2007 Electronics Recycling Supplement - A National Solution?

More than three years after the National Electronics Product Stewardship Initiative (NEPSI) met for the last time, one of its stakeholders has proposed a framework for federal electronics recycling legislation that addresses the contentious issue of how to finance such an effort.

The Electronic Industries Alliance (EIA), Arlington, Va., is a trade organization representing U.S. electronics manufacturers. The EIA counts as its members 1,300 companies that manufacture everything from small electronic components to complex systems used by defense, space and industry, as well as a full range of consumer electronic products.

In September of 2006, a Congressional e-waste working group held a stakeholder meeting in which manufacturers and retailers agreed to find a financing solution for the hill and other stakeholders to consider, Rick Goss, EIA vice president of environmental affairs, says. The EIA’s Environmental Issues Council, which is made up of representatives from 64 companies, including major IT and consumer electronics manufacturers, debated the framework, with the EIA executive committee voting to accept the framework in late May.

The legislative framework EIA has proposed is based on a bifurcated financing system that distinguishes televisions from IT equipment. "The key point is that televisions and IT equipment need to be treated differently," Goss says. He adds that the major market and life cycle differences between televisions and IT equipment call for different funding mechanisms.

FUNDING A SOLUTION. Goss says that the state laws concerning electronics recycling that have been passed each provide different financing mechanisms to fund the collection and recycling of televisions and IT equipment, creating an uneven playing field for the electronics industry’s various manufacturers depending on their product range. According to Goss, advanced recovery fees or producer responsibility funding mechanisms create winners and losers when applied to electronics manufacturers as a whole. Instead, he says, the EIA’s proposed bifurcated financing system provides a "fair and equitable" financing solution to the industry’s manufacturers.

Goss points out that the life span of a television is generally 15 years, while the life span of IT equipment, especially personal computers and laptops, tends to be much shorter, in the range of six-to-eight years. Technological innovations help to speed the obsolescence of personal computers and laptops as well as to serve as a barrier to entering the industry. However, Goss says, a smaller barrier to entry exists in the television manufacturing sector, meaning that companies, particularly overseas firms, can easily set up manufacturing facilities. "Our members are getting competed to death by foreign competitors, particularly Chinese competitors," he says. "We don’t know if these companies will be around in 15 years. They are virtual companies with virtually no permanent presence in the U.S." Goss adds that there is a "huge risk" these foreign competitors may not be around 15 years in the future, which would leave EIA member companies to foot the bill for the recovery and recycling of their competitors’ televisions. "We see a higher orphan rate for TVs than for computer monitors," he adds.

The bifurcated financing solution the EIA has proposed separates televisions from desktop computers, laptops and computer monitors to reflect their different business models, market composition and consumer base, according to the organization. The collection and recycling of televisions would be conducted through an industry-sponsored, third-party organization and initially supported by a nominal advance recovery fee at the time of purchase. The fee would expire once a significant portion of legacy televisions have been recovered and then revert to a producer responsibility funding mechanism.

Goss says many EIA members are extremely concerned about legislation that calls for manufacturers to fund the recovery and recycling of their branded products in light of the volume of televisions in the market, their longevity and the number of manufacturers entering and leaving the market, all of which contribute to considerable legacy issues. "Long-standing manufacturers have a huge and retroactive responsibility," he adds, while "virtual" manufacturers can evade their responsibilities by closing down their operations in 10 years and reopening under a different name in the future.

IT equipment manufacturers would start a convenient and free consumer program to recover and recycle their products, according to the EIA framework. IT manufacturers would have to offer such a program to do business.

In a press release announcing the framework, Goss says, "Across the board, manufacturers made concessions to produce this consensus agreement. We sincerely hope that other stakeholders will be motivated by the same spirit of compromise as we seek a uniform recycling program that our country wants and needs."

While the hodgepodge of state legislation governing electronics recycling can mean headaches for electronics manufacturers, Goss says the EIA did look to state legislation when crafting its framework.

GIVING CREDIT. "We actually have borrowed some language and concepts from some laws that are out there," Goss says, giving a nod to legislation that has been passed at the state level. The framework’s approach to funding the IT portion of the electronics stream is based on the legislation passed by the Texas legislature in June, while its approach to funding the recovery and recycling of televisions came in large part from California’s legislation.

"IT manufacturers have huge institutional customers—up to 75 to 80

The EIA’s framework also borrows from legislation like that in California, which calls for covered electronic devices to meet European Union Restriction on Hazardous Substances (RoHS) requirements.

"The framework was meant to invite broad dialogue from other stakeholders," Goss says. "In the next few weeks, we hope to reach an agreement that this is the approach we want to pursue. We’re open to negotiating what makes the most sense."

He continues, "If there is a future agreement based on this framework, we will actively work to get it enacted."