UKELA CONFERENCE 2005, Edinburgh

Producer Responsibility

A paper by Adrian Harding, Policy Advisor (Producer Responsibility), Environment Agency.

The concept of producer responsibility is not a new one. Manufactures have long had legal responsibility for their products. These obligations – which have focussed on consumer protection - usually apply from the moment a product is presented for sale until the point at which its useful life comes to an end. The profits generated from the sale of new appliances have accrued to producers (and retailers) and the costs of dealing with end of life products have fallen to end-users and local tax payers.

This state of affairs is symptomatic of a linear model of resource consumption. More primary resources consumed, more products sold, more waste to be disposed of. The ‘waste problem’ tended to be explained in terms of the need to find ever more disposal capacity, and the solution was to open new facilities.

In the early 1990s there was a growing recognition that a more sustainable approach to resource management was required. The ‘waste problem’ was redefined - the need to halt the growth in waste production and to increase the proportion of waste diverted for productive use.

Extended Producer Responsibility, usually referred to simply as Producer Responsibility, is one of the measures that have been adopted to bring about a more cyclical pattern of resource management. It has been defined in various ways:

“ an environmental policy approach in which a producer’s responsibility, physical and/or financial, for a product is extended to the post-consumer stage of a product’s life cycle”. OECD, 2001

“from cradle to grave to life after death”. Adrian Harding, 2003

The second of these reflects the way in which Producer Responsibility has been applied. Producer obligations tend to cover three areas:

 the redesign of new products to restrict hazardous components and to make the products more recyclable;  the treatment of waste products to remove hazardous components (many products have a lifetime of 10-15 years so there is a significant lag time before the benefits of redesign are realised); and  the recovery or recycling of a high proportion of post-treatment materials.

This paper examines the application of the Producer Responsibility approach to three waste streams: packaging waste, End-of-life Vehicles (ELVs) and Waste Electrical and Electronic Equipment (WEEE).

Packaging Waste In the early 1990s the European Commission began to take a special interest in packaging:  it was and is a significant waste stream; around 58 million tonnes of packaging is consumed annually within the European Union (17% of Municipal Solid Waste by weight);

1  levels of recovery/recycling were highly variable across Member States and very low in several;  emerging national legislation had potential to act as barriers to trade (e.g. German Packaging Ordinance 1991)

The response to these pressures was Directive 94/62 on Packaging and Packaging Waste.

The Directive did not require Member States to apply waste recovery obligations to producers, however, Member States choose to implement the Directive’s recovery and recycling requirements through imposing Producer Responsibility on one or more stage of the packaging chain.

Since 1997, the Environment Agency and our counterparts in Scotland and Northern Ireland have been actively engaged in explaining, monitoring and enforcing the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 - as amended (‘The Packaging Regulations’).

The UK approach to the implementation of the Directive is unique in that it has spread recovery and recycling obligations throughout the packaging chain from manufacturers of packaging materials through to sellers of packaging and packaged goods.

All companies (or groups) that handle more than 50t of packaging a year and have a turnover in excess of £2m have obligations under the UK Regulations. Another unique feature is the system of tradable evidence of recovery and recycling (Packaging Waste Recovery Notes – PRNs). Between 1999 and 2003 (inc.) over £300m was channelled from producers to accredited reprocessors and exporters. 90% of this money went to UK reprocessors. Given the scale of these transfers it is perhaps surprising to note that the PRN system was not, until this year, covered directly by the Regulations.

The UK approach to meeting the recovery and recycling targets in the Packaging Directive is unlike that adopted by other Member States. Elsewhere in the EU, the recovery obligations are discharged through the use of the ‘Green Dot’ (Der Grüne Punkt) to symbolise that a financial contribution is being made by fillers and retailers to local packaging recovery systems. The Green Dot is often seen on packaging in the UK, although copyright protected and subject to a licensing fee, the Green Dot has no significance in relation to the UK’s Packaging Regulations.

A comparative study undertaken by the Technical University of Berlin (based on date for 2000) showed that the direct costs of compliance in the UK (2 Euros per capita) were substantially lower than in Germany (22 Euros per capita). However, meaningful comparisons across the EU are very difficult for a number of reasons, not least, because of the Member States working to different targets and deadlines and starting from different levels of recovery and recycling. The Directive permitted Member States to set recovery and recycling targets within specified ranges. Some opted for targets towards the top of the permitted range and even above whilst the UK opted for the minimum. In addition, Greece, Portugal and Ireland were given dispensation within the Directive to postpone the attainment of the 2001 targets to 2006.

It is important not to overlook the indirect costs of the various regimes. In the UK every obligated company is required to assess the quantity of packaging handled. Up to seven packaging materials (i.e. glass, paper, plastics, steel, aluminium, wood,

2 and ‘others’) and five packaging activities (i.e. manufacture of raw materials, conversion, pack-filling, selling, and importing) must be considered. Most businesses around in the £2-5m turnover range would cite their administrative costs as being the most significant element of their overall compliance costs.

Regulation 25 places a duty on the Environment Agency to monitor compliance with the Regulations in England and Wales. We publish a monitoring strategy each year and annually report on performance against this strategy.

The Environment Agency has been promoting compliance through seminars and local data workshops and working with individual companies and trade associations. Each year we check the registration data submitted by over 20 compliance schemes and up to 800 individually registered producers. In addition, we undertake more detailed monitoring of over 1,500 registered producers; this often involves a site visit. The Environment Agency also monitors unregistered businesses that appear to exceed the two registration thresholds.

Since 1997, the Environment Agency has taken over 200 prosecutions under the Packaging Regulations. In 2004, we completed 25 successful prosecutions. The largest fine imposed was £75,000. This was the second highest fine to date; the largest being £96,000 imposed on a group of companies in 2002. Prosecutions in 2004 for packaging offences resulted in fines totalling £231,400.

Our enforcement and information activities, the investment made by registered businesses through the PRN system and the work of the reprocessors have delivered a significant reduction in the proportion of packaging waste going to landfill. Between 1998 and 2004, the UK’s recovery rate for packaging waste increased from less than 30% to over 55% (5.66 million tonnes). Put another way, had the rate remained at its 1998 level, an additional 2 million tonnes of packaging waste would have been landfilled in 2004. That’s about the weight of the UK’s annual arisings of End-of-Life Vehicles or about twice the weight of the UK’s arisings of Waste Electrical and Electronic Equipment (WEEE) from household sources.

The Packaging Regulations have been amended several times since 1997 principally to increase recovery and recycling targets but also to close loopholes and to reduce the data burden where possible. Government is currently consulting on proposals to attach obligations to leased and ‘internal supply’ packaging and to capture packaging associated with franchises (including tenanted pubs and similar arrangements). The consultation also looks at data simplification for smaller businesses and proposes some technical amendments to the Regulations. The consultation period closes on 22 June this year.

End-of-Life Vehicles Concerns about the impact that vehicles have upon the environment tend to centre on the fuel consumption, congestion and vehicle emissions associated with a vehicle’s working life. Although these are important issues, we shouldn’t overlook the significant environmental impact that vehicles can have at the end of their lives when they come to be dismantled or disposed of. This has been recognised at a European level through the adoption of the End-of-Life Vehicles Directive (2000/53/EC) which principally applies to motor vehicles under 3.5 tonnes (essentially cars and vans.)

The Directive seeks to ensure that new vehicles are depolluted before they are dismantled and that the sites where this depollution takes place are licensed and have suitable site infrastructure to prevent water pollution. The Directive also

3 contains provisions to improve the design of new vehicles – to reduce the presence of hazardous materials and to improve recyclability – and to increase the supply of dismantling information from producers to consumers and dismantlers.

In November 2003, the End-of-Life Vehicles Regulations 2003 (SI 2003 No. 2635) came into force. These Regulations implemented parts of the Directive including the vehicle depollution and site licensing requirements in England and Wales; similar legislation applies in Scotland and Northern Ireland.

In the UK, the Directive’s storage and treatment requirements were extended to all waste motor vehicles - including buses, coaches and ‘HGVs’. The logic behind this is obvious given that these larger vehicles will often contain far greater quantities of potentially polluting materials e.g. oils, fuel, etc.

To date, over 900 licensed Authorised Treatment Facilities (ATFs) have been notified to the DVLA as meeting the requirements of the Regulations.

From 1 January 2007, vehicle manufacturers and importers will be responsible for financing the treatment and recycling of smaller vehicles (i.e. those covered by the Directive) delivered to licensed sites that are contracted to individual manufacturers and importers. These arrangements are provided for in The End-of-Life Vehicles (Producer Responsibility) Regulations 2005 (SI 2005 No.263) that came into force on 3 March this year. These Producer Responsibility measures do not extend to manufacturers and importers of larger vehicles. Because end-of-life vehicles are now subject to higher standards of treatment, operators of licensed sites will need to recover the costs of the extra treatment. They will do this through the price they pay or charge for end-of-life vehicles delivered to their sites.

Waste Electrical and Electronic Equipment Technological progress, falling prices and our seemingly insatiable demand for new gadgets gives rise to around 1 million tonnes of end-of-life electrical products from UK households; the quantity is rising every year.

The RSA recently unveiled their WEEE Man sculpture outside City Hall in London; its temporary home before being relocated to the Eden Project in Cornwall. The sculpture, standing 7 metres tall is made from 3 tonnes of WEEE, the quantity of waste electrical products that a typical person will discard in their lifetime.

Concerns about the amount, composition and fate of waste electrical and electronic equipment (WEEE) led to the adoption of the WEEE Directive (2002/96/EC) in February 2003. A separate Directive deals with improving the design of new equipment and restricting the use of certain hazardous substances. The pre-amble to the WEEE Directive summarises the concerns:-

“The amount of WEEE generated in the Community is growing rapidly. The content of hazardous components in electrical and electronic equipment is a major concern during the waste management phase and recycling of WEEE is not undertaken to a sufficient extent.”

The Directive requires Member States to encourage the segregation of WEEE and ensure that it is treated and recycled to specified standards. Producers (manufacturers, importers and distance sellers) are responsible for financing the treatment and recovery of separately collected household WEEE. There are separate arrangements in respect of WEEE from non-household sources.

4 Retailers are charged with providing in-store take-back or an equally convenient alternative. It is likely that most retailers will want to participate in a collective arrangement that avoids the need to provide an in-store service. It is expected that the many of the UK’s 1,100 Civic Amenity (CA) sites will become designated collection points for WEEE. Discussions are continuing as to the way in which retailers will help finance this the upgrading of these sites.

Producers are responsible for clearing these collection sites and ensuring that the WEEE is treated and recycled. The precise method of allocation has not been finalised and has been the subject of protracted discussions.

The Environment Agency is likely to have a number of responsibilities in respect of WEEE:

 registration of producers and compliance schemes;  provision of guidance to producers on scope;  permitting of treatment facilities in England and Wales;  regulating the export of equipment, components and materials that are waste;  verification of recycling rates; and  enforcement

The scope of the Directive is very broad and covers tens of thousands of products and millions of individual items. The Dti has proposed some ‘tests’ to exclude various ‘marginal’ products from regulation in the UK; we welcome this initiative. Despite these ‘tests’ we expect to be very busy with scope queries in the first few months after the Regulations have come into force. From the experience we’ve had with the Packaging Regulations, weird and wonderful products will be testing our powers of interpretation for several years to come!

The Directive will not only cover a huge number of products, it also has implications for a very large number of businesses – possibly in excess of 100,000 retailers and producers, an order of magnitude greater than under the Packaging Regulations. There is no de minimis exemption for producers or retailers; this presents a particular challenge in terms of alerting businesses to their obligations, operating a registration system and monitoring compliance.

Questions remain unanswered as to exactly how the registration of producers and the allocation of WEEE will operate. There is also the need to clarify arrangements for non-household WEEE. Producers are required to present evidence of treatment and recycling; the nature of this evidence remains unresolved – how much will it have in common with a PRN, will it be tradable?

The WEEE Directive allows for the treatment and recovery of WEEE to take place overseas but emphasises the need to ensure that the exports are legally permissible. In addition, recovery can only count against recovery targets if the exporter can prove that the recovery operation took place under conditions that are equivalent to the requirements of the WEEE Directive.

The WEEE Directive will not override existing legal requirements such as the need to comply with the Duty of Care. The Environment Agency is very concerned that consignments of non-working WEEE – particularly TVs and computer monitors - are being sourced from businesses and CA sites and shipped to developing countries in contravention of UK and international legislation. We are working with authorities in other States to identify illegal shipments and to take enforcement action.

5 In common with most other Member States, the UK failed to transpose the WEEE Directive by the deadline of 13 August 2004 and will not meet the implementation date of 13 August 2005 for placing obligations on producers and retailers. In March 2005, Government announced a revised implementation plan that will see the producer responsibility obligations deferred until 1 January 2006.

Because the WEEE Directive has implications for storage and treatment requirements, Defra are currently consulting upon proposals for amendments to the existing waste management licensing regime. This consultation ends on 19 August 2005.

A consultation paper on fees and charges in respect of the Producer Responsibility aspects of the Directive is expected imminently.

The Future The Producer Responsibility approach is likely to be applied to other waste streams (e.g. batteries) at a national or EU level. In order to assess the success of the approach we need to be clear at the outset what the objectives are and their relative priority. Recycling targets within and between Directives need to be based on an objective assessment. The scope of future Producer Responsibility legislation needs to be clear and we need to consider the relative merits of collective versus individual Producer Responsibility. Greater commonality of requirements across Directives (e.g. definitions, measurement and reporting) would also be desirable.

May 2005