very little has made no contribution to national collections and therefore should pay correspondingly more per tonne to compensate,” the schemes add.

The proposal also includes adding a 10% base escalator which will not be linked to the shortfall of the individual scheme, to incentivise meeting the collection targets through physical WEEE collections. Schemes using the fee would also have to provide details of direct costs of WEEE collection.

Valpak’s proposed methodology would see schemes provide direct collection and treatment cost data for the calculation of the fee, as well as a participation fee of £2000 for each scheme wishing to use the mechanism, to cover administrative costs.

The process would be overseen by Grant Thornton LLP and involves the data to calculate the weighted average cost per stream. A standardised additional charge of £3.50/tonne would also be applied to allow for the necessary fixed costs of managing collections – to ensure that schemes are not using the fee to avoid costs involved in the WEEE collection process.

The fee applied to schemes unable to meet their collection targets would be escalated against their shortfall from the national target for each WEEE stream.

Joint Trade Associations

The proposal submitted by the Joint Trade Associations, whose mechanism was chosen by BIS to set the 2014 compliance fee, is largely in line with that used in 2014.

JTA, which through its trade association members represents major producers including Candy, Samsung, Delonghi, Toshiba and Dell, is proposing that accountancy firm Mazars oversees the administration of the fee for the second year running.

The 2015 proposal includes using the same methodology involving a sliding scale calculation of costs to set the fee, but adds a requirement that schemes using the fee for any stream for more than 10% of their target will be required to contribute to the administrative costs of the running of the system.

On the use of data, JTA notes: “Only the costs of those PCS’s that choose to use a compliance fee for a stream will be used in the calculation unless certain exceptional circumstances apply.”

Following the month long consultation, which closes on November 15, BIS will announce its decision as to which methodology will apply from around February 2016.

Should BIS opt to use the compliance fee in 2015, any schemes which fall short of their collection targets in 2015 will be liable to pay the fee in accordance with the chosen method from that date.

Full details of the three methodologies can be found on the BIS website.