Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Correspondence from Dixons Group plc to the Permanent Secretary, Department of Environment, Food and Rural Affairs, 18 September 2001

  When we met at the Open Dining Club last week, I said I would write to you about the new regulations affecting the collection and management of end of life equipment and of our concerns about the review of the Special Waste Regulations and the changes to the Montreal protocol giving rise to the new EC Regulation on Substances that Deplete the Ozone Layer. Since we spoke a number of meetings have taken place with officials in your department and the DTI. I am afraid that these meetings give me no great comfort either that officials understand the scale of the issue or that they are willing to assist us in finding solutions to the conundrum before us, in particular the effect that these new controls may have on the take back service that we currently offer to our customers for large domestic appliances.

  Over the last financial year the Dixons Group, (which includes Currys, Britain's largest electrical retailer) recovered 730,000 redundant white goods when delivering new products to customers' homes. More than 300,000 of these were refrigerated. At present, these redundant appliances are returned to our 18 local distribution centres. From there they are disposed of, mainly through small sub-contracts whose core activity revolves around the reconditioning and sale of appliances via export or recycling for material recovery.

  This service is important both to our customers and to local authorities who would otherwise be responsible either for collecting these items from homes (or worse, from wherever they might be dumped) or for receiving them at municipal dumps and managing their disposal. As I said last Monday, the new regulations pose a very real threat to this service.

  In the Review of the Special Waste Regulations, waste electrical appliances containing CRTs, lead, mercury, CFCs, HCFCs, batteries etc, will be classed as hazardous waste form January 2002. At present, under "exemption number 28", retailers who recover redundant end of life electrical products for recycling do not require a waste management licence provided the products are removed from our premises within a set time scale. My colleague John Clare wrote to the Environment Minister, Michael Meacher, to seek guidance as to whether this exemption would prevail. The Minister did not reply but a letter from an official (Chris Megainey) merely confirmed that the exemptions were under review but not when the review might conclude nor that there would be any time allowed between the conclusion of the review and the deadline for implementation. I am sure you are aware of the time it takes to obtain a hazardous waste management licence and the time it might take to create facilities suitable for the storage of hazardous waste if this is what the regulations require. (I am told, for example that facilities required would include covered closed storage with concrete floors. We have neither land, planning permission, nor a budget for the building of such storage. I doubt that our contractors have such facilities either.)

  Your official's letter suggests that there may be an exemption for the agencies that recover hazardous waste although it is our understanding that European legislation specifically forbids this.

  That brings me to my second and major concern, EC Regulation 2037/2000 on Substances that Deplete the Ozone Layer. The UK's requirement under the first stage of Regulation 2037/2000, to remove the CFCs from fridge compressors prior to export meant that a number of countries which previously imported such fridges for refurbishment and re-use no longer find it economic to do so as they would have to be "re-gassed" in the importing country to make them useable. As second-hand fridges can still be obtained from other countries with the compressor. CFCs intact these sources are now being used in place of the UK. As this has removed an income stream from them a number of our former disposal contractors have withdraw from the business.

  The second stage, which requires the extraction and treatment of CFCs in foam, will extend and deepen the impact. There is no facility in the UK to recover and treat CFCs from foam. Nor is it possible to create such a facility before the implementation date in January 2002.

  Our contractors are not prepared to end up as the final holder of large numbers of fridges of which they cannot legally dispose. Thus they have given us notice that they will cease to collect these products from us after 30 November 2001. Several have also served notice that if they cease to collect fridges they will exit the business leaving us without a recycler for cookers and washing machines and jeopardising that service too.

  Were we to continue to collect fridges after that date our local distribution centres run the risk of being overrun with products of which we cannot dispose. Even under the current law we cannot hold these products longer than 28 days, nor do we have the space to do so. Charging customers the true cost of dealing with these products (say £30 a unit [plus transport and storage costs] for foam removal in German facilities or storing them somewhere for a year or so until a nearer facility might be built, presumably with a similar unit processing cost) would quickly cause them to reject the service.

  Thus far my impression is that many local authorities remain unaware of the burden that may fall upon them. They, like us would have to find a disposal route as they will not be able to stockpile and store these products indefinitely without extracting the CFCs from the foam. Some have made it clear to us informally that they will have difficulty in meeting their obligation to accept domestic waste if they cannot dispose of the products or if demand suddenly rises sharply.

  As you can see action is needed swiftly. At present we are able to provide this service as it is roughly cost neutral. We need to secure a cost neutral route to secure its future. As we discussed there could not be a better candidate for "joined up government".

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