A study of Australia’s Current and Future e-waste Recycling Infrastructure Capacity and Needs Prepared by: Wright Corporate Strategy Pty Limited In collaboration with Rawtec Pty Limited For The former Department of the Environment, Water



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A Study of Australia’s Current and Future

E-Waste Recycling

Infrastructure Capacity and Needs

Prepared by:
Wright Corporate Strategy Pty Limited

In collaboration with Rawtec Pty Limited
For
The former Department of the Environment,

Water, Heritage and the Arts
On 14 September 2010 DEWHA became the new
Department of Sustainability, Environment, Water,

Population and Communities

October 2010



Disclaimer

While reasonable efforts have been made to ensure that the contents of


this publication are factually correct, the Commonwealth does not accept
responsibility for the accuracy or completeness of the contents, and
shall not be liable for any loss or damage that may be occasioned
directly or indirectly through the use of, or reliance on, the contents
of this publication.

The views and opinions expressed in this publication are those of the


authors and do not necessarily reflect those of the Australian
Government or the Minister for Sustainability, Environment, Water,
Population and Communities.

Revision History





Date

Details

Draft #1

6 Jul 2010


Issued for client review

Draft #2

5 Aug 2010

Final Report incorporating client comments

Draft #3

13 Aug 2010

Incorporating further client comments

Final

21 October 2010

Incorporating clarification requested by the IWG


Table of Contents

Executive Summary ES1



1. Introduction 1
2 Survey of Current Infrastructure and Practices for 3
E-Waste Recycling

Key Points 3

E-Waste Recycling Facilities and Processes 3

E-Waste Recycling Infrastructure and Work Practices 10

Logistics 14

Current E-Waste Demand and Capacity 15

Summary of E-Waste Recycling and Capacity Issues 16
3. Survey of Current E-waste Logistics Arrangements 18

Key Points 18

Post-Consumer Discard Pathways 18

Post-Recycler Pathways to Markets 22

4. Product Flows – Sales, Discards and Recycling 24

Key Points 24

Current Sales Volume 24

Current End of Life Discard Volumes 26

Current Recycling and Reuse Volumes 27

Forecast Sales Volume 28

Forecast End of Life Discard Volumes 29

Forecast Recycling Volume 30

5. Demand Modelling Scenarios 33

Key Points 33

Modelling Approach 33

Product Group Possibilities 33

Rate of Recycling Take-up Possibilities 34

Description of Modelled Scenarios 36

Scenario Modelling Results 37

Comparison of Results 38


6. Infrastructure Requirements for E-waste Resource Recovery 40
to 2020/21

Key Points 40

A Most Likely Recycling Demand Scenario? 41

Future Mix of Discarded Products Collected for Recycling 42

and Reuse

Future Developments in Recycling, Reuse, and Processing 43

Technologies and Practices

Comparison of Modelled Demand Scenarios and Available 46

Recycling Capacity

Logistics Requirements 51



7. Strategic Implementation Issues and Capacity 53
Shortfall Implications

Key Points 53

Strategic Implementation Issues and Risks 54
8. Stakeholder Consultation 59
ATTACHMENT A. SCENARIO SPECIFICATIONS 61

EXECUTIVE SUMMARY

The Australian Government, with the active support of State and Territory Governments, plans to establish a national framework for product stewardship and extended producer responsibility. The initial product stewardship scheme is to facilitate recovery and recycling of discarded televisions and computers. It is expected to commence in mid 2011. It may later be extended to drive recovery and recycling of other e-waste products such as household appliances. The scheme was assessed in the recently published Decision Regulatory Impact Statement1 (RIS).

The purpose of this study is to provide both a reliable estimate of current e-waste infrastructure capacity, and future requirements for e-waste infrastructure to support a product stewardship scheme that meets community and Government expectations. The study was commissioned by the Department of the Environment, Water, Heritage and the Arts to provide input to the development of legislation and product stewardship arrangements.
Current E-Waste Recycling Demand and Capacity

(Chapters 2, 3 and 4)
The study commenced with a survey of e-waste resource recovery and processing in Australia. The aim was to establish an estimate of current e-waste recycling and reuse demand, and provide a reliable estimate of the capacity available in the Australian e-waste resource recovery industry. This survey indicated that current demand for e-waste recycling and reuse services exceeds 4 million units/year (around 25,000 tonnes) – only around 10% of the discarded e-waste is recovered and processed.

Some 50% of e-waste recycled today is computers and computer peripherals, with the vast majority of this sourced from the commercial sector. However, the number of televisions presenting is increasing rapidly, as more drop-off/collection events are promoted and as more people switch from analogue to digital televisions.

The survey revealed that the e-waste resource recovery sector has ample capacity to process the current demand level. And reserve capacity is available to absorb some further years of growth at the present rate. Furthermore, capacity could be moderately enlarged without significant capital investment – by adding more labour and additional product dismantling equipment, or by adding a further operations shift. This might buy a few more years of surplus processing capacity during the early years of increased e-waste recycling following introduction of a product stewardship scheme.

The main resource recovery practices applied to discarded e-waste, in order of descending volume, are: disassembly or shredding for recycling of materials; refurbishment for reuse; and disassembly for recovery of usable parts. The process of recycling, which applies to the majority of e-waste, is a sequence of successive stages of component disassembly operations to incrementally derive value from the former product. Glass, steel and plastics undergo downstream processing in Australia; electronic components are largely exported for specialised metals recovery.
End of life product discard rates (i.e. the rate at which products are no longer wanted by consumers and are discarded) for televisions and computers have consistently been around half of product sales volumes. This has resulted in a progressive building of product stocks by households and business. Mobile phone hoarding is even more entrenched. This low level of discard action is expected by industry associations to progressively lift following introduction of a product stewardship program, so that annual end of life discard rates should soon approach sales volume.
Future Demand Scenarios (Chapter 5)
The amount of discarded e-waste actually collected and processed each year following commencement of product stewardship is likely to dramatically increase after introduction of the first e-waste product stewardship scheme. However, the rate of take-up of recycling opportunities is uncertain and the pace of introduction of schemes applied to e-waste beyond televisions and computers is not yet determined.
Four distinctly different scenarios were developed describing how recovery and recycling demand may play out as product stewardship schemes are implemented. They are depicted at Figure ES-1.

Figure ES-1 Summary Scenario Diagram

Comprehensive e-waste

(Televisions, computers, peripherals and other e-waste)



















Medium demand scenario

High demand scenario
















Conservative recycling take-up rate (10 year)







Rapid recycling take-up rate (5 year)




























Low demand scenario

Moderate demand scenario

















Restricted e-waste

(Televisions and whole computers only)

All four scenarios feature a substantial increase in e-waste resource recovery and recycling – from the current position of just over 4 million units/year (25,000 tonnes) to between 33 and 41 million units/year (116,000 to 169,000 tonnes/year). The main differences between scenarios are:



  • The rate of resource recovery and recycling take-up (horizontal axis) – so that at one extreme the established target, of collecting and processing 80% of end of life discarded products, is met within 5 years; at the other extreme the timeframe to the resource recovery and recycling target is 10 years.




  • The product coverage of the product stewardship schemes (vertical axis) – at one extreme all e-waste, including televisions, computers, peripherals, mobile phones, appliances, and other e-waste; at the other extreme a restricted product span comprising televisions and whole computers only.

Forecast e-waste recovery and recycling demand, as represented by the four scenarios, is presented at Figure ES-2. This graph also includes a plot of current infrastructure capacity.


This graph demonstrates the differences in forecast recycling take-up between the High and Moderate Demand Scenarios on one hand, and the Medium and Low Demand Scenarios on the other hand. The differences in demand between these two sets of scenarios are pronounced. Scenario differences related to e-waste product coverage are less distinct than those evident in relation to the rate of recovery and recycling take-up.

F
igure ES-2 Modelled Demand Outstrips Current Capacity (units)


Demand and Capacity Findings (Chapters 5 and 6)
Recovery and Recycling Demand will Increase Rapidly

While each scenario is considered plausible, the very rapid (five year) recovery and recycling growth rate associated with the High Demand Scenario and the Moderate Demand Scenario may stretch industry capacity to develop infrastructure to match recovery and recycling demand. This could result in excessive inventories of e-waste products awaiting recycling.

On the other hand, the Medium Demand Scenario and the Low Demand Scenario feature a ten year recovery and recycling take-up rate to the 80% target. This allows scheme administrators to adopt a more conservative pace to develop community education capacity and deploy collection points for discarded products. And it allows for the recycling industry to progressively invest in and develop recycling capacity beyond the current reserve.
The Medium Demand Scenario has the additional benefit of incorporating collection and recycling of other e-waste products, from year 5, while allowing mobile phone collection and recycling to continue flourishing.
The Medium Demand Scenario is considered to be both the most likely and the most desirable for orderly implementation of e-waste product stewardship arrangements. In summary, the scenario is based on two main policy settings:


  • a ten year time frame to achieve the established target of collecting and processing 80% of end of life discarded products; and




  • progressive introduction of new product stewardship schemes to provide coverage of all e-waste products (rather than just televisions and whole computers).

This progressive roll-out should allow the e-waste recycling industry adequate time to develop further capacity – provided momentum is maintained by the parties liable for post-consumer fate of e-waste: the Product Responsibility Organisations (PROs) and other liable parties.


Televisions and computers are forecast to continue to dominate collected e-waste, with televisions ultimately replacing computers as the most collected e-waste (by weight). Mobile phones and other e-waste will remain (by weight) a modest proportion of the total resource recovery pool.

Substantial New Primary Recycling Capacity will be Required

Implementation of e-waste product stewardship would need to be supported by an early and rapid increase in primary e-waste recycling infrastructure and capacity for downstream processing of some components. Increasing community demand for e-waste recycling should propel addition of primary recycling capacity – but capacity additions will need to match the evolving demand.

The indicative estimated increases in primary recovery and recycling capacity requirements for each of the demand scenarios are shown at Figure ES-3.


Figure ES-3 Annual Demand and Available Capacity (units)

T
he Downstream Recycling
Capacity Position is Mixed
There is significant general capacity in Australia for downstream processing of glass, steel, and plastics recovered from e-waste products. This processing infrastructure existed prior to the introduction of e-waste recycling and does not depend on materials from e-waste recycling to remain commercially viable. Indeed, the amount of materials arising from the e-waste recycling sector is very modest when compared with the steel, plastic and glass recycling material flows from other sources.
However, Australia has little capacity to process electronic waste and no commercial-scale facilities suitable for e-waste precious metals recovery. Moreover, recyclers have little interest in establishing facilities in Australia for downstream processing of component subassemblies to recover precious metals in circuit boards etc, based on e-waste products alone – the current technologies are complex and the potential yield is insufficient to support investment.

The main current recovery and recycling practices applied to discarded e-waste are likely to remain relevant, at least until 2020/21. However, progressive reduction of material value used in products, and changes in technologies embodied in electrical and electronic equipment will reduce the (already marginal) recycling value proposition. While there may be minor endeavours at specialised resource recovery in Australia, the trend toward reduced inherent value in components is likely to prompt more recyclers to adopt the practice of whole product shredding followed by material sorting and material processing in lieu of manual product disassembly and sorting (to both material and component) for downstream processing.

Discarded Product Collection Logistics
The PSA and AIIA have advised they are developing plans to provide for multiple types of collection and transfer pathways, including special events and council collections as well as designated drop-off/collection points. They expect that community drop-off and industry collection from designated sites, such as well-known retailers and public waste transfer stations, will become important pathways. This collection pathway has been shown to be successful through the Byteback program.
A case study was used to test the impact of peak collection demand on an apparently reasonable deployment of collection points. The actual number of collection points required to accommodate developing demand will progressively increase and can be readily adjusted.
The case study illustrates that deployment of (say) two drop-off/collection points in each of the 14 Sydney Regions (28 locations across Sydney or one drop-off/collection point for each 150,000 people) together with occasional event-based collections, would provide for a manageable e-waste collection scale with a maximum expected travel distance of 20km. For the High Demand Scenario, an average of around 12 tonnes/week would be collected at each location during year 5 (2015/16); around 15 tonnes/week during year 10 (2020/21).
As around 88% of Australia’s population lives in major cities and inner regional cities and towns, a similar scale of distribution should apply for drop-off/collection points in these locations. On a simple scale-up basis, 120 to 140 collection points would be required to service major cities and inner regional cities and towns across Australia. Depending on the collection policy adopted for regional and remote collection, a further 100 to 200 drop-off/collection points may be required to service outer regional and remote towns.

An alternative collection point strategy would be to deploy one collection point at each of Australia’s 564 local government areas. This would provide for 40 collection points across Sydney, which may be considered as a peak requirement.


Strategic Implementation Risks and Directions for Implementation

(Chapter 7)
The Pace of Capacity Creation is Critical
Market dynamics will be changed strikingly with the introduction of a product stewardship scheme. Demand on the e-waste recycling industry will be controlled by the PRO and other liable parties. The major liable parties will be in a commanding position in the procurement of recycling services; a situation new to an industry sector used to surviving on innovative sourcing of e-waste feedstock. The biggest governance risk will be to ensure that the progressive development of e-waste recovery and recycling capacity keeps pace with progressive increase in e-waste recycling demand.
There is potential for e-waste recycling industry capital allocation to be compromised by procurement action taken by a major liable party with significant market representation. This condition may come about as a result of a competitive tendering regime which awarded major recycling contracts to just a small number of participants in the industry. Such procurement action has the potential to confer high recycling volume contracts on a small number of the 14 existing main recyclers. The successful few, in such a scenario, would be positioned to flourish while their rivals would need to continue to seek out commercial e-waste (outside the product stewardship scheme), and possibly focus their attention on other parts of their diversified businesses.
This scenario also raises the issue that new entrants to the e-waste recycling industry may have difficulty establishing a position from which to demonstrate competence and win recycling tenders. This may not be consistent with Australia’s international obligations to foster domestic capacity.

At a time when rapidly expanding demand will require a maximum of readily available expert recycling capacity, a wise procurement strategy may be to tender numerous modest-sized blocks of e-waste processing on 3-5 year contracts. As well as promoting increased rivalry among existing recyclers, this regime could encourage market entry by new recycling firms.

Although the primary risk for the balanced performance of the e-waste recycling program is clearly assumed by the liable parties, the Australian Government appears to carry a secondary risk. One way to minimise the risk that sub-optimal procurement action may adversely impact the timely creation of industry capacity, would be for the Government to establish a set of procurement principles and conditions. These could establish product stewardship governance arrangements and KPIs so that the Government could set the basis on which the product stewardship scheme could be delegated to industry and would form a basis for monitoring performance. Thoughtful governance arrangements would allow the liable parties to operate independently, but would provide strategic input by the Government

Community Expectations Must be Managed
The liable parties may also have some responsibility for the pace at which new drop-off and collection points are rolled out and the geographic priorities adopted. The major liable parties could thus control both actual and latent demand for recycling services. They could control the volume of recycling demand actually collected by adjusting the pace of collection point roll-out. But this pace may not align with community expectations for recycling opportunities following product stewardship launch.
There is a potential risk of imbalance between e-waste recycling demand and supply. This condition could result if the timing of collection point roll-out and award of recycling contracts does not keep pace with community expectations.

Two extreme possibilities are apparent. The first is that collection points are rolled-out apace, in advance of securing recycling capacity to match collected volume. This possibility would result in a surplus of e-waste to be stored awaiting processing. It may lead to pragmatic decisions to dispose of a proportion of the e-waste inventory, especially if surplus stocks are accumulated at processing facilities or collection points with easy access to disposal facilities.


The second possibility is that the pace of collection point roll-out fails to match community expectations – that are likely to be amplified following publicity accompanying the launch of the scheme. This may result in complaints from communities unable to take near-term recycling action.

Although the primary risk in both the above cases is clearly assumed by the liable parties, it appears the Australian Government carries secondary risk for the balanced roll-out of the e-waste recycling program. In keeping with the suggestion made above, the Government could establish a set of principles and conditions governing collection point roll-out. These would allow the liable parties to operate independently, but would provide strategic input by the Government.

Export of Electronic Components for Processing Must Continue
A further significant risk associated with greatly increased e-waste recycling demand is the continuity of downstream off-shore processing capacity for electronic components. A serious gap in capacity to process components, such as circuit boards and power units, would arise if off-shore processing capacity is closed or does not expand at a rate which matches progressively increasing demand. Australia has no commercial-scale facilities suitable for e-waste precious metals recovery.
Export of electronic components for downstream processing will likely be a continuing requirement unless facilities are created locally for both e-waste and other related feedstock. E-waste demand alone would not support such investment.

The task of securing and maintaining off-shore contracts for downstream processing of electronic components is clearly a commercial responsibility of each e-waste recycling firm. A role for Government in supporting the maintenance of industry capacity may be to clarify export permitting requirements and establish bi-lateral communications specifically on e-waste electronic processing with relevant OECD countries. In this regard, a proposed near-term review of the Hazardous (Regulation of Exports and Imports) Waste Act 1989 may provide a basis for consideration of bilateral policy settings.


Transport Costs from Remote Areas can be Affordable

There may be potential for a major liable party to regard as unsustainable the transport economics and scale issues associated with collection, aggregation and transport from remote areas and outer regional areas. The merit of this position may be arguable where there is a high expectation of whole product recovery for refurbishment and product reuse or component reuse. However, this risk is mitigated when e-waste can be loaded to freight containers without need to preserve product integrity, and transported on conventional transport systems. This is the norm when e-waste is to be shredded for material recovery – an appropriate recycling strategy – rather than conserved for reuse.

This risk may be best handled through an agreed implementation plan between the Australian Government and the relevant industry associations or the major liable parties. One option may be to organise annual sweeps of remote and outer regional areas. There may also be opportunities to link with existing programs such as DrumMuster and ChemCollect, or with developing and expanding programs, such as battery collection.

1. INTRODUCTION
The Australian Government, with the active support of State and Territory Governments, plans to establish a national framework for product stewardship and extended producer responsibility. The initial product stewardship scheme is to cover recovery and recycling of discarded televisions and computers, and is expected to commence in mid 2011. The scheme may later be extended to drive recovery and recycling of other e-waste products such as household appliances.
The purpose of this study is to provide both a reliable estimate of both the current status of e-waste processing infrastructure and a reasonable forecast of future requirements for e-waste processing infrastructure to support a product stewardship scheme that meets community and Government expectations. The study was commissioned by the Department of the Environment, Water, Heritage and the Arts to provide input to the development of legislation and product stewardship arrangements.
The Report begins with a detailed description of current technologies and practices used in the e-waste recycling industry. This survey of current arrangements is completed with an estimate of current infrastructure capacity for processing televisions, computers and other e-waste.
The study also describes alternative recycling demand scenarios that may play out in the first 10 years of a product stewardship scheme. These recycling demand forecasts, under differing program implementation arrangements, provide the basis to forecast infrastructure capacity needs to match expected recycling demand.
The centre-point of this study is a set of forecasts describing the required annual growth of infrastructure capacity and resources. It is clear that considerable additional capacity must be in place to deliver the e-waste product stewardship program.

The report also covers the implications of capacity shortfall and discusses strategic issues associated with implementing product stewardship arrangements for televisions, computers and other e-waste.

The procedure adopted for the study is described pictorially at Figure 1-1.

F
igure 1-1 E-Waste Infrastructure Study Procedure

2. Survey of Current Infrastructure and Practices for E-waste Resource Recovery
This Chapter describes current business arrangements for recycling2 and reuse3 for e-waste. The primary purpose of the survey reported in this Chapter is to establish an estimate of current recycling and reuse demand, and provide a reliable estimate of current recycling and reuse capacity available in the Australian e-waste recycling industry.
Note that the information in this chapter has been sourced in discussions with the main recycling industry operators. An undertaking was made to the recycling industry that no specific attribution would be made and that commercially sensitive information would not be revealed.

Key Points





  • There are presently 14 e-waste recycling facilities of significance operating in Australia. They are sited in NSW, Victoria, Queensland, South Australia and Western Australia. Numerous small operators active in the market are estimated in this study to total less than 20% of activity.



  • The main e-waste recycled today is computers and computer peripherals, with the vast majority of this sourced from the commercial sector. However, the number of televisions presenting is increasing, as more drop-off points are created and special collection events are promoted.


  • Three main resource recovery techniques are applied to discarded e-waste: product reuse; disassembly for recycling; and disassembly for spare parts.





  • Downstream processing of portions of the e-waste stream in Australia is limited to glass (including CRT leaded glass) steel, plastics, and some electrical cables. These streams are aggregated at recycling facilities and the commodities are sold off to material downstream processing facilities.




  • The e-waste recycling sector has ample capacity to process the current demand level. In broad terms, capacity could be enlarged in response to increased demand without significant capital investment – by adding labour and product dismantling equipment or by adding a further operations shift.




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