Allocation Scheme - Calculation Method and Allocation Criteria

May 2020

Procedures for the allocation scheme - Calculation method and allocation criteria

DPA-System is short for Danish Producer Responsibility System. DPA-System is in charge of administrative tasks associated with the rules on producer responsibility under Danish environmental law regarding waste from electrical and electronic equipment, end-of-life batteries and accumulators, and end-of-life vehicles. Producer responsibility for these waste types has authority in the Danish Environmental Protection Act. This Act translates into three Statutory Orders for the different waste types: the WEEE Order, the Battery Order, and the End- of-life Vehicles Order. More information is available on www.dpa-system.dk. The Danish Statutory Orders take offset in three EU directives for the same waste types: the so-called WEEE Directive, the Batteries Directive, and the ELV Directive. Producer responsibility rests on the principle that each producer or importer assumes responsibility for collection and management of WEEE, waste batteries, and end-of-life vehicles to the effect that products becoming waste are managed in an environmentally correct manner, with the highest possible utilisation of resources contained in such products. Producers and importers are in the following referred to as producers as the rules applying to both types are the same. In general, the following abbreviations are used: WEEE for waste electrical and electronic equipment, BAT for batteries and accumulators, and ELV for end-of-life vehicles.

Abstract In pursuance of the rules on producer responsibility this document describes procedures, calculation formulas, and other criteria used in DPA-System to calculate the share of WEEE and waste portable batteries allocated to each producer to be collected in the different municipalities. The distribution of WEEE and portable batteries from households is referred to as “the allocation scheme”. The allocation scheme only covers allocation of the duty to collect from municipal collection sites for individual compliers and collective schemes.

Contents

The allocation scheme - general ...... 3 Allocation period ...... 3 Establishment of municipal collection sites ...... 3

Calculation of producer’s market shares ...... 4

Post-adjustments further to allocation method ...... 5 Post-adjustment for excess/deficient collection...... 5 Post-adjustment for producers entering the market after 1 April...... 6 Post-adjustment for free-rider quantities ...... 7

Post-adjustment for incorrect registrations and deficient registrations ...... 7 Allocation, post-adjustment, and adjustment for previous errors ...... 9

Allocation of municipal collection sites ...... 9 Establishment of new collection sites in the allocation period ...... 10

Individual compliers ...... 10 Allocation criteria for allocation to producers not affiliated to a collective scheme ...... 10 Notification of individual compliers ...... 10 Financial guarantee ...... 10

Other allocation criteria – prioritised list ...... 11

Publication of allocation ...... 13

Appendix 1: Symbols legend ...... 14

The allocation scheme - general In pursuance of the rules on producer responsibility producers and importers of electrical equipment and portable batteries used in households (hereinafter referred to as EEE and BAT) are obliged to take back/collect a proportionate share of WEEE and end-of-life portable batteries (hereinafter WEEE and BAT) from citizens in the municipalities. The proportionate share is based on the producer’s share of quantities placed on the Danish market. The following general principles are behind the allocation: • Waste fractions allocated to producers must correspond to the product categories that he places on the market.

• The producer can choose to affiliate to a collective scheme that assumes administrative and practical tasks associated with the collection and subsequent environmental treatment. WEEE and BAT from households is normally collected in the following ways: 1. Through municipal collection sites 2. Through collection sites established by the collective schemes 3. Through take-back systems organised by an individual producer (called “Own collection”), e.g. in connection with a sale at the point of sale.

The allocation scheme only covers allocation of municipal collection sites for WEEE and portable batteries. DPA-System thus only allocates municipal collection sites registered with DPA-System. All three collection routes described above, however, are always included in the statement of total collected quantities in Denmark. Allocation period An allocation period runs for twelve months. The period runs from 1 September to 31 August. A producer having been allocated a geographical area must in the entire period collect all WEEE and BAT deriving from the allocated fraction/-s in the area.

Establishment of municipal collection sites Municipal collection sites are established by the local authorities and operated by individual local authorities or intermunicipal waste management companies. A collection site receives household WEEE and portable batteries from the municipality’s residents etc. At the municipal collection sites WEEE and BAT are sorted into the fractions set out in the relevant Statutory Orders. These fractions are presented in the following table: Table 1:Statutory WEEE and BAT fractions at municipal collection sites:

1a 1b 2 3 4 5 6 BAT Large Medium- Temperature Small IT/tele Screens and Lamps Photovol- Portable equipm sized exchange equipment equipment monitors taic panels batteries ent equipment

The producer or his collective scheme picks up WEEE and BAT from the collection sites when this has been sorted in the stated fractions. The local authorities register their collection sites and collection equipment on the DPA-System website. The local authorities decide the number of collection sites for WEEE and portable batteries on their territory. Registered collection sites can be found on the DPA-System website.

Calculation of producer’s market shares The producers must take back their proportionate share of WEEE and BAT from the municipal collection sites. To allow for calculation of producers’ share of the WEEE and BAT fractions the producers report annually to DPA-System quantities per category placed on the market and collected; these categories are almost identical to the waste fractions. Data used are the most recently reported quantities, i.e. quantities sold in the previous calendar year and reported in the reporting period of the present year.

The calculation is made as follows1. Producer’s market share (%) per category:

MAp = (MMp/MMDK) (Producer’s quantity placed on the market / Total quantity placed on the market in Denmark).

Based on reported quantities placed on the market, with a deduction of reported re-exported quantities, DPA-System calculates the producer’s market shares of WEEE and BAT to be collected for each of the fractions to which the categories belong.

The producer’s allocated share of WEEE and BAT for the subsequent period without regard to post- adjustment is:

tp = (MAp) (Producer’s market share).

Market shares per category are used as distributional keys when the quantity of WEEE and BAT to be collected in the subsequent period is distributed among producers or their collective schemes.

1 Note: Symbols legend can be found in Appendix 1.

Post-adjustments further to allocation method Based on the data reported every year no later than 31 April to the producer register of DPA-System the producer is allocated with WEEE and BAT for a subsequent period of 12 months starting from 1 September. It may be necessary to post-adjust for the following issues:

Symbol Description

E± Post-adjustment for excess/deficient collection. Compensation for the fact that the collection sites allocated to the producer in the preceding allocation period did not supply the expected quantity of WEEE or BAT. This is called excess/deficient collection.

Enew Post-adjustment for producers entering the market after 1 April. Post-adjustment for producers not entering the market and registering with DPA-System until after 1 April and therefore not included in this year’s allocation. This is called new producers.

Efree Post-adjustment for free-rider quantities. Post-adjustment for producers having noticed after the introduction of the producer responsibility system that they are subject to producer responsibility and have been so also in previous years without being registered. These quantities are called free-rider quantities.

Post-adjustment for excess/deficient collection. This post-adjustment has been established to compensate for the deviation arising from the fact that at the start of the year the distribution of future market shares and the precise future quantity of EEE or portable batteries that will become waste in the municipalities are not known. In the post-adjustment process an adjustment is made for the deviation between the producer’s calculated market share of WEEE and BAT to be taken back and the quantity of WEEE and BAT that the producer actually collected in the previous calendar year. This deviation is included in the subsequent allocation period. If a producer has taken back more WEEE or BAT than his calculated market share, this quantity is deducted in the producer’s market share for the subsequent period. Correspondingly, a producer having taken back a smaller quantity than his market share will see the deficient quantity of end-of-life products added to his share in the subsequent allocation period. Every year, last year’s excess/deficient collection is reset to zero before a new excess/deficient collection for the coming period is calculated, based on the present market share of the reporting year. The reason for this resetting to zero is that, for instance, if last year you were allocated with less than your market share due to excess collection the year before, this quantity should not be included as a deficient collection in the new year. Resetting to zero of last year’s excess/deficient collection is calculated by adjusting the actually collected share as follows:

Producer’s actually collected share (%):

FIAp = (TMp/TMDK) (Producer’s actually collected share / Total quantity taken back in Denmark).

Last year’s excess/deficient collection (%):

OULast year = (Transferred from last year’s calculation)

Producer’s adjusted collected share (%):

KIAp = (FIAp/OULast year) (Producer’s actually collected share (%) - Producer’s excess/deficient collection (%) from last year).

Now the excess/deficient collection (%) of the year can be calculated:

OUp = (MAp - KIAp) (Producer’s market share (%) – Producer’s adjusted collection (%)).

Post-adjustment for producers entering the market after 1 April. The post-adjustment applies to new producers registering at the course of an allocation period and thereby not submitting data for calculation of the current allocation scheme – i.e. annually after 1 April. Such producers are adjusted according to the following principle: The producer should have been allocated with collection of WEEE or BAT for the year in which the producer entered the market. In practice, this is not possible since the allocation has already been calculated. In the subsequent period the producer is therefore allocated both for the subsequent new period and for the preceding period in which he did not participate. In practice, this is done by having for the producer a deficient collection corresponding to his market share - since there was no allocation to that producer in the previous period.

The producer will therefore be allocated as follows:

Enew= (MAp+ ÅUp) (Producer’s market share (%) – deficient collection of the year (%)).

Since the deficient collection will be equal to last year’s market share it will correspond to the following:

Enew= (2*MAp) (2 * market share of the producer).

Post-adjustment for free-rider quantities It appears from the legislation that producers must assume their producer responsibility retrospectively if they were not registered in due time. This is done by registering deficient quantities in the statutory DPA- System register.

The producer is subsequently allocated with a market share according to the following formula:

MAp = ((∑deficit yearMMp) /MMDK) ((Sum of producer’s historical quantities placed on the market that should have been, but have not yet been, included in an allocation) / Total quantities placed on the Danish market).

Post-adjustment for incorrect registrations and deficient registrations Inaccuracies have been seen in quantity data reported for producers during the annual reporting period. These errors or late reports of re-exported quantities will only be registered in the reporting period the subsequent year; therefore, they are included in the first allocation made after the error has been corrected.

Symbol Description

F±errorMM Errors in already registered quantities placed on the market, including deduction of re- exported quantities not registered previously

F±errorTMprod Errors in already registered quantities collected by the producer

F±errorTMcoll. Errors in already registered quantities collected by the collective scheme

Post-adjustment due to errors in registered quantities placed on the market is based on the quantity placed on the market used for calculation of the allocation. Post-adjustment due to errors in registered quantities collected is based on the quantity collected as used for calculation of post-adjustment for excess/deficient collection.

F±errorMM Errors in already registered quantities placed on the market (in the previous reporting year)

A producer may find that he has registered too large or too low quantities placed on the market, or that there are errors in the registered re-exported quantities in the previous reporting year. This is done in practice with the following formula:

F±errorMM = (MMp(error quantity) - MMp(correct quantity)) (First registered, but incorrect quantity placed on the market – the now correct registered quantity placed on the market) = (difference that should either be added to or deducted from the allocation of WEEE or BAT to the producer in the subsequent period).

F±errorTMprod and F±errorTMcoll.

Errors in quantities already taken back by the producer or his collective scheme

The producer has the right to establish his own collection of WEEE or BAT and must be credited for this quantity. If in the previous reporting year quantities collected have been registered incorrectly, a post- adjustment is made according to the following formula:

F±errorTM = (TMp(error quantity) - TMp(correct quantity)) (First registered, but incorrect quantity of own collection) – (the now correct registered quantity of own collection) = (difference that should either be added to or deducted from the allocation of WEEE to the producer in the subsequent period).

The producer may choose to affiliate to a collective scheme for collection of all end-of-life products or parts of them. If the collective scheme collects WEEE or BAT for the producer, he must be credited with this quantity. This is done in the post-adjustment for excess/deficient collection (E±). If the collective scheme in the previous reporting year has made an incorrect registration of the share of WEEE that it has collected on behalf of the producer, this is adjusted with the following formula:

F±errorTMcoll = (TMp(error quantity) - TMp(correct quantity)) (First registered, but incorrect value for collected quantity through collective scheme) – (the now correct registered value for collected quantity through collective scheme) = (difference that should either be added to or deducted from the allocation of WEEE or BAT to the producer in the subsequent period through the collective scheme).

Allocation, post-adjustment, and adjustment for previous errors Allocation including post-adjustment, adjustment for errors in quantities placed on the market or errors in quantities collected is calculated with the following formula: Allocated collection (%):

Tp = (MAp + OUp) (Producer’s market share (%) incl. post-adjustment and adjustment for incorrect registrations + Producer’s excess/deficient collection (%)).

Note that no post-adjustment is made for incorrect registrations or re-exported quantities for periods more than two years back, i.e. for the reporting year that preceded the present reporting year.

Allocation of municipal collection sites DPA-System calculates an expected quantity of collected WEEE and BAT by dividing the average of the municipality’s total, actually collected quantity per fraction for the past three years with the average number of inhabitants for the same three years:

Municipality’s expected quantity of WEEE and BAT (3 years average) = (collected quantity for year-1 + collected quantity for year-2 + collected quantity for year-3) / 3

and Municipality’s number of inhabitants (3 years average) = (Municipality’s number of inhabitants for year-1 + municipality’s number of inhabitants for year-2 + municipality’s number of inhabitants for year-3) / 3

The calculation of kilograms per inhabitant for the municipality is as follows:

Kg per inhabitant = (Municipality’s expected quantity of WEEE / inhabitants in municipality)

Each municipality thereby gets an estimated quantity of WEEE for allocation:

(Present inhabitants in municipality * Kg per capita). Once this calculation has been made DPA-System allocates the different geographic areas and associated collection sites to the producers in proportion to their market share for each fraction. Areas may be one or more neighbouring municipalities, but geographic sub-areas within one municipality are not allocated.

Allocation of the different municipalities takes place per fraction. This is necessary since producers’ market shares typically vary from fraction to fraction. The result may be that several producers are allocated the same municipality, but with the responsibility for each their fraction. In a worst-case scenario this means that there may be up to eight different producers with the responsibility for collecting end-of-life products from each their fraction at the collection sites of the same municipality.

Establishment of new collection sites in the allocation period If new collection sites are established in an area in the allocation period, the producer or the collective scheme responsible for one or more fractions in the municipality must collect the same fractions from the new collection sites.

Individual compliers Allocation criteria for allocation to producers not affiliated to a collective scheme In the allocation of collection duties to individual compliers the same criteria as for the collective schemes apply. Whether a producer himself can be allocated with the collection of WEEE or portable batteries is also calculated from the criteria for allocation. Market shares Allocation is made in relation to market shares, which again are based on quantities placed on the market per fraction. The market share is calculated including adjustments for quantities from previous years. Smallest allocation unit is a municipality It is decisive that the quantity that the individual complier is expected to collect in one fraction is large enough for the producer to be allocated with the quantity of an entire municipality in one fraction for an allocation period. The decision of individual compliers’ allocation of WEEE and BAT in the municipalities is based on2 which municipalities have had the smallest quantities of WEEE and BAT in a given fraction, calculated as a three years’ average of actually collected quantities in municipalities with the lowest quantities.

Notification of individual compliers Based on the above-mentioned criteria a calculation is made every year of which producers can be allocated a geographic municipality for a given fraction. After that, individual compliers are notified that they will be allocated collection in the coming allocation, and they are recommended to enter a collective scheme. Therefore, it is rarely seen that an individual complier performs the collection himself.

Financial guarantee If an individual complier cannot be allocated a fraction in a municipality, he will have instead to provide a financial guarantee. This is described in a separate document on financial guarantee.

2 From an including allocation year 2021

Other allocation criteria – prioritised list As explained, the allocation is based on producers’ market shares per fraction as well as an average of three years’ collected quantities per municipality. When this calculation has been made DPA-System allocates geographically the different municipalities and associated collection sites to the producers and the collective schemes. Allocation of the different collection sites of the municipalities takes place per fraction since producers’ market shares typically vary from fraction to fraction. The result may thereby often be that several producers or collective schemes are allocated the same municipality, but with the responsibility for each their fraction. The below table shows the result of recent discussions with the collective schemes; the following additional allocation principles and priority were agreed upon. DPA-System carries out the allocation in which a municipality is the smallest allocation unit:

Table 2: Prioritised list of allocation criteria – latest revision May 2019

Criteria for allocation (priority ranked) Purpose

Under the below prioritized principles DPA-System allocates the geographical areas in Denmark from Compliance with statutory where producers must collect WEEE in the seven fractions as well as waste portable batteries: requirements

Market shares Allocation is made in relation to market shares, which again are based on quantities placed on Compliance with statutory 1 the market per fraction. The market share is calculated including adjustments from previous requirements years. Geographic areas - regions In relation to his market share, the producer will be allocated with collection of WEEE and batteries in three geographical areas: Ensuring that the producers are Area 1: Capital Region and Region of Zealand. allocated with collection of 2a WEEE all over the country, thus Area 2: North Denmark Region and Central Denmark Region. offsetting geographical Area 3: Region of Southern Denmark differences in the WEEE. The producer may be allocated collection in fewer areas if his market share is too small for the allocation to be distributed on allocation units in all three areas. Non-bridged islands Every three years a change in the allocation of non-bridged islands must be made, the change being most important in the following rank of priority: To ensure that the costs of ferry transportation are not allocated 2b Bornholm Samsø to the same producers over a Ærø long period. Fanø Læsø Municipalities are grouped in a way that as far as possible they constitute a coherent Optimization of collection 3 geographical area. logistics. There must be as few collective schemes per municipality as possible. As far as possible, fractions 1 and 2 should be kept together. The allocation criteria for the fractions collected in To ensure that the municipality cages have been changed so that the following applies in a new order of priority: is serviced by as few collective 4 schemes as possible at all 1. All fractions in cages are kept together as far as possible recycling centres. Optimization 2. Fractions 1b and 3 are kept together as far as possible of collection logistics. 3. Fractions 3 and 4(+6) are kept together as far as possible To ensure that the municipality Smallest allocation unit has as few changes in The smallest allocation unit is a municipality. Allocation is made in a way that as few changes as producers/collective schemes as 5 possible from the preceding allocation period are made in terms of collective schemes possible. Allows for responsible for the different fractions in the areas. establishment of stable cooperation.

If the municipality is part of an intermunicipal waste management company3 this company is Ensures that the 6 the smallest allocation unit. It should be noted that some waste management companies are of municipality/waste management a size that this criterion must be entirely disregarded. company is serviced by the same

3If the municipality has transferred the responsibility and operation of its collection sites to an intermunicipal waste management company.

collective scheme/-s at all recycling centres.

NOTE! In view of optimizing logistics, producers/collective schemes may agree among them in the consultation period for the subsequent year’s allocation, within the same fraction to take over/abandon each other’s collection sites. Such agreements must be notified to DPA-System, and it will be incorporated in the decision on the subsequent year’s allocation before publication on 1 June.

Publication of allocation The allocation is published on the website of DPA-System under the menu: Allocated collection sites, and in the document ”Allocation Year XXXX”. Allocated geographic areas appear from eight maps of Denmark showing the allocation to the collective schemes for each of the seven WEEE fractions and for portable batteries. DPA-System informs the producer of the areas and associated collection sites allocated to him. The producer must then immediately inform the municipality of operators in charge of practical work. Work covers supply of collection equipment and pick-up of WEEE in the different fractions. The municipality is also informed of the result of the allocation. This is done by e-mail sent to the addresses registered with DPA-System by the municipality under the different collection sites.

(NOTE! Symbols legend can be found in Appendix 1)

DPA-System, May 2020

Danish Producer Responsibility System Vesterbrogade 6D, 4. DK-1620 Copenhagen V Tel: +45 3915 5161 E-mail: [email protected] Web: www.dpa-system.dk

Appendix 1: Symbols legend

Symbol Description Unit

Tp Allocated share of the subsequent period’s WEEE incl. post- Kg WEEE per adjustment category

tp Allocated share of den subsequent period’s WEEE without post- Kg WEEE per adjustment category

E± Post-adjustment for excess/deficient collection in preceding Kg WEEE per calendar year category

Enew Post-adjustment for producer entering the market after 1 April in Kg placed on the preceding calendar year market per category

Efree Post-adjustment for producer wishing to assume producer Kg placed on the responsibility retrospectively market per category

F±errorMM Errors in already registered quantities placed on the market Kg placed on the market per category

F±errorTMprod Errors in already registered quantities collected by the producer Kg collected per category

F±errorTMcoll. Errors in already registered quantities collected by the collective Kg collected per scheme category

FIAp Producer’s actually collected share % per category

KIAp Producer’s adjusted collected share % per category

MAp Producer’s market share of total quantity placed on the market in % placed on the Denmark in preceding calendar year market per category

MMDK Total quantity placed on the market in Denmark in preceding Kg placed on the calendar year market per category

MMinhabitant Quantity placed on the market per inhabitant Kg placed on the market per fraction

MMp Quantity placed on the market by producer in preceding calendar Kg placed on the year market per category

MMp(incorrect quantity) Producer’s quantity placed on the market as first incorrectly Kg placed on the registered¨ market per category

MMp (correct quantity) Producer’s now correctly registered quantity placed on the market, Kg placed on the after correction market per category MT Smallest allocated quantity per fraction, the quantity per fraction Kg placed on the that the producer must have placed on the market as a minimum in market per order to be subject to allocation. Otherwise a financial guarantee fraction must be provided.

OUp Producer’s excess/deficient collection in this allocation period. % per category

OULast year Producer excess/deficient collection allocated in last allocation % per category period.

AllocatedM Individual complier’s share in kg of WEEE per fraction that can be Kg per fraction allocated

TF Take-back factor. I.e. ratio of total quantities collected in Denmark % per fraction and total quantities placed on the market in Denmark.

TMDK Total quantity of WEEE collected in Denmark in preceding calendar Kg WEEE per year category

TMp Quantity collected by producer in preceding calendar year Kg WEEE per category

TMp(incorrect quantity) Producer’s collected quantity as first incorrectly registered¨ Kg placed on the market per category

TMp (correct quantity) Producer’s now correctly registered collected quantity, after Kg placed on the correction market per category

ÅUp Deficient collection of the year % per category

∑deficit year MMp Sum of quantities for each of the years for which the producer has Kg placed on the not assumed his producer responsibility market per category