Select Committee on European Union Forty-Ninth Report


Letter from Brian Wilson MP, Minister of State for Energy and Construction to the Chairman

  I have seen the European Scrutiny Committee's brief on the above Directives and I note that you have raised a number of questions. The Committee concludes that there are still a number of uncertainties, particularly with the estimated costs associated with these two proposals. I welcome the opportunity to further explain the Government's position.


  Firstly, on procedural matters, you asked why a copy of the Common Position text has not been submitted and why it had taken so long to prepare the Regulatory Impact Assessments (RIA).

  I must apologise that the Committee did not receive a copy of the Common Position texts. This was not intended. It appears the copies were accidentally omitted when the EMs and RIAs were posted. I attach copies again.

  The RIAs were originally promised last summer and they were completed in March 2002. The main reason for the time delay in preparing the RIAs was a delay in the Council and European Parliament's agenda. The final Common Position texts were not finalised until 14 November 2001 and were submitted to the European Parliament in mid December 2001.


  The main concerns of the Committee focused upon the wide variations in the cost estimates given in the RIAs, the difference between these and the industry's estimates, and the high costs compared with "limited" environmental benefits.

  To explain the cost variations in the WEEE RIA, I need to draw the Committee's attention to the four main scenarios covered:

    —  Scenario A—Separate collection in the UK increases to the same rates as that experienced in the Netherlands following the introduction of the NVMP scheme.

    —  Scenario B—Separate collection of WEEE increases by the same proportion as currently achieved in the Netherlands under the NVMP scheme.

    —  Scenario C—There is 100 per cent separate collection of white goods, brown goods and ICT equipment and 10 per cent separate collection of small WEEE.

    —  Scenario D—There is 100 per cent separate collection of all WEEE arising, consistent with the European Parliament's proposal Amendment to the Common Position.

  (NB. The NVMP scheme quoted in scenarios A and B is one of the schemes contracted under the Dutch waste electrical and electronic equipment legislation and deals with the recovery of white goods and small products).

  Each of these possible options gives rise to a different set of cost implications. One hundred per cent separate collection of WEEE (Scenario D), for example, will probably mean kerbside collections, which would be significantly more costly than "bring" type collection facilities at Civic Amenity sites (Scenario C). From these four scenarios, we can get an idea of the likely differences in costs between the options. Aside from the four scenarios, we also attempted to quantify the impact of bringing forward the date of entry into force of the Directive and of raising recovery targets for all products by 10 per cent. These reflected likely amendments proposed by the European Parliament.

  The RIA on the ROHS Directive reflects the likely variation in costs between different sectors of industry. Some sectors have already started to implement strategies to reduce the amount of lead, cadmium, mercury, hexavalent chromium and brominated flame retardants in their products. Others, especially in the specialist telecoms sectors, where products have to meet certain durability requirements, are able to take advantage of the exemptions set out in the Directive (for example, for lead in the solder of servers and devices for telecommunications network management). In addition to these factors, we have also estimated the costs of bringing forward the entry into force date of the substances ban by one year, as proposed by the European Parliament.

Variations in costs within the RIA

  In summary, the WEEE Directive £200 million variation in cost between Scenario A and D largely reflects the difference in cost between collecting and treating a proportion of WEEE and collecting and treating all WEEE which arises. The European Parliament favour requiring the latter. Until this issue is resolved at conciliation, it is difficult to provide a narrower range of cost estimates.

  The reduction in the cost estimates from the initial WEEE RIA primarily relates to the greater flexibility in the retailer take-back requirements of the Common Position text. Early drafts of the Directive required mandatory in-store take-back of WEEE, on a like for like basis. Retail space is expensive and may not always be immediately available, and so this requirement added considerable cost to the Directive. The Common Position text, however, following UK pressure, allows the flexibility of third party arrangements with no mandatory requirement to offer in-store take-back. Third party arrangements would be less costly.

Difference between RIA costs and industry's estimates

  A number of industry estimates are higher than those in the RIA. The assumptions underlying these vary considerably. However, there are two common reasons for industry estimating higher costs with regard to the WEEE Directive:

    —  The inclusion in the early drafts of the Directive of mandatory in-store take-back at an additional cost of over £500 million per annum.

    —  The possibility of a requirement on producers to write and print manuals for each product to cover refurbishment, disassembly and reuse.

  The latter is not a requirement of the Common Practice text (and therefore not accounted for in the RIA cost estimates). The Common Position text requires producers to provide information as necessary to ensure safe dismantling. The inclusion of the cost of producing these manuals in industry estimates can be explained by a fear that the Common Position requirement might be interpreted this way, and by an amendment proposed by the European Parliament, which would require producers to provide manuals. The UK has strongly opposed any proposal that every product should require a dedicated manual, on the grounds that such a requirement would be disproportionately costly and that it would offer no environmental benefit above the Common Position text.

Environmental benefits

  The Committee has expressed concern that the costs estimated in the WEEE and ROHS RIAs seem to outweigh the "limited" environmental benefits. I think the RIAs could have been clearer on this point. Whilst they point out that benefits are limited by the impact of other legislation, this should not be read as the WEEE/ROHS Directives themselves having limited environmental benefits. It was intended to make the point that overall environmental benefits in this area result from the combined impact of several policies. Each of these policies, however, has an important part to play in achieving those overall environmental benefits.

  As described in paragraphs 25-30 of the WEEE RIA, research by Ecobalance UK on the second draft of the WEEE Directive demonstrates the potential substantial environmental benefits from the Directive. It looks at the environmental impacts of the management of several waste electrical and electronic products under the WEEE Directive scenario and compares them with the current UK scenario. The potential benefits from the WEEE Directive are measured in terms of reductions in environmental harm caused by the greenhouse effect, depletion of the ozone layer, air acidification, water eutrophication, emissions into the air and water, and depletion of non-renewable resources. The research concludes that the harm caused will be reduced by over 50 per cent in many cases as a direct result of the Directive. My Department commissioned PriceWaterhouseCoopers to update this research in the light of the latest draft of the Directive. The report may be viewed on the Departmental website.

  The WEEE and ROHS Directives will contribute to the Government's sustainable development objectives, to greater resource productivity and to its objectives on waste management, in particular an increased level of reuse, recovery and recycling, as set out in the Government's Waste Strategies.


  The Committee has asked whether the WEEE Directive might lead to a situation similar to that encountered for fridges under the Ozone Depleting Substances (ODS) Regulation (EC 2037:2000). I do not believe this will be the case. The issues are fundamentally different. In particular, the proposed WEEE legislation will be based on a Directive text. It is not a directly applicable Regulation (as in the case of the ODS legislation). As a Directive, there is considerably more flexibility in domestic implementation. Moreover, the treatment requirements of the WEEE Directive are primarily related to dismantling procedures. We are not, however, complacent and continue to discuss the requirements with all stakeholders.


  Finally, the Committee has asked to be kept updated on the situation with the European Parliament. The current situation is as follows:

  The European Parliament held a Plenary Meeting on 9-11 April, during which they voted upon proposed amendments following their Second Reading. The main points arising from this were:

WEEE Directive

  (i)  A heavier emphasis on Individual Producer Responsibility with a requirement for proof that it would be disproportionately expensive to be submitted to the Commission before a collective system could be used. There are a number of Member States which already have WEEE legislation. Most of these use collective financing systems. These countries would be allowed to keep such systems for up to 10 years after entry into force. While the Government agrees with the principle of individual producer responsibility, we prefer the Common Position text, which allows a choice as to whether to use individual or collective financing, depending on which offers the best solution. This option is particularly important for smaller businesses.

  (ii)  Compulsory separation of WEEE from household waste by consumers. We believe that this would be costly and difficult to enforce. It could also lead to a sharp increase in the amount of WEEE collected, placing pressure on the recycling infrastructure and upon producers who would have to fund the treatment and recycling. Again, the Government prefers the Common Position text with a greater emphasis on consumer encouragement rather than compulsion.

  (iii)  Increased recovery targets. Recovery can either be achieved through recycling and re-use of materials and components, or through incineration with energy recovery. Since the UK has little incinerator capacity, this would require the UK to meet the targets primarily through higher recycling and reuse. This would be very challenging.

  (iv)  Unfortunately, the European Parliament voted to remove the five year exemption from the financing requirements of producer responsibility for small manufacturers (firms with fewer than 10 employees and a turnover of less than two million Euros). The Government continues to support a time limited exemption for smaller firms.

ROHS Directive:

  As expected, the European Parliament voted to bring forward the date of entry into force for the substances ban by one year to 1 January 2006. They have, however, ensured that this ban will be introduced at the same time in all Member States, by removing the words "at the latest" that were present in the Common Position text.

  Given the continued difference of view between the European Parliament and Council of Ministers we expect that the proposals will go to conciliation under the future Danish Presidency and should lead to a final text this Autumn. I will keep the Committee informed of developments.

23 May 2002

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