Development Bank of Japan
Research Report
No. 18Introduction of a Home Appliance Recycling
System:Effects & Prospects:
Progress towards Utilisation of Recycling
Infrastructure

June 2001

Economic and Industrial Research Department
Development Bank of Japan

Contents

Summary................................................................................................................................iii
Foreword................................................................................................................................1
I.

Outline of the Legal System Covering Recycling of Home Appliances........................2
1. Introduction ........................................................................................................................ 2
2. Used Products and Recycling Problems ......................................................................... 3
3. Highlights and Characteristics of the Home Appliance Recycling Law..................... 4
3.1 Outline of the New System............................................................................................... 4
3.2 Significance of the New System ....................................................................................... 7

II. The Nature of the Home Appliance Recycling Market.................................................91. Waste Volumes of the Four Categories of Used Home Appliances, and Their
Trends .................................................................................................................................. 9
2. Market Scale ........................................................................................................................ 13
3. Profitability of Recycling Plants ....................................................................................... 14
4. Barriers against the Used Home Appliance Recycling Business ................................. 18
5. Actual Business Models..................................................................................................... 19
6. The Nature of the Home Appliance Recycling Market................................................ 21
III. Overseas Trends in Recycling of Used Electric and Electronic Appliances.................23
1. The EU's WEEE Directive Proposal.............................................................................. 23
2. The Situation in Germany................................................................................................. 29
2.1 Outline of German Recycling Policy............................................................................... 29
2.2. The Recycling System Established by the Packaging Materials Ordinance, and
Its Significance .................................................................................................................... 31
2.3 Trends in German WEEE Recycling Policy .................................................................. 34
2.4 The Current State of the German WEEE Recycling Industry.................................... 39
IV. Towards the Use of Recycling Infrastructure ................................................................40
1. Towards Revision in Five years........................................................................................ 40
2. The Challenges of Maintaining and Raising Operating Rates...................................... 40
2.1 Problems in Defining Waste Goods................................................................................ 40
2.2 The Introduction of 'Recycling Rates'............................................................................. 42
3. Problems in Expanding the Scope of Targeted Appliances......................................... 43
References .............................................................................................................................47
Development Bank of Japan Research Report/ No. 18 i

Introduction of a Home Appliance Recycling System: Effects & Prospects:
Progress towards Utilisation of Recycling Infrastructure
Summary
1. Enacted in April 2001, the Law for Recycling of Specified Home Appliances (HomeAppliance Recycling Law) has been introduced as part of a raft of legislation aimed at building up
a society based on re-use of resources, in order to promote the recycling of used consumer
electric appliances, which up till now have been disposed of as normal household waste. Two
supplementary laws support this law, the Waste Disposal Law promoting the appropriate
disposal of waste, and the Law for Promotion of Efficient Utilisation of Resources aimed atachieving efficient use of resources. These laws prepare the ground for an original scheme basedon division of responsibilities among the parties involved, in the setting up of Japan's first fullscale, private sector-based post-consumer waste (PCW) recycling system. This report willconsider the challenges faced in achieving efficient operation of this system, which will have greatsignificance for the construction of a larger-scale recycling system handling used autos and otherproducts, as is expected to follow.
2. The waste volume of the four specified categories of home appliances (refrigerators, washingmachines, televisions and air-conditioners) to be handled by the new system that the Home
Appliance Recycling Law will introduce, at an annual expected weight of 600,000-700,000 metrictons, is only equivalent to 1% or less of the total weight of household waste. By unit volume,around 20 million units in these four categories are expected annually. Even assuming none ofthe previous exportation of used goods or disposal by local authorities takes place, and that thefull volume enters the new recycling system, then the annual market scale of collection andrecycling of these four categories will only be in the region of ¥100 billion. Adding on all othercategories of consumer electric and electronic appliances such as personal computers and mobile
telephones, the annual recycling market scale would be around ¥300 billion. Therefore, although
the social significance for Japan of setting up the foundations for a full-scale PCW recycling
system is great, the scale of the market created will be small.
3. In order to examine the profitability of the home appliance recycling scheme, we haveassumed a fixed number of collection centres (designated exchanges) and their accompanying
recycling plants (processing capacity of 600,000 units per year). Although the recycling yield rate
will be influential, we estimate that the break-even point will be reached if 50-60% of plant
processing capacity in home appliances is collected.
However, there are a number of indeterminate factors affecting the collection volume ofused home appliances, such as exportation of used goods and unlawful disposal. Achieving a
profitable collection rate (= plant operating rate) even in urban areas does not look easy, let alone
on a national scale.
4. The manufacturers, who must ensure the recycling of waste under the new recycling system,
are already responding in a variety of ways to avoid damaging their business profitability. In orderto keep expenses down to the minimum, corporations are following one of two models: 1) using
Development Bank of Japan Research Report/ No. 18 iii

existing waste processors' infrastructure in order to reduce total costs (dispersed model); or 2)
installing new processing facilities integrated with an efficient logistics system in order to reduce
total costs (centralised model). Both models have their respective strengths and weaknesses, anduntil they are actually in operation it will be difficult to assess their true merits.
Although home appliance recycling will have a relatively small market scale, and is faced by
the economic problems already mentioned, it is expected to bring great social benefits. Existing
methods such as landfill disposal of appliances in their original form have caused problems
including the release of harmful substances into the environment (for example, soil pollution by
heavy metals) arising from insufficient pre-disposal processing, and an acute shortage of wastedisposal space. Home appliance recycling is both a form of environmental business, and also asocial infrastructure business arising out of the extension of the responsibilities of manufacturersof home appliances and other goods. However, the significance of the latter is probably greater.
5. Outside of Japan, attempts to set up recycling systems for used home appliances and othergoods are also under way. In June 2000 the European Commission announced their Proposal fora Directive on Waste Electrical and Electronic Equipment (WEEE). Henceforth, EU member
states are expected to enact strict domestic laws covering a wide range of targeted appliances, andincluding bans on the use of harmful substances.
Germany in particular has adopted advanced waste disposal policies since the late 1980s, andis currently considering regulation covering home appliances. Under the Cyclical Economy andWaste Law, no improvement has been seen in exportation of WEEE, or its incineration or
landfill disposal mixed together with household waste. Many details are unclear, but collection isorganised through regular local government bodies, in direct contrast to waste packaging
materials. Furthermore, even in Germany where a wide range of appliances are targeted, the scaleof this market is only estimated at around ¥100 billion (disposal costs), accounting for a limited
portion of the overall waste disposal industry.
6. Home appliance recycling in Japan faces a number of challenges at its inception as thenation's first PCW recycling system led by the private sector. Revisions are planned depending on
how the system progresses, and a number of controversial points suggest themselves regarding
stable operation of recycling facilities and achievement of industry profitability.
Firstly, in order that as many home appliances as possible covered by the system actuallyenter it, the charges levied on the discarder will need to be reduced. To achieve this, developmentof technology aimed at reducing the prime cost of processing must be promoted, and costs
arising from the system's design reduced. By costs arising from the system's design, we mean
regulatory costs such as of obtaining licences, stemming from the legal definition of used home
appliances as waste. The definition of waste in the Japanese legal system will probably have to berevised.
Secondly, when considering future revisions to re-commercialisation rates, currently-rejected
reverse-payment arrangements will become a problem. Processing of waste plastic is a particularchallenge to be overcome in order to raise re-commercialisation rates, and parallel introduction of
a 'recycling rate' that can incorporate reverse-payment arrangements will likely come underconsideration. This would enable targeting of new processing methods such as conversion into
blast-furnace raw materials, which would boost the prospects of recycling products with highplastic-composition weightings. Other benefits of this would include making possible
comparison with European and other leading standards.
Thirdly, when considering expansion of the targeted appliance range, in addition to home
appliances not currently included in the four categories, a common processing infrastructureiv Development Bank of Japan Research Report/ No. 18

encompassing also IT equipment should be examined. The question of IT equipment such as
mobile telephones and personal computers is currently being examined under the Law for
Promotion of Efficient Utilisation of Resources. Separate schemes divided by equipment
category will lead to problems such as some types of equipment not being recycled at all,difficulty of maintaining appropriate operating rates at processing plants due to insufficient
processing volume, and could well actually increase overall costs.
It is hoped that the problems revealed by such considerations can be overcome, to achieve
optimum performance from recycling infrastructure established according to the Home
Appliance Recycling Law, and so it can develop to handle all common forms of PCW.

Development Bank of Japan Research Report/ No. 18 v

Foreword
At the dawn of the 21st Century, the legal system covering waste processing and recycling isundergoing major changes, aimed at the establishment of a cyclical social system. Following
heated debate both in Japan and overseas on the recycling of waste products, Japan saw the fullenactment of the Container and Packaging Recycling Law in 2000, and enactment of the Law for
Recycling of Specified Home Appliances (Home Appliance Recycling Law) in April 2001.
Furthermore, the debate over a recycling system targeted at many products including personal
computers and rechargeable batteries has developed rapidly, based on the Law for Promotion of
Efficient Utilisation of Resources.
This report examines the full-scale private-sector recycling system for waste products being
introduced by the Home Appliance Recycling Law, and considers future developments.
Chapter 1 provides an outline of the legal system relevant to this field, and examines
recycling schemes based on extended producer responsibility (EPR). Chapter 2 considers the role,
the economics, and the characteristics of home appliance recycling within the developing
recycling industry as a whole. Chapter 3 takes a look at the situation overseas, by providing an
outline of the EU's WEEE Directive Proposal on waste electric and electronic equipment, andthe continuing debate in Germany. Chapter 4 summarises areas of contention for future revisionsof Japan's home appliance recycling system, including overseas trends, largely from the viewpointof stable operation of facilities and achievement of business profitability.

Development Bank of Japan Research Report/ No. 18 1

I. Outline of the Legal System Covering Recycling of Home Appliances
1. Introduction
It has long been pointed out that in the 21st Century Japan needs to replace its heavy dependence
on non-renewable natural resources, and generation of large volumes of waste for which there isno space, with a society based on re-use of resources. Accordingly, in the last few years of the20th Century Japan passed a succession of new laws or law revisions concerning waste andrecycling. Many of these new laws came into force on April 1st, 2001. Japan's new waste policy
will be based on the framework of the Basic Law for Promotion of the Formation of a CyclicalSociety, enacted in May 2000, with the greatly revised Waste Disposal Law and Law for
Promotion of Efficient Utilisation of Resources, which are general laws covering waste
processing, recycling, and re-utilisation. The new set-up for the 21st Century is completed byrecycling laws specific to individual product categories, and the Green Purchasing Law, aimed atcreating and consolidating markets for environmentally-friendly products including thoseresulting from recycling (see Figure 1-1). There are four product-specific recycling laws, covering
containers and packaging, home appliances, construction materials, and food. The containers andpackaging recycling law was the first to be enacted.
This report will focus on the Home Appliance Recycling Law, and examine the problems
that must be overcome if the scheme is to work well.
Figure 1-1. Japanese Waste Disposal Legislation
Basic Law for Promotion of the Formation of a Cyclical Society(enacted June 2000)
Revised Waste Disposal Law(enacted April 2001)

Law for Promotion of EfficientUtilisation of Resources(enacted April 2001)

Green Purchasing Law(enacted April 2001)

Product-specific Recycling Laws
Container and Packaging Recycling Law (fully enacted April 2000)
Home Appliance Recycling Law(enacted April 2001)
Construction Materials Recycling Law (enacted November 2000)
Food Recycling Law(enacted May 2001)

Source:2Prepared by DBJ.

Development Bank of Japan Research Report/ No. 18

2. Used Products and Recycling Problems
The Law for Recycling of Specified Home Appliances (henceforth 'Home Appliance RecyclingLaw') stands alongside the Container and Packaging Recycling Law which was fully enacted in
April 2000 in systemising the recycling of waste products. Waste problems are the source ofmuch debate, but the focus of discussions on household waste both in Japan and overseas isschemes to regulate PCW (post-consumer waste). PCW is waste from products which for a time
have been the property of consumers. Under the traditional polluter pays principle (PPP) ofenvironmental policy, the polluter (discarder) is therefore the consumer. However, the aim of thepolicy is to restrict generation of waste, and promote recycling of unavoidable waste, so its initial
objectives will not be achieved if regulation results in the stock of goods, which for consumers
no longer have any usage or exchange value, simply increasing. As a result, the problems ofdefining the 'discarder' of products that have been the property of consumers need to be resolved,
and this has attracted much debate.1
One solution to this problem is known as extended producer responsibility (EPR), whereby
responsibility of the discarder is traced back beyond the consumer and extended to the parties
involved in production, processing and sales. Construction of PCW recycling schemes throughintroduction of the EPR concept was pioneered by Germany with its Packaging Materials
Ordinance (Verpackungsverordnung, 1991) as discussed in Chapter 3, and has since become amajor trend in Europe. The introduction of this concept to Japan took place only recently
through the passing of the Basic Law for Promotion of the Formation of a Cyclical Society in2000.
Of course, the application of EPR is not uniform. In the case of Germany, as described later
consumers pay a volume-based commission for disposal of household waste. Therefore
transferring responsibility for collection and re-cycling of packaging materials to the
manufacturers and others created a new free disposal system for consumers (to be strict, payment
is included in the purchase price of the goods). This generates strong economic incentives for
consumers to sort waste, and Germany has been notably successful in channelling such waste
into recycling routes. This system does not apply to all categories of waste, and some recycling
schemes divide responsibility between local authorities and manufacturers, for example, batteries
and WEEE (under consideration). Schemes are thus tailored to the characteristics of the targeted
waste goods.
In the case of Japan, household waste is in principle disposed of by the local authorities. The
introduction of EPR to tackle the problems of PCW, in addition to this base of public services
funded by tax, will differ from the German example noted above. In fact, the major role played
by local authorities in the Japanese containers and packaging recycling scheme, and the limited
role to be played by local authorities in home appliance recycling, are exactly opposite to theGerman model. In Japan, processing of household waste is largely publicly funded, consumption
being characterised as fundamentally non-exclusive and non-competitive. Japan's legal systemdoes not exclude the possibility of levying of commissions and private-sector sub-contracting,but this plays a minor role. Up to now it has been normal practice to levy disposal commissions
on home appliances, which are classified as 'large waste'. Although the commissions charged do
not necessarily reflect the actual disposal cost2, the charging of even part of the prime cost creates
exclusivity, diluting the disposal system's qualifications as a public service. Containers and12Please refer to Sano, Shichida [2000] for more on international development of EPR.
According to estimates from the Home Appliance Recycling Research Group Report issued by the Tokyo Metropolitan
Government's Cleaning Department, the average unit disposal cost of home appliances is ¥8,733 for air conditioners, ¥6,177
for televisions, ¥12,780 for refrigerators (not including the cost of collection and breaking down of coolant CFCs), and¥7,688 for washing machines. These costs are all several times the large waste disposal commissions charged.
Development Bank of Japan Research Report/ No. 18 3

packaging were in principle treated as household waste until the introduction of the recycling law.
Japanese divergences from the German model are likely to have influenced the form of EPR
adopted.
In any case, the Home Appliance Recycling Law is a revolutionary development in Japanesewaste disposal, introducing as it does genuine PCW recycling based on the EPR concept.
3. Highlights and Characteristics of the Home Appliance Recycling Law
3.1 Outline of the New System
The Home Appliance Recycling Law sets up measures for the appropriate and smooth executionof collection, transportation, and recycling by retailers and manufacturers, with the aim ofappropriate disposal of waste and the efficient use of recycled resources recovered from home
appliances (Home Appliance Recycling Law, Section 1). The special Waste Disposal Law defines
the appropriate disposal of waste, and the special Law for Promotion of Efficient Utilisation of
Resources defines efficient use of resources. The targets of the law are legally defined as'specified home appliances', with their categories to be designated by government ordinance. The
designated four categories of appliances were defined in the Law for Recycling of Specified
Home Appliances Enactment Ordinance, as set out in Figure 1-2. The first requirement ofspecified home appliances is that they are difficult for local authorities to recycle given existing
facilities and technology. This is based on the proclamation (March 1994) of the Waste Disposal
Law, Special Law Section 6.3, and is direct evidence that the Home Appliance Recycling Law is a
special law relating to the Waste Disposal Law, further defining the appropriate disposal of
difficult items3.
Figure 1-2. Specified Home Appliances<Requirements (Section 2.4)><Designations by governmental ordinance (1998)>

1. Difficult for local authorities to recycle, etc.
given existing facilities and technology

Unit-type air conditioners- Wall-hanging and floor-standing separate and window
types

2. Recycling is desirable from the viewpoint ofefficient use of resources, and theeconomic limitations of recycling are notexcessive

Television receivers- Cathode ray tube-type televisions (including types withbuilt-in video recorders)

3. Execution of recycling influenced byproduct design and components andmaterials used

Electric refrigerators- Refrigerators, fridge-freezers, wine chillers

4. Retailers generally deliver goods, so should
also be able to carry out collectionsmoothly
Source:Washing machines- Fully automatic and two-stage washing machines,
washer/driers

Prepared by DBJ.

3

The designated targets of measures covering household waste items that are difficult for local authorities to recycle given
existing facilities and technology, include some large-scale home appliances (television receivers with screens of 25 inches or
more, refrigerators with capacity of 250 litres or more), waste tyres, and sprung beds. Parties responsible for the production,
selling and such of these items can be requested to provide assistance. As pointed out by Sano [2000], the fact that makers andsellers of these items have been brought into the public service of household waste disposal, is noteworthy as an early example
of EPR in Japan.

4

Development Bank of Japan Research Report/ No. 18

In fact, it appears that it would be extremely difficult for local authorities to dispose
appropriately of the four categories of used home appliances. Figure 1-3 is a flow chart showing
how the disposal of the four categories has been carried out up to now. The flow illustrated
represents urban areas, and the disposal weighting borne by regional local authorities is thought
to be higher, but it is clear that local authorities dispose of at least 40% of total waste volume.
Figure 1-4 shows disposal methods, with direct landfill disposal of items in their original form
accounting for around 15%, and a significant volume being entrusted to the private sector for
disposal. This illustrates the limits of disposal by local authorities on their own. Local authorities
are ill-equipped for efficient recovery of resources from home appliances, and there are concerns
over the large social costs resulting from leaching of harmful substances from landfill sites, andother problems.
Figure 1-3. Disposal Flow for Four Categories of Used Home Appliances
20%

Local authorities
Approximately 240,000
tonsConsumers
Approximately
600,000 tons

Direct disposal in
landfill sites

20%

Sales outlets, etc.
Approximately
80% 480,000 tons

Processing businesses
Approximately 360,000
tons

60%

Source:40%

Disposal in landfill sites
after fragmentation
Metal composition
recovery60%

Ministry of Health, Labour & Welfare.

Figure 1-4. Disposal of the Four Categories of Used Home Appliances by Local
Authorities
Air conditionersエ
アコン(n=2,924)
Washing machines
洗濯機(n=2,917)
Refrigerators
冷蔵庫(n=2,914)
Televisions
テレビ(n=2,854)

0%

20%

40%

60%

80%

100%

Entrusteddisposal operators
処分業者toにprivate-sector
委託

Landfill disposal after fragmentation by local
市
町村で破砕後、資源回収して埋立処分
authorities, and recovery of resources

Landfill disposal after fragmentation by local authorities,
市町
村でincineration
破砕後、一部焼却して埋立処分
andpartialLandfill
disposal
by立
local
authorities in original form
市
町村で
直接埋
処分

Others
その他

Source:Ministry of Health, Labour & Welfare.

Development Bank of Japan Research Report/ No. 18 5

The Home Appliance Recycling Law paves the way for the new scheme illustrated in Figure
1-5 to rectify the current situation. The scheme's framework consists of transfer of used home
appliances from the discarder to the retailer and then on the manufacturer. The manufacturers orother parties then take care of recycling, and the consumer pays the cost of the scheme at thetime of discarding. The whole scheme is compulsory, resulting in the construction of a new
disposal channel for used home appliances, based entirely on the private sector. To deal with theportion of appliances that do not enter this system, local authorities and designated corporations
will also play a marginal role. All the stages of the scheme will be monitored by means of acontrol document (manifest).
Figure 1-5. The New Disposal System
Discarding

Collection, transportation

Recycling

Discarder

Retailer

Manufacturer
Importer

Designatedcorporations
Local authorities

Designatedcorporations
Local authorities

Appropriate payment to covercollection and recycling costs

Compulsory
responsibility

Compulsory responsibility; Execution ofrecycling, etc. according to relevant standards

System monitored through control document (manifest)
Responsibility shared between discarder, retailer, and manufacturer
Source:Ministry of Economy, Trade & Industry.

Since this scheme extends the responsibilities of manufacturers and sellers into PCW
recycling, it can be regarded as an EPR-based model. In order that the scheme can work, special
mechanisms have been set up in a number of areas, including:
1) Division of responsibility between manufacturers, sellers, and others
2) The recycling obligation requires 're-commercialisation', i.e. paid or unpaid transfer of theresulting goods (the recycler cannot pay other parties to accept the goods - 'reverse-payment'
arrangements), with priority given to material over thermal recycling
3) Out of a number of possible options including advance payment (internalisation), delayed
payment of disposal fees has been selected, so that consumers bear the costs of recycling in avisible form
Furthermore, in order to secure efficient use of resources, manufacturers and others arecompelled to fulfil yearly recycling and other volume standards, as stipulated in government
ordinances. This probably means that two sets of standards will be set, one for material recycling,
and one for overall recycling including thermal recycling. At the start of the scheme, thefollowing re-commercialisation rate standards have to be met for non-thermal recycling: air
conditioners at least 60%, washing machines at least 50%, refrigerators at least 50%, televisions atleast 55%. The four categories are each composed of materials in different proportions, but asshown in Figure 1-6 taking Toshiba's current models as an example, these standards seem tohave been set so they can more or less be covered by processing of principally metals and glass.
This is probably because the Japanese laws set tougher standards than Europe as described in
Chapter 3: Japanese standards are for material recycling and reject reverse-payment arrangements.

6

Development Bank of Japan Research Report/ No. 18

Figure 1-6. Material Proportions in the Four Categories of Home Appliances
Televisions(Toshiba, maufactured between 1990 and 1995)

Refrigerators(Toshiba, manufactured between 1990 and 1995)
Others 3%

Others 8%
Plastic
13%
Non-ferrous
metal
5%

Ferrousmetal
50%

Plastic
43%

Ferrous metal
9%

Glass
65%
Aluminium
1%

Source:Environmental Report, Toshiba

Washing machines(Toshiba, manufactured between 1990 and 1995)

Aluminium
1%

Environmental Report, Toshiba

Air conditioners(Toshiba, manufactured between 1990 and 1995)

Others 6%

Others 6%
Plastic
19%

Copper 2%

Plastic
38%

Source:Copper3%

Ferrousmetal
53%

Ferousmetal
49%

Aluminium
9%
Copper17%

Source:Environmental Report, Toshiba

Source:Environmental Report, Toshiba

3.2 Significance of the New System
The construction of a reverse flow, including recycling of home appliances, generally createssupplementary supply chain costs arising from the necessary transportation and processing.
Whether this expenditure will cause reduction in final disposal costs that have been rising steadily
due to the acute shortage of space, or cover them through profits on the sale of recycled partsand materials, and to broaden the question further, whether the new system's environmental
benefits to society will outweigh the environmental burden generated in the execution ofrecycling, all depends on the design and construction of the system. Figure 1-7 is a conceptual
diagram of reverse logistics. The efficient construction of such a system depends on factors
including the following4:
1) In order to reduce the biggest cost factor, transportation costs, intermediate processing
should take place as close as possible to the discarding point, thus avoiding wastefultransportation of un-recyclable parts and materials to the recycling plant.
2) In order to raise transportation efficiency, delivery of new products and returning ofwaste products should use the same transportation channels.
4

See Reviewing Distribution Issues in Reverse Logistics, Bloemhof-Ruwaard, Fleischmann, van Nunen.
Development Bank of Japan Research Report/ No. 18 7

3)

The pre-processing stage of sorting has the potential to become a bottleneck in thesystem, making product standardisation necessary.
The introduction of the new recycling system and the ensuing activities of all the parties
involved represent Japan's solution to its waste problems. The operation of a home appliancerecycling system with many discarders but low transportation volume, would probably present aneven greater challenge than the general considerations noted above. The system is the firstexample of genuine private-sector PCW recycling based on EPR, and its success or otherwise islikely to have a great influence on the development of the many recycling systems that will follow
it.
Figure 1-7. Reverse Channel Functions
Sorting
Testing
Collection

Transportation
Dismantling'Forward'
distribution
Resource recovery

Source:8

Reviewing Distribution Issues in Reverse Logistics, Bloemhof-Ruwaard, Fleischmann, van Nunen.

Development Bank of Japan Research Report/ No. 18

II. The Nature of the Home Appliance Recycling Market
1. Waste Volumes of the Four Categories of Used Home Appliances, and Their Trends
The establishment of this home appliance recycling system has raised significant expectations offuelling major growth in the so-called recycling business. In fact, the Ministry of Economy, Trade& Industry forecasts that the market scale of environmental business will reach ¥65 trillion in
2025, while the Ministry of the Environment forecasts that it will reach ¥40 trillion in 2010. The
environmental business is therefore projected to grow rapidly, and it is generally assumed that therecycling sector will be its core. Within the recycling sector, what kind of weighting are home
appliances likely to command?
First we will just examine the four categories of designated home appliances included fromthe start in the recycling system. Current waste volumes of the four categories of used home
appliances are displayed in Figure 2-1, namely just under 20 million units in total annually, at aweight of 600,000-700,000 metric tons. Figure 2-2 shows diffusion rates and ownership unit
volumes for leading home appliances. Patterns vary widely; for example, there are striking
increases in multiple ownership of colour televisions and air conditioners, completely mature
products such as refrigerators and washing machines, and products still in their diffusion phasesuch as video recorders and microwave ovens. As a result, waste volumes of used home
appliances will also vary accordingly. We have produced simple medium-term forecasts of waste
volumes, based on estimates of average length of use in years, and domestic shipment volumes.
The results are shown in Figure 2-3. Looking at the next five years only, running up to when legal
revisions are expected, the waste volume trends of the four categories of home appliances are notanticipated to change from that seen up to now. That is, stable overall volume of around 20
million units annually, at a weight of 600,000-700,000 metric tons, is expected.
Figure 2-1. Weight and Unit Volume of the Four Categories of Home Appliances
Unit volume ('000 units)
Refrigerators
91
92
93
94
95
96
97
98

3,323
3,380
3,447
3,524
3,625
3,752
3,850
3,921

Washing
machines
3,774
3,795
3,831
3,882
3,958
4,060
4,182
4,324

Televisions
4,640
4,855
5,136
5,483
5,886
6,347
6,841
7,370

Air conditioners
2,025
2,172
2,360
2,588
2,889
3,264
3,606
3,915

Total
13,762
14,202
14,774
15,477
16,35817,423
18,47919,530Development Bank of Japan Research Report/ No. 18 9

Weight (metric tons)
196,057
199,420
203,373
207,916
213,875
221,368
227,150
231,339

Washing
machines
94,35094,875
95,77597,05098,950101,500
104,550
108,100

59

25

Refrigerators
91
92
93
94
95
96
97
98
Per unit
weight (kg)Televisions

Air conditioners

116,000
121,375
128,400
137,075
147,150
158,675
171,025
184,250

103,275
110,772
120,360
131,988
147,339
166,464
183,906
199,665

25

51

Total
509,682
526,442547,908
574,029607,314648,007686,631723,354

Note:

Weight calculated by multiplying unit volume by per unit weightSource:Forecast Survey Report on Waste Volume of Electric Appliances, Association for Electric Home Appliances, etc.

Figure 2-2. Diffusion Rates and Ownership Unit Volumes of Principal Home Appliances(1975-1999)

Number of units owned per 100 households

250

Colour televisions

200
Air conditioners
150

Vacuumcleaners

Touch-tone
telephones

Refrigerators

CD players

100

Washing
Video recorders

Personal computers

50

Microwave ovens
00

Source:20

40

60
Diffusion rate

Household Consumption Trends, Economic Planning Agency.

10 Development Bank of Japan Research Report/ No. 18

80

100

120
％

Figure 2-3. Domestic Shipment Unit Volume and Waste Unit Volume Trends of the Four
Categories of Home Appliances
Refrigerators
7,000

Trend line
6,000

Thousand units

5,000
4,000
3,000
2,000

Shipment
volumeShipment unit
unit volume
出荷台数

Waste unit volume

1,000

Waste
unit volume
廃棄台数

0
80

82

84

86

88

90

92

94

96

98

00

02

04

06

08

Calendar year
Note:

Waste unit volumes are 1991-1998 estimates by the Association for Electric Home
Appliances. 1999 and beyond are our estimates. Average length of use estimated atten years.

Electric washing machines
6,000

Trend line
5,000

Thousand units

4,000

3,000

2,000
Shipment
unit volume
出荷台数
1,000

Waste
unit volume
廃棄台数

080 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Calendar year
Note:

Waste unit volumes are 1991-1998 estimates by the Association for Electric Home
Appliances. 1999 and beyond are our estimates. Average length of use estimated atnine years.

Development Bank of Japan Research Report/ No. 18 11

Colour televisions

14,0000.35

12,0000.3

10,0000.25

Trend line

Thousand units

8,000
6,000

0.2
0.15

4,000

0.1
Domestic
shipment unit volume
国内出荷台数
Waste
unit volume
廃棄台数
Shipment
weighting of models with
26型以上の出荷ｳｴｲﾄ（右目盛）
26-inch or greater screens (right-handscale)

2,000

06

04

02

00

98

96

94

92

90

88

86

84

82

0
80

0

0.05

Calendar year
Note:

Waste unit volumes are 1991-1998 estimates by the Association for Electric Home
Appliances. 1999 and beyond are our estimates. Average length of use estimated atnine years.

Air conditioners
12,000

Shipment
unit volume
国内出荷台数

10,000Waste
unit volume
廃棄台数

Thousand units

8,000

Trend line

6,000

4,000

2,000

0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

Fiscal year
Note:

Waste unit volumes are 1991-1998 estimates by the Association for Electric Home
Appliances. 1999 and beyond are our estimates. Average length of use estimated atten years.

12 Development Bank of Japan Research Report/ No. 18

2. Market Scale
Based on the preceding data, what kind of scale can the recycling market in the four categories ofused home appliances be expected to reach? As will be described later, there are various
problems that will affect the outcome, such as exportation of used goods, some recycling by local
authorities that will continue after the new system is introduced, unlawful dumping, and so on.
Ignoring all of these factors, and assuming that the total waste volume enters the new system,
then the annual scale of the recycling market in the four categories of home appliances is
expected to be around ¥100 billion (see Figure 2-4). This figure is based on estimated waste unit
volume for 2005, a uniform primary transportation cost per unit of ¥1,000 (official figures forthis had not been released at the time of writing this report), and the recycling fees announced byeach of the manufacturers.
Figure 2-4. Market Scale Estimation(A) The four categories of home appliances (Reference)
Refrigerators
Washing
machines
Televisions
Air
conditioners
Total

Recycling fee(manufacturers'
figures)
4,600

Primarytransportation
cost (estimate)
1,000

5,600

Waste unit
volume estimate('000 units)
4,521

253

Yearly domestic
shipment unit
volume
5,035

96 年

89.8%

2,400

1,000

3,400

4,403

150

4,807

97 年

91.6%

2,700

1,000

3,700

7,615

282

10,181

97 年

74.8%

3,500

1,000

4,500

6,273

282

8,116

96 年

77.3%

-

-

-

22,812967

28,139

Total

Market scale(¥100 million)

Year

Waste rate

81.1%

* Primary transportation cost has been estimated since figures have not yet beenreleased. The waste unit volume estimate is for 2005.

(B) Other home appliances
Other home
appliances s

Recycling fee(manufacturers'
figures)Primarytransportation
cost (estimate)

Total

Waste unit
volume estimate('000 units)

Market scale(¥100 million)

2,000

1,000

3,000

34,342

1,030* Both recycling cost and primary transportation cost have been estimated. The waste
unit volume estimate is 1998 domestic shipment unit volume multiplied by the waste
rate (waste unit volume/domestic shipment unit volume at the time of purchase) for
the four categories of home appliances.

(C) Personal computer main units, cellular telephones
Primary(A) + (B)
Recyclingfee+ (C)transportation=¥282,900
million(estimate)cost (estimate)
Personalcomputer mainunits
Mobiletelephones
Total

Total

Waste unit
volume estimate('000 units)

Market scale(¥100 million)

2,000

1,000

3,000

7,016

210

1,000

0

1,000

62,185

622

-

-

-

69,201832* Both recycling fees and primary transportation costs have been estimated. The waste
unit volume estimate for personal computer main units is 1998 domestic shipment
unit volume. The mobile telephone estimate is the number of cellular and PHS
telephone subscriber contracts (October 2000)/3.

Development Bank of Japan Research Report/ No. 18 13

Furthermore, the number of designated home appliances is expected to rise over the
medium term. We have estimated the recycling market scale of an additional 115 appliances also
to be in the region of ¥100 billion. If the scheme is extended to the same range of electrical andelectronic appliances handled in Europe, which we discuss later, and we take into accountpersonal computers and mobile telephones (which are not currently targeted by the Home
Appliances Recycling Law), then the overall annual market scale would be around ¥300 billion6.
While not a minor market, and significant as Japan's first genuine private-sector based PCW
recycling system, it will be a marginal market, given the recycling business estimates shown above.
This becomes clearer when considering the many parties that will be involved, such as home
appliance manufacturers, high-volume retailers, regional retailers, major logistics companies,
waste disposal businesses, and so on.
The research on the German recycling market previously done by RWI is useful for
considering market scale in recycling of electrical and electronic appliances. As discussed in detailin Chapter 3, the debate in Germany over electrical and electronic appliance recycling ordinances
has been going on without resolution since 1991. The recycling-route replenishment rate of
unregulated used appliances is currently struggling at around 30%, with a market scale of
DM325-470 million (approximately ¥16.3-23.5 billion). Even anticipating a major improvementin the replenishment rate, it would probably remain a marginal market with a scale of DM1-2
billion (¥50-100 billion)7.
3. Profitability of Recycling Plants
As described above, the scale of the recycling market for the four categories of home appliances,and even for a wider range of used electrical and electronic appliances, will be relatively small.
Home appliance makers are currently preparing the infrastructure necessary to honour their new
recycling obligations. Figure 2-5 gives an outline of the recycling plants that we know about sofar, and we will now examine the profitability of such plants, which are being constructed with agreat deal of initial investment.
We will first examine the ideal-case profitability scenario for a plant recycling the four
categories of home appliances. Our assumptions are laid out in Figure 2-6: the collection points(designated exchanges) that manufacturers are obliged to set up each cover an area with a radiusof 20 km, with 11 of these areas making up one region, for which one recycling plant with anannual processing capacity of 600,000 units will be needed. Based on examples announced so far,
we are assuming plant construction costs of ¥1.6 billion (¥800 million for construction, ¥800
million for equipment), and fixed depreciation over their statutory life.

5

6

7

Clothes dryers, vacuum cleaners, microwave ovens, rice cookers, electric fans, video recorders, video cameras, CD players,
MD players, tape recorders, music centers
Of course the figure will be greatly affected by the level of recycling fees set. It is reckoned that such fees for the four
categories of home appliances are roughly equivalent to around 5% of the sales price. This estimate assumes rather higher
recycling fees for all of the categories.
See Halstrick-Schwenk (2000). However, collection by German local authorities has been assumed, so the estimate is only
based on recycling costs.

14 Development Bank of Japan Research Report/ No. 18

Figure 2-5. Main Recycling Plants for Used Home Appliances
Recycling plant

Annual processing unit
volumePrincipal investors

Hokkaido Ecorecycle
Hitachi, Mitsubishi Materials Home appliances:
Systems
300,000 units(Tomakomai City, Hokkaido)
Ecorecycle
Dowa Mining group(Odate City, Akita Prefecture) Sanyo Electric, Sharp, Sony, Four categories:
300,000 units, officeHitachi, Fujitsu General,
equipment: 200,000Mitsubishi Electric
300,000 units

Assumed target regions
Hokkaido (Ecotown
installation)

Aomori Prefecture, Akita
Prefecture, Iwate Prefecture(Ecotown installation)

East Japan Recycle Systems(Sagisawa City, Miyagi
Prefecture)

Mitsubishi Materials

Home appliances:
300,000 units

Southern Tohoku region(Ecotown installation)

Kanto Ecorecycle(Ohira-cho, Tochigi
Prefecture)

HitachiHome appliances:
300,000 units

Northern Tohoku region

Katsuta(Hitachi Naka City, Ibaragi
Prefecture)

Takuma, Fujita Kankyo

Home appliances:
600,000 units

Kanto area

Hypercycle Systems(Ichikawa City, Chiba
Prefecture)

Mitsubishi Electric, Ichikawa Home appliances:Environmental Engineering 600,000 units

Kanto area

Tokyo Ecorecycle(Koto Ward, Tokyo)

Hitachi, Yumei Kogyo

National Capital region

New company(March 2000 establishment),
Kawasaki City, Kanagawa
Prefecture

NKK, Mitsui, Sanyo Electric, Home appliances:
Trienekens AG, others
400,000-500,000 units

Kanto area

Fuji Ecorecycle(Fujinomiya City, Shizuoka
Prefecture)

Fujitsu General, Sano
Maruka Shoten

560,000 units

Shizuoka Prefecture,
Yamanashi Prefecture, andenvirons

Kansai Recycle Systems(Hirakata City, Osaka)

Sharp
Mitsubishi Materials
Sanyo Electric, Hitachi,
Sony, Fujitsu General,
Mitsubishi Electric

600,000 units (double
shift)
Processing capacity:
360,000 units

Kinki region

Kanpo Recycle Plaza(Sonobecho, Kyoto)

Takuma, Kanpo

n.a.

Kinki region (Ecotown
installation)

Recycle Business Network(Himeji City, Hyogo
Prefecture)

Sanyo Electric, Takuma, Shin Home appliances:
Nippon Kaihatsu
400,000 units

Kinki, Chugoku regions

West Japan Recycle Systems(Kitakyushu City, Fukuoka
Prefecture)

Toshiba, Matsushita ElectricIndustrial

Kyushu region

Source:Home appliances:
400,000 units

500,000 units

Various reports.

Development Bank of Japan Research Report/ No. 18 15

Figure 2-6. Estimate Assumptions
Facilities

Placement

Assumptions
Recycling processing plant: 1 location
Processing capacity:
600,000 units per year
Initial investment:
Construction:¥800 million (life: 30 years)
Machinery:¥800 million (life: 7 years)
Total:¥1,600 million
Leasing of site assumed (case 1: ¥50 million per year; case 2: zero)
Designated exchanges: 11 locations
Facilities are commissioned, so per unit transportation and maintenance costs, etc. payable
One designated exchange per area with radius of 20 km. Average distance from each area to plant of 61.7 km;
①

②

③

④

⑤

⑥

⑦

⑧

⑨

⑩

1 2 0km

Breakdown of used home
appliances, etc.

IncomeProcessing income
Income from sale ofvaluable materials

Fixed costs

Variable costs

ExpenditureTransportation
costs

Exchange costs
Direct disposal
costs
Labour costs
Depreciation costs
Site leasing costs
Interest payable
Other costs

8 0km

⑪

plant

：プ ラ ン ト

Weighted average of 1998 actual waste unit volume; 37 kg per unit
Washing
Air
Refrigerators
Televisions
Totalmachinesconditioners
Waste unit volume('000 units), 1998 overall
3,921
4,324
7,370
3,915
19,530
20.1%
22.1%
37.7%
20.0%
100.0%Breakdown of above
Unit weight (kg)
59
25
25
51
37
Plant processing capacity('000 units)
120
133
226
120
600
Commissions (¥'000)
4.6
2.4
2.7
3.5
3.2
* Plant processing capacity uses proportionate division by waste breakdown of 600,000 metric tons.
Operating rate assumption multiplied by each unit price (recycling fee)
Processing unit volume × weight breakdown × recycling yield rate (5 stages of 60-100%) × market price
Washing
Air
Refrigerators
Televisions
Material prices
machinesconditioners
Ferrous metals
50.0%
53.0%
9.0%
49.0%
¥8,000/ton
Aluminium
1.0%
1.0%
5.0%
9.0%
¥177,000/ton
Copper
3.0%
2.0%
0.0%
17.0%
¥150,000/ton
Glass (fragmented)
0.0%
0.0%
65.0%
0.0%
¥1,200/ton
Plastics and others
46.0%
44.0%
21.0%
25.0%
Non
Total
100.0%
100.0%
100.0%
100.0%• Calculation of so-called secondary transportation costs. Assumes trans-shipment by ten-ton truck at
designated exchanges. Collection weight/10 t X average running distance X operating income per km fortruck transportation (¥500/km)• Transportation costs of materials left after processing regarded as being included in recycling fee. Delivery
cost to controlled disposal site assumed at ¥20,000/t.
• Transportation costs of valuable materials = unit price for actual truck days (operating
income/transportation volume = ¥8645/t) X weight• Commission charges - secondary transportation costs (¥382/unit)* ¥621/unit based on enquiries, etc. - above-mentioned secondary transportation costs of ¥229/unit• Estimated at ¥600/unit (including utility expenses)• ¥340 million: 80 plant employees, plus a few managers• ¥127 million/year: fixed depreciation based on life of buildings and equipment• Plant site costs; ¥50 million/year in case 1, zero in case 2• Case 1 all funds borrowed (2%), case 2 assumed to be zero because operating funds provided by principal
investors• ¥200 million (includes leasing charges, system maintenance and administration costs, technological training
charges)Development Bank of Japan Research Report/ No. 18 1

Income from recycling business will consist of the recycling fees charged on the four
categories of home appliances, and the proceeds of sales of resources (ferrous metal, aluminium,
copper, glass) recovered from the appliances.
Within overall expenditure, variable costs will consist of:1) Transportation costs from the designated exchanges to the recycling plants (secondarytransportation costs)
2) Maintenance and administration costs for designated exchanges
3) The plant's processing expenses (including utilities charges, and so on)4) Transportation costs for valuable materials5) Transportation and disposal costs for the materials left after processing
Fixed costs will be made up of:
1) Labour costs2) Depreciation expenses
3) Ground rent
4) Interest payable5) Other business expenses such as system maintenance and administration costs,
equipment lease costs, etc.
Figure 2-7 shows per home appliance unit costs and profits projections based on ourestimates. Since it is possible to make rough variable cost estimates, we have been able tocalculate marginal profit (income minus variable costs). Income will depend greatly on therecovery rate of valuable materials (the recycling yield rate), so we have made calculations at five
recovery rate levels between 60% and 100% (the horizontal lines in the chart). Variable costs canbe estimated, but by contrast fixed costs, particularly ground rent and interest payable, will vary
greatly depending the individual installation conditions at the plants, making case-by-caseexamination necessary. Furthermore, recycling will bear strong characteristics of a facilities
industry, so operating rate is expected to be very influential. We have therefore presented two
fixed cost cases, and given data according to varying operating rates (in other words, the extent towhich home appliances enter the system compared to its estimated capacity). The figure showsthe extent to which marginal profit based on our set of assumptions can cover fixed costs,
dependant on the operating rate achieved; in other words, whether the break-even level can beattained. As a result, it appears that the break-even level can be broadly attained if an operating
rate of roughly 50-60% is achieved. That is, losses should at least be avoided if 300,000-360,000
units of the four categories of home appliances can be collected, for a plant with processing
capacity of 600,000 units. Of course, this estimate will change greatly if assumptions such as fixed
costs are changed, but this level does not look difficult to attain in urban areas where large
quantities of used home appliances are discarded. On the other hand, it certainly looks difficult
for the nation as a whole.

Development Bank of Japan Research Report/ No. 18 17

Figure 2-7. Fixed Costs and Marginal Profit Per Home Appliance Unit
4,500

Fixed costs 1
固定費１
Fixed costs 2
固定費２

4,000

Marginal profit at 100% recycling yield rate
限界利益（リサイクル歩留100％）
Marginal profit at 90% recycling yield rate
同上（リサイクル歩留90％）

3,500

Marginal profit at 80% recycling yield rate
同上（リサイクル歩留80％）
3,000

Marginal profit at 70% recycling yield rate
同上（リサイクル歩留70％）

Yen

Marginal profit at 60% recycling yield rate
同上（リサイクル歩留60％）
2,500
2,000
1,500
1,000
500
0
30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

Operating rate (%)
Note:

Fixed costs 1 is all estimated fixed costs; fixed costs 2 omits ground rent and interest payable.

Source:Prepared by DBJ.

4. Barriers against the Used Home Appliance Recycling Business
There are many indeterminate factors affecting the collection of used home appliances. The mostprominent of these are exportation of used goods, and unlawful dumping.
Exportation of used goods has become a business whose scale is difficult to overlook. Whena low-salaried labour force is available, the valuable materials continued in Japanese used home
appliances become very attractive, so pressure to purchase them is extremely strong. The main
items being exported are currently audio/video equipment such as colour televisions, videos, andstereos, and air conditioners. Such goods are recycled at local plants, with remaining materials
being traded as junk parts, so that even defunct appliances definitely have commodity value. One
leading large-volume home appliance retailer left used goods at an overnight freight yard with adummy manifest in the interests of research, and the consignment of mainly colour televisions
was duly stolen. Exportation is not excluded by the Home Appliances Recycling Law in its
section on re-use, and after exportation to developing countries most of such used home
appliance are actually used in some way, either repaired, or broken down for parts and so on. At
present the exportation option should not therefore be completely disregarded8.

8

Nevertheless, exportation of used products could well lead to liability problems, given the possibilities of inappropriate
disposal of the materials left after recovery of parts, generating social costs due to pollution of soil and groundwater byharmful substances therein.

18 Development Bank of Japan Research Report/ No. 18This pressure to export used goods could lead to serious problems once the recycling system
has got off the ground. The biggest problem is that if the weighting of exported goods increases,
the number of appliances entering the recycling system will fall, directly affecting plant operating
rates. As described later, in Germany the export weighting of used electrical and electronic
appliances appears to be quite high, and the same kinds of problems are believed to occur9.
Furthermore, control of appliances in the recycling system during primary transportation inparticular is likely to cause new problems. Once the system is under way, if items that have beencollected are stolen for export or other purposes, the recycling fee paid by the user to the seller
will have to be returned. Much time-consuming clerical work will result, such as deletion of dataat the RKC10, part of the manifest system we expect to see many sellers using. The seller alsorisks his reputation being damaged by being blamed for not taking sufficient precautions.
Unlawful dumping present similar problems. Unlawful dumping of used home appliances
may increase to avoid primary transportation costs and recycling fees, and without adequate
counter-measures this is likely to depress collection volume. Storage areas for used home
appliances are a likely target for unlawful dumping, and to avoid this and thus control primarytransportation costs, additional costs for installing security gates and other measures are alreadybeing incurred.
Given these indeterminate factors, and although regional variations are bound to occur, astable average collection rate of 50-60% does not look easy to achieve. We interviewed leadinghome appliance makers, asking them about these points and others concerning plant profitability.
The manufacturers told us that their internal deliberations were generally very pessimistic onplant profitability.
There are also concerns in some parts of the effect on collection rates from local authorities
continuing to dispose of home appliances as they have done up to now. But judging by theattitudes of the local authorities that have voiced them, this should not constitute a major
problem. The Tokyo City Government and various other local authorities have already started toannounce that they will no longer collect home appliances as 'large waste' after the new laws
come into force, and will in principle pass on responsibility to the private sector. It certainly
seems that many local authorities want to take advantage of the new Home Appliance Recycling
Law to remove the four categories of home appliances from the range of waste disposal forwhich they are responsible11.
5. Actual Business Models
As described at the beginning of this chapter, the manufacturers that will be newly compelled by
the home appliance recycling system to recycle the four categories of used home appliances, have
prepared throughout the country the necessary basic infrastructure. As shown by the anticipatedrecycling plant profitability problems described earlier, burdensome initial investment is required.
Moreover, there are many indeterminate factors affecting actual operating rates and so on, so the
manufacturers are devising various schemes aimed at ensuring profitability.

9

According to bvse, the central body for medium and small waste disposal operators, at least 50% of WEEE is exported tocountries with lower environmental standards, in order to save costs. (bvse [1999] Elektronikschrottrecycling p.8)
10RKC stands for recycling ken (ticket) centre, established by the Association for Electric Home Appliances for combined
administration of recycling fees and manifests. The system provides convenient issuing of manifest tickets combined with areceipt, computer-based data checking and backing-up, and monthly settlement between sellers and the RKC of recycling fees
paid by users. At least 80% of home appliance stores are expected to use the system.
11
Over half of the 411 local authorities that responded to a questionnaire (sent to 508 local authorities) from the National City
Cleaning Association said they will no longer carry out official collections.
Development Bank of Japan Research Report/ No. 18 19

Actual business models will differ from the above projections in not handling only the four
categories of home appliances. For example, plants will be designed to handle recycling of officeequipment and other items, with the aim of securing operating rate stability. A whole range ofsupplementary measures are being tried in order to minimise costs, such as joining forces with
Ecotown to reduce the initial investment burden.
Up to now, the responses of manufacturers to these challenges can be broadly divided into
two groups based on approaches to reducing costs:
1) Those attempting to reduce total costs by making the greatest possible use of existing
waste processors' infrastructure (group A)
2) Those attempting to reduce total costs by setting up new recycling plants, andintegrating them with an efficient logistics system (group B)
Figure 2-8 shows the characteristics of the two groups. Group A generally uses a dispersed
processing system in order to keep down initial investment, while group B uses an integrated
processing system, aiming to make up for the heavy initial investment burden through theefficiency of organically integrated plant and logistics functions.
Figure 2-8. Strategy Comparison for Groups A and B
OutlineSchemeCharacteristics

Source:Group AGroup B
14 corporations including Matsushita Electric
20 corporations including Hitachi, Mitsubishi
Industrial, Toshiba, Victor Co. of Japan, Daikin
Electric, Sharp, Sanyo Electric,
Industries
Designated exchanges: 190
Designated exchanges: 190
Recycling bases: 14
Recycling bases: 24• Plants set up internally in principle• Plants regarded as research bases• Collaboration with Ecotown and other businesses• Collaboration with existing waste processing
businesses• Collaboration with leading logistics businesses• Centralised model• Dispersed model• Large initial cost burden• Low initial cost burden• Strategic locating of designated exchanges possible • Locating of designated exchanges restricted bylocation of existing facilities• Ease of adjustment to volume variations• Limited adjustment to volume variations• Possibility of future expansion• Complementary relationship between plants and• Improvement of secondary transportation
designated exchanges
efficiency (reduction of logistics costs) through• Ease of construction
intermediate processing at designated exchanges• Reduction of plant costs through work done at• Time-consuming to respond to developments
affecting the entire system such as method revisions designated exchanges• Low dependence on home appliances means little • Ease of response to method revisions and suchincentive to increase the purity of resources• Specialisation in home appliances means strong
recovered from them
incentive to increase the purity of resources
recovered from them

Unofficial enquiries, various materials.

Group A makes use of the infrastructure of existing waste disposal businesses, which meansthat it is able to respond flexibly to volume fluctuations, for example, if collection of used home
appliances falls short of expectations. It also benefits from the future ability to improvesecondary transportation efficiency through setting up intermediate processing at the designatedexchanges. On the other hand, responding to method revisions affecting the entire system, suchas measures affecting home appliances before they reach the plant, will be time-consuming, andlow systemic dependence on the home appliances themselves means relatively little incentive toincrease the purity of resources recovered from them. Group B makes use of the infrastructureof existing logistics businesses, which means that it is able to adjust transportation of home
appliances flexibly to match operating conditions at plants, and the system's specialisation in

20 Development Bank of Japan Research Report/ No. 18

home appliances creates incentives to increase the purity of resources recovered from them. It
can also respond easily to method revisions affecting the entire system. On the other hand,
although group B is trying to keep down costs by collaborating with Ecotown, the initialinvestment in their own plants will inevitably be burdensome, and their ability to respond tovolume fluctuations will be limited. There will also be location restrictions on the designatedexchanges, because of reliance on existing logistics businesses' infrastructure. Therefore, bothmodels seem to have strengths and weaknesses, but it will be difficult to judge relative superiority
until they have been operating for some time.
The recycling business demands a large amount of investment in processing facilities, yet its
products are classically low value-added, so centralised processing sites are necessary to achieve
economies of scale. From this point of view, the splitting of the manufacturers into two groups
through their response is not desirable12, but on the other hand the development of a range ofbusiness models aimed at achieving recycling profitability, and then letting them compete
efficiently against each other, is not necessarily undesirable. Both groups regard their recycling
plants as research and development centres for future products designed to be easy to recycle.
This is surely the real aim of legislation to compel the manufacturers, who understand theirproducts better than anyone, to recycle, and competition in this area is what is most needed.
6. The Nature of the Home Appliance Recycling Market
We have summarised the relatively small market scale and profitability problems of the newrecycling scheme, but of course these do not diminish its significance. The development of home
appliance recycling is likely to bring huge social benefits, not just alleviation of the acute shortageof waste-disposal space and efficient use of resources targeted by the legislation, but also
reduction of the risk of severe environmental pollution (for example, soil contamination by heavy
metals) from the discharge of harmful substances, resulting from providing alternatives topreceding inappropriate forms of disposal such as burying in the original form in landfill sites.
Figure 2-9 shows the range of environmental risks from harmful substances usually presented by
the processing of electrical and electronic equipment including home appliances. Although not
immediately obvious, this benefit of the Home Appliance Recycling Law cannot be overlooked.

12

Among the many home appliance recycling bases, only West Japan Recycling in Kitakyushu City is used by both groups A and
B. Resulting benefits include the sellers and the designated exchanges being able to save costs through not sorting thecollected home appliances, and reduced concerns over the plant's operating rate. This region is expected to be an importantcase model for home appliance recycling.
Development Bank of Japan Research Report/ No. 18 21

Figure 2-9. Environmental Risks from Processing of Waste Electrical and Electronic
Equipment (WEEE)
Incineration of WEEE
• Atmospheric discharge of dioxins and furanes
ÆLow-temperature combustion of bromine-type flame retardantÆCatalytic mediation of heavy-metal containing substancesÆPVC problems• Negative energy output• Concentration of heavy metals in slag Æ increased risks from slag
Landfill disposal of WEEE
• Leaching and evaporation of harmful substancesÆSoil and ground water pollution by mercury, PCBs, cadmium, etc.
ÆAtmospheric evaporation of mercury, etc.
ÆGeneration of dioxins and furanes through spontaneous combustion at disposal sites
Recycling of WEEE
• Generation of dioxins and furanes through extrusion of halogenated plastics such as bromine-type flame
retardant• Atmospheric discharge of heavy-metal containing substances (lead, cadmium, etc.)• Heavy metal pollution in the shredding process (in recovered metals and shredder dust)
Source:EU WEEE Proposal Directive.

The enactment of the Home Appliance Recycling Law will therefore both give rise to a formof environmental business, and improve social infrastructure through extension of manufacturer
responsibility among home appliance makers and others. Perhaps the latter, however, is ofgreater significance.

22 Development Bank of Japan Research Report/ No. 18

III. Overseas Trends in Recycling of Used Electric and Electroni
Appliances
1. The EU's WEEE Directive Proposal
Next we will turn to overseas trends in recycling of electrical and electronic equipment including
home appliances. The most prominent example is the EU's Proposal for a Directive on Waste
Electrical and Electronic Equipment (WEEE), which compels the collection and recycling ofelectrical and electronic equipment sold within the EU. The first draft of the proposal was
promulgated in April 1998, and after many adjustments to the scope of targeted equipment andthe enactment timetable, it was adopted by the EU Commission in June 2000. Together with thesimultaneously adopted Proposal for a Directive on the Restriction on the Utilisation ofHazardous Substances in Electrical and Electronic Equipment13, and the Proposal for a Directiveon the Environmental Effects of Electrical and Electronic Equipment which is currently being
debated, the directive sets EU regional standards for such equipment from the design to thedisposal stage.
The EU's environmental policy has been gradually strengthened since environmental
regulations were introduced into the European Community Treaty by the Single European
Agreement that came into force in 1987. By now environmental considerations must in principle
be respected in all EU-wide policy initiatives, in order to ensure sustainable development.
However, because regulations often create uneven merits and demerits among the member states,
most initiatives are now in the form of directives, which just set objectives, leaving the attainmentof those objectives up to the internal legislature of the member states. The current directive
proposal is part of the trend outlined above, and attempts mainly to bring about convergence inthe differing measures taken by the member states to promote WEEE recycling and against
hazardous substances (see Figure 3-1). After its adoption by the European Council, the member
states are to enact the necessary domestic legislation to conform to it.
The main characteristics of this directive are generally regarded to be:1) A broad spectrum of targeted items
2) High recycling rates
3) Regulations on hazardous substances (although these have finally been transferred into aseparate directive)
As shown in Figure 3-2, the range of targeted equipment is indeed very broad, covering 79
items in 10 categories, from home appliances to vending machines.

13

This directive stems from part of the original WEEE directive proposal banning the use of specified substances such as
mercury and cadmium by 2004. However, manufacturers demanded a longer lead-time to develop replacement substances, anddue to criticism that it constituted a trade impediment beyond the needs of attaining reasonable goals and thereby infringed
WTO/TBT rules, it was split off and revised into a separate directive proposal.
Development Bank of Japan Research Report/ No. 18 23

Figure 3-1. Outline of the WEEE Directive<WEEE regulations in leading EU
member states><Principal regulations covering use ofhazardous substances>

Denmark (Legislative Order)• Local authorities obliged to collect WEEE, financed
by local taxes and commission charges

Austria• Regulations governing lead-containing fertilisers and heavy
metal-containing sludge• Use of cadmium in cosmetics, etc. banned• Limits on volume of mercury used in fluorescent lighting• Use of PBB banned (1993)

Italy (Waste Processing Order, 1997)• Collection of home appliances and other consumer
durables compulsory• End users compelled to take items to recognised
sellers or public waste depots
The Netherlands (WEEE Law, June 1998-)• End users pass WEEE to sellers or local authorities
free of charge• Appropriate disposal by manufacturers and importers
compulsory; landfill disposal and incineration bannedin principle
Sweden (WEEE Regulations, July 2001-)• Consumers can pass WEEE to sellers or local
authorities• Recycling costs borne by local authorities or
manufacturers• Disposal must be performed by recognised operators;
landfill disposal, incineration, shredding not allowed
Belgium (Flanders region, 1998-)• Manufacturers, importers, distributors, and sellers
compelled to accept WEEE free of charge• Setting of recycling targets for ferrous metal, nonferrous metal, and plastic

Finland• Regulations governing lead-containing fertilisers and heavy
metal-containing sludge
Denmark (under consideration)• Regulations governing lead-containing products• Sale of lead-containing products banned in principle
Sweden• Initiative to eradicate progressively the use of leadcontaining products (cables, solder, light bulbs, cathode ray
tubes, etc.)• Banning of PBDE and PBB under consideration
The Netherlands• Cadmium Ordinance (1999) banning use of cadmium indrawing materials, dyes, plating, etc.
• Progressive eradication of the use of mercury (1998)

Germany• Continuing debate on WEEE Ordinance

WEEE Directive (proposal)

•
•
•
•
•
Source:EU-level common
standards

Directive on the Restriction on the
Utilisation of Hazardous
Substances in Electrical andElectronic Equipment (proposal)

Different regulations within member states, with varying levels of corporate contribution
Different WEEE processing policies within member states leads to transportation ofwaste, harming the efficiency of domestic recycling policies
Different policies within member states regarding progressively banning the use of
specified substances affects trading in electrical and electronic equipment
Environmental pollution from processing of WEEE crosses frontiers
Ensuring a regular volume of waste is essential for efficient WEEE recycling

Produced from the EU proposal draft and other materials.

24 Development Bank of Japan Research Report/ No. 18

Figure 3-2. Electrical and Electronic Equipment (EEE)EEE is defined as equipment dependent on electrical current or electrical magnetic fields for normal functioning,and equipment for generating, transporting, or measuring such electrical current or electrical magnetic fields, andis divided into the following categories. However, only equipment using electricity of less than 1000 volts AC or
1500 volts DC is included.
Category

Examples

1. Large home appliances

Washing machines, refrigerators, microwave ovens

2. Small home appliances

Vacuum cleaners, irons, coffee makers

3. IT and communications equipment

Personal computers (including peripherals), copiers, telephones

4. Audio/video equipment

Radios, televisions, video recorders, musical instruments

5. Lighting equipment

Fluorescent lighting, sodium lighting

6. Electrical and electronic tools

Drills, saws, sewing machines

7. Toys

Video games, electric train sets, electric cars

8. Medical equipment systems

Radioactive treatment equipment, dialysis equipment, iron lungs

9. Monitoring and control equipment

Thermostats, smoke sensors

10 Vending machines

Drink vending machines, solid-goods vending machines

Source:EU directive proposal draft.

As shown by the recycling rates in Figure 3-3, 50-80% by weight is required from 2006.
However, it should be stressed that this EU recycling rate is founded on a different concept toJapan's re-commercialisation rate contained in the Home Appliance Recycling Law. That is,Japan's re-commercialisation rate is calculated from recycled goods transferred in return for
payment or free of charge, and excludes collection based on reverse-payment arrangements. By
contrast, the EU's recycling rate makes no distinctions over exchange value. Accordingly, under
the Japanese recycling system most waste plastic is not counted in re-commercialisation rates,
even if it is processed to a high degree as a blast furnace reducing agent for example, whereas it
would be included in the European recycling rate without argument. This situation results fromdifferences in concept definitions between the EU and Japan. Therefore, although it is generally
thought that high recycling rates are a characteristic of the EU system, at least on a comparison
with Japan, this is not necessarily so.

Development Bank of Japan Research Report/ No. 18 25

Figure 3-3. Outline of the EU's WEEE Directive Proposal
Collection and sorting• EU member states are to work towards attaining the target of collection and sorting of 4kg of WEEE per
head of population annually by January 2006 at the latest.
Processing• EU member states are to take the necessary measures for manufacturers to attain the targets set out below by
January 2006 at the latest.
1) Large consumer equipment: 80% per unit (average weight basis)
Over the same period re-use and recycling rates for components, parts, etc. are to reach at least 75% per unit
(average weight basis)
2) Equipment in categories 2, 4, 6, and 7 (excluding cathode ray tube assemblies): 60% per unit (average weightbasis)
Over the same period re-use and recycling rates for components, parts, etc. are to reach at least 50% per unit
(average weight basis)3) All equipment in category 3 (excluding cathode ray tube assemblies): 75% per unit (average weight basis)
Over the same period re-use and recycling rates for components, parts, etc. are to reach at least 65% per unit
(average weight basis)
4) Re-use and recycling rates for components, parts, etc. of gas/electric discharge lighting are to reach at least
80% per unit (average weight basis)5) All cathode ray tube assemblies: 75% per unit (average weight basis)
Over the same period re-use and recycling rates for components, parts, etc. are to reach at least 75% per unit
(average weight basis)
Monitoring• By January 2005 at the latest, the EU Commission is to decide the details of rules for monitoring attainmentof target values by member states.
Source:EU directive proposal draft.

Compared to the above, the EU's proposed approach to hazardous substances (see Figure 34) provides a clear contrast with Japanese regulations14. Japan's Home Appliance Recycling Law
does not touch on banning the use of, or replacing, hazardous substances, but as noted above by
its nature the appropriate recycling and processing of home appliances includes restricting therelease of hazardous substances contained in them into the environment, and this is an extremely
important benefit of the EU system. For reference, an outline of the various benefits of the EU's
WEEE directive proposal is presented in Figure 3-5.
Figure 3-4. Outline of Regulation Directives on Hazardous Substances• EU member states guarantee to replace lead, mercury, cadmium, sexivalent chromium, PBB, and PBDE usedin electrical and electronic equipment with other substances by January 2008.
• However, in the few cases where replacement substances are worse for the environment, or replacement istechnologically impossible, the list of targeted hazardous substances will be revised. The EU Commission is to
re-appraise these sections in the light of the necessary scientific information by January 2004.
Source:14

EU directive proposal draft.

The rules on hazardous substances are contained in different directives, but we are treating them as a part of the WEEE
initiative for the purposes of this report. Rules relating to hazardous substances are also included.

26 Development Bank of Japan Research Report/ No. 18

Figure 3-5. Benefits of the EU's WEEE Directive Proposal
Financial benefits• Restriction of production costs throughreplacement of primary commodities withsecondary raw materials• Restriction of waste costs throughdevelopment of re-use and recycling

Lower costs for transportation to disposal sites, andprocessing to remove hazardous substances fromshredder dust

• Finally, design improvements, etc. to reducethe cost of reuse and recycling itself
External benefits
Principal external benefits from collection/sorting,and recycling• Avoidance of external costs through re-use ofresources contained in WEEE (sustainable
resource use)

Assuming a collection volume of 4kg per head, atleast one million metric tons per year of substances
will return to the economic cycle• Avoidance of external costs generated by theenvironmental impact of incineration andlandfill burial of WEEE

After appropriate collection and processing, only 1030% of pre-processing weight to be finally buried inlandfill sites
External costs generated by the current pattern of
WEEE disposal are clearly greater than from
disposal of other items, given the hazardous
substances contained in them. Worst of all are
refrigerators containing CFCs, and equipment
incorporating cathode ray tubes• Avoidance of external costs generated by theenvironmental impact of using primarycommodities

Energy savings from recycling of WEEE areestimated at 120 million GJ annually (equivalent to
2.8 million metric tons of oil). This is a 60-80%
saving compared to using primary commodities

Principal external benefits from design improvement
and removal of hazardous substances

Source:• Electrical and electronic equipment design
improvement should not only help to reduce
personal re-use and recycling costs, but also
lessen the impact on the environment at thedisposal stage

Estimating the scale of these effects is difficult
because they depend on action taken by individualstates, and market reactions• The impact of reducing the use of hazardous
substances in electrical and electronicequipment expected to be significantly large,
given their toxicity and ability to permeate
through the environment

Conversion into monetary value is difficult because
of insufficient specialist knowledge of pollution
exposure channels and ecological reactions

EU directive proposal draft.

Based on all the points noted above, Figure 3-6 provides a comparison on EU and Japanese
recycling schemes. To re-cap, the EU system displays the following characteristics in contrast to
the Japanese system:
1) Targeting of a wide spectrum of equipment
2) Recycling costs to be borne by the manufacturer, with mechanisms to cover items soldup to five years ago

Development Bank of Japan Research Report/ No. 18 27

3) Collection and sorting target values have been set (4kg per head of population annually)154) Member states are responsible for their own collection systems
Figure 3-6. Comparison of European and Japan Recycling Scheme (Proposed Scheme)
Home Appliance Recycling Law (Japan)
Targeted waste Home appliances (air conditioners,(annual waste washing machines, refrigerators,
televisions) specified by governmental
volume)ordinance (600,000-700,000 metric tons
per year)
Objectives
Appropriate processing of waste,efficient use of resources (attainment
standards set)
Product• Increased product life
demands• improvement of repairs system• ease of recycling to be raised throughefforts in design and selection ofcomponents and raw materials

WEEE Directive Proposal (EU)*Electrical and electronic equipment (8 million metrictons per year)

Waste reduction, re-use, recycling (attainment standards
set)• Banning of use of hazardous substances (by 2008)• reduction of use of plastic• Code number regulations for components andmaterials• Ability to be repaired, adapted, re-used, broken down,
and recycled• New products to attain recycled plastic re-usage rateof 5% (by 2004)
Seller• Obligation to handle goods sold in the Nonerequirements
past, and goods in the same categories• Obligation to pass on such goods
Funding• Retailers allowed to seek payment for • Member states to decide collection fees
requiredcollection and transportation costs• Manufacturers to bear the cost of recycling newwhen goods accepted
products• Manufacturers allowed to seek
• Interim measures covering five years for products soldpayment of recycling and other costsin the past
Limitations
Revision after five years• Mechanisms to cover items sold up to five years ago
Collection• Member states decide their own methods• Retailers obliged to accept goods
methods(goods sold in the past, and goods inthe same categories)• Manufacturers to organise designatedexchanges• Collection by local authorities anddesignated corporations
Collection
None• Target value: 4kg per person per year;
rates• Binding value to be set from 2006
Recycling rates • Televisions:• Large home appliances:at least 75%;
55%;
(weight basis) • Refrigerators:• Small home appliances:at least 50%;
50%;
• Gas/electric discharge lighting:at least 80%;
• Washing machines: 50%;
• Appliances using cathode ray tubes: at least 70%; etc.
• Air conditioners:
60%
Note:

EU regulations covering usage of hazardous substances included with WEEE Directive Proposal

Source:Produced from Explanation of the Home Appliance Recycling Law, Ministry of International Trade and Industry; Elektro- undElektronikschrottverwertung, bvse, and other materials.

15

If the target is reached, the EU's overall collection volume will be upward of 1.5 million metric tons (= 4kg x 375 million
people). Given Japan's population, the equivalent figure would be 480,000 tons (= 4kg x 120 million people), which should beachieved if around 80% of the waste volume of the four categories of used home appliances is collected; the EU target is nottherefore exceptionally high.

28 Development Bank of Japan Research Report/ No. 18

The introduction of five-year interim measures covers products that have been made up to
now without the assumption that they were to be recycled, and reflects internal and external
opposition within and without to makers immediately making a greater contribution to recycling.
This also became a contentious issue in Japan when advance or delayed payment of the costs ofcollection and recycling was under discussion. As already described, Japan is introducing adelayed payment scheme, i.e. the recycling fee is paid after the product has been used and is being
discarded.
Collection methods are being left to the EU member states to decide for themselves,probably reflecting the wide range of methods that will be used. However, as seen above it isdifficult to imagine a universal collection system that can cope with all the various kinds ofappliances, and their varying collection requirements. Therefore, we expect that collection will
depend largely on public authorities.
Incidentally, the draft of the EU directive proposal estimates the resulting costs of WEEE
collection and recycling at around 500-900 million euros annually (15 nation basis). Within this,collection costs are anticipated at 300-600 million euros, and recycling costs at 200-300 million
euros. The estimates are based on the experiences of member states that have run their own
recycling systems including other considerations, but since a centralised collection system is not
being set up, it is not clear exactly how many calculations were made. Nevertheless, the overallmarket scale estimate is equivalent to ¥47.5-85.5 billion, showing that even on the scale of theregion covered by the EU's directive proposal, WEEE recycling will be a relatively small industry.
In conclusion, from 2006 a wide range of electrical and electronic equipment sold within the
EU region will be subject to member state regulations based on this directive. Although it isdifficult to predict many future developments, replacement of the specified substances at least
has to take place by 2008. It goes without saying that the introduction of such regulation in suchan important market as the EU, will have a direct impact on Japanese home appliance makers.
Furthermore, since there is quite a history of regulation developed in the EU later becoming theinternational de jure standard, it may also in time have an impact on the Japanese domestic market.
2. The Situation in Germany
So how will EU member states respond to the WEEE directive? We will next examine the case ofGermany.
2.1 Outline of German Recycling Policy
As has been made clear already, German recycling policies are a source of interest and an object of
research for policy-makers in Japan. Probably this partly stems from similarities between Japan andGermany in industrial structure, adoption of related market economic systems, and the sharedtendency towards the state taking a major role in social systems. In fact, in the pioneering ofenvironmental policies such as recycling, the lead is frequently taken by a nation that previously
lacked a significant domestic industry in that particular field, although it is difficult to make any
predictions regarding the current case.
In Germany, waste processing is classified within the scope of competitive legislation16, whichmeans that federal law takes precedence. Consequently, the development of recycling policies canbe grasped by examining the history of federal-level legislation, which we will outline first.

16'Competitive legislation' (Konkurrierende Gesetzgebung) indicates a broad arena in which both the federal government andthe individual German states can legislate. In principle, federal law takes precedence over state law (Basic Law, Section 31),
so subsequent federal legislation in areas where state laws already exist makes the state laws invalid.
Development Bank of Japan Research Report/ No. 18 29

Figure 3-7. The History of German Waste Processing Legislation
1972 Laws covering waste disposal

Beseitigung

1986 Laws to avoid the generation of waste and to promote its
appropriate processing

Entsorgung••

Establishment of the principles of waste processing
Federal government given regulatory jurisdiction over individual
products
1991 Packaging Materials Ordinance (revised in 1998)•

Manufacturers and sellers compelled to collect and recycle used packaging materials
1993 (Technological guidelines on household waste: TASI)

1994 Cyclical Economy and Waste Law (promulgated 1996)•••

Kreislauf

Change in concept of waste
Manufacturer responsibility established as general principle
Approval of thermal recycling
1997 Waste Automobile Ordinance1998 Biodegradable Waste Ordinance1998 Waste Battery Ordinance(To come into effect by 2005)• Obligation to stabilise household
waste through pre-processing

1999 PCB Waste OrdinanceSource:Prepared by DBJ.

Federal laws covering waste disposal were introduced in 1972, at a similar time to Japan's waste
and cleaning laws established by the so-called pollution Diet in 1970. The word for waste 'disposal'in Germany's 1972 law is 'Beseitigung', which literally means 'clearing away', reflecting the law's
focus on the removal of waste from the usual sphere of human activities, purely based on publichealth considerations, and therefore of little relevance to the current report. No major changes thentook place until the late 1980s, when waste policy was overturned by the 1986 Laws concerning
Appropriate Disposal of Waste and Avoidance of its Generation, which clearly delineated thefuture direction of waste disposal policy. Its two main characteristics are as follows.
Firstly, the new law displayed the order of priorities regarding waste disposal, namely
avoidance of its generation, followed by its recycling, and then its appropriate disposal. The same
concept is enshrined in Japan's Waste Disposal Law, and from today's standpoint it does notappear remarkable, but as the first legal delineation of this principle it was a milestone.
Secondly, in order that the above principle could be applied, the government was given theauthority by means of special laws to regulate specific products in order to reduce waste.
Consequently, the Packaging Materials Ordinance was introduced in 1991 targeting containers andpackaging materials, and this was the pioneer of the policy mechanism whereby the scope ofrecycling legislation would grow to encompass new individual products, founded on the basic law.
In 1994, the 1986 law was further developed by the Cyclical Economy and Waste Law
30 Development Bank of Japan Research Report/ No. 18

(enacted in 1996), which became a new basic law. Well known in Japan, this law furthered theprinciples of the 1986 law, while also introducing some new ones. Among notable areas such aschanges to existing concepts of waste (Section 3)17, and paving the way for thermal recycling(Sections 4 and 6), perhaps the most prominent development was the principle of productresponsibility (Produktverantwortung). As shown in Figure 3-8, Section 22 of the Law compels
manufacturers at development, production, and sales stages of a product to strive to meet thestandards required by law in avoidance of waste generation, environmentally-friendly recycling,
and final disposal, within the limitations of current technology. This responsibility was definedfor each individual product in the relevant product ordinances introduced by the federal
government, and so was not able to be generally applied just using the basic law. However, after
making its debut in the 1991 Packaging Materials Ordinance, extended producer responsibility(EPR) was also enshrined in the basic law, and it is significant that this doctrine is universally andthoroughly respected in all the related individual product regulations. A range of special laws
have been introduced to supplement the basic law, including the Waste Automobile Ordinance18(1997), the Waste Battery Ordinance (1998), and the Biodegradable Waste Ordinance (1998), andthe range of products being recycled is increasing.
2.2. The Recycling System Established by the Packaging Materials Ordinance, and Its
SignificanceThe Packaging Materials Ordinance was the pioneer of current government policy in Germany. It
compels manufacturers and distributors to collect and recycle packaging materials, in a disposal
system separated from those operated by local authorities. The system that has resulted is wellknown in Japan, but we will recapitulate it here in order to compare it with the Waste Electricaland Electronic Equipment Ordinance described later.
Among the businesses compelled by the ordinance to collect and recycle packaging materials
produced or sold by them, over 600 jointly established Duales System Deutschland AG (DSD).
In cases where businesses compelled to collect and recycle packaging materials do not fulfil theirduties themselves, they use DSD. The 'der grüne Punkt' (green spot) logo on packaging indicatesthat it will be disposed of by the DSD system, and manufacturers are permitted to use the logo
on their products after paying the appropriate licence fee. The licence fee is adjusted to reflect
the level of recycling difficulty, and is different for each type of packaging material.
The discarders of packaging material waste, the consumers, sort product packaging materials
bearing the green spot logo from their regular waste, and it is collected through a special system
set up by DSD19. DSD collects and recycles the packaging materials, with its costs provided by
the licence fees it receives from manufacturers.

17

Waste (Abfälle) is defined in this law as that which is generated by the activities of production and selling, including a wide
range of movable property (bewegliche Sachen) to be disposed (entledigen) of (intentionally, compulsorily) by the owners, andwhich is divided into waste which can be efficiently re-used, recycled, etc. (Abfälle zur Verwertung), and waste for disposal(Abfälle zur Beseitigung). This changed the existing concept of waste insofar as it excluded subjective factors from theownership and possession of movable property to be disposed of, and provided clear definitions for the presence or absenceof exchange value.
18
The original Waste Automobile Ordinance is based on self-regulation (including free collection of autos of a certain age) by
the automobile industry association, and does not touch directly upon manufacturer responsibility. However, there are too
many loopholes in the current regulations, and the Special Committee on Environmental Problems suggests revisions in its
2000 report.
19
The system includes separate collection boxes for different colours of glass and special yellow bags for plastic packaging
materials. Many features of the German system have been introduced to Japan.
Development Bank of Japan Research Report/ No. 18 31

Figure 3-8. Manufacturer Responsibility as Expressed in the Cyclical Economy andWaste Law
Principal content relating to manufacturer responsibility
1) To develop, produce, and sell durable and repeatedly-usable products that after use can be recycled lawfully
and harmlessly, and disposed of with low environmental impact
2) To make preferential use of recycled materials and recovered resources
3) When products contain harmful substances, to give clear notification of this on them, in order that theirwaste is recycled or disposed of with low environmental impact
4) Instructions on returning, re-use, and recycling, and guarantee payments rules to be displayed on products5) To accept, recycle and dispose of products and used products

Parties involved in the development, production, processing, and selling of products are to takemanufacturer responsibility and abide by the law. In order to fulfil manufacturer responsibility,
the generation of waste from products should be restricted as much as possible during the
production and usage stages, and must be designed to enable recycling and disposal after use withlow environmental impact

Authority vested in the Federal Government (Section 23, 24)
Introduction of regulations to define manufacturer responsibility for individual
products, after consulting with affected parties and obtaining the consent of theFederal Upper House.

Source:Cyclical Economy and Waste Law.

Although the system established by the Packaging Materials Ordinance summarised above
inevitably ran into a number a problems20 at its inception, as shown in Figure 3-9, the system
gradually settled down and DSD's earnings improved, so that it was able to change from a limited
company into a joint-stock company in 1997. In the meantime business commissions and so on
from DSD have stimulated huge growth in recycling enterprises, and the successful system that
resulted has become the de facto standard for continental Europe.
The success of the system is to a large extent thanks to sorting of waste (to a relatively highlevel) by consumers, made possible by economic incentives. According to Germany's Local
Authorities and Public Organisations Law, general administrative services are to be financed asmuch as possible by commission charges. Collection of household waste is no exception, withresidents paying their local authorities waste disposal fees under the previous system. The startup of DSD meant packaging waste using a different disposal system, so the volume of waste
handled by local authorities on behalf of consumers was reduced, and so were the fees paid. The
success of DSD seems to lie in the skilful use of such economic incentives, technologicalinnovation, and the automatic sorting of waste.
20

Early problems included large losses, probably resulting from businesses using the system without paying their licence fees,and 'pollution export' scandals from waste being passed on to other countries due to plastic recycling technology being
insufficiently developed.

32 Development Bank of Japan Research Report/ No. 18

Figure 3-9. The Volume of Used Packaging Materials Recycled by DSD
6,000

DSD starts operations'000 metric tons

5,000
4,000
3,000
2,000
1,000
0
92
Glass

93
Paper

94

95
Plastic

96
Tin

97
Mixed

98

99 YearAluminium

Licence fees charged by DSD did not change from 1994 until they were lowered with therevision of the Packaging Materials Ordinance in 199821. This was in marked contrast with therise in disposal unit price seen among local authorities over the same period. The various reasonsfor this rise are discussed later.
To re-cap, Germany's waste policy is based on the concept of minimising the generation ofwaste, and recycling unavoidable waste. This is realised through extension of the scope of
manufacturer responsibly, and development of the appropriate processes for individual products.
The policy was first applied in packaging materials, where thoroughgoing introduction of EPR
has resulted in the construction of a fully private-sector system. The success of DSD also appears
to have reinforced the trend towards using the private sector to implement German waste andrecycling policy. However, there have been problems. As waste is increasingly channelled throughprivate-sector systems, local authorities have had to invest large sums in intermediate processing
facilities and final disposal sites, in order to comply with strict environmental regulation in areas
such as protection against emissions22. In principle, local authorities must finance this investment
from volume-based commission fees, but this has been made difficult by lower operating rates as
waste is increasingly channelled through the private sector. This is just one of the outstanding
problems in Germany. Nevertheless, there is no change in the trend towards expanding the rangeof products that must be recycled, based on the framework of the Cyclical Economy and Waste
Law.
21

The main points of the August 1998 Packaging Materials Ordinance Revision included tightening of policy on businesses
fulfilling their legal obligations themselves (Selbstentsorger), without recourse to the services of DSD, by compelling them toprove that appropriate disposal is carried out, and the introduction of competitive principles, in order to resolve problems that
had arisen since the system was first introduced in 1991. Furthermore, it has been decided to charge a deposit of 0.25 euros(0.5 euros for containers of 1.5 litres or more) on glass and plastic (PET) bottles and other drink containers that are notrecycled and are considered to have a high impact on the environment (ökologische nachhaltige Getränkeverpackung), so afurther revision to reflect this is expected sooner or later.
22
According to the technological guidelines on household waste (TASI) which are still in their preparatory stage before
implementation in 2005, improvements in intermediate and final disposal of household waste are compulsory, which willfurther increase the financial burden on local authorities.
Development Bank of Japan Research Report/ No. 18 33

2.3 Trends in German WEEE Recycling Policy
Waste electric and electronic equipment (WEEE) has of course come within the scope ofGerman recycling policy. The regulatory definition of WEEE is as broad in German regulations
as it is in EU regulations. The outline presented in Figure 3-10 shows that German WEEE
reached an annual volume of around 1.8 million metric tons as of 1998, equivalent to just over
20% of the EU total. As equipment demand expands the volume of waste is projected to rise atan annual rate of approximately 5-10% over the next ten years (see Figure 3-11).
Figure 3-10. Outline of German Electric and Electronic Equipment Recycling Volume(1998)
Category
Householdequipment,(large equipment),(small equipment)

Waste volume('000 metric
tons)
630
(570)
(60)

Breakdown

Equipment examples

Comments

35.0%(31.7%)(3.3%)

Refrigerators,
washing machines,
vacuum cleaners,
toasters• Most to be collected by local authorities' systems• Weighting of plastic (weight basis - same henceforth) relatively low in large
equipment, making recycling easier. 3.4 million metric tons of metal
recovered annually• Only around half of the total waste volume (130,000 metric tons) of small
equipment is collected, so much is disposed of as household waste• Weighting of plastic high in small equipment (at least 50% on average), andthe large number of equipment types, makes manual dismantling
uneconomic, so usually only components containing harmful substances are
removed. After dismantling in a semi-automatic process, components madefrom metal such as cables and motors are recovered• Video equipment such as televisions and personal computer monitors
account for around 80% (320,000 metric tons) of the total• The bulk and weight of television-type equipment give it an extremely highweighting in the recycling system• As noted above under small consumer equipment, a large part of small
entertainment equipment such as radios and video recorders is disposed ofas household waste. Much of the recycling work consists of manual
dismantling, the cost of which is made high by the wide range ofequipment types. It is therefore difficult to cover costs through selling therecovered resources. This is influencing the rise in plastic-usage volume insuch equipment• The category showing the fastest rate of expansion, expected to at least
triple the current level in the medium term
• 30,000 metric tons from consumers, 80,000 tons from businesses• Higher weighting of metal than entertainment equipment, so recycling
economical. Demand for used components also rising.
Recycling of PCB substrates containing precious metal and harmful
substances a key factor• Copiers have highest weighting (31,000 tons), with disposal of seleniumcontaining drums an important point• Often handled by specialist re-use businesses, so high recovery rate andmuch recycling of used components• Like IT equipment, showing marked expansion• Like IT equipment, usage life is relatively short, so possible to incorporate
ease-of-disassembly and other advantages in the design and production
process• Supply from businesses easily sufficient, but insufficient from consumers.
In particular, harmful substances contained in batteries pose a major
problem if cellular telephones are disposed of mixed with household waste• More economical recycling compared to consumer equipment possible
because 1) collection can be organised efficiently, 2) high metal weighting• Easy to recycle because less harmful substances than contained inconsumer equipment• Specialist knowledge required, especially for X-ray equipment andradiotherapy equipment (10,000 tons)• Economical to recycle because of average metal weighting of 70%• High sufficiency rate in large and medium equipment, but lack of reliable
and comprehensive collection system for small equipment• From consumers: 1,100,000 tons, from businesses: 700,000 tons

Entertainment
equipment

400

22.2%

Televisions,monitors, video
recorders, radios

IT equipment

110

6.1%

Computers,
peripherals

Office equipment

110

6.1%

Copiers, printers,
game platforms

Communications
equipment

140

7.8%

Telephones, faxes

Industrial
equipment

360

20.0%

Motors, welding
equipment

Medical equipment

50

2.8%

X-ray equipment,
dental equipment,
measuringequipment

1,800

100.0%

Total

Source:Prepared from Elektronikschrottrecycling Fakten, Zahlen und Verfahren, bvse.

34 Development Bank of Japan Research Report/ No. 18

Figure 3-11. WEEE in the EU and Germany
10

Million metric tons

9
8

8.3

8.6

7.2

7.4

7.7

8.0

1.5

1.6

1.7

1.8

1.9

2.0

95

96

97

98

99

00

7
6
5
4
3
2
1
0

ＥＵ
Source:Year

Germany

Elektronikschrottrecycling, bvse.

Figure 3-12. Breakdown of Materials in WEEE
Others14%

Ferrous metal
36%

Glass
10%

Plastic
19%

Other metal
14%
Source:Non-ferrous metal
7%

Prepared from Elektronikschrottrecycling Fakten, Zahlen und Verfahren, bvse.

Development Bank of Japan Research Report/ No. 18 35

As shown in Figure 3-12, WEEE is composed of a variety of resources. The desirability ofpromoting efficient re-use of these was a major incentive for new regulation, together with others
including:1) The need to stop WEEE being transported to incineration and final disposal facilities
mixed in with household waste, because of the harmful substances contained in themsuch as lead, cadmium, and bromine-type flame retardant2) The need to reduce the weighting of WEEE being exported, despite the Cyclical
Economy and Waste Law's banning of the export of substances harmful to theenvironment
A further objective is to avoid pushing up the total costs of recycling such as fee
procurement costs, which is anticipated if widening the scope of targeted equipment results indetailed regulations for each category that divide the market into smaller and smaller segments.
Figure 3-13 shows the disposal process for equipment currently covered by the recycling system.
The aim of new regulation is to increase dramatically the ratio of equipment entering the'appropriate disposal' system displayed here.
However, the introduction of new regulation has not made smooth progress. The debate on
new regulation started in 1991 with the draft legislation produced by the Federal Environment
Ministry concerning restricting and reducing the generation of WEEE, and its recycling.
According to the draft, manufacturers and sellers were to collect WEEE free of charge andrecycle it, only disposing as waste the un-recyclable or partially un-recyclable parts. The law wasoriginally scheduled to be promulgated in January 1994, but disputes over matters such as thescope of responsibility, and the role and costs to be borne by each party, caused postponement.
To try to resolve the situation, the government submitted draft legislation just covering IT
equipment23 in May 1998. This passed the Federal Lower House, but the revisions shown in
Figure 3-14 were proposed by the Upper House in June 1996, and the debate on these hascontinued since. The revisions would constitute a return to the wide range of WEEE targeted
since 1991. In the meantime, the external situation has changed with, for example, the EU's
WEEE Directive Proposal discussed above, and it remains to be seen how German WEEE
regulations finally turn out.
Figure 3-15 is a comparison of German draft legislation seen so far, and the EU's WEEE
Directive Proposal. Many areas of German proposals are likely to be changed to match thedirective proposal, such as inclusion of extra types of equipment, and collection and recycling
rates, but the most significant feature of the plan is that local authorities will carry out collection.
This presumably results from the judgement that a national collection system is needed, becauseof the wide range of equipment, with a variety of disposal methods, being targeted. It should be
noted the responsibility of local authorities is limited to providing a close interface with thediscarders, such as collection sites24. For example, when sorting and intermediate processing are
required, manufacturers must bear the cost. Nevertheless, of significance is the need to change
the system design according to the characteristics of the items for recycling, that is implied by thisdivergence25 from the fully private-sector system introduced by the Packaging Materials
Ordinance, against which all German recycling policies should be compared.
23

Full title: 'Ordinance for Appropriate Disposal of Information, Office, and Communications Technology Equipment'(Verordnung uber die Entsorgung von Geraten der Informations-, Buro-, und Kommunikationstechnik), commonly known as
the 'IT Equipment Ordinance'.
24
It is also noteworthy that in accordance with local government public tax regulations, commissions are charged on waste
processing carried out by local authorities.
25
The phrase 'shared responsibility' (geteilte Verantwortung) is used in the case of WEEE. In this case, in principle local
authorities and collection operators commissioned by them are responsible for collection, while manufacturers are responsible
for all stages beyond collection. This division of responsibility differs from the Japanese home appliance recycling scheme.
36 Development Bank of Japan Research Report/ No. 18

Figure 3-13. The Course of Development of WEEE Processing in Germany, andPoints of Contention
Removal of harmful
substances(Schadstoffentfrachtung)Prior dismantling(by hand)(Vordemontage)

Examples of components to Harmful
be removed
substance
Condensers
PCB
Technological Guidelines on Specially Administered Waste
Batteries
Heavy metal Waste Battery Ordinance
Mercury-containing switches Mercury
and relays
Liquid crystal displays
Technological Guidelines on Specially Administered Waste
Old hairdryers, toasters, etc. Asbestos
Cathode ray tubes
Heavy metal
CFCs used in refrigerators
CFCs
Fluorescent lighting
Mercury
Separation of:
Recyclable components
Components made of one element that do not require a divided-stage
process to remove
Items remaining after dismantling by an automatic divided-stage process
However, processing of medical and other kinds of equipment to be carried out by specialist operators(Main points of contention)
Recycling andprocessing(Recycling, Trennen)• Recovery of ferrous and non-ferrous metal⇒ Traditional recycling area. Recycling rate of 95% or higher of collection volume achieved in
WEEE• Recovery of metal from cables⇒ Processing to remove ferrous metal, aluminium, and other metal from electricity-transmission andother cables; the process is economic with no major problems• Recycling of fluorescent lighting⇒ Annual waste volume of 26,000 tons; processing to recycle the small quantities of mercury
contained. Air is injected to remove the fluorescent materials and mercury, which are then filteredout. Metals and glass are fragmented and recovered in the usual way• Recycling of plastic⇒ An extremely large number of different types of plastic are used in equipment currently being
recycled. These are generally categorised into 1) combustible, 2) non-combustible (containing
flame retardant), and 3) hardened plastic, but in each category sorting by type is necessary formaterial recycling. Methods include grinding up and grading, but many problems exist, including
the fact that the process is uneconomic except for some extremely valuable types• Separation of glass⇒ Together with plastic, glass commands the highest weighting in WEEE. The main process isseparation of the glass contained in many components into types. Future challenges include
development of the technology for economic recycling of masks removed from panel guards, andstandardisation to promote material recycling of glass• Processing of mixed metal/plastic units⇒ Technology needs to be developed for low-cost processing of components made of multiple
materials, and containing few valuable materials• Processing of printed circuit boards⇒ This area has seen a marked increase (1998: 100,000 tons) as the volume of waste personal
computers has grown. Although the boards contain precious metal such as platinum and gold,
they also contain harmful substances such as bromine-type flame retardant, so combining
recovery with guarding against harm is extremely expensive. Therefore the following processing
pattern is being used, while new technology is being developed:- Precious metal recovered by refining if present
Removal of parts containing
harmful substances and re- Separation of metal and plastic in dry process after
usable parts
shredding if little precious metal present• Processing of condensers ⇒ Classified as Specially Administered Waste, so processed in special
waste incineration facilities or by underground disposal• Processing of batteries ⇒ Cost reduced sharply by introduction of automatic sorting facilities.
Low collection rate a problem, but 1998 Waste Battery Ordinance expected to bring improvement• Processing of CFCs used in refrigerators

Source:etc.

Prepared from Elektronikschrottrecycling, bvse.

Development Bank of Japan Research Report/ No. 18 37

Figure 3-14. Revisions Proposed by the Federal Upper House• Scope of application
Regulations to be broadened to cover amusement equipment and home appliances. Accordingly most of the 1.5
million tons of WEEE would be covered, not just the 10% represented by IT equipment• Collection obligations
Manufacturers compelled to collect not just their own brand goods, but other brands in the same category, andequipment existing in the market before the regulations take effect. Obligation limited to volume sold per
calendar year
• Local government responsibilities
Local authorities are still to carry out collection of WEEE discarded by consumers, but not for processing
themselves, rather in order that the manufacturers and the recycling system can receive the goods. However,discussion continues on who is to bear the associated new costs of containers, sites, etc.
Source:Federal Environment Ministry's web site.

Figure 3-15. Comparison of the EU's WEEE Directive Proposal and German Draft
Legislation
WEEE directive proposal (EU)German draft WEEE legislation

Targeted waste(annual waste volume)

Electrical and electronic equipment(8 million tons per year)

Electrical and electronic equipment(2 million tons per year)

Objective

Restriction of waste, re-use, recycling (targets set)

Restriction of waste, re-use, recycling(no targets set)

Product requirements• Banning of use of substances (by 2008)• Reduction of use of plastics• Code number regulations for components andmaterials• Capable of being repaired, adapted, re-used,dismantled, and recycled• Recycled plastic usage rate of 5% (by 2004)

None

Seller requirements

None

Cost allocation

Limitations• Member states to decide who bears cost ofcollection• Manufacturers to bear cost of recycling new
products• Five-year interim measures for products sold in
the past
Five-year interim measures• Compelled to accept same kinds of equipment as
those sold• Local authorities to bear cost of collection• Manufacturers to bear cost of sorting andintermediate processing, etc. conducted by local
authorities• Manufacturers to bear cost of recycling andprocessing

Collection• Member states to decide themselves• Local authorities compelled to collect• Manufacturers may also set up their own
collection systems

Collection rate

• Target: Average 4kg per person annually• Minimum level: To be decided from 2006

None

Recycling rate(volume base)At least 75%• Large home appliances:
At least 50%• Small home appliances:
At least 80%• Gas discharge lighting:• Equipment using cathode ray tubes:
At least 70%

None

etc.
Source:Prepared from Elektro- und Elektronikschrottrecycling, bvse.

38 Development Bank of Japan Research Report/ No. 18

Manufacturers only have to handle the same unit
volume as their sales that fiscal year

2.4 The Current State of the German WEEE Recycling Industry
Delays in the introduction of new legislation have had a major impact on waste processing
businesses. Environment-related businesses are generally very sensitive to regulatory trends, since
their markets are created by new and revised regulations, and the WEEE recycling sector is no
exception. In the past dominated by medium and small operators, the signs that new regulations
were on the way in the early 1990s prompted a succession of new entrants, especially fromenergy divisions of large corporations, resulting in a process of oligopolisation.26
Many existing operators, let alone the new entrants, have been looking to increase theircapacity, seeing a good business opportunity in a processing volume of over one million tons
annually, stable processing fees, the proceeds from selling components, recovered materials, andso on. However, delays in the passage of legislation so far have kept down the volume of waste
equipment entering the system27, leading to increased price competition to secure sufficientvolume, so that now operating base closures and personnel adjustments have become a threat in
the industry.
The course of development of WEEE recycling in Germany provides a useful illustration ofsystem design problems, and above all, of different approaches to collection systems. There arealso implications relevant to Japan to be drawn from the problems of not securing sufficientvolume entering the system once it is operational, due to legislative delays or other reasons.

26

The informative RWI survey (75 replies from 262 companies surveyed) mentioned earlier shows that as of 1996 the top ten
companies controlled 66.3% of sales, 69% of processing volume, and 64.2% of employment, with the top 25 companies
controlling 86.2%, 87%, and 83.4% respectively.
27
Compared to the initial forecast as of 1996 of 1.5 million tons, only around 460,000 tons of waste equipment is apparently
being processed by the private-sector system. According to the RWI survey, around half of the number of items being
processed came through the local government collection system, followed by the retail sector and corporations. Collection
from consumers is very limited, and the survey concludes: 'People and institutions using electrical and electronic equipment
rarely consider disposal and recycling of the equipment after its use has ended'. This illustrates the difficulty of trying to set up
the recycling of electrical and electronic equipment, especially small items that are easy to discard.
Development Bank of Japan Research Report/ No. 18 39

IV. Towards the Use of Recycling Infrastructure
1. Towards Revision in Five years
The introduction of a full-scale PCW recycling system for home appliances in Japan faces a
number of challenges at its inception. It will be some time after the system has started operation
before it can be properly appraised, since there are volitional components to the special divisionof responsibility system regarding the handling of the specified home appliances, and because there-commercialisation rates exclude reverse-payment arrangements with a view to efficient use ofresources, and so on. The government also intends to review the situation after the scheme has
been in operation for five years, and then carry out such measures as may be necessary. This
chapter will examine areas where revisions may become necessary, in the light of controversial
points summarised so far, overseas trends, and so on. This could be done from a number ofapproaches, but we intend to tackle the subject with respect to how profitability and stable
operation of recycling facilities can be achieved.
2. The Challenges of Maintaining and Raising Operating Rates
2.1 Problems in Defining Waste Goods
In order to maintain appropriate plant operating rates and secure their long-term profitability, as
many as possible of the four types of home appliance currently being targeted must enter thesystem, and the resource recovery rate from the waste home appliances collected must be raised.
A manifest administration system is built into the scheme to track the appliances once they
have entered it, so presumably the majority of such appliances will actually reach the processing
stage (ignoring the problems of extra efforts needed to control this and to prevent stealing fromdepots and such). The challenge faced is therefore the portion of waste home appliances that do
not enter the scheme, and are instead processed (or discarded) in other ways. Of course, the mostimportant consideration is therefore to ensure that the discarders, i.e. consumers, are fully
informed of the new system. The administrators of the scheme have already started this diffusionand education exercise, but it would be more efficient in this case of where costs are notinternalised (not included in product prices) if the charge to consumers were lower, thus reducing
the temptation not to use the scheme. Reduction of the scheme's charges may be assisted bytechnological innovation that improves the profitability per weight unit of the collected
appliances, as described below, but this looks unlikely for the being, since the declared charges
seem to reflect more what consumers are thought to be willing to pay, than the prime cost ofprocessing.
At present it would therefore probably be more efficient to reduce such costs incurred incarrying out recycling business as can be reduced. Above all, if revision of the system is to beconsidered, reduction of costs arising from the system's design should be examined. The
fundamental costs arising from the Waste Disposal Law's strictures on waste home appliances area prime example of what we mean by costs arising from the system's design.
As described in Chapter 1, by its nature the Home Appliance Recycling Law is secondary
legislation appended to the Waste Disposal Law. In other words used home appliances have been
defined as waste28. Of course, in order to carry out collection, transportation and processing of28

In Japan waste is defined by the Waste Disposal Law, and by notification from the former Ministry of Health and Welfare
pertaining to that law, namely things no longer wanted by the possessor, which cannot be sold for payment to others, in otherwords articles with no usage or exchange value. Accordingly, this raises problems such as needing permission to process usedhome appliances due to their classification as waste. For further economic interpretation of waste, see Yoshino [1996].

40 Development Bank of Japan Research Report/ No. 18

waste, the permission of the municipality's mayor or equivalent is required for household waste,
and the permission of the prefecture's governor or equivalent is required for industrial waste.
One exemption from the Waste Disposal Law enshrined in the Home Appliance Recycling Law
is the waiving of the requirement for parties who have in the past manufactured or imported
specified home appliances themselves to obtain such permission for processing (including
processing contracted to other parties) those appliances (Section 49). However, in order tomaintain facility operating rates, it will be necessary to process home appliances manufactured orimported by other parties, and items outside of the four categories. In this case it will benecessary to obtain new consumer and industrial waste processing licences, both of which arebecoming harder to obtain. Consequently, makers have been forming tie-ups with operators whoalready hold licences in the relevant fields, in order to surmount this problem. Such priorpreparation has been going on in every region, and the costs of maintaining and administeringsuch networks over the long term will probably be significant. Such costs also add to processing
prime cost. Together with the problems of obtaining permission for recycling facilities from town
planning councils, this is an area where improvement is desirable29, and can be regarded asstemming from the legal treatment of used home appliances as waste.
Used home appliances have no usage or exchange value for the discarding consumer, whichenables them to be regarded categorically as waste. However, value is then generated during thecourse of the dismantling and separation processes. It is because the Japanese legal system
regards such goods as waste that the above problems are caused.
Rather than being a shortcoming of the Home Appliance Recycling Law, this is a bigger
problem stemming from the definition of waste. The German Cyclical Economy and Waste Lawchanged the definition of waste to distinguish between waste which can be efficiently re-used andwaste which should be disposed of, with the former targeted for return to the economic system
as a form of secondary raw material. In the same way, Japan should also consider legal
redefinition of waste.
The Ministry of the Environment has already declared its intention to revise thecategorisation of consumer and industrial waste as part of its deregulation activities. Furthermore,
in January 2001 a think-tank calling itself the Waste in the 21st Century Discussion Group
proposed changing the definition of waste to distinguish between 'waste' and 'useful goods(valuable goods + valueless goods)' and thus exclude recyclable goods from the regulatory systemof the Waste Disposal Law. The subject is therefore expected to be discussed in greater detailhenceforth.
Moreover, widening of the range of appliances to be processed is an important step towards
raising operating rates, but this will be discussed below.
A trend towards development of easily-recyclable products has already begun, aimed atraising resources recovery rates. Figure 4-1 summarises examples that have emerged so far. A
number of different approaches are in evidence, including restriction of materials, and theincreased use of one-piece units to make dismantling easier. There has also been related
development in measures against harmful substances, with Japanese corporations leading thefield in avoiding the use of lead in particular. This is a prime example of the merits of EPR, i.e.
extension of the responsibilities of the parties who know the most about the products - their
manufacturers. This trend is expected to accelerate in the future as information feeds back to the
manufacturers from their recycling operations. This also reflects progress in advancing LCA-type
methods.

29

See Hosoda [2000].
Development Bank of Japan Research Report/ No. 18 41

Figure 4-1. Methods of Making Home Appliance Easier to Recycle
All appliances

Televisions

Refrigerators

Washing machines

Air conditioners

Source:• Restriction of plastic grades• Revision of plastic composition• Indication of plastics used
• Switch to halogen-free flame retardant in main units and printed circuit boards• Reduction of number of components through integration of printed circuit boards, etc.
• Use of lead-free cables• Reduction of number of screws used through structural improvement• Shortening of PVC-sheathed cables, elimination of PVC door sashes• Use of lead-free, halogen-free printed circuit boards• Unification of dismantling procedures• Separation of motor made easier through structural improvement• Use of lead-free printed circuit boards• Reduction of hard-to-recycle components and materials• Reduction of number of screws used through fewer components, etc.
• Switch to coatings using resinous materials

Various corporate environmental reports and other reports.

2.2 The Introduction of 'Recycling Rates'
Changes to the current re-commercialisation rates are also expected when the Home Appliance
Recycling Law is revised five years hence. Once again, it should be borne in mind that Japanese
re-commercialisation rates for the four categories of home appliances do not include 'reversepayment' disposal, unlike corresponding rates applied in Europe. If the current recycling rates arerevised upwards, recycling of plastic parts will become mandatory, in addition to raising of therecovery rates of materials already covered such as metal and glass. These challenges should be
partly resolved through technological innovation making recycling easier, but it is unlikely thatmost of the plastic composition of products can be processed whether through paid or unpaid
methods.
According to figures produced by the Association for the Promotion of Plastic Disposal, in1998 waste plastic from both consumer and industrial sources reached 9.84 million tons, ofwhich 33% or 3.28 million tons was buried as landfill. Around 44% is now being recycled, either
via incineration to generate electricity or heat, or through material recycling, and this ratio is
expected to rise in the future.
There are diverse methods of recycling plastic, among which use in blast furnaces looks
extremely promising. Blast furnaces work by feeding iron ore and coke in turn into the top, while
hot air is blown in through the tuyere at the bottom. The coke is converted into CO gas, with theheat generated in this reaction and the CO causing reduction and melting of the ore. The pig ironand slag thus generated are then drawn off from the bottom of the furnace. Plastic can be used inblast furnaces as a reducing agent to replace the coke (up to around 40%). Blast furnace
operators are currently believed to be targeting the use of 200,000-300,000 tons of plastic per
year in this way. The advantages of using waste plastic as a reducing agent in blast furnaces
include:1) Large volumes can be processed
2) Many types and kinds of plastics can be used, including compound plastics
3) Usage efficiency is high4) No dioxin is generated
Of the 106,000 tons of 'other plastic' to be processed according to the Container andPackaging Recycling Law which came into full force in April 2000, 40% is to be used in blast
42 Development Bank of Japan Research Report/ No. 18

furnaces. As this shows, blast furnaces are a very promising recycling method.
As with used home appliances then, there are problems that need to be resolved likebromine-type flame retardant contained in television main units and elsewhere. However, sinceappliances with high plastic composition weightings are likely to be added to the range oftargeted goods, processing of waste plastic in blast furnaces remains a promising option. In fact,
Mitsubishi Electric has already announced its intention to introduce equipment to sort plastic
from used home appliances and enable its use as a reducing agent in blast furnaces.
However, the re-commercialisation rate presents a problem. At present only goods which
can be passed on in return for payment or for free are regarded as being recycled. However,when commissioning blast furnace operators to process waste plastic, payments will have to bemade to the blast furnace operators for their processing costs, which will constitute nonpermitted 'reverse payments'. Reverse payments are probably not permitted because of thecontrast with marketable goods enshrined in the current legal definition of waste. Whatever thereason, under the current framework blast furnace processing will only be considered as recommercialisation if the waste plastic can be sold to the blast furnace operators as a coke
substitute. This reverse-payment problem looks difficult to resolve in the near term, since thevolume of plastic collected is unstable, there are quality complications making necessary capital
investment on prior sorting processes and so on to remove impurities. In the long term, ofcourse, it is quite feasible that blast furnace operators will be able to receive a stable supply of an
appropriate volume of thoroughly sorted waste plastic, as recycling systems for containers andpackaging and so on get into their stride. But the present situation means that although blast
furnace processing is an appropriate recycling method for plastic, it will do nothing to boost there-commercialisation rates of used home appliances.
A recycling rate that permits both re-commercialisation and recycling rates including reversepayment arrangements is therefore desirable. This would allow processing methods such as blast
furnaces that are appropriate despite involving reverse payments, to live up to the ambitious
intentions of the Home Appliance Recycling Law, and make possible recycling rates comparable
to those in Europe.
3. Problems in Expanding the Scope of Targeted Appliances
Extra targeted appliances will need to be added to the four categories in order to achieve stable
operation of recycling facilities. There are many possible candidates just within home appliances,such as video recorders and microwave ovens. However, these are easily portable and therefore
quite different to the existing four categories, collection of which will generally be carried out by
retailers. This raises doubts as to whether such new categories will accord with the spirit of'Specified Home Appliances' enshrined in the law. Being easily portable, unlawful discarding will
also be simple to carry out. Many of these goods also have a high composition weighting of hardto-recycle plastic, and re-commercialisation rates will be a thorny issue. Targeting of new
appliances and additional efficient collection systems will be two tasks to be considered whenrevising the Home Appliance Recycling Law.
IT equipment such as personal computers and cellular telephones will present considerable
problems as additional recycling targets. Such problems will probably be as big as or even bigger
than those posed by the existing four categories of home appliances, since IT equipment isdiffusing rapidly and becomes obsolete very fast.
Figure 4-2 shows domestic personal computer shipment volume. The launch of Windows 95
caused a big surge in diffusion, which combined with the short life of the products means a large
volume of waste personal computers is expected in the future. The Electronic Information
Technology Industry Association estimates that 45,000 tons of waste personal computers wereDevelopment Bank of Japan Research Report/ No. 18 43

generated in fiscal 1998, of which 37,000 tons came from businesses and 8,000 tons fromconsumers. The association expects volume to expand up to 2001, and then to fluctuate aroundthe 80,000 tons level over the long term, due to decline in per unit weight.
Figure 4-2. Domestic Personal Computer Shipment Volume (Main Unit)

10,0009,000
8,000'000 metric tons

7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Year
Source:Japan Association for the Promotion of Electronic Industries.

The same is true for cellular telephones and PHS terminals. Aggregate subscriber contracts
for the two types of equipment have already passed 50 million, so a large volume of waste
handsets is being generated.
A processing scheme for these kinds of IT equipment is already being set up under the Law
for the Promotion of Efficient Utilisation of Resources, which has a wider scope than the Home
Appliance Recycling Law. This law was enacted in July 2000 through revision of the Law for the
Promotion of Utilisation of Recycled Resources (the former Recycling Law). It is scheduled forenactment in April 2001 and obliges businesses to carry out the so-called 3R's for specified
products: restriction of waste generation, re-use of components and so on, and recovery andrecycling of used products. Since the time of the previous law, personal computers had been
under consideration as targets for recycling, and in June 2000 the Waste and Recycling Section of
the Industrial Structure Council in principle decided to target them in the new law. As a result,the Ministerial ordinance draft promulgated in January 2001 sets the following used-productminimum recovery and recycling limits that must be achieved by personal computer
manufacturers by fiscal 2003: desktop models 50% (excluding displays), notebook models 20%,
cathode ray tube displays 55%, liquid crystal displays 55%.
The Ministerial ordinance draft also proposes the targeting of nickel-cadmium and otherkinds of rechargeable batteries30. This measure follows the lead taken by the German Waste
Battery Ordinance, and is designed to establish a scheme for appropriate recovery, recycling, and30

The majority of rechargeable batteries are sold already installed in appliances.

44 Development Bank of Japan Research Report/ No. 18

disposal in consideration of the harmful substances and so on contained in rechargeable batteries.
Such regulation will also have a major impact on the recycling of used cellular and PHS
telephones. When batteries currently in use are replaced, the old batteries will be collected31, andcontrol of used equipment using rechargeable batteries will be tightened, thus reducing thevolume that is included with normal household waste, and making it easier to collect usedbatteries in large quantities. Thirteen battery makers have already established the Japan Battery
Recycling Association targeting the collection and recycling of small rechargeable batteries, andthey are encouraging the makers of equipment containing rechargeable batteries to take part,
among other developments.
Some makers have been preparing the infrastructure for personal computer recycling in
anticipation of such anticipated regulation. An outline of these developments is shown in Figure
4-3. The channels and infrastructure for paid collection and recycling of used computers from
corporate sources, which have a higher weighting than consumer sources, were preparedoriginally, so makers are now concentrating on the same kind of infrastructure for collectingfrom consumer sources, which will also become compulsory in 2002. There is also now a new
trend towards product development based on LCA analysis, and the design and launching ofeasily recyclable products.
Figure 4-3. Personal Computer Recycling Trends
Infrastructure
NEC

Recycling bases: 5; Collection bases: 14(scheduled to increase in 2001)
Component re-use entrusted tosubsidiaries
Recycling bases: 5
Collection bases: 13

Fujitsu
IBM Japan
Hitachi

Note:
Source:Recycling bases: 3
Collection bases: 12 (gradualconversion of parts centres)
Collection bases: 3 new facilities→ two company total of 15 to be used
jointly

Collection system
NEC Logistics andcollaborating logistics
operators
Fujitsu Logistics andcollaborating logistics
operators
Logistics subsidiaries andcollaborating logistics
operators
Hitachi Logistics andcollaborating logistics
operators

Adaptation to consumer
sourcesUse of household
delivery services underconsideration
Development of existingcollection system
Use of household
delivery services underconsideration; Joint
development of Internet
based collection system

Some recycling and collection bases are joint facilities.
Company web sites and various reports.

The different schemes for home appliances and personal computers stem from personal
computers having a different sales pattern, and their rapid product turnover meaning that they
can be re-used in many cases. Corporations are the main users of personal computers, and lease
contracts are the norm, providing stable collection conditions. Consequently, it is reasonable tojudge that the system of shared responsibility between producers, sellers, and consumers that has
been prepared for the four categories of home appliances should not be applied to personal
computers. However, this method of selecting certain types of equipment as suitable forrecycling, and then setting up the infrastructure, means that some types of equipment will be
excluded. Furthermore, setting up of different infrastructure for each type of equipment raises
doubts as to whether appropriate plant operating rates can be achieved. The process to be
31

For example, NTT DoCoMo has been collecting used batteries since 1993, and used terminals and other equipment since1998, achieving collection of 5.05 million units in 1998, and 5.90 million in 1999.
Development Bank of Japan Research Report/ No. 18 45

applied to personal computers, for example, of dismantling and sorting → fragmentation andsorting → resource recovery → disposal, is similar to that for televisions and other home
appliances. Moreover, the current diffusion of 'IT home appliances' means that home appliances
are rapidly becoming more similar to personal computers in their functionality. In thesecircumstances, is it sensible to set up different systems at the infrastructure level of processing
plants and so on, let alone at the collection stage? As mentioned previously, the European
WEEE category is likely to become the de jure standard, and this category encompasses both
home appliances and IT-related equipment.
A policy of sub-dividing targeted equipment and setting up different schemes would invite
problems such as exclusion of some kinds of equipment, and insufficient operating rates in
categories where sufficient waste volume cannot be secured. As a result, it also risks raising total
costs (including social costs). When the Home Appliance Recycling Law is revised, integration
with IT-related equipment recycling schemes should be considered.
It is hoped that the planned revisions to the Home Appliance Recycling Law will resolve theproblems outlined above, so that the scheme's infrastructure can develop to handle all common
forms of PCW.
Keisuke Takegahara [e-mail:ketakeg@dbj.go.jp]

46 Development Bank of Japan Research Report/ No. 18

References
Atsuhiko Sano, Kayoko Nanata. 2000. Kakudai suru Kigyo no Kankyo Sekinin (Increasing private-sector
responsibility for the environment).
Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit 2000. Umweltpolitik
Umweltgutachten 2000 des Rates von Sachversändigen für Umweltfragen. BUM.
bvse 1999. Elektronikschrott Recycling Fakten, Zahlen und Verfahren. bvse.
bvse 2000. Geschäftsbericht 1999/2000. bvse.
Ecobusiness Network 2000. E de Mitewakaru Recycle Jiten (Pictorial Recycling Dictionary). Japan Plant
Maintenance Association.
Eiji Hosoda. 2000. Yokuwakaru Kaden Reycle-Ho (Understanding the Home Appliance Recycling Law).
Nikkei Ecology, May 2000, etc.
Iwao Omae. 2000. Plastic Recycle wo Dosuruka (What To Do About Plastic Recycling?) Chemical
Industry Daily.
Jacqueline M. Bloemhot-Ruwaard, Moritz Fleischmann, Jo A.E.E. van Nunen 2000. Previewing
Distribution Issues in Reverse Logistics, New Trends in Distribution Logistics. Springer.
Japan Association for the Promotion of Electronic Industries [all issues]. Shiyozumi Computer no
Kaishu/Shori/Recycle no Jyokyo ni Kansuru Chosa Hokokusho (Survey of Used Computer Collection,
Disposal, and Recycling).
Katsuya Nagata (Editor) 1996. Seihin Assessment to Recycle Sekkei Jirei (Product Assessment andRecycling Design Examples). Clean Japan Center.
Kazuhiro Ueda. 1992. Haikibutsu to Recycle no Keizaigaku (The Economics of Waste and Recycling).
Yuhikaku.
Kunihiko Takeda. 2000. Recycle Osen Retto (Recycling the Polluted Peninsular). Seishun Publishing.
Makoto Ando. 2000. Ho-kisei ga umu Business Chance (Business Opportunities from Legislation).
Environmental Equipment, December 2000.
Marianne von Halstrick-Schwenk 2000. Umfang und Struktur der Entsorgungswirtschaft im Bereich
Elektroaltgreäte/Elektronikschrott in Deutschland. RWI-Papiere, Nr.65.
Ministry of International Trade and Industry, Machinery Industry Office, Electrical Machinery
Section 1999. Kaden Recycle-Ho no Kaisetsu (Explanation of the Home Appliance Recycling Law).
International Trade and Industry Research Society Publishing Section.
O Sokupiru. 1999. Kankyo Seisaku no Keizai Bunseki (Economic Analysis of Environmental Policy). Japan
Economic Appraisal.
Shusaku Yamatani (Editor) 2000. Haikibutsu to Recycle no Kokyo Seisaku (Public Policy on Waste andRecycling). Chuo Keizai.
Toshiyuki Yoshino. 1996. Shigen Kankyo-gata Shakai no Keizairiron (Economic Theory of a Resource
Cycling Society). Tokai University Press.
Tsuneo Matsumura. 2001. “Shiyozumi Kadenhin no Recycle System (The Used Home Appliance Recycling
System)”. Keisoku to Seigyo (Measurement and Control), Volume 40, 2.
Yasushi Umeda (Editor) 1998. Inverse Manufacturing. Industrial Research Association.
Other related reports, web sites, materials, etc.

Development Bank of Japan Research Report/ No. 18 47

List of Back Numbers (Including JDB Research Report)
No. 18 Introduction of a Home Appliance Recycling System: Effects & Prospects: Progress towards Utilisation of
Recycling Infrastructure (This issue)
No. 17 Survey on Planned Capital Spending for Fiscal Years 2000 and 2001, June 2001
No. 16 Revitalization of Middle-aged and Elderly Workers in Japan’s Labor Markets: Requiring the Expansion of
the Vocational Training Functions, March 2001
No. 15 Risk-Averting Portfolio Trends of Japanese Households, March 2001
No. 14 Consumption Demand Trends and the Structure of Supply: Focus on Retail Industry Supply Behavior,
March 2001
No. 13 Recent Trends in the Japanese Economy: Weakness of Current Economic Recovery and Its Background,
March 2001
No.12

Emipirical Reassessment of Japanese Corporate Investment Behavior: Features and Changes since the1980s, based on Micro-level Panel Data (This issue)

No.11

Survey on Planned Capital Spending for Fiscal Year 1999, 2000 and 2001, October 2000

No.10

Job Creation and Job Destruction in Japan, 1978-1998: An Empirical Analysis Based on Enterprise Data,
September 2000

No.9

Recent Trends in the Japanese Economy: Information Technology and the Economy, September 2000

No.8

Trend of International Reorganization Affecting the Japanese Automobile and Auto Parts Industries, June
2000

No.7

Survey on Planned Capital Spending for Fiscal Years 1999 and 2000, May 2000

No.6

Current Status and Future Perspective of the Japanese Remediation Industry: Technology and Market for
Underground Remediation, May 2000

No.5

Recent Trends in the Japanese Economy: The 1990s in Retrospect, March 2000

No.4

Destabilized Consumption and the Post-bubble Consumer Environment, February 2000

No.3

The Slump in Plant and Equipment Investment in the 1990s: Focusing on Lowered Expectations, the Debt
Burden and Other Structural Factors, January 2000

No.2

Survey on Planned Capital Spending for Fiscal Years 1998, 1999 and 2000, November 1999

No.1

Corporate Strategies in Japan’s Semiconductor Industry: Implications of Development in Other AsianCountries, November 1999

JDB Research Report
No.96

Recent Trends in the Japanese Economy: Focused on Fixed Investment and Capital Stock, August 1999

No.95

Efforts to Protect the Natural Environment in the United States and Germany: Environmental Mitigation
and Biotope Conservation, July 1999

No.94

Survey on Planned Capital Spending for Fiscal Years 1998 and 1999, June 1999

No.93

Towards the realization of ‘environmental partnership’: A survey of Japan’s environmental NPO sector
through comparison with Germany, June 1999

No.92

The Impact of Demographic Changes on Consumption and Savings, March 1999

No.91

Recent Research and Development Trends in Japanese Enterprises: Technology Fusion, March 1999

No.90

Recent Trends in the Japanese Economy: Prolonged Balance Sheet Adjustment, January 1999

No.89Impact of Asset Price Fluctuations on Household and Corporate Behavior: A Comparison between Japanand the U.S., December 1998

No.88

Survey on Planned Capital Spending for Fiscal Years 1997, 1998, and 1999, December 1998

No.87

Foreign Exchange Rate Fluctuations and Changes in the Input-Output Structure, November 1998

No.86

Structural Changes in Unemployment of Japan: An Approach from Labor Flow, November 1998

No.85

Recent Trends in the Japanese Economy: Characteristics of the Current Recession, August 1998

No.84

R&D Stock and Trade Structure in Japan, August 1998

No.83

Survey on Planned Capital Spending for Fiscal Years 1997 and 1998, August 1998

No.82

The Significance, Potential, and Problems of DNA Analysis Research: Establishing Public Acceptance isEssential, May 1998

No.81

The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996, 1997 and 1998
Conducted in August 1997, March 1998

No.80

Recent Trends in the Japanese Economy: Growth Base of the Japanese Economy, January 1998

No.79

Information Appliances: The Strength of Japanese Companies and Tasks for the Future, January 1998

No.78

Challenges and Outlook for the Japanese Machinery Industries: Impact of ISO14000 Series andEnvironmental Cost, January 1998

No.77

Current Conditions and Issues of Computerization in the Health Care Industry : For the Construction of a
Health Care Information Network, January 1998

No.76

Household Consumption and Saving in Japan, December 1997

No.75

The Direction of Japanese Distribution System Reforms: Strengthening the Infrastructure to Support
Diverse Consumer Choices, November 1997

No.74

Foreign Direct Investments by Japanese Manufacturing Industries and Their Effects on International
Trade, October 1997

No.73

The Impact of the Changing Trade Structure on the Japanese Economy: With Special Focus on the Effects
on Productivity and Employment, October 1997

No.72

An Analysis of Foreign Direct Investment and Foreign Affiliates in Japan, August 1997

No.71

Recent Trends in the Japanese Economy: Stock Replacement and New Demand as Aspects of Economic
Recovery, August 1997

No. 70 Corporate Fundraising : An International Comparison, June 1997
No. 69 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in February 1997, May 1997
No. 68 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in August 1996, August 1997
No. 67 An International Comparison of Corporate Investment Behavior: Empirical Analysis Using Firm Datefrom Japan, France and the US, April 1997
No. 66 Housing in the National Capital: Analysis of the Market for Housing using Micro Data, March 1997
No. 65 The Environment for Locating Business Operations in Major East Asian Cities, January 1997
No. 64 Direction of Reconstruction of Business Strategy in the Chemical Industry, January 1997
No. 63 Reflection on Discussions Concerning Regulation of the Electric Power Industry: Deregulation of theElectric Power Industry in Japan and Implication of Experiences in the United States, December 1996
No. 62 Current Status and Future Perspective of the Japanese Semiconductor Industry, November 1996

No. 61 A Breakthrough for the Japanese Software Industry?: Responsiveness to Users’ Needs is the key, October
1996
No. 60 Recent Trends in the Japanese Economy Focusing on the Characteristics and Sustainability of the Current
Economic Recovery, September 1996
No. 59 Analysis of the Primary Causes and Economic Effects of Information: Related investment in the UnitedStates and Trends in Japan, August 1996
No. 58 Selected Summaries of Research Reports: Published in FY 1995, June 1996
No. 57 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1995 and 1996
Conducted in February 1996, May 1996
No. 56 Recent Trends in the Japanese Economy, May 1996
No. 55 Issues Concerning the Competitiveness of the Japanese Steel Industry, February 1996
No. 54 Changes in the Financial Environment and the Real Economy, January 1996
No. 53 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994, 1995 and 1996
Conducted in August 1995, October 1995
No. 52 Current Economic Trends: Focusing on the Appreciation of the Yen and its Effects, October 1995
No. 51 Problems Concerning the International Competitiveness of the Petrochemical Industry, October 1995
No. 50 An Economic Approach to International Competitiveness, October 1995
No. 49 Selected Summaries of Research Reports Published in FY 1994, July 1995
No. 48 Strategies for Improving the Efficiency of the Japanese Physical Distribution System: Part2, July 1995
No. 47 Issues on International Competitive Strength of the Auto Industry, June 1995
No. 46 Problems Concerning the International Competitiveness of the Electronics and Electric Machinery
Industry, June 1995
No. 45 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994 and 1995
Conducted in March 1995, June 1995
No. 44 Strategies for Improving the Efficiency of the Japanese Physical Distribution System, March 1995
No. 43 Capital Spending Recovery Scenario Cycle and Structure, August 1994
No. 42 Progress of International Joint Development between Industrialized Countries on the Private Level, May
1994
No. 41 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993, 1994 and 1995
Conducted in August 1994 , November 1994
No. 40 Selected Summaries of Research Reports Published in FY 1993, June 1994
No. 39 Recent Trends in Japan’s Foreign Accounts, April 1994
No. 38 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993 and 1994
Conducted in March 1994, April 1994
No. 37 Economic Zones and East Asia Prospect for Economic Activity Oriented Market Integration, December
1993
No. 36 Japanese Corporate Responses to Global Environmental Issues, December 1993
No. 35 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992, 1993 and 1994
Conducted in August 1993, September 1993
No. 34 Structure of Profit to Capital in the Manufacturing Industry, September 1993

No. 33 Comparison of the Japanese and The U.S. Labor Markets, October 1992
No. 32 The Relative Competitiveness of U.S., German, and Japanese Manufacturing, March 1993
No. 31 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992 and 1993
Conducted in March 1993, April 1993
No. 30 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991, 1992 and 1993
Conducted in August 1992, December 1992
No. 29 Flow of Funds in the 80s and Future Corporate Finance in Japan, November 1992
No. 28 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991 and 1992
Conducted in February 1992, April 1992
No. 27 An Analysis of Foreign Direct Investment in Japan, March 1992
No. 26 Projection of Japan's Trade Surplus in 1995: Analysis of Japan's Trade Structure in the 80s, February 1992
No. 25 Intra-Industry Trade and Dynamic Development of The World Economy, November 1991
No. 24 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990, 1991 and 1992
Conducted in August 1991, September 1991
No. 23 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990 and 1991
Conducted in February 1991, March 1991
No. 22 Trends of the Petrochemical Industry and its Marketplace in East Asia, March 1991
No. 21 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989, 1990 and 1991
Conducted in August1990,September 1990
No. 20 Deepening Economic Linkages in The Pacific Basin Region: Trade, Foreign Direct Investment andTechnology, September 1990
No. 19 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989 and 1990
Conducted in February 1990, March 1990
No. 18 Petrochemicals In Japan, The US, and Korea an Assessment of Economic Efficiency, February 1990
No. 17 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1988, 1989 and 1990
Conducted in August 1989, October 1989
No. 16 Impact of the EC Unification on Japan’s Automobile and Electronics Industries, August 1989
No. 15 Industrial and Trade Structures and the International Competitiveness of Asia’s Newly Industrializing
Economies, August 1989
No. 14 The Japan Development Bank Reports on Capital Investment Spending: Survey for Fiscal Years 1988 and1989 Conducted in February 1989, March 1989
No. 13 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1987, 1988 and 1989
Conducted in August 1988, September 1988
No. 12 Growing Foreign Investors’ Activities and the Future of Internationalization, September 1988
No. 11 Futures Tasks and Prospects for the Japanese Machine-Tool Industry, July 1988
No. 10 International Division of Labor in the Machine Industries Among Japan, Asia’s NICs and ASEANCountries, June 1988
No. 9

Trends of the Petrochemical Industry and its Marketplace in East Asia around Japan, May 1988

No. 8

The International Competitiveness of Japan and U.S. in High Technology Industries, April 1988

No. 7

The Japan Development Bank Reports on Private Fixed Investment in Japan, March 1988

No. 6

Economic Projections of the Japan’s Economy to the Year 2000, February 1988

No. 5The Japan Development Bank Reports on Private Fixed Investment in Japan, September 1987

No. 4

Current Trends in the Japanese Auto Parts Industry in Overseas Production, July 1987

No. 3

Current Moves for Foreign Direct Investment into Japan, May 1987

No. 2

Overseas Direct Investments by Japanese Corporations, May 1987

No. 1

Current U.S. Consumption Trends, May 1987