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Computer and Peripherals Material Project

Prepared by Meinhardt Infrastructure & Environment Group
for Environment Australia
October 2001
ISBN 0642547734


9. Pilot Program

9.1 Existing Framework

Any activities undertaken for environmental improvement need to be set within the operational framework of the ICT industry, the waste management industry and the current status of recycling and recovery in Australia.

The proposed development of a National Product Stewardship Strategy for the Electrical and Electronic Product Industry sets alternative disposal methods for waste computer and peripheral material within a wider national framework. Government policy at all levels is increasingly incorporating the principles of extended producer responsibility and the "cradle-to-grave" accountability of manufacturers for their products. Legislation in Europe has already been passed to mandate this and legislation recently passed in NSW (the Waste Avoidance and Resource Recovery Act 2001) also incorporates a regulatory response in relation to extended producer responsibility and product stewardship. This is unlikely to be the only legislation passed in Australia to incorporate these principles; other States are likely to follow suit in the future.

Waste management of computer equipment at the end of its useful life has principally been undertaken at Local Government level through existing collection systems and waste infrastructure. The Australian recycling industry is relatively immature, and is constrained by a range of factors such as the small size of the Australian market, the economics of transport to collection centres and markets, the labour-intensive nature of material separation, and the commodity prices of competing virgin material. This has placed intense pressure on the viability of Local Government waste management and recycling services.

Additionally, the large (and increasing) volumes of waste computer and peripheral equipment have the potential to place waste disposal burdens on Local Government which cannot be met under current circumstances. The projected volumes of waste equipment may in certain locations require landfill facilities dedicated solely to computer equipment, unless significant inroads into the problem can be made. Most Local Governments do not have the financial resources needed to establish dedicated facilities, further underlining the necessity for environmental improvement.

Given the low base of recycled and disposed equipment and the large volumes estimated to be in storage, major changes need to be effected in order to achieve rapid increases in the reuse and recycling of computer equipment. This will require efforts to:

Increasing the rate of recycling depends upon a number of factors, including additional investment in infrastructure and the establishment of effective collection systems that capture a significant portion of obsolete equipment.

The continuation of storage of obsolete computer equipment as the option of choice of most users also needs to be addressed. The longer the stockpile is allowed to grow, the worse the problem will be in attempting to find solutions. Forward planning for recycling and disposal facilities requires a better understanding of the volumes likely to be accepted and for such volumes to arrive in a relatively steady stream. However while stockpiling continues, it is likely that at some stage saturation point will be reached, and that "the Great Australian Spring Clean" will lead to "the Great Australian Waste Computer Crisis".

9.2 Pilot Projects

In order to achieve the large gains necessary, significant change needs to be effected across the wide range of industry participants. In order to assist such change, a number of pilot projects have been identified as offering potential for rapid environmental improvement. These are discussed below.

It should be noted that there are a range of avenues for environmental improvement (as discussed in Section 8), not all of which are considered appropriate as pilot projects. The options detailed below are those considered suitable as pilots for on-going improvement in the future.

9.2.1 Trade-in Scheme

One of the reasons why there is such a large stockpile is the consumer's perception that their equipment retains value. While this is not necessarily the case, this perceived value can be used to good effect both as a marketing initiative to encourage new purchases and as a method of diversion from storage of obsolete equipment.

One Australian manufacturer (Hewlett Packard) has introduced a trade-in scheme for some laser printer models, whereby purchasers of new equipment can return their old equipment. The obsolete equipment is accepted at an agreed value as a deposit against the purchase. A similar trade-in scheme is operated by another manufacturer in the US (refer Section 7.2 Gateway), although the logistics of equipment return are much more detailed.

The widespread introduction of trade-in schemes by manufacturers and/or retailers in Australia offers the potential of:

There are a number of methods by which such a trade-in scheme could be implemented.

It could be offered by selected manufacturers who have their own retail outlets; this would encourage consumers to trade direct with manufacturers rather than through secondary retail stores. Given that most manufacturers would already have in place a system for transport of machines returned under warranty, the trade-in scheme would require adjustment to existing services, rather than establishment of a new collection system in total.

Some manufacturers may identify the contribution of the trade-in scheme as such a market advantage for their products that they choose to extend the program further. This may include extension to retail outlets where collection and transportation arrangements between manufacturer and retailer allow.

There would need to be suitable arrangements put in place by each manufacturer to address disposal of components that could not be utilised in refurbishment (e.g. equipment produced by other manufacturers, old components unsuitable for current models). This is more appropriately handled by a recycler of computer and peripheral equipment, and the manufacturer (or a group of manufacturers) may wish to enter into a contractual arrangement with an experienced recycler with facilities that are close to or compatible with their manufacturing plants. Such an arrangement would include the safe disposal of non-recovered material by the recycler.

It is difficult to quantify either the cost or revenue likely from implementing such a trade-in scheme. These figures would differ from one manufacturer to another, depending upon the success of the scheme related to their products, the network of direct outlets they may have, whether they extend the trade-in to selected retailers, and what arrangements they may put in place with recycling companies for recovery of material and components. A pilot trade-in scheme would also depend on the number of manufacturers involved and the length of the pilot undertaken. As an indication, however, it is expected that involvement of one manufacturer over say a 6 month trial period would involve total costs upwards of $100,000; the amount of revenue that could be off-set against this cost is indeterminable.

It should be noted that participation of manufacturers in such a scheme would be on a voluntary basis, however the potential for new sales and retention of existing customers is likely to provide a significant market advantage to participating companies. Recognition of this advantage would encourage participation in the scheme.

9.2.2 Collection Program

While there have been a number of collection trials of computer and peripheral equipment conducted in various overseas countries, this has not yet been attempted systematically in Australia. Compaq established a collection trial in NSW, however this did not service all market segments as it was only available to business clients. Some computer equipment is collected via Local Government hard waste collection services; it may also be segregated with whitegoods and other scrap electrical equipment at landfills. However there remains a lack of diversion of computer equipment from the general waste stream, and a consequential lack of information on the quantity and type of equipment being disposed of and the type of collection system best suited to maximise recovery.

Establishment of a combination collection program is particularly suited to a pilot project. It can help raise awareness of the scale of the waste problem utilising existing infrastructure and systems, it can help establish statistical data on the volumes of waste equipment currently in circulation and/or storage, and it can provide direction in determining the most viable collection system in the long-term appropriate to a range of regional and logistic circumstances.

The type of project proposed is modelled on the collection program undertaken in Minnesota by the MOEA, adapted to suit the local Australian situation.

It is proposed that a lead body (such as Environment Australia or the industry association) coordinate funding for the collection project through a number of partners. The US trial involved funding of US$25,000 each from four partners. This translates to a total Australian cost of $200,000, however the amount of funding required for a similar project in Australia may be subject to adjustment through incorporation of additional program partners, provision of in-kind support or changes to the scope of the project. This may reduce the total cost to between $100,000 - $200,000, spread across a number of different organisations.

Once financial support was addressed, the lead body would canvas support from a range of organisations to participate in the project. This may also involve in-kind support (particularly for State and Local Governments) or provision of services by private industry. The latter may be sought either through requests for Expressions of Interest, or through the tender process (where the need for specific services is identified).

The objective of the project would be to provide as many collection events as possible (within project funding), incorporating a range of collection methods and systems, under the banner of the same project. These events may include:

The length of these events may differ from one event to another, yet fall within an overarching program for the total pilot project (e.g. one day or one month within a total program period of 3 months).

The advantage of the total project umbrella lies in the momentum such a scheme could bring to the collection events, through economies of scale for recycling companies and promoting and encouraging participation of consumers. Participating events could be chosen to provide a wide coverage, both regionally and geographically. They could also be carefully selected to provide a range of different collection methods; analysis of the results could indicate the optimum collection systems to be established in the long-term to maximise recovery.

The lead body would need to liaise with and encourage participation with a range of organisations such as:

Arrangements for processing of collected equipment would need to be put in place prior to the commencement of the program.

9.2.3 Product Labelling & Certification

Product labelling and certification could be addressed in a number of ways:

Provision of information to purchasers by manufacturers should be encouraged and a program to develop the criteria for reporting this information could be undertaken. Standard reporting criteria (i.e. key environmental performance areas to report against) would help the consumer compare different products against the same parameters. A lead body (such as Environment Australia or the industry association) could develop the broad criteria; this would need to be kept simple, e.g. limited to five key points. This could be an interim measure until a detailed assessment tool such as an eco-mark was adopted by industry. The program to develop the key performance areas for reporting would draw upon existing information such as energy use.

This would be a voluntary measure agreed to by the major manufacturers; consequently there would need to be consensus among the manufacturers on the criteria to be incorporated.

This may feature a phased program for implementation, applying to selected models of equipment in the first instance. The provision of environmental information could be expanded beyond the pilot stage to all models, as part of the features of DfE implemented by manufacturers.

It is not necessary to provide this information in hard copy to consumers; given that most equipment is manufactured and packaged overseas for subsequent import to Australia, the logistics involved in providing information with each unit would be difficult for the industry to implement. Rather, the information could be provided on each manufacturer's web-site in the area dealing with product specifications; many international manufacturers have pages dedicated to each country of operations, therefore this could be quarantined to Australian-specific information.

Provision of this information on an existing web-site would involve minimal cost on the manufacturer's part. The major cost would be from development of the criteria and gaining consensus on this by the manufacturers; this may be addressed as part of an industry-wide environmental responsibility overseen by the industry association. This cost is likely to be met via in-kind support from the industry association; this may be up to $5,000 for labour and support costs.

The significant purchasing power of all levels of Government is evidenced by the spending on ICT mentioned in Section 8.3.3. The development of an Australia-wide Government purchasing guideline could provide encouragement for incorporating minimum environmental standards or requirements such as take-back of end-of-equipment into Government contracts. This could also be developed for Government departments to build into leasing contracts.

Development of standard Government purchasing policies would help smaller departments adopt measures which they may not have the resources to develop in terms of environmental issues. This could be particularly beneficial at a Local Government level.

Contracts for the purchase of computer hardware by the NSW Government now incorporate a number of environmental criteria. These may form a basis for a whole-of-government guideline.

Establishment of the proposed guideline would require consensus between all levels of Government. This may be initiated through a body such as ANZECC.

No cost has been apportioned to this project due to the sole involvement of Government and its statutory role in environmental guideline development.

The development of a voluntary Australian eco-mark program could build upon the criteria developed under the previous two projects. This would entail initial development of a body to facilitate the accreditation mechanisms. The program would need to be self-funding in the long term but establishment assistance would be warranted. To establish the program the following elements are required:

It is important that the accreditation body has the necessary expertise and assessment systems in place. It also needs to be reputable from a consumer and environmental perspective. This role may be appropriately fulfilled by organisations such as the Australian Consumers Association (as an extension of assessment of computer and peripheral equipment currently undertaken under their 'Choice' program) or a similar respected organisation.

Linking of the program to existing environmentally-based schemes (e.g. Energy Star, Banksia Awards) in Australia may help promote its adoption and success.

There are significant marketing advantages gained by manufacturers who meet the environmental criteria and can advertise their certification in promotional material and programs. This is already undertaken by manufacturers who meet the necessary criteria for international programs (such as Blue Angel or TCO). The inclusion of an eco-mark focused on Australian criteria provides a local marketing feature to Australian consumers, as well as an additional advantage to international marketing drives.

Initial seed funding may be in the order of $100,000 - $150,000 to establish the criteria and testing regime, develop the certification label and establish trademark rights, and develop the on-going organisational structure. On-going operating expenses may be required on an annual basis if the pilot develops further.

However this cost could be significantly reduced, depending upon the degree of incorporation of criteria already established under international programs or reliance upon existing international eco-marks (such as Blue Angel) for the Australian industry.

9.2.4 Alternative Uses for Recovered Plastic

The economic viability of managing waste PCs depends upon the value of the use for the products and materials. The challenge is therefore to identify and capitalise on the highest value commodities arising from the computer and peripherals waste stream.

Many of the high value alternative products require disassembly of components into their constituent materials (e.g. extraction of precious metals from PCBs); the high cost of doing this in Australia is a complex economic issue which cannot be adequately addressed through a pilot project. However there remain opportunities for proving the value of using some materials from waste computers and peripherals in low-end applications. This incremental approach of using recycled material in one application, and allowing market forces and innovation to expand uses to other applications, is the approach being used for a range of other recycled materials.

The lack of recognised end uses by industry can be addressed by undertaking trials with selected manufacturers to determine the applicability of the recovered material to their manufacturing process. The trial would test the material's properties, performance, quality, safety and other operating parameters, within the context of substitution of virgin material in each manufacturing process. Where it is demonstrated that recycled material can perform to the same criteria as virgin material, the deciding factor on selection is likely to be the price differential. For some materials (particularly plastics), the cheaper price of recycled material has already been identified by some manufacturers.

Given the preponderance of plastics used in manufacture of computers and peripheral equipment, the testing of plastic resin in other applications is an appropriate area for a pilot project. Discussions with a range of stakeholders have determined that there are a number of manufacturers in Australia who may be prepared to test various plastic resins for a range of applications. The plastics industry association, PACIA, advise that some of their members are investigating innovative ways of using recycled plastics, although specific companies have not been identified.

Selected companies, identified in conjunction with PACIA, could be approached to participate in a trial to test the properties of recycled plastics and their use in a range of applications. The plastics may be sourced from collection programs undertaken as part of a pilot project (refer Section 9.2.2) or sourced direct from computer manufacturers. Laboratory analysis of the properties of the material would be required by participating companies in order to check its suitability for replacement of plastics currently used in their process.

Similar trials undertaken by State EPAs for other types of recycled materials have cost in the order of $25,000 - $50,000. However the cost is dependent on the number of manufacturers involved in the trial, the extent to which the trial goes (e.g. the number of parameters tested) and the scope of promotion of the project outcomes to other manufacturers.

9.2.5 Awareness Raising

One of the major issues with waste computer and peripheral equipment is the lack of awareness of the problems surrounding disposal, recovery and recycling. This lack of awareness is spread across a range of stakeholders and in part stems from a lack of understanding of the size of the problem.

While this project has estimated volumes of computers from point of generation to point of disposal, some estimates include a high degree of uncertainty about their accurate reflection of real volumes. More work needs to be done in the area of gathering data, some of which could be undertaken as part of a pilot project.

While the ABS has undertaken a number of surveys on computer use, there are significant gaps in some sectors such as Government, education and health. These sectors have been identified by industry participants as significant users of computer and peripheral equipment, however there is a lack of information on the volumes of equipment purchased or disposed of by these sectors.

A pilot project could be undertaken to establish the volumes utilised in these three sectors (Government, education and health) and their current practices in reuse, recycling and disposal. This may best be facilitated by Environment Australia; the imprimatur of the Commonwealth Government may encourage participation by these sectors. Benchmarking of volumes and practices will assist in highlighting areas and practices inconsistent with environmentally responsible behaviour, and provide a focus for further action in the future to address identified issues.

The cooperation of State and Local Governments would be required to incorporate equipment used at all levels of Government. This would involve liaison with the various State EPAs (or other environmental authorities) and the Australian Local Government Association. It is expected that their cooperation would be forthcoming, given that the issue of waste computer and peripheral equipment is consistent with a number of existing reporting requirements (e.g. Waste Reduction and Purchasing Policy guidelines).

There is likely to be little extraneous cost for this pilot, with costs for time spent reporting and collating information borne by participating bodies.

Other education programs could be initiated as part of a pilot project, or in conjunction with other proposed pilots discussed above (e.g. promotion of project outcomes).

One area offering scope for establishment as a pilot is the proposed provision of information on reuse and recycling companies on an industry web-site. This information is currently available from a range of separate sources including EcoRecycle Victoria, NSW Waste Boards/Resource NSW and Yellow Pages.

However this information has not been collated or established as a single source for information on reuse and recycling companies across Australia. The establishment of a single reference source on-line would provide simplicity of access to users (both domestic householders and corporate users) seeking this type of information.

However there are two additional issues which would need to be addressed in conjunction with establishment of the on-line resource:

At a preliminary stage, promotion of the web-site may be done in conjunction with the proposed collection program (outlined above in Section 9.2.2). Details of the site may be part of an information package provided to participants in the collection program. Costs may be minimised by highlighting its existence electronically, rather than providing printed material for each person with a piece of equipment dropped off or collected during the program.

Further promotion could be undertaken by the industry association through its membership (e.g. providing 'hotlinks' to the site from member companies' web-sites) and by advising appropriate statutory authorities (e.g. EcoRecycle Victoria, Resource NSW) of its existence.

Updating of information on the site could be part of a six monthly review system, the scope of which is beyond a pilot stage.

As much of this data is already available, establishment costs will be linked to data collation, establishment of a web-site or separate page on an existing industry web-site, and provision of 'hotlinks' on members' web-sites. It is possible that this will not involve external costs, but could be undertaken by the industry association and member companies' internal expertise. If external expertise was required, costs may be in the order of $10,000 establishment costs, with annual management and updating expenses up to $5,000 per year.

9.2.6 Pilot Summary

The proposed pilot projects discussed above are summarised in Table 9.1 below.

Table 9.1 Pilot Projects
Project Stakeholders Logistical Issues Budget
Trade-in scheme Manufacturers Retailers Recyclers Requires coordinated approach between all stakeholders.Need for agreement re acceptance of alternate brands.Apportionment of cost and responsibility for acceptance and transportation requires consensus.Disposal of non-recovered material. Varies with individual stakeholders & take-up rate by consumers. Will involve acceptance, storage, transport, recycling, refurbishment & residual disposal costs.Involvement of one manufacturer for 6 month trial upwards of $100,000 (revenue off-set undetermined).
Collection Program Commonwealth, State & Local Governments Manufacturers Retailers RecyclersWaste Management Contractors Requires lead body accepting responsibility for overall program & development of funding arrangements.Complex administration and coordination of participating organisations.National awareness / publicity campaign involved.Recycling/disposal arrangements put in place for material collected. Estimated budget range $100,000 - $200,000.May be subject to tender for elements of the program.Scope of program can be matched to funding, e.g. limited to certain regions (metropolitan, State) or reduced systems tested.
Product Information Manufacturers Industry association. Australian manufacturers required to provide information on environmental performance of products.Industry association liaison required with manufacturers In-kind support up to $5,000 for labour costs.
Government Purchasing Guidelines Commonwealth, State & Local Governments Consensus between all Government levels required.Lengthy period of liaison is likely. No budget estimated - government role.
Australian Eco-mark Independent accreditation body ManufacturersIndustry association Participation by manufacturers and support of AIIA is vital.Agreement necessary on role of accreditation body.Independence of accreditation body must be assured.Criteria for testing must be well regarded. Initial seed funding $100,000 - $150,000 to establish criteria & testing regime, develop certification label, establish trademark rights & develop on-going organisational structure.Additional annual operating expenses required if pilot extended.
Alternative Uses for Recovered Plastic Lead body (may be Commonwealth/State Government or AIIA) Recyclers or computer manufacturers (to source material) PACIA Alternate manufacturers using plastic resins Identity of lead body (project may be sub-contracted).Sourcing of computer plastic for testing.Involvement of PACIA is essential.Identification and involvement of range of manufacturers to participate in the trial.Laboratory analysis of material properties required. Cost dependent on number of trial participants & extent of testing; may be in the range of $25,000 - $50,000.
Data Gathering Commonwealth, State and Local Governments Cooperation required between different levels of Government and different sectors (e.g. education, health).Liaison between all participants may be lengthy. No budget estimated - government involvement only.
Information Sharing Industry association Collation of information from existing sources.Web-site design expertise required (may be internal or external to industry association).Widespread publicising of availability of information on web-site.On-going updating required to keep information current. May be undertaken by in-house expertise, however if external assistance required establishment costs approximately $10,000. Annual updates up to $5,000 per annum.