Examination of Witnesses (Questions 300-319)
Dr Kirstie McIntyre, Mr Andrew Clack, Professor Ab
Stevels and Mr Peter Evans
29 JANUARY 2008
Q300 Lord May of Oxford: I found
rather unconvincing, I have to tell you, the idea that you had
your range of boxes—one was cost and one was social benefit
and economic benefit—and you said that they are usually
all ticked plus, because my fairly long and varied experience
on three continents in various contexts is that more commonly
than not there is a tension between a good thing you want to do,
particularly social environmental good, and the cost.
Professor Stevels: I would like to repeat that
our experience shows that this is not true for a lot of cases
in the electronics industry. Maybe the plus in one case is a much
bigger one than in the other one, but it is still close. Particularly
for recycled material, there is a consistent plus along the whole
horizontal line, with one exception, and that was an experience
we had at Philips already in 1995. Then we were using some 20
per cent of recycled plastic in the houses of our TVs, which is
a lot of material, and there we stumbled and we got stuck—which
we are still today—because of the structure of the industry.
What you want to have if you apply such big amounts is a continuous
stream of constant quality and high volume, and, since 1995, we
have still the situation today that it is impossible if you say,
"We want to have 10,000 tonnes per year of recycled high
impact polystyrene"—which is our so called "chief"
construction material, which means 92 per cent of the plastics
in Philips consumer electronics products consists of that material.
If you want to get that from the market, from recyclists, you
cannot get it. It means that the structure of industry is hampering
you there in making progress. It is not the cost idea, not the
eco-design matrix, not, let us say, management—nothing else—it
is the structure of the industry, the structure of the market.
Of course, for smaller demands for specific purposes, you can
use the recycled plastic, but if it becomes really to mass applications
you have a problem.
Q301 Lord May of Oxford: Could I
specifically ask Mr Clack, who has a specific corporate social
responsibility: my experience is that there are often tensions
there between what will enhance the league ranking in corporate
social responsibility and some of the other considerations. I
wonder what contributions you find between the CSR panel and the
broader aim of reducing waste.
Mr Clack: I can obviously only answer for Panasonic,
but I suspect it is the same for all the companies represented
here. Corporate social responsibility has risen right up the agenda
for our company. That is driven by expectations in the wider stakeholder
community, companies like us and I am sure my colleagues' companies
are now very open in setting specific targets for what they will
achieve. We are much more transparent, I guess, than we probably
were in the past, and we engage with a range of stakeholders to
improve our position. I do not particularly see, from my involvement,
any great tensions there at all. As I said earlier, there is certainly
no connection between not investing in energy efficiency and environmental
performance and cost performance. The two are quite clearly linked.
We have seen, by investing in those areas, benefits right throughout
the supply chain in our overall corporate social responsibility
profile as a company.
Mr Evans: I would like to raise an extra point
to what Kirstie and Andrew have said about materials and wastage.
One of the things in which we have been particularly successful
is reducing packaging around products, and certainly packaging
in terms of components coming in. Wherever we have a major production
facility, we try to attract the major suppliers close to that
location and therefore we can use a lot of reusable, high quality
packaging which is purposely designed for that. It gives us particular
benefits, not just in that the packaging is not disposed of on
a regular basis but also in that it protects the parts we get
supplied to a much better degree. One of the areas on which we
have concentrated very much is particularly in reducing the packaging
around the components coming into our facilities and it has been
a significant improvement.
Q302 Baroness Sharp of Guildford:
We have talked quite a lot about the recycling of plastics. If
I am right in understanding what you have said, that, for the
main material, if you take a television set—the surround
of a television set and so forth, which is the plastic surround—you
cannot use recycled plastic for that. Am I right?
Mr Evans: No, you can. But the problem we have
is that the materials available from the recycling stream are
not in high enough quantities to make it viable for us to use.
We are trying at this moment to clarify a stream of plastic that
is useable. Obviously when we make a mould, that mould is designed
for a specific plastic requirement and specific plastic properties—melt-flow
index, and all that sort of thing. We have found that we cannot
get a big enough supply to make it effective for us to change.
We can get 10 or 15 tonnes, but when you talk, as Ab said, of
a minimum of 1,000 to 1,200 tonnes to make it reasonable for us
to change a mould to accept recycled material. We have in the
past used significant volumes of materials, and certainly on previous
models have used a significant amount of PET from plastic bottles,
but, unfortunately, the newer trend of televisions, which are
the flat panel TVs, tend to require a different quality of plastic,
and therefore we have had to move away, back to high impact polystyrene—we
cannot source the material to the volumes we require to meet that
demand.
Q303 Baroness Sharp of Guildford:
Do you expect that in time you will be able to do this?
Mr Evans: We are certainly working with a number
of recyclers to do that.
Dr McIntyre: We have been able to do it with
our cartridges. We sell millions and millions of them. The reason
why we have been able to do it with our cartridges, in particular,
is because we have set up our own cartridge recycling service.
Some of the problems with the WEEE Directive, for example, is
that the WEEE Directive gives producers/manufacturers collective
responsibility, so what comes back is a selection of everybody's
equipment. Of course, we all use slightly different plastics—and
I hope in the future we will stop doing that, as a whole bunch
of manufacturers, but of course there are competitive elements
to this and so we use slightly different types of plastics and
we mark them in different ways—and, therefore, when you
get this mixed selection, mixed bag of products back, it is very
difficult, as my colleagues have said, to pull out enough to feed
into a manufacturing process to really make a difference. Where
we see we have been able to set up our own recycling process,
irrespective of what the law says—in fact, we do it on a
voluntary basis—we are able to generate enough raw material
to feed through into our mainstream manufacturing processes. These
are not cartridges which will be sold in a specific green box
to say, "This is a special recycled content cartridge";
it will be just sold as a normal cartridge. We would like to do
that with more of our products. Therefore, we would like the law
to recognise the setting up of these individual systems, these
bespoke systems for each manufacturer. Those sorts of things should
be rewarded and recognised in law and brought very much through
to the fore.
Q304 Baroness Sharp of Guildford:
You are recycling the plastic in the cartridges, as distinct from
just refilling them with toner and therefore reusing them.
Dr McIntyre: That is right. We recycle the plastic.
Q305 Baroness Sharp of Guildford:
Can you recycle the recycled plastic?
Dr McIntyre: You do get into problems eventually.
Plastic is made of long polymer chains. Every time it goes through
a recycling process, the chains get a bit chopped up, and so,
like with paper, you end up with what is called "down-cycling":
first of all, you get nice office paper, then it is turned into
newspaper and eventually it becomes loo roll. Plastic works in
a very similar situation: you cannot keep recycling it over and
over and over again, but you should be able to get at least two
or three good uses out of it before it gets to a point where you
cannot mix it further.
Q306 Chairman: I am not really clear
on what incentive there is for me, as a consumer of your ink cartridge,
to buy a replacement Hewlett Packard cartridge if I hand over
an empty one. What is there in it for me, as a consumer, to do
that?
Dr McIntyre: We make it easy for you, to be
honest with you. In these cartridges in particular, our top 10
most popular cartridges, we put a bag into the box, so that when
you buy the new cartridge you have a postage paid bag—
Chairman: I am sorry, I mean how much financially.
The fact is if I go and buy a replacement for my Hewlett Packard
cartridge, it will cost me anything between £25 and £30
to buy it with your brand. If I buy something which does the job
but is not Hewlett Packard I can get it for £15. Why should
I pay £10 to £15 to enable you to recycle it, apparently
to get some benefit from it which I do not as a consumer seem
able to discern?
Lord May of Oxford: So that you can feel responsible.
Q307 Lord Bhattacharyya: Corporate
social responsibility.
Dr McIntyre: I would first point out that not
all of our cartridges cost £25. For the printer that I use
at home they are £7, the original cartridges, so it depends
what printers you are buying. We do not refill cartridges ourselves.
We do not sell HP refilled cartridges. The reason we do not do
that is we cannot guarantee the quality. We cannot guarantee that
you will get exactly the same quality out of that cartridge as
you do if you buy a new one, a virgin one, so we do not do it
ourselves. We are working on those issues, but we cannot guarantee
the quality, and we believe our brand should be consistent with
very high quality: "works first time, every time".
Q308 Chairman: Surely this is a shortcoming
in vertical integration. Maybe you would be better giving it to
people who can do it first time.
Dr McIntyre: There are lots of people who do
do refilling. We do not stop people from doing refilling. We do
not stop our consumers from buying those.
Q309 Chairman: You make it inconvenient,
when we are trying to use the refilled cartridges in our Hewlett
Packard machines.
Dr McIntyre: One of the biggest issues, from
an environmental perspective, when we talk about recycling of
cartridges is that we cannot recycle third party refilled cartridges,
because they do not use the same ink formulations that we do and
therefore the chemical makeup is different and you get into all
sorts of problems. It gets into a much more technical level of
detail than I am able to talk about.
Chairman: I listened to the You and Yours
programme over Christmas on this. I am not going to take up the
time of the Committee on this, but I am putting my money on the
European Commission, for once, to sort out what seems to be something
which is on the edge of anti-competitive practices. I put it no
more strongly than that. It does not sit very easily alongside
your CSR or environmental obligations when you are not really
looking at this from the point of view of the consumer who is
sufficiently concerned to want to recycle cartridges.
Q310 Lord May of Oxford: But it helps
tick all the boxes.
Dr McIntyre: Perhaps I could just come back
on that one. It is not possible to recycle a refilled cartridge.
Once that cartridge has been refilled once, it has to go to landfill.
It is not possible to recycle the plastic out of that cartridge.
However, with a virgin cartridge, we can recycle it again and
again and again. There is a difference. It is an exceedingly complicated
thing to try to explain to a consumer. We do not stop people refilling
their cartridges, and therefore you make the choice: you buy a
brand new one every time, you get the old one recycled, we make
it into new cartridges and you get consistent, reliable, high
quality print out of it every time, or you buy a refill cartridge.
You make your own decisions with it.
Q311 Chairman: Your name is Kirstie
McIntyre. I suspect you are Scottish in some way. People like
myself—although I have an Irish name, I am a Scot—tend
to go by price at least part of the time!
Dr McIntyre: This brings us full circle around
to our other issues.
Lord Lewis of Newnham: Is this not the fundamental
point—I think it was implicit in what Lord May was saying:
at the end of the day it is the cost that is the bottom line?
It has been shown not only with this but repeatedly with many
green products that if the green product is at the same or a lower
price, it is an attractive proposition. If it is more expensive,
it rarely takes off.
Q312 Baroness Sharp of Guildford:
If the issue is the chemical formulation of the toner, do we not
want to standardise the chemical formulation of the toner?
Dr McIntyre: Then we do desperately come into
anti-competitive issues and about setting up monopolies for those
chemical manufacturers who make ink. That really is commercial
confidentiality stuff that we get into there, which is very difficult.
You bring it around: it does come back to price. That is why—and
I have said it before—particularly with public procurement,
you come into this total cost of ownership and not just buying
on that upfront price. Then you are enabling all of us to put
forward the green products, to put forward our innovation, and
for those products to be able to be ranked equally amongst other
products that at the outset look cheaper but in the long term
take more to run.
Lord Crickhowell: I have one question I would
like to ask about that, but, for the second week running, I have
been diverted by the Chairman's obsession about refilled cartridges!
Chairman: I just felt I had to raise it.
Q313 Lord Crickhowell: I want to
make only one point about that, in a week where I have received
an invitation from the Tate Gallery who have a scheme in which
the Tate will get rewarded. You said you did encourage the return
and you put a bag in for posting it and all that. I confess I
am rather idle about that. I think you could make it much easier
for people to return your cartridges and make it much more evident
in your selling package. Most of us, when we come to get a cartridge
because the damn printer has stopped working, want to get it in.
You get it out of the almost impossible wrap you put it in now,
which takes about ten minutes to open, and the last thing you
really want to do is to struggle with bags and all, you want to
get on with your print job. I should have thought you ought to
have systems of collecting these things in the shops which sell
them. When I go into PC World and pay these very large sums, why
do you not have great collecting bins outside for the old cartridges?
Why do you not get on with it and do it in a way that is easier?
However, that is not my main point.
Dr McIntyre: Some people might find that more
challenging than just putting it in a bag and posting it.
Q314 Lord Crickhowell: I do not think
you are very good at doing that particular job. However, to come
back to the point, the important point, for the second week running,
is the impossibility of getting large quantities of recycled equipment.
We heard that last week from the bottle manufacturers and others.
One of the difficulties has been that the local authorities, based,
as Professor Stevels said, on out-of-date waste Directives, with
400 different policies, have an incentive based on weight, and
they are not producing enough glass for the glass manufacturers,
we were told, and we heard again and again that, in terms of plastic,
the local authorities are not producing plastic for the industry
to recycle. I have two questions. When you talk about industry
getting you large quantities, if there really is this market that
you would say is there why are the manufacturers not building
up in order to meet that demand? Is it a problem of the local
authorities failing to make it easier for them to dump the waste
or not encouraging us to get it out of the kitchen waste or whatever
it is? There is a real flaw, we were told last week, in waste
collection arrangements. Is this something that worries you or
interests you?
Dr McIntyre: The comment you are talking about
was made by Professor Stevels.
Professor Stevels: If you look to the take-back
systems, my criticism on the WEEE is the fact that in the Directive
as we have now a lot of attention is being paid to treatment;
a little attention is being paid to collection; and no attention
is being paid to the reuse of secondary materials at all. This
is a very difficult situation. There is more. If you have take-back
systems, then you have one reality of life to face—also
in this country: everything which has value disappears before
it reaches proper recycling. It means that, for instance, due
to the increase of metal prices over the last years, the number
of washing machines being returned has become lower. Instead of
increasing, as you would expect—if the systems are getting
more mature, that you would get more, and if the public is being
informed, that you would get more—the contrary happens,
the volume drops, and that is simply because washing machines
today have a positive end-of-life value which means that they
disappear through all kinds of informal channels. There are the
issues of illegal exports—which at least for the Netherlands
are substantial—and then the whole waste issue has become
counterproductive because in this way it ends up in third world
countries where proper treatment is not available. And there is
the issue that for certain countries in the third world you have
so-called "active buyers", people knocking at the door
of retailers, knocking at the door of recyclers, saying, "Sir
or Madam, what do you have? I want to buy it all" and they
take it to—you name it—the type of countries which
have a lack of raw materials. In that sense, the position of the
official recyclers has been weakened substantially in the last
years. I even dare to say that who is cheating the system best,
is today reaping a lot of rewards. This is very serious. Today
this is one of the important reasons why, for instance, verifying
material streams which can be reused at a high level are not available.
Q315 Baroness Platt of Writtle: What
research and development is needed to bring about more "closed-loop"
material cycles? Is this research better placed in industry laboratories
or public research institutions or maybe working together?
Professor Stevels: My answer would be together.
For instance, in the Netherlands we have run a very successful
co-operation programme between Philips Electronics and Delft University
of Technology on the recycling of electronics. You see the results
and the fruits of that from the scientific perspective in this
book, and, in practice, you see it back in the take-back and recycling
system in the Netherlands—where, I dare to say, it is one
of the best in Europe today, best in terms of environmental gain
versus cost ratio.
Mr Evans: I think there is a major issue that
we need to address here to move forward. If you look at Japan,
which has probably the highest rate of reuse of materials, they
have specifically taken four product streams and concentrated
on those four product streams which are about 80 per cent of the
total. They get a less broad range of materials for those, so
they get a higher recycling rate, because the materials are not
as widespread. We could improve significantly by reducing the
spread. We have things like plastics coming from heart rate monitors
which all go into the same sort of mix and, therefore, do degrade
the materials we get out. If we specifically concentrated on large
streams, we could get a much more refined material that we could
better use in industry.
Mr Clack: In Japan the focus, as Peter said,
is on the four categories: TV, refrigerators, washing machines,
and air conditioners. It is very focused and the manufacturers
work well, in competing groups, and the achievement levels are
significantly better than that being achieved in Europe.
Q316 Lord Crickhowell: We are on
to the questions I was going to ask about international comparisons
and the lessons we can learn. Last week we heard that the Germans
are much better at dealing with the glass bottle situation than
here. You have now given an example of Japan. Are there any other
countries that you would pick out, with particular policies which
we might be picking off and looking at?
Dr McIntyre: There is a large study going on
at the moment with several universities from across the world
which the manufacturers are also sponsoring as well. It is being
done by INSEAD University, which is a big management university
in France, in the USA—MIT and Yale and Lund University from
Sweden. Together we have created a research consortia to look
at recycling systems in other countries. We are looking at electronic
products. There is no "cut/paste" for Europe; there
is no immediate solution that is a perfect fit for Europe. We
need to look at everything out there and take the best bits and
create a European solution for us which will drive us towards
a single market for WEEE. We are looking at the first set of deliverables
for that in March this year so we should not be far off coming
forward with some recommendations which would then slot into the
revision of the WEEE directive which is coming this year, hopefully,
with the Commission.
Q317 Baroness Platt of Writtle: That
might be helpful to us if that is coming out in March.
Dr McIntyre: It will be, yes. We can, of course,
submit it.
Q318 Lord Crickhowell: That is very
helpful and I see that as international companies you have got
to think international right across the field. I just want to
bring us back to this country. One of you earlier said that you
use plastic bottles and that there is an inadequate supply of
plastic bottles. The Japanese have set up a good scheme for bringing
back raw products from recycling them but, as we heard last week
from the bottle industry and the aluminium industry, there is
a grave shortage of supply because of the set-up we have in waste
collection from the consumer. The aluminium people believe that
if it was not all based on weight but on a more up-to-date directive
they would get the aluminium, which is an almost totally recyclable-for-ever
product. There are huge quantities of plastic bottles and other
equipment used by the ordinary domestic householder which are
not effectively being recycled in this country to give you the
volumes that you said earlier you need and cannot get. I still
would like to try and get a comment from you as to what, if anything,
your industry thinks about recycling, not in the rest of the world
or third world countries but what is happening here in this country
which would make it more likely that you could get the volumes
that you say you want but cannot get.
Mr Evans: One of the major issues we have is
the economics. If the economics were right then we would get more
recycling. The reality is that the capital investment in being
able to get this material from a raw material state back into
a useful state probably is not correct at the moment. Certainly
with metals it is changing significantly and I think the arguments
now are such that many metals could be reprocessed. That is where
to me the bottleneck is at this moment. The collection could well
be done by local authorities. It is the bit in the middle, the
reprocessing industry, that is not at this moment putting in the
capital investment to generate the materials that we would like
to use.
Q319 Lord Crickhowell: But if you
are providing demand why are they not doing it?
Mr Evans: I do not know. My background is in
the manufacturing plant in South Wales and we went to many plastics
recyclers when we were doing the exercise with PET and we were
getting PET bottles from Spain because there was no source in
the UK where we could get the volumes. We could get ten, 15 tonnes
but we could not get the 500-plus tonnes in a load that we needed,
so it is there where the bottleneck tends to be and I do not have
an answer as to how we solve that.
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