Select Committee on European Scrutiny Twenty-Fourth Report


HAZARDOUS SUBSTANCES IN ELECTRICAL AND ELECTRONIC EQUIPMENT


(a)
(22499)
10143/01
COM(01) 316


Amended draft Directive on restricting the use of certain hazardous substances in electrical and electronic equipment.

(b)
(23309)



Common Position of the Council on draft Directive on restricting the use of certain hazardous substances in electrical and electronic equipment.


    

Legal base:Article 95 EC; co-decision; qualified majority voting
Document originated:(a) 6 June 2001
Forwarded to Council: (a) 8 June 2001
Deposited in Parliament:  (a) 20 June 2001
Department:Trade and Industry
Basis of consideration: (a) EM of 11 July 2001
(b) EM of 15 March 2002
Previous consideration:None; but see (21540) 10802/00: HC 23-xxix (1999-2000), paragraph 11 (15 November 2000) and HC 28-i (2000-01), paragraph 1 (13 December 2000)
To be discussed in Council: Not known
Committee's assessment:Politically important
Committee's decision:Not cleared; further information requested



Background

  5.1  Waste from electrical and electronic equipment (WEEE) was identified in the Community's Fifth Environmental Action Programme[6] as one of the target areas for prevention, recovery and safe disposal. According to the Commission, there are a number of reasons for this. First, components tend to include heavy metals and other hazardous substances, such as halogens, polychlorinated biphenyls (PCBs), brominated flame retardants, and asbestos and arsenic. Since more than 90% of WEEE is landfilled, incinerated or recovered without any pre-treatment, it accounts for a large proportion of the hazardous materials in the waste stream. Secondly, the decreasing life-span of much of the equipment has led to a rapid growth of WEEE. Thirdly, the proliferation of national measures in this area has hampered the effectiveness of national recycling policies; resulted in substantial disparities in the financial burdens for economic operators; and had implications for trade in electrical and electronic equipment.

  5.2  The Commission therefore brought forward in June 2000 two proposals. The first of these, on which we are reporting separately, aims to reduce the amount of such waste from electrical equipment[7], and to encourage its recycling and recovery. However, the Commission believes that, even if that proposal were to be adopted, there would still be some environmental risk, and that substitutes for the most dangerous substances should be used wherever possible. Its second proposal, dealt with in these documents, would therefore harmonise the rules on the restriction of the use of hazardous substances in electrical and electronic equipment by:

  • requiring the use of substitutes for mercury, lead, cadmium, hexavalent chromium and brominated flame retardants from 1 January 2008;

  • providing exemptions to this requirement where the use of these substances is unavoidable, or where their substitutes would have greater negative impacts on health or the environment; and

  • setting up a Community procedure to amend these exemptions in the light of advances in scientific knowledge or technical progress, and to establish maximum levels to which the presence of the substances would be tolerated in specific materials and components.

The Commission also suggested that, since a number of manufacturers have already phased out heavy metals and flame retardants, the cost of this proposal could perhaps be limited to about 150 million euros a year.

  5.3  Our predecessors were told in an Explanatory Memorandum of 2 October 2000 that the Government agreed that, where product standards and requirements are set, these should be harmonised, and considered that reducing the hazardous content of electrical and electronic equipment could lessen the potential for any environmental impacts resulting from their disposal. That said, the main issues for the UK arising from the proposal were identified as being:

  • the need for adequate risk assessment and cost benefit analyses; and

  • the possibility that there may be circumstances where the continued use of these substances is justified, for example where switching to others could have adverse implications.

  5.4  At the same time, the Government supplied an initial Regulatory Impact Assessment, which made the point that, although the use of these substances was declining, production of electrical and electronic equipment was increasing, making it difficult to assess accurately either the costs or the benefits of the action proposed. However, it suggested that the benefits from any further measures to limit hazardous substances within the UK could be limited, but that, depending on the lead-in time allowed, the costs had been estimated by industry as being as high as £1.2 billion on a one-off basis, with (unquantified) on-going costs arising from the use of more expensive materials or increased energy use.

  5.5  When our predecessors first considered this proposal, and those relating to the separate collection and treatment of waste, they commented both on their potential significance and on the considerable uncertainties arising as regards the relative costs and benefits. They therefore said that they would not be able to take a view on them until they had seen updated Regulatory Impact Assessments. However, although further information was provided on 7 December 2000, they decided on 13 December 2000 to recommend both sets of proposals for debate in European Standing Committee A. That debate took place on 28 March 2001[8].

The current documents

  5.6  We next received a short unsigned Explanatory Memorandum of 11 July 2001 from the Department of Trade and Industry, prompted by the amendments suggested by the Commission (document (a)) following the European Parliament's first reading on 15 May 2001. According to the Explanatory Memorandum, although some of the Parliament's amendments accepted by the Commission had been included in the Common Position reached by the Environment Council on 7 June 2001, there was likely to be disagreement between the Council and Parliament, leading to a second reading by the Parliament, and possibly involving the conciliation process. The Explanatory Memorandum added that the Common Position text was currently being examined by jurists/linguists, and was expected to be finalised "after the summer". At that point, the Department would be submitting a full Explanatory Memorandum and revised Regulatory Impact Assessment.

  5.7  We have now received - some eight months later - an Explanatory Memorandum of 15 March 2002 from the Minister of State for Industry and Energy at the Department of Trade and Industry (Mr Brian Wilson), together with a partial Regulatory Impact Assessment dealing with the Common Position (though we have not been given a copy of the Common Position text itself).

  5.8  The Explanatory Memorandum says that the Government fully supports the Common Position, on which the key issues include the risk assessments being carried out on the two brominated flame retardants it is proposed to ban. It would however appear that the main change made to the original proposal would be to bring forward by a year - from 1 January 2008 to 1 January 2007 - the date on which it takes effect.

  5.9  If that is so, the Regulatory Impact Assessment, which updates the information provided previously, is probably the more significant of these two documents. As regards the potential benefits, it points out that these will arise from the diminished risk to human health and the environment during the manufacture and dismantling of the equipment containing hazardous substances, and from the reduced quantities of the substances in question finding their way into soil, water and air through the landfill and incineration of waste. However, it says that these effects are difficult to quantify, although it suggests that, as current exposure levels in the UK are low, and the use of these substances in electrical equipment small compared with other applications, the benefits (though valuable in their own right) are likely to be limited. It also suggests that it is currently not possible in the case of the proposed ban on flame retardants to establish if the risks of the available alternatives outweigh the benefits of the ban.

  5.10  Similarly, the Assessment says that it is also very difficult to quantify the costs of the measure, given its complexity, the relatively little information available on which to base any estimates, and the fact that many components are imported. It also points out that the substitution of the substances listed in the proposal has already been undertaken voluntarily by many manufacturers. However, the Assessment goes on to identify three main costs which it says are likely to affect component suppliers, product assemblers and manufacturers in varying degrees, depending upon the market situation. These are the redesigning of manufacturing machinery, the research and development needed to find and test alternative substances, and higher operating costs.

  5.11  Industry has suggested that the first of these might amount to between £400 million and £570 million, giving an annualised cost of £40 million to £57 million, if an average ten-year life is assumed. The research costs are likely to be that much more significant, since they will in practice be incurred in the four years before the Directive takes effect. The Assessment says that industry has put the cost of these at between £1.5 billion and £3 billion over that period, equivalent to between £375 million and £750 million a year, though the Department itself suggests the latter figure might be nearer £150 million. A similar divergence exists on the additional operating costs (in terms of energy and raw materials), with industry suggesting a figure of about £200 million a year (principally for lead), as compared with the Department's estimate of between £33 million and £38 million. The Regulatory Impact Assessment sums up this somewhat confusing situation by suggesting that research and development costs might range from £156 million to £385 million a year and the additional other costs from £57 million to £98 million. It also suggests that these figures indicate annual average costs of £120 million over a ten-year period.

Conclusion

  5.12  As with the proposal on waste from electrical equipment, we would have found it helpful to have been sent a copy of the Common Position text, and we again find it hard to see why a Regulatory Impact Assessment originally promised last summer should have taken so long to complete.

  5.13  Our main concerns, however, relate to the substance of the proposals, and in particular to the cost information provided. It is clear that there are wide differences in the estimates made, not only between the Government's upper and lower figures but between the Government's figures and the industry's. Furthermore, even the lowest of these estimates appears to be considerably in excess of what the Assessment itself describes as the "limited" environmental benefits. Consequently, even though we can understand why the Government should in principle be in favour of measures to reduce the risks from these hazardous substances, we would like the Minister to explain more fully its strong support in practice for what is proposed here. We would also be glad if he would keep us informed of developments in the light of the European Parliament's second reading.

  5.14  In the meantime, we are holding these documents under scrutiny.



6   OJ No. C 138, 17.5.93. Back

7  Defined for this purpose as large and small household appliances; IT and telecommunications equipment; consumer and lighting equipment; electrical and electronic goods; toys; certain medical equipment systems; monitoring and control instruments; and automatic dispensers. Back

8   Official Report, European Standing Committee C, 28 March 2001. Back


 
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