The revised regulations on WEEE in 2013 heralded two main changes which have continued to influence market behaviour and, I believe, is the best intervention to stabilise the market.
First of all, the regulations introduced a compliance fee – which is essentially a safety valve in the UK WEEE system and moves it away from a closed ‘must buy’ market to a more competitive free market where producer compliance schemes (PCSs) are given tonnage targets in advance.
This means that, in any year, there could be too much or too little WEEE collected depending on the target setting accuracy and consumer behaviour.
It is crucial to have a fee that achieves Defra’s policy goals and ensures that schemes can still comply if, for any reason, they do not have sufficient WEEE. But the fee needs to be set at the ‘Goldilocks’ level – not too high, not too low, but just right – for prevailing market conditions in any given year.
If it is too high, market prices for WEEE treatment or evidence could rise simply on sentiment. If too low, then PCSs could choose to under-collect and pay a fee, leading to a surplus in the market and the possibility of unaligned council-run designated collection facilities (DCFs).
Fortunately, the second change to the regulations prevents there being unaligned local authority DCFs: sites left without a contracted PCS can ex-ercise their right for free uplift under Regulation 34. But this regulation is less than ideal, hence the launch of the producer compliance scheme balancing system (PBS) (see box).
Regulation 34 is a backstop to be used where a council DCF cannot find a willing PCS partner. The law allows such a site, when out of contract, to contact any PCS and request a free collection. The PCS must collect even if it already has enough WEEE.
While this seems to be the fairest option on the surface, in reality, Regulation 34 is a headache for local authority sites and PCSs alike.
For local authorities, the regulation is retrospective, meaning that a site can ask for a collection only once the WEEE is ready to collect and it only applies to individual collections. This restriction requires the site manager to reach out to a PCS every time a container is full.
While sites can ask the same PCS or a different scheme each time, it can also insist the scheme it previously partnered with to continue. Neither is ideal and all options waste valuable time, adding disruption and costs into the system.
From a PCS’s point of view, enforcing Regulation 34 has the potential effect of being costly – and may even cause a scheme to go bust if a large or several large councils insist it collects their WEEE. Most PCSs have joined the PBS to help the system function properly and it coincidentally provides a kind of insurance policy. It seems odd that not all PCSs are members – perhaps it is just a matter of time before everyone supports it.
compliance fee weee is recycled
So what is the solution? The newly created PBS ensures that all surplus WEEE held at DCFs can be centrally managed via a ‘black box’. Participating schemes are required to bid for a collection, with the best winning. The system’s independent administrator then ensures costs are shared out confidentially, depending on market share per stream, between all participating PCSs.
What this new system will do is take away the immediate danger currently faced by all PCSs: the risk of being inundated with WEEE they do not need while, at the same time, supporting those council sites without a contracted WEEE collection partner.
The PBS can provide continuity of service, one point of contact and certainty that what councils have at their DCFs will be collected and properly recycled in a managed, professional manner.
The new system is open to all PCSs to join, and the service operates like a normal local authority/PCS contracted collection covering several months. Importantly, it is set up in advance and not operated retrospectively.
Producer Balancing System
- All approved PCSs are eligible to join and bid for the collection – the best bid wins and is treated in confidence
- Service would be like a normal local authority/PCS contracted collection covering six months or to the end of the compliance year, whichever is the longer, and is set up in advance not in retrospect
- Cost is then shared out, confidentially, based on PCS market share
- Reduced risk of participating schemes being inundated with WEEE they do not need; risk remains for non-PBS members
- Provides continuity of service and certainty for local authorities
- Visible option for all parties
Philip Morton retired this month as Repic chief executive