No clear path

It’s a tough time for electronics recyclers as devices are getting smaller and lighter. For recyclers that have long relied on selling electronic scrap on a per-pound basis, this has proved problematic.

“You have these lightweight devices now with just a chip in them; what does that mean for recyclers?” asks Jason Linnell, co-founder and executive director of the National Center for Electronics Recycling (NCER), Vienna, West Virginia.

“The recycling industry is going to have to adapt to some of the newer realities, like commodity prices not being high,” he adds.

When commodity prices were higher, devices that could have been reused frequently were shredded to recycle the valuable materials they contained. Joe Clayton, vice president of sales and marketing for MRP Co., Hunt Valley, Maryland, says this is because recyclers could get more money from the separated commodities than for the whole device on the reuse market.

Clayton says MRP is one of the largest brokers of circuit boards globally and recycles a number of commodities generated from end-of-life electronics (EOL), including precious metals and ferrous and nonferrous metals.

“When commodity prices were higher, more reuse items might have been scrapped as the spread would not have been as great as it is currently with depressed commodity values,” Clayton says. “We are entering a new circular economy where reuse is preferable over disposal.”

Unless contractually bound, Clayton suggests reuse always should be the preferred method for handling electronics.

MODIFYING BUSINESS MODELS

In light of commodity prices falling for nearly two years and the lower metal concentration in EOL electronics, recyclers now are considering avenues that they have either avoided or didn’t get involved in before for various reasons.

For some e-scrap recyclers that previously never considered reuse, it is becoming a more attractive option, says Eugene Niuh, business development director for OmniSource Electronics Recycling, Fort Wayne, Indiana, a division of nonferrous and ferrous scrap recycler OmniSource Corp., a subsidiary of steel producer Steel Dynamics Inc.

Niuh says, “As a recycler we’ve got to be very proactive and nimble on our feet to adjust our business models. Reuse certainly needs to be an important part of business models for e-scrap recyclers.”

Linnell agrees. He says recyclers are looking at reuse as a way to get more revenue coming in. Where electronics recyclers in the past would focus mostly on shredding devices in an effort to have higher volumes, and ultimately higher profits, reusing EOL electronics now serves as another source of revenue.

In the recent past, recyclers refrained from diverting time away from processing lines, Linnell says. Yet, with continuous depressed commodity pricing, they have reconsidered other revenue opportunities.

The greatest value recovery opportunity for e-scrap recyclers is from used devices, according to the NCER’s May 2016 report, “The Electronics Recycling Landscape Report.” The report also states reuse is the most environmentally friendly option.

Linnell notes that shredding e-scrap hasn’t been abandoned, as dominant players still are doing a significant amount of it. Commodities recovered from shredded e-scrap are being sold daily on the market.

However, some recyclers that would not have looked at reuse in the past are considering it now, Linnell says.

LEVEL THE PLAYING FIELD

There’s no doubt that electronics recyclers in the U.S. must contend with an uneven playing field. Half of the states have some type of law mandating recycling.

However, not all of these various state laws are equal, Linnell says.

Speaking at WasteExpo 2016, held June 6-9 in Las Vegas, during the session “Electronics Recycling Trends & Markets,” Linnell said “a real plateau” has happened regarding states ratifying e-scrap laws.

The depth and range of e-scrap legislation from state to state is a challenge for recyclers, said Niuh, who also spoke during the WasteExpo session. He said recyclers must be knowledgeable about the changing incoming material stream and the laws.

“If you operate in several states, you really have to be in tune with legislation there,” Niuh said. “There are a lot of challenges recyclers in these states [with e-scrap laws] have to be aware of.”

Additionally, for those states that have yet to establish e-scrap legislation, it is highly unlikely that they will enact any laws related to e-scrap in the coming years, Linnell says. Utah was the last state to join the list, and that was in 2011.

“We’ve been stalled on that front,” Linnell says regarding adding more states to the list of those with e-scrap laws on the books. “If you look at the map of who’s left, there’s not a lot of likely candidates that are going to pass anything soon, except maybe Massachusetts.”

NCER works a great deal with state representatives to oversee implementation of state laws, Linnell says. When it comes to reuse options, recyclers are limited under state laws, he says.

Niuh says without question one of the main challenges for electronics recyclers is a lack of federal e-scrap legislation.

“Unfortunately it will continue to be an extremely challenging time for recyclers,” he says. “Reuse is a viable option for recyclers to try to increase their margins internally, but without question recyclers such as us will be faced with the ongoing challenges of legislation and not having a level playing field.”

The pace to have laws debated, passed and enacted is typically slower than the lifespan of electronics, Niuh says.

SUPPORT THE SYSTEM

As for the existing EOL electronics collection system in the U.S., NCER’s report says it is currently broken. “One of the very few things all stakeholders agreed on during the interview process is that the U.S. system—if what is in place today can be considered a ‘system’—is broken,” the report states.

Niuh says many Americans are undereducated on where to recycle devices. His idea for a better e-scrap collection system is to partner with already-established infrastructure, such as waste management companies or solid waste districts. Partnering with companies that have existing transfer stations, collection systems, etc., would prevent the need to start from scratch and also would serve as a convenience for people, he says.

OmniSource’s Niuh suggests hosting an e-scrap collection day once per month and collecting fees at these events.

“From an e-scrap perspective, I’m not just going to set up shop in a small town; partnering is my idea,” he says, adding, “The infrastructure is already there.”

Piggybacking on existing systems is the way to go, says Andrew Rubin, president of the electronics recycling company FCM Recycling Inc., headquartered in Lavaltrie, Quebec. FCM recently was certified to the R2 (Responsible Recycling Practices) Standard at all six of its Canadian operating units.

People are only going to go so far to drop off devices, Rubin says. Making the experience convenient for them is the best way to ensure more e-scrap enters the recycling stream, he adds.

Rubin offers a perspective on Canada’s electronics recycling legislation. With the exception of the territory of Nunavut, all 10 of Canada’s provinces and two of its territories have passed extended producer responsibility legislation for electronics. The Electronic Products Recycling Association operates eight of these programs. The U.S. could learn from Canada, he says, as having commonality among collection programs has proven successful.

“It was tough in Canada before we had the even flow among provinces,” Rubin says. “It got easier and a lot more efficient when it was universal rules and regulations across the board.”

He adds, “The only way the states are going to see success in this—which is diverting from landfill, stopping the transport of hazardous materials as well as creating jobs and an industry that is decent—is there has to be some sort of body that ties these together and has a universal collection program, standards and a universal payment scheme.”

Despite the lack of federal legislation in the U.S., Linnell ensures NCER will continue to work with states that have e-scrap laws and with recyclers that are considering expanding into reuse. “This is the new reality for the short term, so recyclers have to look at ways they can do more reuse,” he says.

The author is associate editor of Recycling Today and can be contacted via email at mworkman@gie.net.