The trouble with WEEE

As one of the biggest metal recyclers announces that it plans to withdraw from WEEE recycling, the cracks are beginning to show in the legislation designed to promote recycling of ewaste. Fears have been raised that Sims departure from the market puts achievement of the UK's WEEE targets in jeopardy, but actually the problem goes deeper than that.

The real reason the government compliance schemes can't meet their targets is because there are much more commercially appealing options available. WEEE producer compliance schemes charge the producer a membership fee and a handling fee. Customers typically pay for collection of their WEEE. Yet in many market sectors - especially IT equipment - there are services available which actually return revenue to the organisation returning the unwanted kit. These services are fully compliant with waste legislation, and typically operate higher up the waste hierarchy than WEEE producer compliance schemes. But the WEEE they process doesn't contribute to the government compliance targets.

The WEEE producer compliance system is fundamentally flawed, for several reasons. Firstly, because it operates on the basis of volume targets so it is geared towards collecting the maximum amount of ewaste, not deriving the maximum value from the resources contained within it. Secondly, because it doesn't measure whole device re-use or parts re-use, both of which are preferable to recycling from the point of view of the waste hierarchy. And thirdly because it imposes a cost on the EEE producer which is based purely on market share and takes no account of how easy it is to recover value from the device. As a result, the most expedient process for recyclers is to bulk up ewaste and shred everything, resulting in low-grade recyclate that has little value as a manufacturing resource. Even if a device is working, or repairable, the collection process damages it beyond repair. and there is no incentive on WEEE producers to improve the design of their products to facilitate repairability or material recovery at end of first use.

Compare that with an ICT asset recovery company that inspects devices to determine what can be refurbished or cosmetically improved and resold for second use, what can have spare parts harvested for use in repairing other devices and what can be dismantled so that single metals or polymers can be recovered and returned in as-virgin quality for other manufacturing processes. A large proportion of ICT equipment has sufficient intrinsic value to fund the recovery processes, generate a profit margin for the asset recovery company and even return some value to the producer or the user. Many such programmes offer social value, by making donations to charity or funding education projects. This approach supports the resource stewardship agenda, returns value to the economy and creates jobs, but no account is taken of it in the government's WEEE targets.

Many suppliers of ICT equipment in the B2B sector now find themselves in the same position as my employer. We are compelled to pay into a compliance scheme which hardly any of our customers use because the alternatives are preferable from both an economic and an environmental point of view. Indeed, when we retired old IT we used a free asset recovery service with added social value in preference to the WEEE compliance scheme we offer our customers. The current WEEE legislation will miss its targets because it serves nobody but the compliance partners - and yet apparently they can't make it pay either. We need a better system, and quickly.

Why the 3Rs model is no longer fit for purpose

Those of us who have been around green issues for a while are very familiar with the 3Rs mantra – reduce, re-use, recycle – and that waste hierarchy also forms the foundation for the work of bodies such as WRAP which support companies that want to use resources more efficiently. But as we approach a resource-constrained not-so-distant future there’s a growing body of thought that we need to go further than the incremental improvements that the 3Rs model supports.

Certainly, that’s the view of the Ellen MacArthur Foundation, which works to promote the concept of the Circular Economy. MacArthur argues that our traditional economy is founded on an essentially linear take-make-dispose model which relies on an abundant supply of raw materials that can be manufactured into consumer goods with a finite life that will be discarded as soon as something newer and shinier comes along. The Circular Economy model strives to create a system where mineral and organic resources are endlessly cycled through the economy, reducing our need to find new raw materials and freeing ourselves from the issues of resource scarcity, price volatility and so on that are the inevitable outcome of a rapidly growing and urbanising population combined with an undeniably finite planet.

Of course we like our models to be alliterative whenever possible, so the MacArthur adaption adds “rethink and redesign” above the apex of the traditional 3Rs model. In MacArthur’s diagram they share a box, but I’d go one step further and place rethink above redesign in a separate box. Our mindset tends to be firmly centred on products and redesign can easily be assumed to apply to a product; using “rethink” as the first prompt makes a more explicit point that we need to go right back to basics and reconsider what human need we are trying to meet and in what form. For example, to use an example borrowed from Kingfisher, customers who visit a B&Q store to buy a drill don’t necessarily need one. What they need is a hole, and B&Q is focusing on finding better ways to meet the need for a hole rather than simply redesigning a more efficient drill.

There’s scope to improve the waste hierarchy at the bottom of the pyramid, too – and WRAP is already using a model that includes recovery of energy from waste as the step below recycling. But it’s widely accepted that 80% of the environmental impacts of a product are determined at the design stage. So once we’ve re-imagined the customer need there’s a compelling case for making sure that, if a product is the appropriate way to fulfil it, then it’s designed to not just use resources efficiently but make it as easy as possible to recover them when the product is no longer fit for re-use.  Kyocera has been thinking this way since 1992, when it launched its first ECOSYS printer, designed to both reduce consumables waste and to facilitate disassembly and recycling at end of life. Ahead of its time? Perhaps – but it’s reassuring to see that such ideas are finally becoming mainstream.

Serendipity and shared values

I spent today with a bunch of like-minded people exploring the barriers to a circular economy and sharing ideas for catalysing change, under the auspices of the Circular Economy Task Force convened by Green Alliance. At the moment I think it's fair to say that we have more questions than answers, but we're definitely making progress. One of the key challenges we've identified is how to incentivise the behaviours that support a circular economy, for example returning end of life products to a recycling centre. Work done for the day, I headed home and met my 12-year old son at Reading Station for an artisan ice-cream at the fabulous Tutti Frutti.

On the bus home, he told me he'd discovered his favourite place in the entire world - a city in Brazil with many green spaces, a cheap and efficient public transport system and impressively high recycling rates achieved through the issue of "green tokens" that can be exchanged for public transport tickets and fresh produce. He couldn't remember its name, but I have since found out that it's Curitiba. My son had no idea how I had spent my day, and I hadn't planned to discuss it with him, but his observation prompted a lively discussion about the merits of a circular economy. And I genuinely learned something new that is of direct relevance to my work.

I suggested, jokingly, that perhaps next time the Task Force meets, he should come with me. He was so excited by the idea that I'm beginning to think seriously about suggesting it. And not just him - perhaps a whole cohort of young people.  After all, it's their future we're trying to safeguard. And, as my son reminded me today, they might just know more than we give them credit for.

Introduction to the Circular Economy

While businesses have largely embraced the notion that they must manage their direct carbon emissions – in terms of gas, electricity and vehicle fuel – there is a growing awareness that embodied carbon has an equally significant, although less direct, effect. For every mobile phone, washing machine or vehicle that is produced, carbon emissions are created at every stage of the lifecycle; from extracting the raw materials used in its manufacture to managing its disposal at end of life. And as the global population grows, urbanises and becomes increasingly prosperous, the amount of goods we consume grows, too. This has the dual effect of both increasing carbon emissions from the manufacture, transport and use of the products and also putting stress on the raw materials used to manufacture and transport them. This stress leads to prices of raw materials becoming both higher and more volatile, creating clear economic risks for business through the whole value chain from raw material extraction right through to the retailer.

The concept of the Circular Economy is a provocation to move from the traditional linear “take-make-waste” model of consumption to a model where resources are used more efficiently and can cycle through the economy multiple times. A Circular Economy describes an industrial system designed to be restorative or regenerative, where end of life products become a source of materials for other processes. It is consistent with a transition from fossil fuels to renewable energy, the elimination of toxic chemicals that impair re-use of materials and promotion of product design that seeks to reduce waste, facilitate repair and make disassembly and materials re-use the norm.

A Circular Economy is based on three core principles. Firstly, it aims to ‘design out’ waste. In a Circular Economy waste simply does not exist—products are designed and optimised for a cycle of disassembly and all resources are re-used. These resource cycles define the Circular Economy and set it apart from disposal and even recycling where large amounts of embodied energy and labour are lost. Secondly, circularity differentiates between consumable and durable components. In the Circular Economy consumable components are largely made of biological ingredients or ‘nutrients’ that are at least non-toxic and possibly even beneficial, and can be safely returned to the biosphere—either directly or in a cascade of consecutive uses. Conversely, durable components such as engines or computers are made of technical nutrients, like metals and most plastics, and are designed from the outset for reuse. And finally, the energy required to fuel this cycle should be renewable by nature, to decrease resource dependence and increase system resilience.

The Circular Economy also redefines the customer’s need as functionality rather than necessarily the ownership of a product. This can lead to a new relationship between businesses and their customers based on product performance. An economy where users usually buy products outright encourages industry to make them “to a price” which can lead to longevity being designed out in order to remain competitive at the point of sale. In a Circular Economy, durable products are leased, rented or shared – and if they are sold, there are incentives in place to encourage the return of the product or its components and materials at the end of its period of primary use, so that they may be re-used. The innate resistance to paying more for a durable product that will last longer may be addressed by new “pay as you use” pricing models.

From a business perspective, the Circular Economy doesn’t just address the risks of resource scarcity and price volatility, it offers the opportunity to create new customer value through disruptive innovation. It invites businesses to re-think how they fulfil customer demand and to develop new business models that continue to create wealth and provide employment while at the same time conserving resources and reducing carbon emissions.

 

The Ellen MacArthur Foundation has fantastic free resources for educators and businesses who want to learn more.

Falling out of love with the Kindle

An article in last weekend's Observer brought into focus my growing ambivalence about my Kindle. When the Kindle was launched I gleefully joined the early adopters, revelling in the fact that I could read without consuming paper and, with lifelong 3G included, get new reading material on demand without relying on WiFi. But over the last year or so, I've lost some of that early enthusiasm. I'm no longer the eager advocate that I once was, for several reasons.

Disquiet about labour standards in the factory where the Kindle is made. Kindles are manufactured at Foxconn in China, which has been criticised for its poor labour conditions and its high suicide rate - and is now the subject of bribery allegations. I've avoided buying Apple products for several years because it manufactures there but only recently I was dismayed to discover that the Kindle is made there, too.

Concern about Amazon's tax status. Recently, Amazon has been criticised for its policy of tax avoidance. I now try not to buy from organisations that don't pay their fare share of tax but, once you've acquired a Kindle, it's not so easy to acquire your ebooks from another source.

Reluctance to trade with monolithic corporations. The problem with massive corporations like Amazon is that they squeeze smaller operators out of the market, reducing choice and damaging competition. By buying from them, we perpetutate a business model that will ultimately undermine our power as consumers.

Of course, other e-readers are available and may not suffer from the issues outlined above, but one inevitable drawback remains:

Ebooks remove the ability to share. One of the joys of paper books is that they can be freely loaned, borrowed and sold on - sadly not the case with ebooks. In my experience, most paper books are read only once by each person, but the more people that have the opportunity to become a pass-on reader, the more environmentally efficient the original production of that book becomes. Authors may, for this reason, prefer the ebook model but the passing on of paper books went on for many centuries before the invention of ebooks without any apparent damage to the livelihood of authors.

The pass-on readership of paper books has the potential to make them vastly more carbon-efficient than might otherwise be the case. And while the lending library quite rightly gets the final word as the most eco-efficient way of reading, it has the potential to erode the earning potential of authors. Maybe it's time to move to an entirely new business model for reading material - the rental of paper books, with a royalty paid to the author each time the book is rented. Circular economy thinking applied to the written word.

The Great Recovery versus the death of hardware

Yesterday saw the launch of The Great Recovery, a joint venture project between the Royal Society of Arts and the Technology Strategy Board to promote the role of design in accelerating the transition towards a circular economy. Designers came armed with examples of super-easy to recycle circuit boards that can be disassembled simply by immersing them in warm water and alarming statistics about the amount of e-waste we ship back to China which already controls many of the resources needed to make it.

To me, the role of design in promoting resource-efficiency is obvious – if we design products to both consume fewer resources and make the materials easier to recover at the end of the product’s life, then sustainability becomes systemic and the circular economy is a natural consequence. And yet a totally different design philosophy is being adopted in the far east, where the electronics industry is engaged in a race to the bottom.

Many of our most prestigious technology brands have become massively wealthy by outsourcing manufacturing to China and Korea where labour is cheap and policymakers less interested in workers’ rights. Their focus is on building the products as cheaply as possible so that they can boost their profit margin to the maximum their brand value can justify. Innovations like design for recyclability have no place in this business model – anything that adds cost is ruthlessly excised in the drive to minimise production cost and maximise revenue. As a result, those countries have developed a high level of expertise in low-cost manufacturing of electronic goods that is now becoming a serious competitive threat to the vendors that instigated it.

One blogger visiting China this summer was shaken to find that even for a one-off purchase, with no haggling, he could acquire a perfectly reasonable tablet running Android Ice Cream Sandwich – with wifi, a camera and all the appropriate trimmings – for just $45. Little wonder, then, that he was moved to conclude that hardware is dead. It’s impossible to make a profit on hardware alone when it becomes so commoditised; the only way to make money is to sell something else and convince consumers to pay for the whole experience of which hardware is only a constituent part.

The implications of this for product designers are profound, because every designer works to a brief and clients have to ensure that their products or services are commercially viable. Given a situation where one country both controls many of the raw materials and has perfected the art of manufacturing a product for a price nobody can beat, it’s just possible that China’s domination of the electronics industry could become absolute. Meanwhile, technology vendors face some tough challenges and a catch-22 situation: reducing reliance on rare earths requires innovation in product design, which is hard to fund when the country that dominates the supply of those rare earths is driving price erosion that reduces margins to levels which mitigate against investment in R&D.

Despite this observation, I remain optimistic about the ability of the design community to propel us towards a circular economy. It certainly has the creativity and passion for the challenge. But vendors will have to adopt a long-term view that properly values the risks associated with strategic materials and resource scarcity, and be brave enough to make investments in design innovation that may take many years to pay back.

From Products to Performance

At a recent Aldersgate Group panel session on the Circular Economy, hosted at BASE London,

Douwe Jan Joustra, Managing Partner of One Planet Architecture Institute, argued that “we do not have an energy problem”. The world has plenty of energy and nature has functioned for three billion years on solar-based energy systems, so “we have an intelligence problem that we are not able to get our energy systems up and running [and] solar based.”

Mr Joustra argued that instead of energy, the planet should focus on finite resources, given that “we will never get any new materials on this earth”, so shifting the economic system from a linear model to a circular one is paramount. The circular economy offers the opportunity for “a real systems innovation”. For example by changing the focus from product ownership to paying for performance: “do you want all the chemistry that you have in a television set or do you want to see the news?” In a circular economy, customers will pay for the service of a product, rather than the product itself.

This type of business model is not so controversial - it has been commonplace in some markets for decades. But the trick lies in converting more businesses to a performance-based model - and perhaps reviving it in some markets where it has fallen from favour. Just a few decades ago, it was almost unheard-of for a household to own a TV - all but the very wealthy rented them. Yet now, I can't think of a single businesses that routinely rents brown goods and most consumers don't even consider it. Outright purchase has become the norm, and if the purchase price is more than they can afford all at once, consumers sign a finance agreement or put it on their credit card. In fact, easy access to credit has done more to fuel consumerism than any other single innovation. Even the current economic conditions haven't changed our relationship with credit all that much.

There are some industries where the performance-based model is gaining ground - managed print or managed document services is one. Increasingly, companies are not buying printers and copiers but instead entering into a contract for the consumption of print and copies with a supplier that retains title the equipment which it maintains and manages for an agreed contract period. There is a good business case for this; it removes risk, offers tax advantages and provides management information on consumption which in turn can help to reduce print volumes, cutting both cost and environmental impact. Yet the attempt of Interface to introduce a similar service for office carpet - with equally compelling financial and environmental benefits - finally had to be abandoned because customers were not prepared to do anything other than purchase carpet outright.

As the saying goes, we can't solve our problems using the same level of thinking that created them. The concept of the Circular Economy provides opportunities to rethink business models, revisit ideas that were successful in the past and transfer business models from one market to another. And it starts with reframing the question "what do I want to buy?" as "what do I want to achieve?"

Cradle to cradle paper

An innovative project by Banner Business Supplies closes the loop on office paper by supplying copier paper manufactured from a customer's own waste paper. Banner collects waste paper from the office (both confidential and general waste), securely shreds and de-inks it and transforms it back into blank paper for delivery back to the office it came from.

According to Banner, Closed Loop Paper uses 50% less water, 60% less energy causes 70% less air pollution than virgin paper. The process uses no bleach and the manufacturing process is fully audited. It's an impressive service - but it does depend on the customer having sufficient volume of waste paper to make the process viable. Closed Loop Paper was developed in response to demand from HMRC and currently processes around 25,000 tonnes per year.

As more organisations try to reduce their reliance on hard copy, I can foresee issues caused by the declining supplies of paper from single customers. But this concept would work really well across a whole business park or even a town or city, creating local employment opportunities as well as reducing transport impacts by recycling paper as close as possible to where the waste originates.