Select Committee on European Scrutiny Thirty-Second Report


3. 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
Department:Trade and Industry
Basis of consideration:Minister's letter of 23 May 2002
Previous consideration:HC 152-xxiv (2001-02), paragraph 5 (17 April 2002)
To be discussed in Council:See paragraph 3.10 below
Committee's assessment:Politically important
Committee's decision:For debate in European Standing Committee C (together with documents on waste from electrical and electronic equipment)


Background

  3.1  Waste from electrical and electronic equipment (WEEE) was identified in the Community's Fifth Environmental Action Programme[8] as one of the target areas for prevention, recovery and safe disposal. 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[9], 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. Consequently, its second proposal, dealt with in these documents, would 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.

  3.2  Our predecessors were told in an initial Regulatory Impact Assessment of 2 October 2000 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. In the light of these uncertainties, they decided on 13 December 2000[10] to recommend these proposals for debate in European Standing Committee A, together with those on the separate collection and treatment of waste. That debate took place on 28 March 2001[11].

  3.3  Subsequent developments were recorded in our Report of 17 April 2002.[12] In particular, this noted that, in an Explanatory Memorandum of 15 March 2002, the Minister of State for Industry and Energy at the Department of Trade and Industry (Mr Brian Wilson), had pointed out that the Council's Common Position would bring forward by a year — from 1 January 2008 to 1 January 2007 — the date on which the proposal took effect.

  3.4  The Minister also provided with his Explanatory Memorandum a partial Regulatory Impact Assessment, which pointed out that the potential benefits were difficult to quantify, but that, as current exposure levels in the UK were low, and the use of these substances in electrical equipment small compared with other applications, these were likely to be limited. It also suggested that it was currently not possible in the case of the proposed ban on flame retardants to establish if the risks of the available alternatives outweighed the benefits of the ban.

  3.5  Similarly, the Assessment said that it was also very difficult to quantify the costs of the measure, though it went on to identify three main elements which it said were likely to affect component suppliers, product assemblers and manufacturers in varying degrees (the redesigning of manufacturing machinery, the research and development needed to find and test alternative substances, and higher operating costs). Industry had 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, which would in practice be incurred in the four years before the Directive took effect, had been estimated by industry as between £1.5 billion and £3 billion over that period, equivalent to between £375 million and £750 million a year, though the Department itself suggested the latter figure might be nearer £150 million. A similar divergence arose 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 summed 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.

  3.6  In the conclusion to our Report, we expressed concern at the 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. We also noted that even the lowest of these estimates appeared to be considerably in excess of what the Assessment itself described as the "limited" environmental benefits. Consequently, even though we said that we could understand why the Government should in principle be in favour of measures to reduce the risks from these hazardous substances, we asked the Minister to explain more fully its strong support in practice for what was proposed here. We also asked him to keep us informed of developments in the light of the European Parliament's second reading.

  3.7  As regards the variations in the Government's own cost estimates, the Minister says that the Regulatory Impact Assessment reflects the likely differences in costs between different sectors of industry, some of which have already started to implement strategies to reduce the amounts of lead, cadmium, mercury, chromium and brominated flame retardants in their products, whilst others — especially in the specialised telecommunications sectors — are able to take advantage of certain exemptions in the proposal.

  3.8  As for our concerns that the costs appeared to outweigh the "limited" environmental benefits, the Minister says that he believes that the Regulatory Impact Assessments could have been clearer on this point. In particular, he observes that, whilst they point out that the benefits are limited by the impact of other legislation, this should not be read as saying that the proposals have limited benefits, but rather that the overall benefits in this area result from the combined impact of several policies, with each having an important part to play. He sees the proposals as contributing to the Government's sustainable development objectives, to greater resource productivity and to its objectives on waste management.

  3.9  On the developments since our last Report, the Minister says that the European Parliament proposed a number of amendments at its second reading on 9-11 April 2002. The most important of these would involve bringing forward that date of entry in force of the proposal by a further year to 1 January 2006, whilst also ensuring that the ban will be introduced at the same time in all Member States, by removing the words "at the latest" from the Common Position text. Were an operative date of 1 January 2006 to be agreed, the Regulatory Impact Assessment supplied on 15 March 2002 suggests that the additional R & D costs to UK business would rise by £15 million; the additional operating costs by £13 to 33 million (in present value terms); and the capital costs by £16 to 21 million (in present value terms), assuming an average equipment life of ten years.

  3.10  Finally, the Minister says that, given the continued difference in view between the Council and the European Parliament, he expects the proposal to go to conciliation under the forthcoming Danish Presidency, leading to a final text this autumn.

Conclusion

  3.11  Whilst we are grateful to the Minister for this further information, and recognise the difficulty of providing accurate estimates of the potential costs in an area of this kind, we are nevertheless concerned at the uncertainties which arise, not least as a result of the amendment proposed by the European Parliament. Also, we remain to be wholly convinced by the Minister's explanation of the likely benefits. In view of this, and notwithstanding the debate which took place in March 2001 on the Commission's original proposals, we think that it would be right for the House to have a further opportunity to look at what is proposed here. We are therefore recommending these latest texts for debate in European Standing Committee C, along with those on waste from electrical and electronic equipment.[13]


8   OJ No. C 138, 17.5.93. Back

9  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

10  (21540) 10802/00; see HC 28-i (2000-01), paragraph 1 (13 December 2000). Back

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

12  HC 152-xxiv (2001-02), paragraphs 5.6 - 5.11. Back

13  See paragraph 2 above. Back


 
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