Annex C. EPR for waste of electric and electronic equipment in Canada1

Séguin Jacinthe
, Waste Reduction and Management Division, Environment Canada

SUMMARY BOX

Governance

  • Provinces (environment ministries or mandated organizations) lead the establishment of waste electrical and electronic equipment (WEEE) extended producer responsibility (EPR) regulations.

Roles of provincial government

  • to develop and administer regulations for the management of WEEE;

  • to set performance targets for the designated materials

  • to review and approve industry stewardship plans

  • to monitor and oversee the programs’ operations, and

  • to provide the compliance and enforcement measures.

Cost allocation

  • Fees paid by obligated stewards passed on to consumers (e.g. between CAD 3 and CAD 15 per desktop computer across provinces).

  • The greatest system costs are payments made to collectors (CAD 59* – CAD 150 per tonne), transporters (CAD 40 – CAD 200 per tonne), and processors (CAD 150 – CAD 700 per tonne). Total costs vary by province from CAD 350 – CAD 870 per tonne to CAD 880 – CAD 1030 per tonne.1

  • Overhead costs (oversight and monitoring, education and enforcement costs) account for 15-25% of overall costs.

Cost coverage

Operational costs range from CAD 1 105 to CAD 1 822 per tonne across provinces

Environmental performance

125 000 tonnes of end-of-life electronic collected in 2012 and amount of WEEE collected increase year after year.

DfE incentive

/

Cost efficiency

  • Most programs have achieved financial sustainability.

  • In British Colombia, EPR program added CAD 110 000 000 to the province’s GDP.

* Currency shown in document is in Canadian dollars.

1. These values are not found in the Canadian WEEE case study; however, they are published in The WEEE Report: Waste Electrical and Electronic Equipment Reuse and Recycling in Canada – 2013 by CM Consulting.

1. Description of EPR set-up

  1. Legal context

In 2009, the Canadian Council of Ministers of the Environment (CCME), an intergovernmental forum made up of 14 environmental ministers from federal, provincial and territorial governments, developed the Canada-wide Action Plan (CAP) for EPR. The goal of the CAP is to increase diversion and recycling of municipal solid waste through the harmonization of provincial EPR programs. In particular, twelve principles for electronics stewardship were approved in order to support the jurisdictions of provincial and territorial authorities in the development of WEEE programs. Today, nine out of ten Canadian provinces have WEEE regulations and programs in place. The CCME recognized that EPR may not be appropriate in Canada’s remote Northern territories given the unique circumstances and high transportation costs, and is examining a combination of other measures in order to achieve the desired results in those regions.

  1. Allocation of responsibilities (distribution of roles, financial flows)

In Canada, the provincial governments are responsible for developing, monitoring and administering regulations for the treatment of WEEE. These governments set performance targets for the designated materials, review and approve industry stewardship plans, monitor and oversee the programs’ operations, and provide the compliance and enforcement measures. Producers (manufacturers and first importers) may fund and operate individual WEEE stewardship programs, or establish and register with a non-for-profit producer responsibility organization (PRO aka an industry funding organization [IFO]) to act as the stewardship agent representing producers. In either case, they have to report designated product sales and fees to the PRO or the government oversight agency on a monthly basis, and to report overall program performance on an annual basis. PROs may act as collectors and/or establish depots for collection. They register and contract with authorized services providers (WEEE processors and recyclers must comply with minimum health and environment criteria and be approved by the Recycler Qualification Office, which operates under the EPRA), and are also in charge of publicly reporting performance, and of information and education campaigns towards consumers. Municipalities may also contract with PROs and participate in the collection of WEEE as a service provider. They further support EPR programs through green procurement policies or through the adoption of secondary policies such as landfill bans.

A key component of the funding model of EPR programs in Canada is the use of environmental handling fees (EHFs), which are regularly reviewed by the Electronic Products Recycling Association (EPRA) or another appointed body2 where EPR programs exist. These fees, which are paid by obligated stewards and passed on to customers at the point of purchase, are determined on a per unit basis and vary between provinces depending on the costs required to operate the program, as well on other factors such as the product weight and quantity, the composition of products and the presence of orphan products in the market. According to August 2013 data, EHFs levied on WEEE ranged from CAD 3.00 for desktop computers in Ontario to CAD 15in Saskatchewan and Manitoba. EHFs levied on computer printers ranged from CAD 4.80 in Alberta to CAD 10.35 in Ontario.

  1. Governance system and sanctions

In Canada, most provincial environment ministries lead the establishment of WEEE EPR regulations, provide program oversight and ensure compliance. In some provinces however, oversights and management is delegated to mandated organisations such as Waste Diversion Ontario (WDO) and Recyc-Québec, which report directly to the provincial ministries of environment and are entirely funded by industry. Regarding sanctions, Québec is the only province to provide financial penalties for producers who fail to meet collection targets (the obligation will become effective in 2018). These penalties, which are up to CAD 10per desktop computer and CAD 15per display device, are expected to encourage producers to join a collective PRO that can facilitate administration. Outside Québec, most other provincial regulations include general sanctions for other non-compliance aspects. For example, Waste Diversion Ontario has the power to remove the mandate from an underperforming PRO.

2. Environmental effectiveness

  1. Collection and recycling rates

Together, Canadian WEEE programmes collected over 125 000 tonnes of end-of-life electronics in 2012. Table C.1 shows the amount of material collected in selected provinces.3 In addition to having the highest overall collection rate both per capita (5.61 kg) and in total (75 702 tonnes), Ontario exceeded its previous year’s collection total by 45%. Overall, provinces are improving in performance year after year. The Canadian experience demonstrates that a diversity of collection approaches, consumer outreach strategies, infrastructure facilities and market access can work and co-exist, and that regulating authorities take into account the many factors that can influence performance in their respective jurisdiction.

Table C.1. Performance indicators for Canadian WEEE programs (data from annual 2012 reporting)

Indicator

British Columbia

Alberta

Saskatchewan

Ontario

Nova Scotia

Prince Edward Island

Population

4 582 000

4 025 100

1 108 300

13 538 000

940 800

145 200

Tonnes Collected

21 963

17 280

3 080

75 702

4 719

649

Kilograms Collected/Capita

4.8

4.67

2.85

5.61

4.97

4. 44

# of Collection Sites

142

325**

72

444

37

6

Population Awareness (%)

75

80

89

67

79

69

Program Cost/Tonne (CAD)

1 208

1 117**

1 822

1 105

1 269

1 393

* Data is collected from 2012 annual reporting.

** Data represents fiscal year 2011-12.

Source: Séguin, J. (2014), “Promoting Sustainable Materials Management Through Extended Producer Responsibility: Canadian Waste Electrical and Electronic Equipment (WEEE)”, Case study prepared for the OECD, www.oecd.org/env/waste/gfenv-extendedproducerresponsibility-june2014.htm.

  1. Design-for-Environment (DfE)

In Canada, most programs have collection targets but there are no specific incentives in the existing provincial WEEE regulations for producers to address DfE. Moreover, there are no regulatory requirements for electronics to contain a certain percentage of recyclable components. The province of Québec is currently developing a differentiated fee structure to reward DfE initiatives by producers. However, this may add administrative complexity and it is questioned whether those objectives would not be better pursued outside the EPR governance framework as complementary measures. In particular, design changes have appeared to be most responsive to the emergence of Reduction of Hazardous Substances (RoHS) type regulations initiated in the European Union and other targeted toxics reduction initiatives, as opposed to general EPR regulations.

3. Economic efficiency (including competition aspects)

  1. Cost efficiency

In 2012, the costs to operate Canada’s WEEE collection programs ranged from CAD 1 105 per tonne in Ontario to CAD 1 822 per tonne in Saskatchewan, which includes the overall costs of delivering the programs, including collection, consolidation, transportation, audits, processing, administration, communications, R&D, and management. The greatest system costs are payments made to collectors, ranging from CAD 59 per tonne in Prince Edward Island to CAD 150 per tonne in Ontario; transporters, ranging from CAD 40 per tonne in Prince Edward Island to up to CAD 200 per tonne in Alberta; and processors, ranging from at least CAD 150 per tonne in Ontario to CAD 700 per tonne in Alberta.4 Generally, overhead costs, which include general administration, oversight and monitoring, education and enforcement costs, are said to account for 15-25% of overall program costs.

While EPR programs are generally established with a financial sustainability objective in mind, not all Canadian programs have achieved this objective at this time.

Table C.2. Canada’s WEEE collection programmes – Revenues and expenses by program, 2012 (in Canadian dollars)
picture

Source: CM Consulting (2013), The WEEE Report: Waste Electrical and Electronic Equipment Reuse and Recycling in Canada.

In 2008, a study was conducted to assess the economic impacts of British Colombia’s recycling regulation. It was estimated that total employment generated by electronics recycling in that province was over 123 full-time equivalents in 2007. In addition to job creation, the program added over CAD 110 000 000 to the province’s GDP, meaning for that every tonne of material diverted from landfill CAD 4 150 total value was created both by industries directly and indirectly involved in waste management and by induced consumer spending.

  1. Operation deficit plan

In order to avoid operating deficits including because of the presence of orphan products, EPRA has established an Operating Contingency Fund, which is intended to accumulate the equivalent of one year of projected operating costs by transferrin"g all surplus of revenues over expenses.

  1. Trade and competition

By assuring and stimulating the collection of a wide range of WEEE, EPR programs have created opportunities to increase recycling and resource recovery. Because WEEE recycling is a very competitive business, processors in Canada have cited concerns about their ability to compete and the need for clearer guidance on controls applied internationally to recycled materials exported from Canada. The regulatory regime that controls the transboundary movement of these products, whether a waste or not, can have an impact on the development of local recycling industries in Canada.

In order to ensure a level playing field that encourages competition and innovation, provincial program operators use a competitive tender process when selecting WEEE processors. This can sometimes pose challenges in a federation like Canada where EPR program requirements have been developed and implemented individually by provincial authorities; which calls for increased harmonization efforts by the CCME. Certain provinces allow producers to organize either collectively or individually to meet their requirements, which should encourage competition and the arrival of new PROs on the market. In practice however, once large PROs have been formed, economies of scale can make it difficult for smaller operators to compete.

4. Key issues and possible reforms

  1. Towards harmonization

Despite many shared standards and policies, the independent operation and administration of provincial WEEE programs in the beginning was not ideal. In addition to creating significant policy and operational inefficiencies, it led to reduced service quality for program members and higher costs5. Other features such as the visibility or non-visibility of fees in advertised prices may hinder consumer acceptability of different EPR programs. In response to these problems, a new governance structure to streamline electronics stewardship programs across the country was developed by Electronics Product Stewardship Canada (EPSC) in partnership with the Retail Council of Canada (RCC). EPRA is now responsible for managing electronics recycling programs in every province except for Alberta and New Brunswick. This transition has generated multiple benefits for both stewards and consumers, including: streamlined administrative processes and lower administrative costs; lower operational costs; consolidated communication to members to minimize duplicate messaging; lower unit costs for shared services, due to distribution over more programs; and improved service quality.6 But despite the differing legislative approaches, the Canadian EPR experience remains effective, with increasing amount of WEEE collected year after year, new collection depots established across the country and higher consumer awareness across provinces.

  1. Difficult access to remote and rural areas

Another key challenge in Canada is access of rural and remote communities to EPR programs. Even though access has reached at least 92% of the population in several provinces and all consumers pay an environmental handling fee in provinces with an EPR program for WEEE, rural residents may have fewer opportunities to participate in electronic take-back programs. Several factors make operating a WEEE collection and recycling program in rural areas considerably more difficult than in urban locations such as the lack of infrastructure, the high costs associated with collection, and the long distances and resulting high transportation costs, Canada’s three northern territories, the Northwest Territories, Yukon, and Nunavut, face the additional challenge of not being able to rely on large and profitable urban programs to support the development of infrastructure in remote areas. Continued discussions and efforts are undertaken in order to establish the necessary partnerships for assisting in creating further opportunities for EPR in northern Canada.

Notes

← 1. Full source available at: Séguin, J. (2014), “Promoting Sustainable Materials Management Through Extended Producer Responsibility: Canadian Waste Electrical and Electronic Equipment (WEEE)”, Case study prepared for the OECD, www.oecd.org/env/waste/gfenv-extendedproducerresponsibility-june2014.htm.

← 2. With the exception of Alberta (represented by the Alberta Recycling Management Authority), the Canada-wide EPRA is the PRO responsible for representing obligated stewards selling electronic products covered by EPR regulations in a given province.

← 3. It is important to note that each province uses a different approach for determining program performance and may cover different scope of products, which limits performance comparisons.

← 4. These values are not found in the Canadian WEEE case study; however, they are published in The WEEE Report: Waste Electrical and Electronic Equipment Reuse and Recycling in Canada – 2013 by CM Consulting.

← 5. Electronics Product Recycling Association, “Annual Report 2012,” http://eprassociation.ca/ar/en/2012/EPRA2012%20-%20Annual%20Report.pdf,accessed 20 October 2013.

← 6. Ibid.