The average person thinks nothing of buying the latest i-phone, Blackberry or other gadget, which is one reason why electronics waste is the fastest growing waste stream worldwide. Fueled by shortened product lifecycles and the introduction of an endless variety of equipment, e-waste is growing about five times faster than conventional solid waste. The trend will only get worse as the U.S. shifts to digital-only TV broadcasts in 2009. In fact, this shift to digital TV could instantly obsolete 105 million TVs if consumers do not purchase a special set-top box converter (which itself will become future e-waste).
States Adopt E-Waste Legislation
As legislators and the public recognize the growing e-waste problem, legislation is steadily increasing at the state and municipal level. E-waste laws are officially on the books in seven states: California, Maine, Maryland, Washington, Minnesota, Oregon, and most recently, Texas. More bills are pending in several other state legislatures and in New York City. So far this year, e-waste bills have been introduced in 23 states.
As the first state to pass an e-waste law, California opted to levy recycling fees on consumer purchases of new TVs as a way to finance the recycling of e-waste generated in the state. Despite this precedent, subsequent states to pass e-waste legislation have required manufacturers that sell electronics products in these states to finance free electronics recycling services.
Although electronics manufacturers oppose it, e-waste legislation increasingly is focusing on producer responsibility, as this solution requires little additional cost to state and local governments and is not viewed by the public as a new tax. As more and more manufacturers have initiated take-back programs for discarded electronics, producer responsibility-based legislation seems to be gaining momentum.
Recently, the Electronics Industries Alliance (EIA) proposed a national system to finance the recovery and recycling of scrap electronics, representing the first consensus agreement among various electronics manufacturers. Their proposal is a sort of hybrid between California’s model (levying fees on new TVs) and the more popular producer responsibility model adopted by other states. By issuing its proposal, the EIA is attempting to push the U.S. toward a national solution, which it believes will be easier, fairer and more cost-effective for manufacturers to comply with.
But don’t count on a federal e-waste solution. There’s been talk of federal e-waste legislation over the years, but it hasn’t gained much traction on Capitol Hill. Part of the reason seems to be that major manufacturers like Dell, H-P, and others have shown that they are willing and able to deal with e-waste. Additionally, with a steadily growing number of states taking the initiative on this issue, the problem of e-waste seems to have become less urgent on a national level.
Finally, there is the problem of how exactly the federal government would enforce nationwide e-waste legislation, particularly since the flow of e-waste material can be difficult to trace (a large amount continues to be exported to developing countries).
While the EIA hopes to shift the momentum away from state-by-state “patchwork” legislation toward its new national proposal, that outcome seems unlikely given current trends. In fact, states that are considering e-waste legislation may actually view the EIA proposal as unattractive since it requires consumers to partially pay for e-cycling. California’s approach, however, has been highly successful in that state and may still be viewed as a “role model” for other states considering e-waste legislation.
Meanwhile the EU Implements the WEEE Directive
While the U.S. adopts e-waste legislation on a state-by-state basis, the European Union collectively signed onto the WEEE (Waste Electrical and Electronic Equipment) Directive back in 2003. The WEEE Directive requires EU member nations to collect and recycle a predetermined amount of e-waste each year.
After many delays, the UK began complying with this directive on July 1, becoming one of the last of the 25 EU member states to do so. Similar to the producer responsibility legislation taking hold in the U.S., WEEE imposes the responsibilities of collection, recovery, and recycling primarily on manufacturers of electronics products. WEEE also requires retailers to offer free “take-back” services, allowing a consumer to recycle an old TV, for example, when purchasing a new one.
E-cycling – A Huge Industry Sector
Regardless of how the legislative phase of the e-waste issue plays out, e-cycling represents one of the most exciting and dynamic areas in the recycling industry, currently estimated at a $40 billion market per year. While most of the companies in the field are privately held, the industry’s rapid growth will create a need for many currently private companies to tap the public equity markets as a source of capital.
Australia-based Sims Group (SIMYY:OTC) is one of the few publicly traded companies in the sector. Through its subsidiary Sims Recycling Solutions, Sims Group is now North America’s largest electronics recycler, following the firm’s recent purchase of Noranda Recycling, one of North America’s largest electronic equipment recyclers. Noranda has operations in California, Tennessee, and Canada, adding to Sims’ existing facilities in California and Virginia. Bolstered by this large acquisition and growing
legislation worldwide for e-cycling, Sims has publicly stated its goal to recycle 25 million computers and TV sets this year.
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Adapted from Canaccord Adams Industry Research on Resource Optimization and Sustainability.
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