State electronics recycling laws in the United States have traditionally served as a test bed for legislative initiatives aimed at achieving a shared goal – offering household recycling programs (and sometimes others).
State Recycling Programs
State programs, on the other hand, have a similar difficulty in balancing the opposing demands of the legislation’s stated aims with market forces on the ground. The availability of electronics in a given community, collection requirements, and worldwide market dynamics for the commodities included in the devices are among the variables at work.
In light of this, the Illinois program’s reforms, which began in 2019, have been hailed as a possible model for the rest of the industry. The Illinois legislative reforms, which were approved in 2017 and 2018, sought to shift the focus away from pounds collected by manufacturers and toward guaranteeing that collection programs would be maintained regardless of the tonnages coming in.
Although the Illinois experiment is still in its early phases of implementation, the first two years have demonstrated that it is really offering a new feasible framework that other states may follow.
Illinois State Program: A Closer Look
In 2008, Illinois passed legislation establishing the program. Legislative changes in the early years of the program extended the spectrum of devices eligible for the program and modified the method for calculating how much weight producers were obliged to gather.
Throughout, the program attempted to strike a balance between ensuring that the pounds collected by local programs were paid by manufacturer-supported recyclers and allocating expenses equally among those manufacturers and the recyclers with whom they collaborated. Local collectors, recyclers, and manufacturers were ready for a fresh strategy after repeated failed attempts to find a legal solution.
The Consumer Electronics Recycling Act (CERA), which was first enacted by the Illinois legislature and signed by the governor in 2017, is one example of this technique. Instead of focusing on the number of pounds collected, the Act placed a greater emphasis on county collection coverage, requiring manufacturers to provide continuous service. Coverage implies that a local authority, such as a county or other comparable body, may rely on the manufacturer’s program to pick up covered devices throughout the year, regardless of how many pounds are collected. In addition, depending on population density, each county opting in must have a minimum number of collecting locations.
Manufacturers were encouraged to cease funding collection programs once their weight-based targets were attained under prior iterations of the Illinois legislation, and the collection-coverage method under CERA was designed to address that problem.
CERA, on the other hand, came with certain unavoidable concessions. For starters, CERA collection systems are limited to covered devices only coming from residences — the Illinois program formerly included material from certain types of businesses, charitable organizations, and schools. It’s worth noting, however, that the Illinois law’s wide list of devices protected remained unchanged (only New York has a more complete list).
Another compromise is that CERA eliminates the additional pounds incentives for manufacturers collecting from charity groups and rural regions, as pounds are no longer the focus. In addition, because the new legislation contemplates shared responsibility for collection, it does not offer full reimbursement of all expenses by manufacturers. From bulk transportation (full trailer loads) through ultimate recycling, manufacturers must bear all expenses. Collectors are permitted to collect drop-off fees, but they may be fined if pick-ups are under a certain weight limit.
Finally, CERA does not automatically provide collection coverage across the state. Importantly, the law requires counties to “opt-in” to the manufacturer program(s) in order to get service.
The county opt-in procedure takes place once a year, and the map that manufacturers must service is created as a result. Manufacturers of covered devices have the option of providing bulk transportation and recycling to any counties that wish to participate. Manufacturers can work alone, in a group, or as part of a “super-group.” Any collection of manufacturers that collectively account for more than 50% of the total obligation falls into this category, often known as a “manufacturer clearinghouse.” All participating manufacturers choose to join the clearinghouse in the first years of the redesigned scheme.
The manufacturer clearinghouse must submit an annual plan to the Illinois EPA outlining how it will carry out the program and have it authorized in order to offer collection coverage to all opt-in counties. However, much of the other specifics are left to the manufacturer program to sort out outside of this fundamental structure — counties opt in and suggest sites, and manufacturers then offer bulk transportation and recycling – This covers the initial setup and the manufacturer clearinghouse’s “rules.”
The Clearinghouse: How It Works
The clearinghouse might have gone in a variety of directions in terms of how it would operate and function. But initially, in 2018, a critical amendment to the law was required in the form of antitrust protection for the manufacturers who are splitting the opt-in counties amongst themselves under the clearinghouse. The governor signed the modification to the law in the middle of 2018, allowing the clearinghouse to move forward with its construction.
The Consumer Technology Association, a trade group, came up to organize the discussions and give the initial funds to get the clearinghouse up and running. The Electronics Recycling Representative Organization, an established charity with a manufacturing board, was chosen to host the clearinghouse (ERRO). After appointing a clearinghouse administrator (the National Center for Electronics Recycling), ERRO convened a manufacturer advisory committee to consider what services the Illinois Manufacturer Clearinghouse should provide to fulfill CERA’s standards.
The manufacturer advisory council ultimately decided on a technique known as the group plan allocation approach. The clearinghouse acts as an umbrella organization in this system, allowing firms to engage in recycling programs operated by “group plans” beneath it. The clearinghouse’s goal is to distribute pounds and expenses equitably by allocating, or assigning, counties and their collection operations to the various group plans. Group plans and manufacturers have the freedom to pick which recyclers they wish to deal with, and the clearinghouse makes every effort to maintain current connections. Manufacturers have the option to modify group plans from year to year and to take on a county assignment on their own if they so want.
The final “rules” that would govern the clearinghouse and manufacturer involvement emerged out of the manufacturer advisory group’s deliberations in 2018. The guidelines contained information on a crucial component of the program that goes above and beyond what the law mandates. Manufacturers and their group plans were given incentives to keep private programs running in addition to county-run ones. The more “private program” weight they gather, the fewer opt-in counties they must cover. Collection at retailer establishments, charitable groups, curbside collection, and programs from counties that did not opt in are among the private programs. Many manufacturers had long supported these collection initiatives and had developed networks that they wanted to see continue and be recognized for under the new method. The regulations include an annual “true up” computation to see if any group plans over- or under-collected for the year; any disparities carry over to subsequent years to keep everyone on the same playing field.
Another important aspect of the requirements was laid out in broad terms in the 2018 modification to the law, which outlined how producers should distribute responsibility between themselves. This is the main data element that determines how much manufacturers and their groups should gather each year (in pounds) and is used to calculate the true-up calculation. Each producer is given a “obligation percentage” at the most basic level. This is a proportion of the entire, undetermined quantity of pounds that will be gathered each year. According to the law, this is calculated by multiplying the manufacturer’s market share in a product category (in weight, not units) by the category’s return share in the waste stream. This can include producers who sell a variety of products, as seen in the following example.
Let’s assume Manufacturer A has a 5% market share in TVs and a 10% market share in monitors. Manufacturer A would have a 2.7 percent obligation on its TV sales since TVs represent for roughly 54 percent of the covered electronics collection stream in the state (5 percent of 54 is 2.7). Monitors, on the other hand, make up roughly 6% of the covered collection stream, thus Manufacturer A’s obligation percentage is 0.6 percent (10 percent of 6). Manufacturer A’s total obligation share is 3.3 percent when we add 2.7 percent and 0.6 percent.
If Manufacturer A joins a group plan with a total responsibility of 10% of the manufacturer (including Manufacturer A’s 3.3%), the clearinghouse will try to allocate counties that are likely to receive 10% of the pounds from opt-in and private programs.
Implementation
Once the regulations were in place, it was time to begin the new program, which began in January 2019 after numerous phases throughout 2018.
In March 2018, counties had to formally opt in to the program, which 58 local government authorities did. Those opt-in counties accounted for over 90% of the population of the state. In April, manufacturers were required to register and choose one of six group plans that would run in 2019. The clearinghouse then had to look back at previous years’ statistics to predict how much each county would receive. Finally, the clearinghouse assigned each county to one of the group plans to provide bulk transportation and recycling service in 2019, taking into account existing connections and preferences. All of these aspects were included into the Clearinghouse Plan, which was presented to the Illinois EPA and eventually authorized before the program’s launch.
The initial deployment was difficult, as it is with any sophisticated software reorganization. Counties were uncertain who they would need to collaborate with, and group plans were required to clarify their position, as some were direct recyclers and others were management companies that employed third-party recyclers. Any company that contracts with manufacturers to carry out their legal responsibilities is considered a group plan. Naturally, recyclers and management companies who had previously worked with factories in other states aspired to provide group plan services under the new CERA framework. Despite the difficulties, the initiative began in January 2019 with little change for the ordinary Illinois customer dropping off unwanted devices.
Through quarterly reports, the clearinghouse kept track of progress and informed each group plan on its progress toward reaching its collective obligation percentage. In all, opt-in counties and private programs from shops, nonprofit groups, and curbside collection programs collected approximately 29 million pounds in 2019, with opt-in programs accounting for 51% of the weight and private programs accounting for 49%. This was a substantial decrease from the yearly totals reported between 2016 and 2018. However, this discrepancy might be explained by the peculiar reporting requirements of prior versions of the statute. Previously, collectors and makers had to submit individually, and there was no method to avoid double-reporting.
The second year of the program followed the same pattern as the first, although numerous adjustments changed the structure of the clearinghouse’s overall strategy for 2020. The overall number of group plans grew by one, with some counties that had opted in for 2019 dropping out and other counties joining in their place. All of these developments, along with the decision of numerous manufacturers to modify their group plans, resulted in several revisions in the assignment of counties to group plans for 2020. Overall, the number of 2020 opt-in counties grew to 61, and the proportion of the state’s population covered remained stable at about 90%.
The COVID-19 pandemic, which began in the second quarter of 2020, provided a huge challenge to the collecting programs. Many collection locations, notably private collection programs, temporarily halted operations, and collecting events were canceled. The consequence was a 30 percent reduction in tonnage in the second quarter of 2019 compared to the same period last year.
Lessons Learned
While Illinois is still in the early phases of implementing this sort of program, there have been a few lessons learnt thus far.
For starters, the program’s debut and successful negotiation of the clearinghouse’s regulations indicate that this new strategy can work. Many attempts have been made over the years to bring together electronics manufacturers in the United States to create cooperative collecting programs. The clearinghouse method in Illinois was successful in bringing together producers to work out the details of how to build recycling systems in the most effective way possible to satisfy the law’s criteria. Manufacturers have discovered that this approach may be scaled and duplicated in other states that already have programs in place, and stakeholders are actively investigating those possibilities.
Second, by allowing local governments to opt in, the ground rules for the smallest number of sites have been established. However, several counties have had trouble determining the ideal venue or activities and have so opted out.
Finally, as with any new or restructured program, education and communication are critical for avoiding misunderstandings, especially when new organizations are engaged and collecting needs change.
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