Producer compliance schemes set up to meet the waste electrical and electronic equipment Regulations are warning that the regime could become mired in legal wrangling because of a row over the trading of evidence.
Since July, producers of electrical and electronic equipment have to pay for its collection, treatment and recovery. To discharge their duties, 3,500 producers have joined compliance schemes, which must obtain sufficient evidence of WEEE treatment and recovery to cover the collective obligations of their members, based on market share (see table).
However, it is very difficult to predict both the level and type of WEEE that will be collected meaning it is highly unlikely that any scheme will physically handle the exact amount of WEEE it needs.
A promised settlement centre, to be operated by Real Time Engineering, will allow trading of evidence from those that have a surplus to those with a shortage. It will also allow local authorities that have not entered into agreement with a compliance scheme to sell evidence. It is expected to be fully operational by November.
However, some schemes are raising concerns that others are deliberately punching above their weight: signing up more designated collection facilities than their market share. And with the no pricing mechanism, there are fears that schemes will use this to squeeze those facing a shortfall in evidence, undermining their competitiveness and blowing a hole in producers’ budgets for the scheme.
Leading compliance scheme Valpak said it was aware of other schemes that were “well in excess” of their obligations. Duncan Simpson, its director of marketing, said these schemes should have operated in the spirit of the regulations: “Are the compliance schemes that have over-procured holding other schemes to ransom because they can derive some extra revenue from the process?”
In April, the Business Department (BERR) wrote to compliance schemes saying that it would monitor them “closely” to “ensure that levels of collection and treatment are in line with overall obligation[s].”1 Evidence of excessive over or undercollection will be examined, it said, and could lead to compliance scheme approval being revoked.
However the department now appears to have backed off the issue: there has been no further announcements as to what will be acceptable and the matter was not touched upon in the government’s most recent, consolidated guidance.2
REPIC, the largest compliance scheme by market share, also has concerns about the situation. It is thought to have secured only a fraction of the evidence it needs. In a statement, it said there was clear insecurity in the market and that it had become aware of “extreme WEEE evidence price models.”
Electrolink, with a market share of just 0.53%, is one known to have over-procured. While BERR is refusing to say which local authorities have signed with which scheme, industry insiders say it has signed up 10-15% of councils. However, Electrolink strongly rejected accusations that it was trying to corner the market.
Mike Beard, Electrolink’s corporate affairs manager, said the company had little sympathy with the position that some compliance schemes find themselves in. Electrolink had paid local authorities their full costs to upgrade their civic amenity sites, he said. Schemes unprepared to meet those were always likely to fall out of favour with councils. “Imagine if local authorities had said we’re not playing this game because no one came to us with plans that are viable. That would have been a disaster. Local authorities liked our business plan because it reflects the needs of the environment and those of tax payers.”
Electrolink is “ready, willing and needing” to trade, he added.
However, it is the costs associated with such evidence that is worrying other schemes. Electrolink is offering evidence for televisions for £400 per tonne. Many schemes had expected it to cost no more than £150-200, according to Transform’s Phil Conran.
“If the prices weren’t so extreme I think most people would have accepted their selling price,” said Mr Conran. “But if you have members with an obligation of 300,000 tonnes who are now being told they will have to pay an additional £200 per tonne than they originally thought, then it’s either shift scheme or go bust.”
ENDS understands that REPIC is considering whether to seek a judicial review of the matter, but it would neither confirm nor deny this. It has also issued Freedom of Information (FoI) requests to the Environment Agency to see other scheme’s operational plans. Further FoI requests are understood to have been filed with local authorities to determine why they signed contracts with schemes.
There are fears that this activity indicates REPIC is moving to defend non-compliance with the regulations, undermining the market for everyone and potentially leading to a stand-off with compliance schemes unable to recoup their costs.
In its statement REPIC said it was “successfully” working with other schemes “to ensure the fair distribution of WEEE in accordance with the code of practice, which prevents schemes being put at risk.”