Proposal for a Directive of the European Parliament and of the Council amending Directive 2002/96/EC on waste electrical and electronic equipment
Date: 2003-04-29
Institutions: European Commission
Subjects: business administration, economic consequence, electronic waste, financing, polluter pays principle, producer's liability, waste management, waste recycling

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 29.4.2003
COM(2003) 219 final

2003/0084(COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directive 2002/96/EC on waste electrical and electronic equipment

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

1.1.

INTRODUCTION

Overview  of  the  financing  obligations  under  the  Directive  on  waste  electrical
and electronic equipment

The  European  Parliament  and  the  Council  recently  adopted  Directive  2002/96/EC  on  waste
electrical  and  electronic  equipment  (WEEE)1.  This  directive  provides  for  the  collection  and
environmentally sound treatment of WEEE.

The financing of collection2, treatment, re-use, recovery and environmentally sound disposal
of WEEE is to be provided by producers of electrical and electronic equipment. The Directive
distinguishes between household and non-household waste on the one hand and ‘new’ and
‘historical’ waste, on the other hand. ‘New’ waste is waste from products put on the market
after 13 August 2005. ‘Historical’ waste is waste from products put on the market before that
date.

For  the  financing  of  ‘new’  waste,  producers  are  responsible  on  an  individual  basis.  This
applies both to household and non-household sources3.

For  the  financing  of  ‘historical’  waste,  there  is  a  difference  between  household  and  non-
household sources.

– 

– 

For 'historical' household waste, the financing is to be provided by “... all producers,
existing  on 
respective  costs  occur,  contribut[ing]
proportionately, e.g. in proportion to their respective share of the market by type of
equipment.4”

the  market  when 

the 

For 'historical' waste from non-household sources, “the financing of the  costs shall
be  provided  for  by  producers.  Member  States  may,  as  an  alternative,  provide  that
users other than private household also be made, partly or totally, responsible for this
financing. Producers and users other than private households may, without prejudice
to this Directive, conclude agreements stipulating other financing methods.5”

This means that for historical household waste, collective schemes apply where producers of
new products pay for the financing of old products. For historical waste from non-household
sources, in principle an individual system applies where producers of old products pay for the
financing of their products put on the market in the past6.

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2

3

4

5

6

OJ L 37, 13.2.2003, p. 24.
The  financing  obligation  of  producers  for  the  collection  of  equipment  from  private  households  only
applies from the collection point onwards.
Directive  2002/96/EC  on  waste  electrical  and  electronic  equipment,  Art.  8(2)  and  Art.  9,  first
paragraph; OJ L 37, 13.2.2003, p. 24.
Directive  2002/96/EC  on  waste  electrical  and  electronic  equipment,  Art.  8(3);  OJ  L  37,  13.2.2003,
p. 24.
Directive 2002/96/EC on waste electrical and electronic equipment, Art. 9, second paragraph; OJ L 37,
13.2.2003, p. 24.
This only applies for the option described in this paragraph, i.e. if producers pay and users are not made
responsible  and  no  other  financing  agreements  have  been  concluded.  However,  as  the  alternative

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The following sections only concern historical waste from non-household sources.

1.2.

The  effects  of  the  financing  rules  on  historical  waste  from  non-household
sources.

The  take-back  obligation  for  waste  equipment  put  on  the  market  in  the  past  creates  a
retroactive liability for which no provision was made. The burden will vary depending on the
volumes  of  equipment  companies  sold  in  the  past.  It  will  particularly  heavy  for  companies
which sold high volumes and whose sales are going down. New companies will not bear any
obligation.

Concern has been expressed that, depending upon the size of the liability, companies already
in  difficulties  might  be  forced  into  insolvency.  Any  such  liability  will  be  reflected  in  the
accounts of the companies concerned.

2.

THE DEBATE IN THE EUROPEAN PARLIAMENT AND THE COUNCIL

The original Commission proposal7 left the financing of historical waste from non-household
sources  to  “agreements  between  producers  and  users  of  the  equipment  at  the  time  of
purchase.” During the first reading, this provision was changed into a formulation stipulating
that “the financing of the costs of management shall be  provided for  by producers.” At that
time, this was acceptable to all institutions.

Only during the final stages of the adoption of the WEEE Directive was the attention of the
institutions  drawn  to  the  financing  implications  of  Art.  9  of  this  Directive.  As  no  second
reading  amendment  was  made  on  this  article,  it  was  impossible  to  change  the  text  at  that
stage. However, the European Parliament, the Council and the Commission agreed on a Joint
Declaration8:

"Noting that concerns have been raised about the possible financial implications for producers
of  the  present  wording  of  Article  9,  the  European  Parliament,  the  Council  and  the
Commission  declare  their  common  intention  of  examining  these  issues  at  the  earliest
opportunity. Should these concerns prove to be founded the Commission states its intention to
make  a  proposal  to  amend  Article  9  of  the  Directive.  The  Council  and  the  Parliament
undertake  to  act  expeditiously  on  any  such  proposal  in  accordance  with  their  respective
internal procedures."

This proposal follows up this declaration.

3.

TIMING OF THIS PROPOSAL

The  Council,  Parliament  and  Commission  underlined  the  need  to  examine  this  issue  at  the
earliest  opportunity.  This  urgency  is  based  on  the  need  to  adopt  this  revision  before  the
WEEE  Directive  is  transposed  into  Member  States  legislation,  i.e.  before  13  August  2004.

options  are  only  'may'-provisions  and  do  not  change  the  fundamental  obligation  of  producers,  these
alternatives are not considered in the following.
Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  waste  electrical  and
electronic equipment; COM(2000) 347, OJ C 365 E, 19.12.2000, p. 184.
OJ L 37, 13.2.2003, p. 39.

7

8

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Otherwise, all national legislation adopted by then would have to be revised. This urgency is
also one of the reasons why the Commission did not undertake a separate study.

4.

THE PROPOSED REVISION

4.1.

Scope of the revision

This  proposal  is  limited  to  clarifying  the  rules  applying  to  the  financing  of  historical  waste
from non-household sources in Article 9, so as to avoid the concerns raised in relation to the
implications. The proposal does not alter any of the rules applying to household sources nor
the  individual  responsibility  applying  to  the  financing  of  new  waste  from  non-household
sources nor any other aspect of the WEEE Directive.

4.2.

Content of the revision

The  proposal  changes  the  responsibility  to  finance  historical  waste  from  non-household
sources from producers of the waste equipment to producers supplying a new product, where
such a new product exists. For historical waste that is not replaced by new products, the users
other  than  private  households  shall  be  responsible.  This  is  done  by  amending  the  first
sentence  of  the  second  paragraph  of  Article  9  of  the  WEEE  Directive,  as  adopted  by  the
European Parliament and the Council to read as follows.

“Member  States  shall  ensure  that,  by  13  August  2005,  for  WEEE  from  products  put  on  the
market before 13 August 2005 (historical waste), the financing of the costs of management is
as set out in the [following two] subparagraphs.

For historical waste being replaced by equivalent products or by products fulfilling the same
function, the financing of the costs shall be provided for by producers of those new products
when  supplying  them.  Member  States  may,  as  an  alternative,  provide  that  users  other  than
private households also be made, partly or totally, responsible for this financing.

For other historical waste, the financing of the costs shall be provided for by the users other
than private households.”

4.3.

Reasoning for the proposed revision

At  the  time  of  conciliation,  the  main  argument  brought  forward  by  industry  was  that
accounting rules may have the effect of requiring accruals reflecting the financing obligation
to be settled in the future as historical equipment becomes waste. Fears were expressed that
this  might  endanger  the  financial  viability  of  companies  already  in  difficulty.  It  should  be
noted that the recognition of accruals  (or  not)  will not  affect the  actual  cash flows resulting
from the financing obligations. These are fixed by the obligations and not by the subsequent
accounting, which merely reflects the obligations that exist. Accordingly, it is these financing
obligations which are the focus of this proposal.

In order to eliminate a disproportionate burden on some companies with a large market share
in  the  past,  the  responsibility  for  financing  the  take  back  of  historical  equipment  has  been
revised and no longer lies with the producer of the waste equipment.

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In this  proposal,  this  is  done  by  changing  the  responsibility  from  the  producer  of  the  waste
equipment  to  the  producer  of  new  equipment  when  selling  a  new  product  that  replaces
products  of  equivalent  type  or  fulfilling  the  same  function.  This  will  limit  the  financing
implications for producers to the costs for waste equipment taken back when a new product is
sold. Therefore, these costs will only occur if companies sell new products. In addition, there
may also be historical waste for which there is no replacement by new products. In this case,
the users other than private households will be responsible for financing the take back costs.
These  changes  will  also  eliminate  the  problem  of  orphan  waste  from  companies  which  no
longer exist.

This change of responsibility may be perceived as being in contradiction to the polluter pays
principle. It should be noted, however, that at the time when historical waste was put on the
market, there was no legislation implementing the polluter pays principle in the sense of the
rules for new equipment of Directive 2002/96/EC. Therefore, it may be correct that the past
legislative situation was in contradiction to the polluter pays principle. However, it is difficult
to  distinguish  whether  the  producer  or  the  user  is  the  polluter.  It  is  therefore  debatable
whether  attributing  a  liability  to  the  producer  of  original  equipment  is  a  correct
implementation  of  the  polluter  pays  principle.  Whatever  view  is  taken  on  this,  it  will  be
impossible  to  correct  this  situation  without  creating  a  retroactive  liability  with  all
consequences described above. In summary, the proposal is no more against the polluter pays
principle than the past legal situation and the choice is either to accept this historical bias or to
create a retroactive liability with all the consequences described above.

The  proposal  will  not  have  any  impact  on  design  incentives  as  it  only  covers  waste  from
products already sold and in use before the financing obligations of the WEEE Directive take
effect.

4.4.

Subsidiarity

The  proposal  leaves  the  detailed  arrangements  to  Member  States.  This  also  includes  the
possibility  for  Member  States  to  set  more  detailed  rules  on  the  responsibilities  of  users  to
prepare  the  collection  of  equipment.  As  long  as  the  general  principles  of  financing  are
harmonised,  no  major  distortions  of  competition  within  the  Internal  Market  are  expected.
Therefore, the principle of subsidiarity should apply.

5.

ECONOMIC, ENVIRONMENT AND SOCIAL IMPLICATIONS OF THE DIRECTIVE

5.1.

Evaluation of economic costs and benefits and impacts on business

The  proposed  revision  is  expected  to  lower  the  costs  of  implementing  the  WEEE  Directive
slightly by eliminating the disproportionate financial burden that companies with a declining
market share might face as a result of their obligations under the current version of Article 9.

The  overall  cost  of  financing  the  collection,  treatment,  re-use,  recovery  and  recycling  of
historical  waste  from  non-household  sources  is  unlikely  to  change  substantially.  In  the
original Commission proposal9, the costs for these operations were estimated at around 100-
200  million  €  per  year  for  the  EU  15.  Assuming  an  average  lifetime  of  10  to  20  years,

9

Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  waste  electrical  and
electronic equipment; COM(2000) 347, OJ C 365 E, 19.12.2000, p. 184.

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liabilities under Art. 9 of the current version of the WEEE Directive could amount to between
1 and 4 billion €. It should be underlined, though, that this is a rough estimate as there is very
little information on the collection and recycling costs of non-household equipment.

5.2.

Evaluation of environmental benefits

The  environmental  benefits  will  not  change  compared  to  the  current  version  of  the  WEEE
Directive.  This  is  because  the  proposal  will  only  affect  the  way  financing  is  provided  for
historical waste from non-household sources.

5.3.

Social aspects

The proposal might avoid the potential loss of employment which might be the indirect effect
of disproportionately burdensome obligations for companies which had a larger market share
in the past.

5.4.

Evaluation of impacts on Acceding and Candidate Countries

The  Directive  is  expected  to  reduce  economic  and  social  costs  of  Directive  2002/96/EC  in
Acceding  and  Candidate  Countries  in  the  same  way  as  for  the  current  Member  States.  It  is
expected to be neutral for environmental aspects.

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2003/0084(COD)

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Directive 2002/96/EC on waste electrical and electronic equipment

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
175(1) thereof,

Having regard to the proposal from the Commission10,

Having regard to the opinion of the European Economic and Social Committee11,

Having regard to the opinion of the Committee of the Regions12

Acting in accordance with the procedure laid down in Article 251 of the Treaty13,

Whereas:

(1)

(2)

(3)

During  the  adoption  procedure  concerning  Directive  2002/96/EC  of  the  European
Parliament  and  of the Council of 27 January 2003 on waste  electrical  and  electronic
equipment14  concerns  were  raised  about  the  possible  financial  implications  of  the
wording of Article 9 of that Directive for producers of the equipment concerned.

At  the  meeting  of  the  Conciliation  Committee  of  10  October  2002  on  that  Directive
the European Parliament, Council and Commission expressed their intention in a Joint
Declaration  to  examine  the  issues  relating  to  Article  9  of  Directive  2002/96/EC,
concerning  financing  in  respect  of  waste  electrical  and  electronic  equipment  from
users other than private households, at the earliest opportunity.

In accordance with the Joint Declaration the Commission has examined the financial
implications for producers following from the actual wording of Article 9 of Directive
2002/96/EC, and has found that the take-back obligation for waste equipment put on
the market in the past creates a retroactive liability for which no provision was made
and which is likely to expose certain producers to serious economic risks.

10

11

12

13

14

OJ C […], […], p. […].
OJ C […], […], p. […].
OJ C […], […], p. […].
OJ C […], […], p. […].
OJ L 37, 13.2.2003, p. 24.

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(4)

(5)

(6)

In order to prevent such risks the financial responsibility for the collection, treatment,
re-use,  recovery  and  recycling  of  waste  equipment  from  users  other  than  private
households  put  on  the  market  before  13  August  2005  should  be  borne  by  producers
when  supplying  new  products  replacing  products  of  equivalent  type  or  fulfilling  the
same functions. Where such waste is not replaced by new products, the users should
be responsible. Member States, producers and users should have to possibility to make
alternative arrangements.

Directive 2002/96/EC should be amended accordingly.

Following  Article  17  of  Directive  2002/96/EC  Member  States  must  bring  into  force
the  laws,  regulations  and  administrative  provisions  necessary  to  comply  with  that
Directive  by  13 August  2004.  In order  to prevent  the  need  to  amend  Member  States
legislation adopted by that date, this Directive should be adopted as soon as possible
and  implemented  in  Member  States  legislation  at  the  same  time  as  Directive
2002/96/EC.

HAVE ADOPTED THIS DIRECTIVE:

Article 9 of Directive 2002/96/EC is replaced by the following:

Article 1

"Article 9

Financing in respect of WEEE from users other than private households

1.

Member States shall ensure that,  by  13 August 2005, the financing of the costs for
the  collection,  treatment,  recovery  and  environmentally  sound  disposal  of  WEEE
from  users  other  than  private  households  from  products  put  on  the  market  after  13
August 2005 is to be provided for by producers.

Member States shall ensure that, by 13 August  2005,  for WEEE from  products  put
on the market before 13 August 2005 (historical waste), the financing of the costs of
management is as set out in the third and fourth subparagraphs.

For historical waste being  replaced by equivalent products or  by products fulfilling
the same function,  the  financing  of  the  costs  shall  be  provided  for  by  producers  of
those  new  products  when  supplying  them.  Member  States  may,  as  an  alternative,
provide  that  users  other  than  private  households  also  be  made,  partly  or  totally,
responsible for this financing.

For  other  historical  waste,  the  financing  of  the  costs  shall  be  provided  for  by  the
users other than private households.

2.

Producers  and  users  other  than  private  households  may,  without  prejudice  to  this
Directive, conclude agreements stipulating other financing methods.”

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Article 2

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative  provisions
necessary to comply with this Directive by 13 August 2004. They shall forthwith inform the
Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive
or be accompanied by such a reference on the occasion of their official publication. Member
States shall determine how such reference is to be made.

This Directive shall enter into force on the day following that of its publication in the Official
Journal of the European Union.

Article 3

Article 4

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament
The President

For the Council
The President

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