One-stop WEEE shop aims to spark compliance competition

Drew Wilson, Contributing Writer -- Electronic Business, 5/16/2006

Since August 2005, Europe’s Waste Electrical and Electronic Equipment (WEEE) directive has required companies selling electronics into the European Union to demonstrate that they are taking back and recycling their gadgets.

That’s the general idea. But Europe is now a diverse 25-country mosaic stretching from Finland to Malta, and the practical details of WEEE implementation are left up to the member states. So that means that registration, reporting, take-back and recycling are open to interpretation in as many as 25 different ways.

Most companies comply by signing up with the national compliance scheme in each member state, which is cumbersome, complex and not necessarily the most cost-effective solution.

In fact, the U.S. Commercial Service recently reported that U.S. companies most frequently ask about pan-European recycling possibilities—a one-stop shop that covers all the requirements across all the member states.

Basically, there aren’t any. But the European Recycling Platform (ERP)—founded by Braun, Electrolux, Hewlett-Packard, and Sony in 2002—comes pretty close.

ERP provides one point of contact for registration, take-back and recycling across nine EU countries that represent 85 percent of the e-waste in Europe, according to Hans Korfmacher, ERP’s director. (The nine countries that ERP serves are Austria, France,
Germany, Ireland, Italy, Poland, Portugal, Spain and the UK.) Based in Paris, ERP manages outsourcing agreements with logistics and recycling companies, working through general contractors CCR Logistics, in Germany, and Geodis, a French supply chain management company.

Manufacturers formed ERP as an alternative to the national recycling consortiums, adds Gregor Margetson, head of European Sustainability Affairs for Samsung Electronics, also a member of ERP. Margetson says that some EU countries had pre-WEEE recycling laws and built up monopolistic national compliance schemes that were not cost-efficient. At the same time, smaller recyclers never bothered to organize into big networks to provide a single-source turnkey solution.

“The purpose of ERP is to introduce competition into markets where companies previously had only one choice,” Margetson says. “ERP was founded to say, ‘We don’t like your prices; we can do it cheaper and force you to compete.’”

According to Korfmacher, the founding idea is proving to be true. He says ERP has done cost research in the countries where it competes against national schemes. Although results vary by product line, ERP’s overall costs, both operational and in overhead, are 50 percent to 80 percent lower than if a company used the national compliance scheme in each of those countries.

ERP’s pan-European stretch brings economies of scale. “Certain operations such as logistics, administration and auditing carry roughly the same costs for a small country such as Austria as they do for a group of countries,” Korfmacher explains. “ERP has lower overhead costs, because of its nine-country span. It’s done centrally, so you don’t need the same number of people.”

Outside of ERP, manufacturers haven’t linked up much for WEEE compliance. Loewe, Philips Consumer Electronics and Sharp do collaborate, although only in Germany. EcologyNet Europe, a Germany-based WEEE solution owned by Panasonic, with several OEM members, offers a pan-European solution for B2B waste only, according to Thomas Dietersagen, managing director.

But the landscape appears to be changing, as WEEE slowly comes into effect at different speeds across the EU.

DHL reported that it was developing a WEEE solution for manufacturers along the lines of ERP’s, although Deutsche Post World Net in Germany, DHL’s parent company, would not disclose details.

The WEEE Forum, a loose association of national compliance schemes in EU countries, is trying to offer some pan-European assistance to producers.

“At least others have understood that a pan-European solution is necessary for producers,” Korfmacher says.

ERP has 21 member companies, accounting for roughly 15 percent of Europe’s e-waste. ERP wants to limit growth to 30 percent market share to avoid becoming a monopoly itself. “Our rule is not to become too big,” Korfmacher says.