Waste electrical and electronic equipment reform consultation: business and regulatory impact assessment - partial

3.0 Summary of policy options considered

61. The policy options considered in this analysis have been designed in line with the policy objectives set out above: to aid the convenience, understanding and ability to collect, reuse and recycle WEEE. Each option is compared against a common baseline which is the business-as-usual case. Full details of the costs and benefits for each policy option can be found in the impact assessment published by the UK Government, the results of which are summarised below. Net present value for each option is set out in Table 2.

62. Non-regulatory options have been disregarded. The key objective of the proposed policy is that businesses that distribute and place EEE on the market take on their share of responsibilities for that equipment when it becomes waste, whilst barriers to increasing the recycling of WEEE are removed. It is considered that a voluntary approach would not ensure that this is achieved because of the likely levels of free-riding if the system was not enforced. This is evidenced by the high levels of non-compliance amongst internet sellers that are based overseas. This is a market failure, and it can only be corrected through a regulatory approach. This policy requires that producers operate on a level playing field, therefore regulations are required to ensure that all obligated producers comply.

63. Option 1 Business-as-usual or do-nothing option. This would maintain the current system, whereby the point of producer responsibility remains at the household waste and recycling centre, and to provide a system of return for WEEE collected by distributors.

64. Option 2. To introduce a UK-wide household collection system for small mixed WEEE (SMW), to be financed by producers and free to households. This option specifically aims to address the problem of inconvenience and cost to households of disposing of SMW, by ensuring that producers are responsible for collecting SMW directly from households free of charge. This should eliminate the lack of incentive to recycle SMW and reduce the amount that is disposed of in residual waste (and littering in the case of vapes)^[55]. It is proposed that this would also include a coordinated consumer communications campaign to address the problem of the lack of knowledge around recycling of WEEE.

65. This option would move the point of producer responsibility from a local authority waste site to each respective household. We envisage that such an obligation is likely to be most effectively discharged on behalf of producers by an industry-led, not for profit, central body. Such a UK-wide body would require UK government approval, which would be assessed against a set of criteria that are specified in legislation. The body would be responsible for establishing the system, contracting as necessary with organisations to undertake WEEE collections, and ensuring that these items are sent for proper treatment, reuse, and recycling. It would be required to propose a methodology for fairly charging the costs incurred in treatment, reuse, and recycling of WEEE to producers and/or producer compliance schemes^[56]. These costs would also cover household-related communications, which the central body would be responsible for delivering on behalf of producers.

66. There is no mandate for how this must be delivered. This impact assessment has therefore costed this option on the assumption that the service will be delivered through local authorities and their service providers as an add on to their existing waste collection services. However, in reality, producers may develop an alternative approach. It might also be the case that the model varies across different areas to reflect local demographics or that the industry adopts alternative methods to meet the obligations set out in regulation.

67. Option 3. To introduce a UK-wide household collection system for bulky WEEE, to be financed by producers, and free to households, in addition to the small mixed WEEE system. This is the same as Option 2, building upon it with the addition of a bulky WEEE collection from households. As with option 2, this aims to address the problems of cost and inconvenience to households of recycling WEEE by ensuring producers are responsible for collecting bulky WEEE directly from households free of charge.

68. As with Option 2, it is envisaged that this will be delivered on behalf of producers by a new industry-led, not for profit, central body, approved by UK government. Similarly, there will be no mandate on how this service must be delivered, however it is anticipated that this would be an “on demand” service, similar to the bulky waste collection services currently offered by some local authorities. Again, the most efficient delivery route may be through partnerships with local authorities, who on the whole, currently provide households with a bulky waste service for a fee but ensuring that it is offered free-of-charge to households. This impact assessment has therefore costed this option on the assumption that the service will be delivered through local authorities and their service providers.

69. Option 4. This option is the same as Option 3, but with additional aspects to strengthen distributor obligations to take back WEEE from their customers.

70. Seek to introduce a mandatory obligation on sellers to offer a free-of-charge collection of an old large domestic EEE appliance (i.e., bulky WEEE) upon delivery of a new replacement item^[57]. Many retailers offer this service on a paid basis currently, but under the reform they would be required to offer this service for no additional charge. I.e., businesses would be mandated to provide this service, and the service should be free for charge to consumers.

71. Mandating distributors with an annual EEE turnover of over £100k to provide a “0:1 takeback service” for all categories of WEEE^[58]. Currently, the take-back obligation is on a 1:1, like for like basis for goods sold. Under this option, these distributors would be mandated to provide a free takeback service^[59] for EEE that is the same type as has been sold in their stores or online, without the requirement to purchase a new item to access the service. Distributors below the £100k threshold would continue to provide a 1:1 takeback service. The consultation asks for views on whether alternative obligations should exist for solely online sellers, fulfilment houses or online marketplaces, who are likely to find these requirements challenging.

72. Mandating producer compliance schemes to bear the cost of transport of WEEE from the distributors’ premises to an approved accredited treatment facility (AATF) for treatment. Currently producer compliance schemes must simply have systems in place to receive WEEE from distributors. This means that the distributor bears the cost of transport from their premises to a specific point (e.g., treatment facility) nominated by the producer compliance scheme. This cost can act as a disincentive for the distributor to maximise their take-back from consumers.

73. This option will result in additional tonnes of WEEE being reused and recycled. As each of the considered options are cumulative, this option provides the highest quantity of WEEE captured for reuse and recycling (as demonstrated in this impact assessment). It is more convenient, and efficient for a retailer to pick up bulky WEEE when delivering a new item than for LAs to make additional journeys to collect bulky WEEE. Implementing both LA collection and retailer collection offers a wider range of options to enable households to recycle their WEEE, which addresses the current underlying problems of inconvenience and financial costs of recycling WEEE.

74. Option 5. This option is the same as Option 4, but with the additional aspect of designated online market places (OMPs) as a new class of producers. The proposal is designed to address problems with the current regulation and ensure that OMPs contribute to the costs of collection, treatment, recovery and reuse or recycling of WEEE, that reflects the UK market share of their overseas online sellers. By designating them as a new class of producer, OMPs would stand in the shoes of the overseas sellers on their platform and be obligated to register with a Producer Compliance Scheme and submit the same data as other producers. This is consistent with UK government proposals to place obligations on online marketplaces as part of wider proposals to introduce extended producer responsibility for packaging^[60].

75. The key impact of this option is to reduce the potential for certain businesses to free ride and ensure the EEE producers selling through online marketplaces are contributing towards compliance costs. As this is not expected to change the amount of WEEE being collected, rather the distribution of costs between producers, the main costs and benefits will be the same as option 4. Producers already complying with their regulatory obligations will see a reduction in costs compared to those in option 4 with these costs passed to newly obligated producers, such that the overall cost to business remains the same. Some additional transition and familiarisation costs are expected to occur for Online Market Places (OMPs) however these have not been quantified. These costs will be explored further through the consultation process.

Note: Numbers may not sum exactly due to rounding. Options are cumulative, and all include the provisions of previous options. Option 6 is the preferred option. 10 years in 2019 prices, 2020 present value.

76. Option 6 is the preferred option. Option 6 is the same as option 5, with the addition of the creation of a new category in the WEEE regulations for vapes. As with option 5, this would address problems existing under the current regulation and enhance their effectiveness.

77. Under the current regulations^[61], EEE products are grouped into 14 categories. Producers of products in a particular category are obligated to finance the cost of collection, treatment, recovery and recycling of products from that category when they become waste, based on their market share and expressed in tonnes. Vapes fall within category 7 which covers toys, leisure, and sports equipment, which means that producers of other category 7 products share the cost of recycling vapes collected for recycling. The key benefit is to ensure that vapes producers are paying the full cost of recycling vapes collected under the regulations. This ensures that other category 7 producers are not paying overinflated fees to remain compliant and incentivises vapes producers to ensure their products are recyclable.

78. As vapes are more expensive to recycle than other WEEE items, were government to set ambitious targets on vapes specifically, this would lead to higher costs to producers overall. However, as Government are not currently consulting on target rates post the reforms outlined here, analysis for option 6 does not account for any additional recycled tonnage (and therefore costs) on top of that in the previous options. As such, costs are assumed to be the same as under option 5.

79. No additional costs and benefits have been quantified for this option, on the basis that costs would largely remain the same as option 5. This is because the primary aim of this option is a redistribution of costs between producers. It is acknowledged that there may be transitional costs which have not been quantified.