Proposal for a

Proposal for a

TABLE OF CONTENTS

DIRECTIVE ..../.../EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Waste Electrical and Electronic Equipment 1

DIRECTIVE ..../.../EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on on the restriction of the use of certain hazardous substances in electrical and electronic equipment 1

EXPLANATORY MEMORANDUM 4

ANNEX I Material specific reductions of environmental impacts through reprocessing 29

ANNEX II The impact of the Proposal on business - with special reference to small and medium-sized enterprises (SMEs) 30

ANNEX III Bibliography 34

ANNEX IV 34

DIRECTIVE ../../EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on Waste Electrical and Electronic Equipment 42

ANNEX I A 56

ANNEX I B 57

ANNEX II 61

ANNEX III 62

ANNEX IV 63

DIRECTIVE ..../.../EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on on the restriction of the use of certain hazardous substances in electrical and electronic equipment 1

ANNEX

The production of electrical and electronic equipment is one of the fastest growing domains of manufacturing industry in the Western world. Both technological innovation and market expansion continue to accelerate the replacement process. New applications of electrical and electronic equipment are increasing significantly. There is hardly any part of life where electrical and electronic equipment are not used. This development leads to an important increase in waste electrical and electronic equipment (WEEE).

The WEEE stream is a complex mixture of materials and components. In combination with the constant development of new materials and chemicals having environmental effects, this leads to increasing problems at the waste stage. The WEEE stream differs from the municipal waste stream for a number of reasons:

• The rapid growth of WEEE is of concern. In 1998, 6 million tonnes of waste electrical and electronic equipment were generated (4% of the municipal waste stream). The volume of WEEE is expected to increase by at least 3-5% per annum. This means that in five years 16-28% more WEEE will be generated and in 12 years the amount will have doubled. The growth of WEEE is about three times higher than the growth of the average municipal waste.
• Because of their hazardous content, electrical and electronic equipment cause major environmental problems during the waste management phase if not properly pre-treated. As more than 90% of WEEE is landfilled, incinerated or recovered without any pre-treatment, a large proportion of various pollutants found in the municipal waste stream comes from WEEE.
• The environmental burden due to the production of electrical and electronic products ("ecological baggage") exceeds by far the environmental burden due to the production of materials constituting the other sub-streams of the municipal waste stream. As a consequence, enhanced recycling of WEEE should be a major factor in preserving resources, in particular energy.

In view of the environmental problems related to the management of WEEE, Member States began drafting national legislation in this area. The Netherlands, Denmark, Sweden, Austria, Belgium and Italy have already presented legislation on this subject. Finland and Germany are expected to do so soon. The Member States which have so far not drafted national legislation expressed their concern about the lack of harmonised European legislation for this waste stream during various consultation meetings preceding the present initiative.

In view of the Internal Market, national approaches to the subject of WEEE give rise to various problems:

• Different national policies on the management of WEEE hamper the effectiveness of national recycling policies as cross-border movements of WEEE to cheaper waste management systems are likely.
• Different national applications of the principle of producer responsibility lead to substantial disparities in the financial burden for economic operators.
• Diverging national requirements on the the phasing-out of specific substances, could have implications on trade in electrical and electronic equipment.

In order to address adequately the environmental problems associated with the current methods for the treatment and disposal of WEEE, it is considered appropriate to introduce measures at Community level that aim, firstly, at the prevention of WEEE, secondly at the re-use, recycling and other forms of recovery of such wastes and, thirdly, at minimising the risks and impacts to the environment from the treatment and disposal of WEEE. It is also the aim of this initiative to contribute to the harmonisation ofe national measures on the management of waste electrical and electronic equipment in order to ensure the functioning of the internal market. These measures are being proposed in two separate Directives. The first – the draft Directive on WEEE – deals with the management of waste and is based on Article 175 of the Treaty. The second, which seeks to harmonise national measures on the restriction of the use of certain hazardous substances in electrical and electronic equipment, is based on Article 95 EC Treaty. These two Directives will be accompanised by a further proposal on the design and manufacture of electrical and electronic equipment later this year. and to avoid obstacles to trade and distortion of competition within the Community.

1. Policy considerations

Article 174 of the Treaty establishing the European Community (EC Treaty) states that Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.

The Community programme of policy and action in relation to the environment and sustainable development ("Fifth Environmental Action Programme") states that the achievement of sustainable development calls for significant changes in current patterns of development, production, consumption and behaviour. Furthermore, it advocates, inter alia, a reduction in wasteful consumption of natural resources and the prevention of pollution.

More specifically, the "Fifth Environmental Action Programme" contains an entire chapter dedicated to waste management issues, in which WEEE is mentioned as one of the target areas to be regulated by application of the principles of prevention, recovery and safe disposal of waste.

The Council, in its Resolution of 7 May 1990 on Waste Management Policy, invited the Commission to establish action programmes for particular types of waste. Member States identified, inter alia, end-of-life electrical and electronic equipment as a waste stream to be addressed in this respect.

The Council, in its Resolution of 24 February 1997 on a Community strategy for waste management, invited the Commission to develop, as soon as possible, an appropriate follow-up to the initiative on waste electrical and electronic equipment.

The European Parliament, in its Resolution of 14 November 1996 (A4-0364/96), asked the Commission to present proposals for directives on a number of priority waste streams, including electrical and electronic waste, and to base such proposals on the principle of producer responsibility. The European Parliament, in the same Resolution, requests the Council and the Commission to put forward proposals for cutting the volume of waste as well as reducing the presence of hazardous substances in waste such as chlorine, mercury, polyvinyl chloride (PVC), cadmium and other heavy metals.

2. Objectives and main elements of the proposal

The proposed Directive on Waste Electrical and Electronic Equipment will contribute to the protection of human health and the environment as required by Article 174 of the Treaty. The principal objectives of this Proposal are to protect soil, water and air from pollution caused by current management of WEEE, to avoid the generation of waste, which has to be disposed of and to reduce the harmfulness of WEEE. It seeks to preserve valuable resources, in particular energy. Another objective of the proposed Directive is the harmonisation of national measures on the management of WEEE.

The objectives are to be achieved by means of a wide range of measures, including measures on the separate collection of WEEE, the treatment of WEEE and the recovery of such waste.

• Producers should take the responsibility for certain phases of the waste management of their products. This financial or physical responsibility creates an economic incentive for producers to adapt the design of their products to the prerequisites of sound waste management. The financial responsibility of economic operators should also enable private households to return the equipment free of charge
• Separate collection of WEEE has to be ensured through appropriate systems, so that users can return their electrical and electronic equipment. In order to create a common level playing field between the Member States, a "soft" collection target is provided for.
• In order to ensure improved treatment and re-use/recycling of WEEE, producers have to set up appropriate systems. Certain requirements are prescribed as a minimum standard for the treatment of WEEE. Treatment plants must be certified by the Member State. Targets are laid down for the obligation to re-use, recycle WEEE and recover energy thereof.
• In order to achieve high collection rates and to facilitate recovery of WEEE, users of electrical and electronic equipment must be informed about their role in this system. The proposed Directive contains a labelling requirement for equipment which might easily end up in a dustbin. In addition, it will be necessary for producers to inform recyclers about certain aspects of the content of such equipment.

The proposed Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment will contribute to the same objectives by ensuring that substances causing major problems during the waste management phase, such as lead, mercury, cadmium, hexavalant chromium and certain brominated flame retardants are substituted.

1. Environmental problems addressed in the proposals

In general terms, all equipment which needs electricity to work properly is either electrical or electronic. Each electrical or electronic product consists of a combination of several basic building blocks. The basic building blocks common to electrical and electronic equipment are printed circuit boards/assemblies, cables, cords and wires, plastics containing flame retardants, mercury switches and breakers, display equipment, such as cathode ray tubes and crystal liquid displays, accumulators and batteries, data storage media, light generating devices, capacitors, resistors and relays, sensors and connectors. The most environmentally problematic substances contained in these components are heavy metals, such as mercury, lead, cadmium and chromium, halogenated substances, such as chlorofluorocarbons (CFCs), polychlorinated biphenyls (PCBs), polyvinyl chloride (PVC) and brominated flame retardants as well as asbestos and arsenic.

1. Current management of WEEE

The environmental risks associated with the waste stream are not properly dealt with by current waste management practice. Today, more than 90% of WEEE is landfilled, incinerated or recovered without any pre-treatment. This leads to a considerable input of hazardous materials into the disposal or recovery routes.

1. Incineration of WEEE

It is estimated that emissions from waste incineration account for 36 tonnes per year of mercury and 16 tonnes per year of cadmium in the Community. Furthermore, the incineration of non-hazardous wastes has been identified as the largest source of emissions of dioxins and furans to air in Europe. The WEEE stream contributes significantly to the heavy metals and halogenated substances contained in the municipal waste stream. In addition, specific adverse effects could occur during incineration due to the variety of different substances found together in WEEE. Copper works like a catalyst, thereby increasing the risk of formation of dioxins when flame retardants are incinerated. This is of particular concern as the incineration of brominated flame retardants at a low temperature (600-800°C) may lead to the generation of extremely toxic polybrominated disbenso dioxins (PBDDs) and polybrominated disbenso furans (PBDFs).

On 7 October 1998, the Commission adopted a proposal for a Council Directive on the incineration of waste. This proposal provides for stringent emission limit values, which should lead to a significant reduction of emissions of various pollutants into the atmosphere. It replaces Directive 89/369/EEC of 8 June 1989 on the prevention of air pollution from new municipal waste incineration plants and Directive 89/429/EEC of 21 June 1989 on the reduction of air pollution from existing municipal waste-incineration plants. However, for a number of reasons end-of-pipe technology could not be considered as the only method to avoid emissions from waste management operations. Separate collection and treatment of waste streams, such as WEEE, contributes to a cleaner municipal waste stream and thereby a reduction in the emissions caused by the incineration or the smelting of WEEE containing heavy metals and halogenated substances. This is of particular importance in cases where the respective stringent emission standards are not implemented or are not applicable as in the case of metal smelters.

Significant quantities of PVC are contained in WEEE. There is substantial evidence supporting the view that PVC is not suitable for incineration, particularly in view of the quantity and the hazardous nature of the flue gas residues resulting from incineration. In addition, losses of plasticizers, especially phthalates, from the landfilling of PVC are widely recognised and can have potential adverse effects on the human health and the environment. It should also be noted that very little PVC waste, in particular in WEEE, is currently recycled.

Apart from the air emissions, two other aspects linked to the incineration of WEEE are of importance. These concern both installations complying with the provisions of the proposal for a Council Directive on the incineration of waste and installations not complying with those provisions.

1. Pilot tests have revealed that common appliances such as TV sets yield a negative energy output throughout the incineration process. As an example, the energy loss resulting from feeding glass - such as cathode ray tubes - into an incinerator has been calculated to be -400 kj/kg.
2. The introduction of (small) WEEE into incinerators results in high concentrations of metals, including heavy metals, in the slag, in the flue gas or in the filter cake. According to a Dutch study, almost all of the bottom ash produced in the Netherlands (around 600.000 tonnes in 1995) is disposed of in the road building sector where it is used as filling material. To be used in an environmentally safe way, the bottom ash has to meet physical and technical requirements, in particular leaching requirements. Even where bottom ashes containing certain concentrations of heavy metals are specifically cleaned, they can only be used as construction material with additional environmental requirements. It has been calculated that if small white and brown goods were no longer incinerated with the rest of the waste, the content of copper, lead, nickel and other metals could be reduced to such an extent that the bottom ashes would fall within the Dutch leaching requirements.

1. Landfilling of WEEE

Due to the variety of different substances contained in WEEE, negative environmental effects occur during landfilling of these wastes. Significant impacts could be prevented where WEEE is put on controlled landfills which respect environmentally sound technical standards. Nevertheless, as no landfill is completely watertight throughout its lifetime, a certain leaching of metals and chemical substances cannot be excluded. It goes without saying that environmental impacts are considerably higher when WEEE is put on uncontrolled landfills, which still takes place to a significant extent in certain Member States and in most candidate countries for accession to the European Union.

The risks relating to the landfilling of WEEE are due to the variety of substances contained in WEEE. The main problems in this context are the leaching and evaporation of hazardous substances. Leaching of mercury takes place when certain electronic devices, such as circuit breakers, are destroyed. The same is true for PCBs from condensers. When brominated flame retarded plastic or cadmium containing plastics are landfilled, both polybrominated diphenylethers (PBDEs) and cadmium may leach into the soil and groundwater. It had been found that significant amounts of lead ions are dissolved from broken lead containing glass, such as the cone glass of cathode ray tubes, by the acidic groundwater often found in landfills. Therefore, pollution from cone glass in landfills is likely.

Not only the leaching of mercury poses specific problems. The vaporisation of metallic mercury and dimethylene mercury, both part of WEEE, is also of concern. In addition, uncontrolled fires may arise at the landfills. In such fires, both metals and other chemical substances, such as the extremely toxic dioxins and furans including tetrachloro-dibenzo-dioxin (TCDD) and polychlorinated and polybrominated dioxins and furans (PCDDs, PBDDs and PCDFs) from halogenated flame retardant products and PCB containing condensers may be emitted.

2. Recycling of WEEE

One of the main objectives of the present initiative is to increase the recycling of WEEE. In general, increased recycling preserves resources and disposal capacities, in particular landfill. In spite of the positive effects, the recovery operation might add to environmental pollution if the waste is not properly pre-treated.

Due to plastics containing halogenated substances, Bboth dioxins and furans are generated as a consequence of recycling the metal content of WEEE, which also contain halogenated plastics. Halogenated substances contained in WEEE, in particular brominated flame retardants, are also of concern during the extrusion of plastics, which is part of the plastic recycling. Due to the risk of generating dioxins and furans, recyclers usually abstain from recycling flame retarded plastics from WEEE. In view of the lack of proper identification of plastic containing flame retardants and the inherent difficulty in distinguishing flame retardant plastic from ordinary plastic, most recyclers do not process any plastic from WEEE.

Environmental problems during the recycling of WEEE are not only linked to halogenated substances. Hazardous emissions to the air also result from the recycling of WEEE containing heavy metals, such as lead and cadmium. These emissions could be significantly reduced by replacing the respective materials by less polluting substances in new electrical and electronic equipment and by means of proper pre-treatment of WEEE. Another problem with heavy metals and halogenated substances in untreated WEEE occurs during the shredding process. As WEEE is in most cases shredded without proper disassembly, hazardous substances, such as PCBs contained in capacitors, may be dispersed into the recovered metals and the shredder waste.

1. Resource aspects

Through the present WEEE management, valuable materials are disposed of and lost for future generations. Along with the loss of resources, substantial pollution of the environment through mining is of concern. It is not possible to give exact figures on the environmental impact of the extraction of all the materials contained in electrical and electronic equipment. This depends very much on the site and region where the materials are extracted. However, the processes leading to the extraction of these metals and their general impact on the environment are well known and documented.

2. The principle of producer responsibility

The polluter pays principle is laid down in Article 174 of the EC Treaty. The idea behind this principle is to make those persons responsible for environmental pollution who have the possibility to improve the situation. Producers of electrical and electronic equipment design the product, determine its specifications and select its materials. Only producers can develop approaches to the design and manufacture of their products to ensure the longest possible product life and, in the event that it is scrapped, the best methods of recovery and disposal.

At the moment there is hardly any economic incentive for the producer to take waste management, in particular recycling aspects, into consideration at the design stage. In this context, producers who have invested in design for recycling complain about the lack of financial incentives to maintain this product policy. As a result such actions run the risk of being discontinued. Therefore, the Proposal for a WEEE Directive seeks to extend the traditional role of producers by making them responsible for the management of electrical and electronic products at end-of-life. The creation of a link between the producers and waste management contributes to an improved product design with a view to facilitating recycling and disposal of products once they reach their end of life. Specialised recyclers confirm the practical relevance of improved design for the recycling of electrical and electronic equipment.

In order to reduce costs for producers resulting from the management of waste from products put on the market before entry into force (historical waste) of this legislation, a transition period of five years after entry into force of the Directive is granted. While the concerns of most sectors of the electronics industry will be met by this transition period, producers of products with longer lifetimes might need further assistance to address the problem of historical waste. In this context, Member States, without prejudice to Community competition law, would remain free to allow producers to cover these costs through a visible, fixed fee on the price of new products.

For electrical and electronic equipment not used by private households, the financing of the waste management will need to be agreed between the producer and the user of the equipment at the time of purchase. This is in line with conventional business practice.

1. Legislation on hazardous substances

1. Policy considerations

In line with the Communication on the review of the Community strategy for waste management from 1996, the Proposal for a Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment provides for the reduction of the content of certain hazardous materials in WEEE, including lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBB) and polybrominated diphenylethers (PBDEs). In this respect, the Proposal follows the principles of existing Community waste legislation, which already included restrictions on the marketing of hazardous substances. Examples can be found in the European Parliament and Council Directive 94/62/EC on packaging and packaging waste and the Council Directive 91/157/EEC on batteries and accumulators containing certain dangerous substances as amended by Commission Directive 98/101/EC adapting to technical progress Directive 91/157/EEC.

Various health and environmental problems linked to the current management of WEEE could be reduced by means of a diversion of these wastes away from landfills and incinerators. This could be achieved by setting up separate collection, treatment and recovery schemes for WEEE. However, at this stage it is unclear when collection rates can be achieved, which represent a substantial part of electrical and electronic equipment put on the market. In the meanwhile, in particular small WEEE will continue to be found in the current disposal routes. In addition, even if WEEE were collected separately and submitted to recycling processes, their content of hazardous substances, poses risks to the health or the environment. Therefore, the substitution of those substances, which are most problematic in the waste management phase, is the most effective way of ensuring a significant reduction of risks to the health and the environment related to these substances. However, where substitution is not feasible due to the lack of suitable alternatives, exemptions from the requirement to substitute should be granted. These exemptions should be listed in an Annex to the Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment and should be regularly amended in the light of technical progress and new scientific evidence.

The strategy of substituting substances is based on the most current scientific knowledge, taking in particular acount of the specific problems caused by these substances in the waste stream. These substances are well known and have already been subject to a range of different control measures both at Community and national level. However, scientific work on these substances is ongoing and in particular comprehensive risk assessments under Regulation (EC) 793/93 are currently under way for cadmium and three types of PBDE. Although the information emerging to date from these risk assessments gives no reason to believe that the measures foreseen in this Proposal are disproportionate, the scientific work and other work will be kept under review and if necessary this Proposal will be adjusted in accordance with the conclusions of this work.

2. Risks posed by the targeted substances

Lead

Lead can damage both the central and peripheral nervous systems of humans. Effects on the endocrine system have also been observed. In addition, lead can adversely affect the cardiovascular system and the kidneys. Lead accumulates in the environment and has high acute and chronic toxic effects on plants, animals and micro-organisms.

Under Council Directive 67/548/EEC on the classification and labelling of dangerous substances, as amended, lead compounds are classified:

- R20/22 Harmful by inhalation and if swallowed

- R33 Danger of cumulative effects.

The relative importance of any single source of exposure is difficult to predict and will vary with geographic location, climate and local geochemistry. In any case, consumer electronics constitute 40% of lead found in landfills. The main concern in regard to the presence of lead in landfills is the potential for the lead to leach and contaminate drinking water supplies.

Cadmium

Cadmium compounds are classified as toxic with a possible risk of irreversible effects on human health. Cadmium and cadmium compounds accumulate in the human body, in particular in the kidneys which in time may lead to damage. Cadmium is adsorbed by respiration but is also taken up with food. Due to its long half-life (30 years), cadmium can easily be accumulated in amounts that cause symptoms of poisoning. With prolonged exposure cadmium chloride may cause cancer. Cadmium shows a danger of cumulative effects in the environment due to its acute and chronic toxicity.

Under Council Directive 67/548/EEC on the classification and labelling of dangerous substances cadmium compounds are classified:

- R23/25 Toxic by inhalation, if swallowed.

- R33 Danger of cumulative effects.

- R40 Possible risks of irreversible effects.

Mercury

Inorganic mercury spread in the water is transformed to methylated mercury in the bottom sediments. Methylated mercury is easily accumulated in living organisms and concentrates through the food chain via fish. Methylated mercury has chronic effects and causes damage to the brain.

Under Council Directive 67/548/EEC on the classification and labelling of dangerous substances, as amended, mercury is classified:

- R23/24/25 Toxic by inhalation, in contact with skin and if swallowed.

- R33 Danger of cumulative effects.

Under Council Directive 67/548/EEC on the classification and labelling of dangerous substances, as amended, mercury alkyls and inorganic compounds of mercury are classified:

- R26/27/28 Very toxic by inhalation, in contact with skin and if swallowed.

- R33 Danger of cumulative effects.

It is estimated that 22% of annual world consumption of mercury is used in electrical and electronic equipment.

Hexavalent chromium (Chromium VI)

Chromium VI can easily pass through cell membranes. Accordingly, chromium VI is easily absorbed and produces various toxic effects within the cells. Therefore, chromium VI is considered an important risk for the environment in industrialised countries. Furthermore, chromium VI causes severe allergic reactions. Small concentrations of chromium VI in the environment might lead to an increase of allergies. Asthmatic bronchitis is another allergic reaction linked to chromium VI. Chromium VI is also considered genotoxic, potentially damaging the DNA.

In addition, hexavalent chromium compounds are assumed to be toxic for the environment.

As regards possible exposure, chromium VI contained in wastes can easily leach from landfills which are not appropriately sealed. During incineration of chromium VI contaminated wastes the metal evaporates through fly ash. Chromium VI in the fly ash is easily soluble. There is agreement among scientists that wastes containing chromium should not be incinerated.

Brominated flame retardants

Brominated flame retardants are regularly designed into electronic products today as a means of ensuring flammability protection. The use is mainly in four applications: in printed circuit boards, components such as connectors, plastic covers and cables. 5-, 8- and 10-BDE are mainly used in printed circuit boards, plastic covers of TV sets and domestic kitchen appliances.

One of the main objectives of the present Proposal is to divert WEEE from disposal operations and to increase recycling of this waste. This is in particular true for plastics, which constitutes 20% of the composition of WEEE. One of the main impediments to the recycling of this fraction is the risk of dioxin and furan generation by certain brominated flame retardants during the recycling of the respective plastic. In particular, it has been shown that polybrominated diphenylethers (PBDEs) formed the toxic polybrominated disbenso furans (PBDF) and polybrominated disbenso dioxins (PBDD) during extrusion, which is part of the plastic recycling process. As a consequence, the German chemical industry stopped the production of these chemicals in 1986.

In addition, high concentrations of PBDEs have been found in the blood of workers in recycling plants. Various scientific observations indicate that PBDEs might act as endocrine disrupters.

The presence of polybrominated biphenyls (PBBs) in Arctic seal samples indicates a wide geographical distribution. The principal known routes of PBBs from point sources into the aquatic environment are PBBs plant areas and waste dumps. PBBs are almost insoluble in water and are primarily found in sediments of polluted lakes and rivers. PBBs have been found to be 200 times more soluble in landfill leachate than in distilled water. This may result in a wider distribution in the environment. Once PBBs have been released into the environment, they can reach the food chain, where they are concentrated. PBBs have been detected in fish from several regions. Ingestion of fish is a source of PBB transfer to mammals and birds. Neither uptake nor degradation of PBBs by plants has been recorded. In contrast, PBBs are easily absorbed by animals and although they have been found to be very persistent in animals, small amounts of PBB metabolites have been detected.

Further information on the risks associated with these substances is set out in Annex IV.

2. Internal Market aspects – Situation in the Member States

1. Situation in the Member States

In view of the environmental problems linked to the management of WEEE, Member States started drafting national legislation. The Netherlands, Denmark, Sweden, Austria, Belgium and Italy have already presented legislation on WEEE. Finland and Germany are expected to do so soon. Those Member States which have so far not drafted national legislation expressed their concern about the lack of harmonised European legislation for this waste stream during various consultation meetings preceding the present initiative.

Since the mid-1990s Austria has had legislation on the take-back and recovery of lamps and white goods. Initially, the recovery systems for both product groups were financed through a fee on the price of new products. Due to competitive disadvantages suffered by the Austrian retailers of white goods compared with competitors in Germany and Italy, an end-of-life fee was introduced and the fee on the product price was reduced accordingly. A draft ordinance on the overall WEEE stream was published in March 1994, but further discussions were suspended pending the entry into force of EU legislation.

A regulation covering brown and white goods in the Flemish Region of Belgium was adopted in 1998. Manufacturers, importers, distributors and retailers are obliged to take back free of charge all kinds of white and brown goods as well as Information Technology (IT) equipment. Recycling targets for ferrous and non-ferrous metals and for plastics are included in the regulation.

According to the Danish statutory order, from January 1999 Danish local authorities have been will be responsible for the collection and recovery of brown and white goods, IT and telecommunication equipment, monitoring equipment, equipment for medical and laboratory use and other electrical and electronic equipment. To fund this, end-users are charged through local taxes or collection fees.

In Germany an ordinance on the take-back and recycling of WEEE is in the final stages of the legislative procedure. The draft provides for the responsibility of local municipalities to collect WEEE and producers to treat, recover and dispose of this waste.

An Italian decree on waste management of December 1997 lays down take-back and recovery obligations for several kinds of durable goods in domestic use, such as white goods, TVs and certain IT equipment. On the basis of agreements with industry a nationwide network of collection centres and recovery facilities is to be set up. End-users have to deliver this equipment to an authorised dealer or to public or private waste management organisations.

On 1 June 1998 a regulation establishing rules for taking back and processing white and brown goods after use came into force in the Netherlands. According to this legislation consumers can return WEEE free of charge to the supplier or to the local authority. Subsequently, manufacturers and importers must process the items concerned. The landfilling or incineration of WEEE collected separately will be prohibited.

In April 2000 Sweden adopted an ordinance for WEEE allowing consumers to bring back their waste to retailers or municipal collection points. Costs of recycling will be borne by either the municipalities or the manufacturers. WEEE may not be landfilled, incinerated or shredded without treatment by a certified operator. This ordinance is expected to come into effect on 1 July 2001.

There are many examples of the regulation of lead-containing products and of particular uses of lead such as:

• In Austria, there are restrictions on the lead content of fertilisers and on the use of sewage sludge if the heavy metal content in the soil or the sludge exceeds certain limits. Similar ordinances have been adopted by Finland and drafted by the German government.
• In Denmark, a regulation on lead-containing products is under way. The draft regulation contains a general prohibition (with exemptions) on the sale of products containing lead substances. The sale of a range of specified products containing lead is also prohibited.
• In Sweden, there are initiatives to phase out lead use in many products including cables, solder, light bulbs, cathode rays and keels.

Examples of legislation on other heavy metals are the Dutch Cadmium Decree 1999 prohibiting the use of cadmium as pigments, dyes, stabilisers and plating. A similar ordinance was adopted by the Austrian government in 1993. In Austria the content of mercury in lamps is limited to 15 mg per lamp. In 1998 the Netherlands also enacted a general phase-out of mercury in products.

The Swedish National Chemicals Inspectorate proposed a ban of PBDE and PBB, which is currently being considered by the Swedish government, while Austria banned the use of PBB as early as 1993. Factually, the use of PBDE is prohibited in Germany as certain limit values for brominated furans and dioxins may not be exceeded according to the national Chemicals Prohibition Ordinance. This is in line with a voluntary commitment to discontinue the use of PBDEs given by the German chemicals industry in 1989.

1. The Internal Market

With regard to the Internal Market, three main problems resulting from different national approaches to the management of WEEE can be identified:

• Different national applications of the principle of producer responsibility might lead to substantial disparities of financial burden for the economic operators
• Different national policies on the management of end-of-life electrical and electronic equipment could hamper the effectiveness of national recycling policies, as transboundary movement of WEEE to cheaper waste management systems could occur
• Diverging requirements on the phasing-out of specific substances could have implications on trade in electrical and electronic equipment.

In view of the developments in the Member States, it is necessary to clarifyprovide for harmonisation of the environmental objectives and the responsibilities of the various actors as regards the management of WEEE at Community level.

1. International developments and trade aspects

1. International developments

The Organisation for Economic Cooperation and Development (OECD) considers the concept of Extended Producer Responsibility (EPR) a policy tool to minimise waste. In the course of the year 2000 the OECD envisages to publish It is intended to develop a guidance document as a basis for governments wishing to implement EPR. In this context, WEEE was identified as one of the priority areas for action.

Apart from a voluntary system on "Extended Product Responsibility" no legislative action on waste from electrical and electronic equipment is envisaged at Federal level in the United States. Contrary to that, various US States have introduced a landfill disposal ban on white goods and equipment containing cathode ray tubes, including an advanced disposal fee on new appliances.

A draft Recycling Law for Domestic Electric Appliances was adopted by the Japanese Parliament (Diet) in May 1998. According to the law, retailers have to collect television sets, refrigerators, washing machines and air conditioners from consumers. These items will be transferred to the manufacturers who are responsible for further treatment, in particular recycling. Retailers and manufacturers will collect charges necessary to cover the cost of recycling the waste. A similar ordinance has been adopted in Taiwan and entered into force on 1 March 1998.

In Switzerland, an ordinance on the take-back and disposal of electrical and electronic appliances entered into force on 1 July 1998. In Norway, an ordinance on the acceptance, collection, recycling and disposal of discarded electrical and electronic equipment was adopted in March 1998.

2. Trade aspects

Both proposed Directives will uniformly apply to all electrical and electronic equipment on the EU market, independently from where these products have been manufactured. The proposed measures are necessary to fulfil the objectives of the Directives. As regards the Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment although various health and environmental problems linked to the current management of WEEE could be reduced by means of a diversion of these wastes away from landfills and incinerators, it is unclear when collection rates can be achieved, which represent a substantial part of electrical and electronic equipment put on the market. In the meanwhile, in particular small WEEE will continue to be found in the current disposal routes. In addition, even if WEEE were collected separately and submitted to recycling processes, their content of hazardous substances, poses risks to the health or the environment. Therefore, the substitution of those substances, which are most problematic in the waste management phase, is the most effective way of ensuring a significant reduction of risks to the health and the environment related to these substances. In this light, the substitution requirement as set out in Article 4 of the Proposal for a Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment can be considered to be the best means of tackling health/environmental effects arising from substances scientifically recognised as dangerous. In addition, all measures in the proposed Directive have been designed in such a way so as to meet international obligations and to minimise potential trade impacts. The need to avoid unnecessary obstacles to trade has been duly taken into account. This was particularly kept in mind when defining the implementing modalities of the substance ban and notably when setting the time schedule (2008), providing with a list of exemptions and allowing for a possibility of derogation under specific circumstances (review clause). Furthermore, it is ensured that these derogations will be kept under review in the light of technical progress and new scientific evidence.

2. Legal basis

Most of the measures set out in the WEEE Directive focus on the improvement of WEEE management. Therefore, this Directive is based on Article 175 of the EC Treaty. The aim of the Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment is to approximate the laws of the Member States on the restrictions of the use of hazardous substances in electrical and electronic equipment. Accordingly, the legal basis for this measure is Article 95 EC Treaty.

3. Subsidiarity and proportionality

1. Subsidiarity

Environmental protection measures and measures with an impact on the internal market fall within both the competence of the Community and the Member States. Measures on WEEE constitute a clear example of this competence-sharing. In accordance with the principle of subsidiarity (Article 5 of the Treaty), the Community shall take action in areas which do not fall within its exclusive competence only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community:

• The pollution caused by the management of WEEE is of a transboundary nature. This is in particular true for the pollution of the air or water resulting from the incineration, landfill or improper recycling of WEEE.
• For various parts of WEEE, recycling is economically viable only if large quantities of waste are processed. According to the principle of economies of scale only a few centralised installations in Europe would process these wastes. Cathode ray tubes are an example of this situation. Sufficient quantities of this equipment could only be processed if WEEE were collected in several European countries
• Individual national approaches to WEEE, in particular with regard to restrictions of the use of hazardous substances in electrical and electronic equipment, lead to various problems for the Internal Market as described in the chapter "The Internal Market". These problems could only be addressed by Community measures.

When devising collection, treatment and financing systems for the management of WEEE, national and regional conditions have to be taken into account. The present initiative leaves sufficient flexibility to the Member States to take these aspects into consideration. The proposed Community legislation is limited to the prescription of the main principles of WEEE management and financing and to the establishment of principles at Community level which are needed to avoid the distortion of the Internal Market. Along these lines, the restrictions on the use of hazardous substances in electrical and electronic equipment have been integrated into the Proposal for a Directive, which is based on Article 95 EC Treaty.

1. Proportionality

Both proposals focuse exclusively on the key elements for actions to be taken with regard to waste electrical and electronic equipment, such as prevention, collection, treatment and recovery as well as financing. In addition, they only introduce obligations which are necessary to achieve the environmental objectives, in accordance with the proportionality principle.

It has been argued that the substitution of hazardous substances in new electrical and electronic equipment might be redundant as WEEE would be collected separately, thereby removed from the general waste stream and treated separately. However, various estimates of the quantity of WEEE indicate that the "soft" collection target of 4 kg per inhabitant, as set out in Article 5 of the WEEE Proposal, constitutes only 25 % of the overall annual generation of this waste. Although the appropriateness of the indicated target was confirmed by the experience with Dutch WEEE legislation, it remains to be seen whether other Member States attain the collection target in the medium term. As a consequence, the substitution of the hazardous substances, as laid down in Article 4 of the Proposal on the restriction of the use of certain hazardous substances in electrical and electronic equipment, is the most effective way to reduce the presence of these substances in the waste stream.

It has been demonstrated that attributing the economic responsibility for the treatment, recovery and disposal of WEEE to producers constitutes an important incentive to improve the design of electrical and electronic equipment which takes waste management aspects into account. Contrary to that, there is no evidence that attributing the collection of WEEE from private households to producers would have an impact on the design of the equipment. Therefore, the responsibility of producers is limited to the actual treatment, recovery and disposal of this waste. For practical reasons producers will have to pick up the waste from designated collection points.

1. Consistency with other Community policies

The objectives of the Proposals are fully in line with the Treaty requirements for environmental protection and the rights of consumers and also contribute to the. They are also in line with the requirements of the Internal Market, such as the elimination of obstacles to the free movement of goods and services as well as the elimination and prevention of distortions of competition. As regards Community waste management policy, the present initiative complements legislation on the disposal of waste (i.e. landfill and incineration of waste) as well as legislation on specific waste streams, such as batteries.

Landfilling of waste

Directive 1999/31/EC on the landfill of waste provides that only treated waste can be landfilled. It falls into the scope of the present initiative to complement the Landfill Directive by stipulating concrete requirements as regards the treatment of WEEE.

Incineration of waste

Waste going to incinerators has to be pre-treated for various reasons. All residues from the incineration process, including slags, fly ash and filter cake are used in other processes, for example as construction material. The recoverability of these residues depends on their (heavy) metal content, which is linked to the quality of the material introduced in the incineration process. As a consequence, a treatment operation as foreseen in the present initiative contributes to a reduction of various metals in the respective residues. In addition, both investments and operating costs of the flue gas cleaning could be reduced if wastes put to incineration contained less heavy metals or halogenated substances.

Batteries

A large proportion of heavy metals, such as lead and cadmium, in the municipal waste stream comes from batteries. As a consequence, Directive 91/157/EEC on batteries and accumulators containing certain dangerous substances requires these batteries to be collected. However, as up to 90% of consumer batteries are integrated in electrical and electronic equipment without being removed by the consumer prior to disposal of the equipment, the separate collection of these equipment – as foreseen under the WEEE Proposal – constitutes an indispensable part of an efficient collection scheme for batteries.

Climate change and legislation on ozone depleting substances

The present initiative is explicitly recognised as a useful vehicle for reducing halogenated fluorocarbons (HFC) emissions in the EU's post-Kyoto strategy. Furthermore, the present Proposal defines the general stipulations on the recovery of used controlled substances contained in Council Regulation (EC) 3093/94 on substances that deplete the ozone layer.

Primary production of metals accounts for 10% of global CO₂ emissions. Depending on the metal, 70% to 95% of the energy used for the primary extraction of metals could be saved through enhanced recycling. In view of the fact that more than 3.5 million tonnes of metals are contained in the WEEE generated annually, the WEEE Proposal contributes significantly to the CO₂ reduction required to achieve the Kyoto targets.

Research policy

For several years the Community Research Framework programme has supported activities to stimulate the industrial change necessary to design, manufacture and use a new generation of electrical and electronic equipment that is more respectful for the environment, in line with the terms of the proposed Directives. The GROWTH programme in particular, in co-ordination with the EUREKA initiative "CARE", is stimulating industry to take the environmental impact of their products more seriously into account and to address the recycling and reduction of waste aspects from the design stage. European actions support also the substitution of harmful materials by less toxic ones. Such activities encompass not only RTD projects but also co-ordination networks, concerted actions and training activities.

2. Economic assessment

1. Implementation costs

1. Separate collection and re-use/recycling

On the basis of available information, the total net costs of meeting the collection and re-use/recycling requirements for household WEEE of the proposed draft Directive on WEEE are likely be in the range of €500-900 million/yr for the EU15. The requirements for commercial equipment might, according to a rough estimate, add around 20% to this figure. An extrapolation of Dutch figures, derived from the practical experience with national WEEE legislation in 1999, indicates costs for public relations, consultancy, overhead costs of collection and recovery systems etc. of around €100 million in the first year with a downward trend over time. If all these costs were passed on directly to the consumer through the product price, this would lead to an average price increase of 1% for most electrical and electronic goods, but could be as much as 2-3% for some product categories, such as refrigerators, televisions and other monitors.

It is, however, likely that these costs are overestimated when allowance is made for economies of scale, disposal costs avoided, etc. Furthermore, these costs are based on the assumption that Member States are not undertaking their own initiatives. However, 10 of the current 15 Member States have already implemented or intend to implement separate collection and recycling schemes for WEEE. Therefore, the incremental costs of the EU Proposal will be substantially lower than the abovementioned figures.

Collection costs for household equipment

Assuming collection of 4 kg per inhabitant, the total collected quantity of waste electrical and electronic equipment under the Directive will be 1.5 million tonnes. The average reported collection costs are in the range of €200 to 400/t. Taking these figures, overall collection costs for the EU 15 would be between €300 and 600 million/yr. It is, however, likely that these costs will come down over time once the basic investments for the collection infrastructure have been made, logistics have been optimised and consumer awareness has led to higher collection rates.

Recycling costs for household equipment

Recycling costs differ largely according to the equipment types. Costs for large household equipment typically range from around €10 to 80/t. Costs for refrigerators are usually in the area of €200 to 300/t, for equipment containing monitors €100 to 800/t and small household equipment €200 to 500/t. On the basis of various pilot projects and assuming a waste composition of 70% large household goods, 15% equipment containing monitors and 15% small household equipment, a rough range of €200 to 300 m/yr has been calculated as recycling costs according to the requirements of the Directive.

This estimate is confirmed by the initial results from the Dutch recovery system for waste electrical and electronic equipment. In 1999, the recycling costs per million inhabitants were € 695 000. Extrapolated to the total EU population, this would amount to a cost of €258 m/yr.

2. Hazardous substance reductions in new equipment

A number of manufacturers have already phased out lead, mercury, cadmium, hexavalent chromium and halogenated flame retardants in various applications. This suggests that the costs of doing so are quite limited.

The only issue where more substantial costs have been claimed by industry is lead in solders. According to calculations by the Commission, the additional operational costs of using tin-based solders are roughly estimated to be about €150 million/yr. Annualised investment costs are thought to be relatively low. On this basis, the total price increase would remain very small for most products (e.g. €0.0006 to 0.003 per telephone, €0.003 to 0.017 per calculator and €0.03 to 0.17 per television). In conclusion, the issue of replacement of lead in solders is thought to be more an issue of fine-tuning alternative technologies than a cost question.

2. Benefits of the proposed Directives

1. Financial benefits

From a purely financial point of view, there are three main types of benefits:

• Production costs for the virgin material which is replaced by secondary material can be saved. This is the reason for existing re-use and recycling. Since secondary materials are in competition with virgin materials, the price difference will determine which source producers will use. This is, however, already taken into account in the above cost figures, which are net costs.
• Disposal costs can be saved through re-using/recycling higher levels of waste electrical and electronic equipment. Assuming that the majority of WEEE would go to landfills with higher standards than today (at a cost of €50/tonne), cost savings due to reduced landfill space would be around €50 million for EU15. Further financial cost reductions may be achieved due to the reduced amount of hazardous components going into shredders.
• Finally, the costs for re-use and recycling will be lowered in future through better design of new equipment due to the feedback mechanism of producer responsibility and through additional instruments such as design standards and general obligations for Member States to encourage eco-design.

1. External benefits

The main reason for the need to legislate in this field is the existence of externalities, i.e. environmental impacts that are not integrated in the price of the product and that are usually paid for by society via cleanup costs or environmental degradation. Although there is general awareness about the problems associated with waste electrical and electronic equipment, very little research exists that could give a monetary evaluation of the externalities arising from current management practices with this waste. The absence of such an analysis, for what is a politically pressing issue, cannot however be construed as a reason for inaction.

The main benefits of separate collection and recycling are:

• the avoidance of external costs due to the possible use of the resources contained in the waste electrical and electronic equipment which would otherwise go to disposal (around 6 million tonnes annually). At a collection rate of 4 kg per inhabitant, more than 1 million tonnes of materials could be diverted and reintroduced into the economic cycle. It is difficult to evaluate how far the true costs of using resources today instead of leaving them for future generations and/or distributing them in a more equitable way among the world´s population are reflected in the price of virgin material. Sustainable resource use is, however, one of the questions at the core of the principle of sustainable development
• the avoidance of external costs caused by negative impacts on the environment from incinerating and/or landfilling waste electrical and electronic equipment. After treatment of collected equipment, only 10-30% of the original weight would be sent to final disposal. The remaining fraction after treatment (around 100 000 tons) can be sent to specialised installations, if necessary for hazardous waste. Waste fees usually do not distinguish between waste materials causing different environmental impacts since they are usually based on weight or flat rates. The external costs caused by current management of waste electrical and electronic equipment are without any doubt higher than for average types of waste, due to the content of hazardous materials in WEEE. These external costs will therefore be particularly high for refrigerators containing CFCs or equipment containing cathode ray tubes
• the avoidance of external costs caused by negative impacts on the environment from the production of virgin materials. Inter alia, the recycling of WEEE is estimated to contribute to energy savings in the order of 120 million Giga Joule (equivalent to about 2.8 million tonnes of oil) annually. An estimated 60% to 80% saving in energy can be obtained by using the materials recycled under the WEEE Proposal as compared to the use of virgin materials (compare Annex I).

• The effects of producer responsibility and other measures aimed at better design of new equipment are likely to reduce not only the financial costs of re-use and recycling but also the impact on the environment of the waste management of the equipment. It is, however, difficult to give a quantitative evaluation of these effects since they will depend on the design of national implementation measures and the reaction of the market to these measures.
• The risks of the substances targeted by the Proposal on the restriction of the use of certain hazardous substances in electrical and electronic equipment have been described in chapter 5.2 and Annex IV. The absence of specialist knowledge about specific pollution pathways, dose-response functions on living organisms, risks of potential incidents and the value that society puts on the absence of these risks makes it, however, impossible to put a clear monetary value on these externalities. Due to the inherent toxicity of these substances and the fact that they may reach the environment in a bioavailable form, associated risks are indeed substantial. Whenever more environmentally friendly substitutes exist at a reasonable price, prevention at source therefore is likely to be preferable to endofpipe solutions.

1. Life cycle assessment and life cycle financial analysis

A 1999 study for the United Kingdom’s Department of Trade and Industry investigated in detail the environmental and financial balance of re-use and recycling activities according to the proposed targets including alternative costs for disposal and the production of virgin materials. The study shows that even today relatively high rates of re-use and recycling are achieved for many equipment types. These activities seem to be profitable even from a purely financial perspective. Increasing the levels will raise costs. Markets for the re-used/recycled equipment need to be created. However, the study concludes that the scenario according to the targets of this Proposal can be seen as cost-effective from a financial point of view.

An increase of re-use and recycling up to the targets of the WEEE Proposal will result in lower environmental impacts except for refrigerators and television sets. The study, however, does not attempt to value certain effects which are particularly serious such as the release into the environment of CFCs from refrigerators and heavy metals from monitors.

1. Macroeconomic effects

A key factor when considering the possible effects of a change in product price is whether the demand for the goods in question is elastic or inelastic. A Dutch study on this subject suggests that the demand for a number of electronic goods, especially large white goods and several types of brown goods can be qualified as inelastic (refrigerators, washing machines, heating boilers, televisions and computers) given the types of prices changes that are likely to be involved (1-3%). In other words, over the long term the level of sales is not likely to be affected by these types of price changes.

For certain other products, mainly consumer electronics such as hi-fis or shavers, demand might be regarded as partially elastic. The maximum calculated loss of sales is 1-2% assuming an average price increase of 1%. This effect and the associated indirect cost is, however, likely to diminish as economies of scale and innovation bring down the costs of separately collecting and treating WEEE.

Consequently, the measure will have some effect on prices, inflation, aggregate demand etc. These effects are, however, likely to be relatively limited.

1. Consultation of stakeholders

In 1994 and 1995 representatives of Member States, all relevant economic operators and environmental NGOs participated in a Project Group which worked out an information and recommendation document on the management of WEEE. Subsequently, all stakeholders were consulted on discussion papers preceding the present Proposal.

In general, all Member States welcome the European Commission's initiative. On various occasions Member States expressed the opinion that at least a legally binding framework at Community level had to be created. With regard to the collection of WEEE, the majority of Member States favoured a system where both local municipalities, retailers and producers share financial and technical responsibility. Responsibility for treatment, recovery and disposal of WEEE should be given to producers. Flexibility for national solutions was advocated for any financing scheme on WEEE.

• In the consultation meetings with industry, support for a harmonised European approach in the area of WEEE was expressed in order to avoid a distortion of the Internal Market. Furthermore, the objectives of the Proposal were welcomed by industry. The phasing-out requirement in a waste management Directive, based on Article 175 EC Treaty, was considered inappropriate although in substance the need for minimisation of the use of the concerned substances was widely accepted. Industry accepted a certain involvement in the recycling of their products. In this context, part of industry favoured a transparent payment system which would not influence the relationship between producers and distributors. Other parts expressed their interest in a competitive financing system without transparent fees put on the product price.
• In June 1999 a draft Proposal for a WEEE Directive Directive, including the restrictions for certain hazardous substances, was submitted to the business test panel as a pilot project. Out of the 611 businesses consulted, 188 were affected by the Proposal. Several businesses which participated in the consultation exercise suggested that responsibility for the waste from electrical and electronic equipment should be shared. In particular, municipalities, retailers, distributors, manufacturers and recyclers should work together to take back and recycle the electrical and electronic equipment from private households. In addition, some businesses advocated the removal or delay of the material bans.
• The Commission initiative on WEEE was welcomed by the environmental NGOs, which favoured the principle of producer responsibility. According to the NGOs the prevention of WEEE should be stressed. This means encouraging producers to produce products with longer lifetimes. The provision on the substitution of substances was supported by NGOs, which asked for an extension of this requirement to additional halogenated substances, in particular PVC.

1. Data/Scientific basis

The proposed Directives are based on scientific evaluations of the impacts of the current methods of management of WEEE in various Member States. More than a dozen collection and recovery pilot projects undertaken throughout the European Union provided data on this issue. The studies listed in Annex III are examples of the scientific basis for the proposed Directive.

The sectors most likely to be affected by the proposed Directive are electronic component suppliers, equipment producers, electrical repairers and the waste collection and treatment industry. The effects on the waste collection and treatment industry will almost certainly be positive. The Directive will force an expansion of the treatment and recycling market and consequently boost the number of jobs in the sector. Depending to some extent on how the financing mechanism is set up, there is, however, the risk that producers will decide to establish their own collection and/or recycling systems to the detriment of the existing traditional recycling companies.

Sectors such as producers of domestic appliances (Nace 29.7), computers and office equipment (Nace 30), telecom equipment (Nace 32.2), consumer electronics (Nace 32.3) and light bulbs (Nace 31.5) are dominated by just a few firms that typically account for 80% of turnover and jobs in the sector. Nevertheless, there are still over 100 000 companies in the electronics industry that employ less than 20 people each but account for 180 000 jobs out of total of 1.4 million jobs in the sector. The electronic components sub-sector (Nace 32.1) is less concentrated than the other sub-sectors with a substantial proportion of jobs and turnover accounted for by SMEs.

Metal recyclers are located in all Member States.

Manufacturers of electrical and electronic equipment are mainly located in Germany, the United Kingdom, France, Italy, the Netherlands and Sweden.

The measure is addressed to the Member States. Business will have to comply with the national legislation implementing this measure.

Business involved in the production of electrical and electronic equipment will have to include waste management considerations into the design and production of the equipment. These waste management considerations include the use of easily recyclable/recoverable materials, the control of hazardous substances, the use, where feasible, of recycled materials and of common component and material coding standards. In certain cases they will have to substitute heavy metals, such as mercury, lead, cadmium and hexavalant chromium as well as certain brominated flame retardants.

Undertakings or enterprises involved in the treatment of WEEE will have to fulfil a number of technical requirements laid down in Article 5 of the proposed WEEE Directive and the Annexes. Although it is difficult to predict precisely where investment will have to be concentrated across the sectors since there are vast differences in the structures and in the geographical location of the businesses, in some cases it is estimated that the investments to be made in order to comply with these requirements may be considerable. The real extent of these investments will also depend on whether national or regional legislation is already in place. Where such legislation exists, industry will more easily be able to comply with the requirements of the Proposal.

Establishments and operators carrying out treatment operations will also be required, in order to operate, to obtain an authorisation from public authorities.

The internalisation of the waste management costs in the price of electrical and electronic products may lead to:

1. changes in the sales of products;
2. other effects, such as changes in the time of purchase, moves within price segments or loss of spending power.

A key factor when considering the possible effects of product price changes is whether the demand for the goods in question is elastic or inelastic. The work done by the consultancy KPMG suggests that the demand for a number of electronic goods, especially large white goods and several kinds of brown goods can be considered inelastic (refrigerators, washing machines, heating boilers, televisions and computers) given the types of price changes that are likely to be involved (1-3%). In other words, over the long term the level of sales is not likely to be affected by these types of price changes.

For certain other products, mainly consumer electronics such as hi-fis or shavers, demand might be qualified as partially elastic. The maximum calculated loss of sales is 1-2% assuming an average price increase of 1%. This effect and the associated indirect cost is likely to diminish as economies of scale and innovation bring down the costs of separately collecting and treating WEEE.

Increasing the product price may also lead to either an advanced or a postponed purchasing decision. The latter is likely, although probably only to a relatively small extent. Similarly, consumers might choose to shift between product price categories opting for cheaper and less performing models, thus lowering the standard of living of these consumers.

Recycling of WEEE is labour-intensive. This has impacts on the costs of managing WEEE but produces significant benefits in the area of job creation. Accordingly, national governments presented their WEEE legislation as part of both environmental and social policy. In this context, various projects have shown that dismantling of WEEE is particularly suitable for the integration of the long-term unemployed and disabled people into the work force.

According to German practice, an annual turnover of €5 million should enable recycling companies to employ 30 people on a permanent basis and around 70 further people in associated enterprises. Based on a minimum collection amount of 4 kg WEEE per inhabitant a year, the overall recycling costs amount to €525 Mio throughout the EU. Accordingly, around 10 500 jobs could be created by recycling alone. Many more jobs will be created through the collection and the transportation of WEEE. On the basis of US studies on recycling and employment, an average of one job is created for 465 tonnes of processed material. Accordingly, the job-creation potential for recycling 6 million tonnes of WEEE is approximately 13 000 new jobs.

From the consultations with European associations of SMEs involved in the management of WEEE, the most important variable to take into consideration seems to be the time-span necessary to make the investments and develop the necessary environment-related skills. This time-span is estimated to be approximately six months for dismantling operators. The Proposal provides for a sufficient transitional period, since the Directive will have to be transposed by Member States 18 months after its entry into force.

Several international, European and national business organisations were consulted between 1994 and 1999 before finalising this Proposal. The international and European organisations include:

Abschlußbericht des Arbeitskreises 13 "Elektronikschrott" (Niedersachsen 1998), Kommission der Niedersächsischen Landesregierung zur Vermeidung und Verwertung von Abfällen.

Apparetour Back to the beginning - National pilot project, for collecting, recycling and repairing electrical and electronic equipment in the district of Eindhoven (Eindhoven 1997), Ploos van Amstel Milieu Consulting B.V.

Collection and treatment of end-of-life Electrical and Electronic Equipment, (December 1996), Basque Government Ministry of Territory, Housing and Environment.

Collection and treatment of waste from electrical and electronic products (Oslo 1996), Ministry of the Environment.

Collection targets for waste from electrical and electronic equipment (Germany 1998), European Commission DG XI.

Comparison of Systems for Collection/Recycling/Disposal of End-of-life Electrical and Electronic Equipment, Economic Impact (Vienna 1996), Austrian Electrical and Electronic Industries Association.

Economische effecten verwijderingsbijdrage wit- en bruingoed (Den Haag 1995), KPMG.

Electrical and Electronic equipment – the basis for producer responsibility (Stockholm 1995), Swedish Environmental Protection Agency.

Electrical and electronic waste. Sales, quantities of waste and treatment (Oslo 1996), Hjellnes Cowi AS.