Solid Waste & Recycling

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The E-Waste Recycling Market

Is there money to be made reusing or recycling electronics waste ("e-waste")? Some companies believe the answer is "yes" and have begun to realize the profit potential in a market still in its infancy...


Is there money to be made reusing or recycling electronics waste (“e-waste”)? Some companies believe the answer is “yes” and have begun to realize the profit potential in a market still in its infancy.

E-waste is the name given to obsolete or otherwise unwanted computers, televisions, VCRs and mobile phones that may pose environmental hazards when disposed of in landfills. As consumers and businesses upgrade to new technology, many are unsure about how to responsibly dispose of old equipment.

Industry Canada estimates that Canadian businesses and households generate 79,000 tonnes of e-waste on an annual basis. In 1999 alone, over 37,478 metric tonnes of e-waste were disposed of in Canada, including over 1,495 tonnes of lead, 2.2 tonnes of cadmium, and 0.55 tonnes of mercury.

Currently, approximately 10 percent of e-waste is refurbished or recycled with the remainder being landfilled. With their usefulness unfulfilled and the potentially hazardous pollutants contained within, a more environmentally friendly approach is needed for to dealing with this waste stream.

The entrepreneurial market

Across Canada, there are an estimated 300 small, independent companies that have started as a result of the potential opportunity from recycling e-waste. Computation, a computer recycling, refurbished equipment sales, and service shop in downtown Toronto is one such company.

Founded by Dennis Maslo in 2001 Computation has since diverted a few thousand computers and monitors from landfills.

Maslo has defined Computation as a recycler with an environmental and social conscience. For example, his company will not send discarded equipment to landfill. Instead, the first goal is to refurbish equipment for re-use.

Any e-waste that can’t be refurbished and resold or donated by Computation is taken to plastics and metals recyclers and refiners where various materials are recovered and recycled. Some might view the higher cost associated with recycling as a barrier to higher profit, but it has resulted in the company being the recycler of choice for environmentally conscious businesses.

Liabilities must be considered in relation to e-waste. Specifically, many companies that arrange for removal of their e-waste insist that disposal be in accordance with their environmental policy and also require a guarantee that all information is destroyed. Computation guarantees environmental safe re-use/disposal and destruction of information.

Although not willing to disclose profits and losses, one can deduce the Computation is making a go of it. With two full time and two part staff, the company remains still has its doors open after four years. Computation’s financial viability, and that of other companies like it, comes down to whether the market will continue to value an e-waste management and computer disposal service that is respectful of the environment. A brighter future possible if certain industry and government initiatives come to fruition.

Industry initiatives

On the national level in Canada, the Electronics Product Stewardship Canada, a not-for-profit organization made up of 16 electronics manufacturers (including Apple, Dell, Sony and IBM), is working on a countrywide e-waste stewardship program. The plan will likely mean that the cost of recycling electronics will be built into the price of the gadgets at the front end (a user pay model). This is likely a preferred approach since some take back programs offered in the U.S. by manufactures can cost up to $30 per item. (Ouch!). (See Editorial, page 4.)

The environmental fee collected up-front would likely be redistributed to provincial or regional organizations that manage the local recycling. It will be up to an Industry Funded Organization (IFO), to steward their products at end-of-life, by setting up depots, and contracting businesses such as Computation to manage the equipment according to defined processes.

The concern of such an industry initiative is that it is not necessarily in their best interest that computer equipment be refurbished and re-used as they make money on selling new equipment. If the small refurbishment and re-use companies like Computation are to stand a chance at making a profit, while continuing to execute their environmental mandate, there will need to be strong government policy in place to emphasis reuse through any product stewardship initiative.

Government involvement

In the October of 2004, Alberta launched Canada’s first provincial program for e-waste recycling. In the initial phase of the program an environmental fee will be placed on each item ranging for $5 to $45 and will be used to cover the cost of collection, transportation and recycling. The Alberta Recycling Management Authority (ARMA) will collect the fees from wholesalers, distributors and retailers, which will likely be passed on to consumers at the point of purchase.

Conclusion

While there is money to be made in the e-waste industry, there are a number of different models that could be followed that could create winners and losers. The focus of any government policy and industry initiative should acknowledge that there is a definite re-use market for e-waste and to build on the current infrastructure being developed. To do otherwise would be not make economic or environmental sense.

NOTE: The author thanks Paul Cannata for his research in preparing this article.

John Nicholson is a management consultant with Environmental Business Consultants based in Toronto, Ontario. E-mail John at john.nicholson@ebccanada.com


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