Annex
PRICING/FUNDING
OPTIONS—FRIDGES
Based on capital and operating cost profiles
for existing German/Swedish technology the processing cost per
fridge—dependent on economies of scale is going to be in
the range of £25-£30 per unit for upper quartile (low
volume) individual customers. This suggests an annualised cost
in the region of £70 million for the estimated three million
fridges to be disposed of annually (equivalent to 10 per cent
of current retail sales value quoted at £717 million by non
food, retail agencies). Lower quartile cost expectations in a
mature market might operate at £50 million to £60 million
per annum by 2005+.
POSSIBLE OPTIONS
1. Full Producer Responsibility on a
brand by brand basis—Scrap fridges are retrieved from the
market place FOC and OEMs then negotiate a bulk fee with reprocessors
and are charged on a brand by brand basis. "Orphan"
and unidentified brands charged pro rata or costs funded by public
purse.
2. Funding under Producer Responsibility
but with all manufacturers negotiating nationally based rates
with collectors/reprocessors. Average costs—including publicity
and public education—subject to audit by OFT coupled to
central government support for an across the board green levy
on all new fridges to cover cost of reprocessing historic stock.
3. Tradeable Permits—Collate data
based on last 10 year statistics by brand and then institute Tradeable
Permits on importers/manufacturers. Reprocessors able to trade
permits based on reprocessed throughput. TPs could operate in
conjunction with 1. and 2. above.
4. Operating TPs on HCFC content only
(as per my letter to the Minister).
5. Allow retailers to recover an incremental
fee on a voluntary basis on all new fridges sold and they
negotiate national reprocessing deals with reprocessors to match
surcharge. Relieve retailers of onerous storage conditions relating
to hazardous waste.
6. Allow Waste Disposal Authorities and/or
Waste Collection Authorities to negotiate bilateral contracts
with reprocessors to handle fridges returned to CA sites. Such
an approach would be time intensive and potentially penalise local
authorities distant from installed reprocessing capacity. Retailers,
manufacturers and importers have no financial liability—cost
borne entirely public sector. CA sites could apply a charge on
the public for returned fridges but this would more probably result
in dumping of fridges illicitly at the gate after hours or in
isolated locations in the community.
7. DEFRA/Environment Agency or other
central body negotiates a national rate with reprocessors.
Costs are borne centrally by the public purse as a centrally managed
charge with collection FOC from local authority collection points.
This would probably involve regionalised contracts in the interests
of scale and logistics efficiency.
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