WEEE/E-waste Business Model - International Environmental ...

Ministry of Environment
WEEE/E-WASTE BUSINESS MODEL
Prepared by the Ministry of Environment (MoE)
Supported by UNEP-DTIE
OCTOBER 2009

Table of Contents
Executive Summary............................................................................................................ 2
CHAPTER 1: INTRODUCTION & BACKGROUND...................................................... 6
1.0 Introduction......................................................................................................... 6
1.1 Project on “Waste Electronic and Electric Equipment/ E-waste Management in
Phnom Penh City ............................................................................................................ 6
1.2 Project Objectives ............................................................................................... 7
1.3 Approach and Methodology ............................................................................... 7
1.4 Outcome.............................................................................................................. 8
1.5 Format of Report............................................................................................... 10
CHAPTER 2: BUSINESS MODEL AND STRATEGIC ANALYSIS............................ 11
2.0 Introduction....................................................................................................... 11
2.1 Basis for Development of Business Model....................................................... 11
2.2 Business Model................................................................................................. 12
2.3 SWOT Analysis ................................................................................................ 21
2.4 PPP based E-waste business model in Combodia............................................. 23
CHAPTER 3: RECOMMENDATIONS AND TIME LINE............................................ 25
3.0 Recommendations............................................................................................. 25
3.1 General Recommendations ............................................................................... 25
3.2 Steps involved in Implementation of Business Model ..................................... 25
List of Tables
Table 2.1: Project Risk Profile.......................................................................................... 11
Table 2.2: Established European WEEE Schemes (EU/EEA): Flexibility of Cost Models
........................................................................................................................................... 15
Table 2.3: SWOT Analysis............................................................................................... 22
Table 2.4: Summary Mapping of model versus instruments/incentives........................... 23
List of Figures
Figure 2.1: Financial Model of Netherlands NVMP – A Collective EU Collective
Compliance System .......................................................................................................... 18
Figure 2.2: Financial Flow Model of Japanese E-waste Take back System – A
Consumer/Retailer based system ...................................................................................... 19
Figure 2.3: Financial Flow Model of Swiss E-waste........................................................ 20
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Executive Summary
E-waste inventory ranges from 6792 metric tons in 2008 to 22,443 metric tons in 2019. It
is expected to grow exponentially with a significant correlation during the next decade
both in terms of numbers and weight. In terms of numbers E-waste from mobile phones
is expected to grow at a higher rate followed by TVs, PCs, refrigerator, air conditioners
and washing machine. This will form the basis of planning for product wise intervention.
In terms of weight, E-waste from TV is expected to grow at a higher rate followed by
PCs, refrigerator, air conditioners, washing machine and mobile phones. The E-waste
inventory projections both in numbers and weight show significant growth starting from
the year 2012 onward. It gives policy planners, implementers and other stakeholders
three years to plan and implement future interventions starting from the year 2009.From
the regulatory perspective, definition of electrical and electronic equipment is not
covered under the existing regulations. One of the major gaps, which have been
identified, is the lack of clear definition of E-waste under existing regulations. There is a
need to cover E-waste either under existing regulations or a separate regulation
depending on the time frame and capacity of regulatory agencies to implement it. Since
draft 3R strategy is being formulated in the country, E-waste can also be brought under
its purview so that necessary regulatory interventions can be planned and implemented.
The E-waste trade value chain consisting of stakeholders implementing twelve
processes indicates that future interventions are required at level 1 and level 2
consisting of primary E-waste generators and secondary E-waste generator.
Considering the 1 st and 2 nd level E-waste treatment, plant specifications have been
defined and financial viability has been assessed. The volume of E-waste item to be
collected and transported till 2020 based on E-waste inventory estimates in Phnom Penh
ranges from 4490 m 3 to 32923 m 3 for washing machine, 5140 m 3 to 6925 m 3 for personal
computers, 9m 3 to 46m 3 for mobile phones, 2918 m 3 to 9573 m 3 for refrigerator, 1458 m 3
to 5976 m 3 for Air Conditioners and 1557 m 3 to 2618 m 3 for washing machine. This is
based on 50% availability of E-waste for recycling. Depending upon the type of E-waste,
different types of bins/ cages have been identified and recommended. The collected Ewaste
in container will be lifted manually, through fork lifts, placed into small trucks/
container carriers and transported from the collection facility to E-waste treatment
facility. Depending on the collection efficiency and availability of the input raw material,
the facility can start with one shredder of half the capacity followed by the second. There
is huge variation in the prices of the treatment system starting from US$ 789700 to US$
3.1 million depending on type of technology. The output from the E-waste recycling
system will be sold/ exported to metal recyclers outside Cambodia. E-waste export
market is expected to follow the same trend as that of global market for precious metals.
The analysis of the price graphs indicates that metal market peaks and bottoms out in a
ten year period. E-waste purchase price in PPM has ranged from US$ 1/kg to US$ 4/kg
during the last ten year period. A financial analysis for the 7500 tons per annum E-waste
recycling facility in PPM has been carried out based on capital and operating cost
estimates, local land prices, labor costs, customs duty, equipment costs, electricity costs
and current interest rates. It has been proposed that the capital costs will be in the form
of debt and equity in a ratio of 70:30. The financial viability indicators e.g. IRR shows
viability of the project. NPV is positive and decreases with high cost of capital. But the
financial indicators are not strong enough to attract private investment because IRR
value is much lower than 25% and payback period is 5 years. The project is most
sensitive to land prices followed by interest rates, and customs duty. This analysis also
indicates that if lower quantities of PC are dismantled then financial viability goes down
2

significantly. It shows that for waste white goods treatment and disposal, the
combination of incentives should be higher. Financial viability is also sensitive to price
fluctuations i.e. prices with respect to both input raw material as well as output. A
comparative analysis of financial analysis indicators shows that viability improves with
the improved capacity utilization. Capacity utilization depends upon the availability of the
raw material. In order to make the project more viable an efficient E-waste collection and
transportation system and a set of incentives like lower interest rate or duty exemption or
subsidy on land may be planned. These measures need to be implemented in the form
of a business model.
The key elements, which form the basis of development of business model include risk
profile of the project, financial viability of the project and consumer behavior. The major
risks of medium to high intensities, which have been identified, are given below.
1. Risks due to lack of definition of E-waste in existing regulations
2. Risks due to part inclusion of E-waste in existing Waste Rules
3. Risks due to lack of harmonization of E-waste in Export/ Import rules
4. Risks of availability of raw material
5. Risk associated with collection
6. Risk associated with competition
7. Type of raw material/ input to E-waste recycling system
8. Scale of operation
9. Expected yield/ output
10. Price Risks
Risks 1 to 3 are related to policy and regulatory level interventions. Risks 4 to 6, 10 are
related to market and logistics interventions. Risks 7 to 9 are related to technology level
interventions. Consumer behavior reflects the attitude of the consumer for E-waste
management. It has been well established that consumers want value of their E-waste
and may prefer exchange schemes where retailers offer them discounted price of the
brand new item in exchange of their old electrical and electronic equipment. The three
different types of E-waste business models, which can be implemented, are described
below.
1. Conventional E-waste Recycling Model
2. Public Private Partnership (PPP) based E-waste Business Model
3. Extended Producer Responsibility Based Business Model
The analysis of the above three models indicates that there are three mechanisms for Ewaste
management out of which two mechanisms are at extreme levels i.e. conventional
E-waste recycling model and EPR based business model. Strength, Weakness,
Opportunities and Threat (SWOT) analysis of these two extreme mechanisms has been
carried out to understand the applicability under the current business environment. The
common points, which can be inferred from this analysis, are given below.
1. Regulatory intervention is required in implementation of both the models.
2. Government participation will boost the implementation of both the models.
3. Potential of leakage exists in both the systems i.e. they are not foolproof
system. Though EPR system offers the potential of reduction of leakage of
waste to informal sector, it is also not 100% foolproof. The recent EU report
3

on the implementation of WEEE directive in member countries clearly states
the gap in WEEE collection efficiency.
The major point of difference in the implementation of the two models is the “money
flow” i.e. “who” pays ‘whom”. In Combodian context, the EPR system will lead to a
complete shift in “consumer behavior”. The existing consumer, which is used to receive
the “best salvage value” of their E-waste, will start giving it “free of cost” and start paying
“Recycling Fee” at the same time. The major barriers, which are expected to implement
this system, are given below.
1. Is the consumer ready at the moment to adopt the system or ‘shift’ in
attitude?
2. If yes, then what is the time line for implementation?
3. Does the regulatory monitoring system have capacity to monitor this system?
4. Who will be responsible for leakages and implementation of penal
provisions?
5. Who will be responsible for ownership of imported E-waste seized at the point
of entry in the country?
6. How many E-waste recycling facilities will be viable under this system and
how the E-waste collection and transportation system will be organized
considering intra province or province state issues?
A summary mapping of the “sensitivity analysis” versus the three models shows that a
clear “trade off” exists between the government participation in terms of land/ subsidy/
customs duty & octroi waiver/ income tax rebate/ interest rate rebate on one hand and
input raw material cost, rights to sell recovered material and recycling fee on the other
hand. The timing of this trade off can be linked to time taken to shift ‘consumer
behavior”. This provides the basis for either supporting the recyclers for a particular
period of time or lead to development of PPP model for E-waste management.
Though Combodia has no experience of implementing PPP models in infrastructure
sector, the proposed E-waste recycling project can be formulated and implemented
along the PPP mechanism. The salient features of this proposed model is given below.
1. The project should fall under the category of urban infrastructure. In case, it is
not included in this category then efforts should be made to included it under
urban infrastructure category.
2. Any statutory/ government agency can become partner in the project both in
terms of provision of land on concession basis and/ or equity partnership.
3. 20% to 40% of the project cost can be contributed by the government in order
to make it viable.
4. “User Fee” or “Service Fee” can be in the form of annuity transferred from the
government to the recycling project operators every year. This annuity can be
transferred by the authorized government agency in proportion to the
recycled E-waste by recycler every year.
The mechanism for implementation includes recovery of the user fee at the point of sale
can be transferred to a fund specially created for E-waste recycling. This fund can be
managed by the government agency or an independent fund manager. Money from this
fund can be transferred to the recycler as per approved annuity based on statement of
accounts submitted by the recycler to statutory entity. PPP model can provide ideal
solution at the time when the E-waste management is entering into implementation
4

stage where the situation appears to be in transition. One of the major advantage of this
mechanism could be that this user fee can be levied at the time of sale of brand new
electrical and electronic equipment and transferred to the same fund in case of EPR
regime. The management of the fund can also be transferred to an independent fund
manager under EPR regime. The timing of this transfer will be in line with PPP contract
conditions, when government wants to exit out of the model and transfer all its roles and
responsibilities to an entity in EPR regime. A rough estimate of this exit could be after
eight to ten years depending upon the financial indicators, when the E-waste recycling
facility becomes profit generating entity.
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1.0 Introduction
CHAPTER 1: INTRODUCTION & BACKGROUND
Basel Convention’s, “Report on the Survey of the Import and the Environmentally Sound
Management of Electronic Wastes in the Asia-Pacific Region,” stated that E-waste
release per annum is roughly 276 units of computer, 2,760 units of TV sets, 5,520 units
of mobile phones and 690 units of fixed phones. This report also indicates that there is a
rapid increase in the import of electronic equipment in the country. Moreover, with rapid
increase in internet and information technology penetration and decrease in the retail
prices of EEE, their end of life is getting reduced. Therefore, a need was identified to
carry out due diligence as part of preparatory work for developing E-waste action plan
for Cambodia.
As a next step, the MoE of KoC got support from SBC and MoE of Japan, to implement
the project “Environmentally Sound Management of Electrical and Electronic Waste in
Cambodia” in 2006-07. A technical field study was conducted by local NGO, namely,
Cambodia Environment Association (CEA) in a selected sample of provinces and cities
that have different socio-economic conditions of high, medium and low income families
in order to prepare a detailed E-waste inventory in the country. This study was carried
out under supervision of the MOE of Cambodia, MoE of Japan and EX Corporation. The
study items included E-waste from TV, computer, air-conditioners, mobile phone,
refrigerator and washing machines. The major findings of this study included E-waste
estimation as of 2007, which consisted 40,983.00 kg from TV, 13,318.80 kg from airconditioners,
2,016.24 kg from mobile phones and 1,310.40 kg from personal computers.
It was also found that major quantities of E-waste are generated in Phnom Penh City.
Further, the study indicated usage of low repairing/dismantling technology with
inappropriate facilities in study areas, which threaten the environment and public health.
In Phnom Penh, many small family workshops, within houses, have been established to
recover reusable and recyclable materials from E-waste without proper precautions. The
residual E-waste is disposed off as municipal solid waste in bins and landfill sites. Since
EEE contain hazardous materials, these family level operations create a direct risk to
workers and their families, to the community and to the environment, especially due to
release of hazardous substances in soil, water and air.
In order to achieve improved environmental conditions and high economic values from
E-waste prior to its disposal, a pilot project is being planned in Phnom Penh since this
city is considered to largely generate E-waste than other provinces and cities in
Cambodia.
1.1 Project on “Waste Electronic and Electric Equipment/ E-waste Management
in Phnom Penh City
Based on the current situation of E-waste handling in Phnom Penh, a comprehensive
pilot project is designed to build the local capacity for proper E-waste management,
including recovery of valuable materials. The local capacity building effort is aimed at
national and local government level including small businesses and private sector. In this
regard, MoE, Government of Cambodia has received a support from UNEP-DTIE-IETC
to implement the project, “E-waste Management in the Phnom Penh Municipality”. The
project has started in earlier 2009, after the official signing by the representatives of MoE
and UNEP-DTIE-IETC.
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1.2 Project Objectives
The objective of the proposed project is to formulate, design and implement an
integrated WEEE/E-waste management pilot project in PPM. After augmentation of local
capacity, the level of effort could be scaled up to the national level and replicated in
other countries. Specific objectives of the proposed pilot project are given below.
• Build the national and local capacity in Cambodia on inventorization and
management of E-waste by undertaking various activities, including the inventory of
E-waste and a pilot project to process E-waste in and environmentally sound manner
with optimum level of recovery for recycling.
• Bring out the guidelines and training materials for dissemination for other developing
countries to replicate similar projects and capacity building process.
1.3 Approach and Methodology
The capacity building is designed for government institutions, private sector and local
NGO. The current capacity building effort is being targeted in two major areas i.e. Ewaste
inventorization and E-waste management. UNEP has already produced two
volumes of E-waste Manual. The first volume provides guidelines for E-waste
inventorization, while second volume provides guidelines for E-waste Management. This
project will utilize these manuals as part of their comprehensive approach and
methodology as described below:
Activity 1: Inventory of E-waste
• Assessment of the Phnom Penh City with respect to generation of E-waste from
various sources (residential, commercial, industrial, inter-city, etc.)
• Establishment of Material flow with respect to E-waste generation in Phnom Penh
City and identification of stakeholders
• Quantification and characterization of E-waste in Phnom Penh City, including
quantity of various types as well as characterization of each type of E-waste
• Technical assistance to institutionalize E-waste inventory and its updating with
Phnom Penh City Government
Output: Report on current inventory and future projections of WEEE/ E-waste and
mechanism for its update.
Activity 2: Study of E-waste recycling structure
• Study of E-waste recycling/ other recycling infrastructure (formal/informal) and its
capacity
• Study of E-waste toxic footprint by inventorizing E-waste recycling sites in case
recycling occurs in informal sector in Phnom Penh City
• Study of the feasibility of the level of treatment of E-waste in formal sector in Phnom
Penh City
Output: Status report on existing recycling system and its capacity.
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Activity 3: Design of pilot project for E-waste storage, collection and transportation
system
• Study of consumer behavior for E-waste storage, collection, transportation and
disposal in Phnom Penh City
• Study of existing infrastructure for storage, collection and transportation system in
Phnom Penh City
• Pilot testing of E-waste storage, collection and transportation system using existing
infrastructure
Output: Feasibility report on E-waste collection and transportation system.
Activity 4: Identification of best practices and enabling policy/ regulatory requirement
to ensure E-waste management including collection, transportation, and
treatment and disposal system includes possibilities of public private
partnership
Output: Feasibility report on a model E-waste management.
Activity 5: Identification of stakeholders (manufacturing industry) and initiating a
dialogue with them to involve them in future work related to EPR/e-design
of key electronic components (e.g. computers – keyboard manufacturers)
Output: Stakeholders Workshop and Report
Activity 6: Dissemination of the project experiences, including guidelines and Ewaste
Plan for Phnom Penh City, at national level. This will help other
cities to develop their own plans based on local data
Output: National Workshop and Report
1.4 Outcome
The outcome of activities 1, 2 and 3 has lead to development of E-waste inventory,
collection, transportation, treatment and viability of an E-waste management system in
PPM. E-waste inventory ranges from 6792 metric tons in 2008 to 22,443 metric tons in
2019. It is expected to grow exponentially with a significant correlation during the next
decade both in terms of numbers and weight. In terms of numbers E-waste from mobile
phones is expected to grow at a higher rate followed by TVs, PCs, refrigerator, air
conditioners and washing machine. This will form the basis of planning for product wise
intervention. In terms of weight, E-waste from TV is expected to grow at a higher rate
followed by PCs, refrigerator, air conditioners, washing machine and mobile phones.
This will form the basis of planning for any collection, transportation and recycling facility
in future. In terms of E-waste fractions, the availability of iron ranges from 3079 tons to
7249 tons followed by glass, which ranges from 1344 tons to 7277 tons. Plastic
availability ranges from 1190 tons to 4091 tons while non-iron metal, which constitute
precious metals and other metals like copper, lead etc. ranges from 607 tons to 1991
tons. The availability of electronic component ranges from 618 tons to 1690 tons while
others range from 536 tons to 1558 tons. The E-waste inventory projections both in
numbers and weight show significant growth starting from the year 2012 onward. It gives
policy planners, implementers and other stakeholders three years to plan and implement
future interventions starting from the year 2009.
8

From the regulatory perspective, definition of electrical and electronic equipment is not
covered under the existing regulations. One of the major gaps, which have been
identified, is the lack of clear definition of E-waste under existing regulations. There is
very little difference between definition of used EEE and E-waste. Role of collector/
transporter is defined only in the context of hazardous waste and solid waste. There is
no specific definition of generator or producer of E-waste. However, definition of importer
of Used EEE is mentioned in the existing regulation. There is a need to cover E-waste
either under existing regulations or a separate regulation depending on the time frame
and capacity of regulatory agencies to implement it. Since draft 3R strategy is being
formulated in the country, E-waste can also be brought under its purview so that
necessary regulatory interventions can be planned and implemented.
EEE market in PPM is organized in three different types of market segments i.e. shops
selling brand new EEE, shops selling brand new as well as second hand EEE and
shops selling second hand EEE. The majority of EEE market in PPM is organized in
mixed market conditions with shops selling a combination of new and second hand items
and shops selling second hand items. The market share of second hand EEE is
increasing every year, although, some of brand-new items are cheaper. Consumers
prefer branded EEE even when it is second hand. Shops selling second hand EEE have
multiple functions of selling, repairing, refurbishing and dismantling. Geographically, it is
organized in different hubs catering to ICT and white goods sector. It is observed that
the major hubs of AC refurbishing / dismantling also serve as major hubs for refrigerator
refurbishing/ repair and dismantling. Major hubs for TV and PC are located at different
places. However, hubs at Chamkamorn and Toul Kok serve as two major hubs for TV
and PCs. Chamkamorn, Toulkok and Meanchay also serve as major repairing/
refurbishing centre for washing machine. Therefore, four functions can be geographically
addressed at one place while considering future interventions. There are twelve
processes, which need to be considered for environmentally sound management while
planning for future interventions since no chemical processing is occurring within
municipal boundary of PPM. The E-waste trade value chain consisting of stakeholders
implementing twelve processes indicates that future interventions are required at level 1
and level 2 consisting of primary E-waste generators and secondary E-waste generator.
Considering the 1 st and 2 nd level E-waste treatment, plant specifications have been
defined and financial viability has been assessed. The volume of E-waste item to be
collected and transported till 2020 based on E-waste inventory estimates in Phnom Penh
ranges from 4490 m 3 to 32923 m 3 for washing machine, 5140 m 3 to 6925 m 3 for personal
computers, 9m 3 to 46m 3 for mobile phones, 2918 m 3 to 9573 m 3 for refrigerator, 1458 m 3
to 5976 m 3 for Air Conditioners and 1557 m 3 to 2618 m 3 for washing machine. This is
based on 50% availability of E-waste for recycling. Depending upon the type of E-waste,
different types of bins/ cages have been identified and recommended. The collected Ewaste
in container will be lifted manually, through fork lifts, placed into small trucks/
container carriers and transported from the collection facility to E-waste treatment
facility. Depending on the collection efficiency and availability of the input raw material,
the facility can start with one shredder of half the capacity followed by the second. There
is huge variation in the prices of the treatment system starting from US$ 789700 to US$
3.1 million depending on type of technology. The output from the E-waste recycling
system will be sold/ exported to metal recyclers outside Cambodia. E-waste export
market is expected to follow the same trend as that of global market for precious metals.
The analysis of the price graphs indicates that metal market peaks and bottoms out in a
ten year period. E-waste purchase price in PPM has ranged from US$ 1/kg to US$ 4/kg
9

during the last ten year period. A financial analysis for the 7500 tons per annum E-waste
recycling facility in PPM has been carried out based on capital and operating cost
estimates, local land prices, labor costs, customs duty, equipment costs, electricity costs
and current interest rates. It has been proposed that the capital costs will be in the form
of debt and equity in a ratio of 70:30. The financial viability indicators e.g. IRR shows
viability of the project. NPV is positive and decreases with high cost of capital. But the
financial indicators are not strong enough to attract private investment because IRR
value is much lower than 25% and payback period is 5 years. The project is most
sensitive to land prices followed by interest rates, and customs duty. This analysis also
indicates that if lower quantities of PC are dismantled then financial viability goes down
significantly. It shows that for waste white goods treatment and disposal, the
combination of incentives should be higher. Financial viability is also sensitive to price
fluctuations i.e. prices with respect to both input raw material as well as output. A
comparative analysis of financial analysis indicators shows that viability improves with
the improved capacity utilization. Capacity utilization depends upon the availability of the
raw material. In order to make the project more viable an efficient E-waste collection and
transportation system and a set of incentives like lower interest rate or duty exemption or
subsidy on land may be planned. These measures need to be implemented in the form
of a business model.
1.5 Format of Report
This report describes the E-waste business model after completion of activity 4. The
report consists of three chapters. Chapter 1 gives background information, approach and
methodology used, training and its outcome and format of the report. Chapter 2
describes business model and strategic analysis. Chapter 3 describes recommendations
and timeline.
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2.0 Introduction
CHAPTER 2: BUSINESS MODEL AND STRATEGIC ANALYSIS
This chapter describes the basis of business model, description of business model
followed by strategic analysis on the application of the model. Further, recommendations
have been formulated including time line for implementation of the recommendations.
2.1 Basis for Development of Business Model
The key elements, which form the basis of development of business model, are given
below.
a. Risk profile of the project
b. Financial Viability of the project
c. Consumer Behavior
Risk Profile
The cumulative risk profile of the entire project is summarized in table 2.1.
Table 2.1: Project Risk Profile
Factors/ Intensity
Regulatory Risks
High Medium Low
Risks due to lack of definition of E-waste in
existing regulations
√
Risks due to part inclusion of E-waste in
existing Waste Rules
√
Risks due to lack of harmonization of Ewaste
in Export/ Import rules
Market Risks
√
Risks of availability Short term √
of raw material Long term √
Risk associated with Short term √
collection Long term √
Risk associated with Short term √
transportation Long term √
Risk associated with Short term √
competition
Technology Risks
Long term √
Type of raw material/ input to E-waste √
recycling system
Scale of operation √
Expected yield/ output √
Experience of technology supplier √
Environmental Issues √
Price Risks √
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The major risks of medium to high intensities, which have been identified, are given
below.
11. Risks due to lack of definition of E-waste in existing regulations
12. Risks due to part inclusion of E-waste in existing Waste Rules
13. Risks due to lack of harmonization of E-waste in Export/ Import rules
14. Risks of availability of raw material
15. Risk associated with collection
16. Risk associated with competition
17. Type of raw material/ input to E-waste recycling system
18. Scale of operation
19. Expected yield/ output
20. Price Risks
Risks 1 to 3 are related to policy and regulatory level interventions. Risks 4 to 6, 10 are
related to market and logistics interventions. Risks 7 to 9 are related to technology level
interventions.
Financial Viability
Under the existing policy and regulatory regime, financial analysis has been carried out
by factoring in risks 4 to 10. Financial viability has been assessed in terms of internal
rate of return (IRR), net present value (NPV), payback period and their sensitivity with
respect to different interventions. The salient features of this analysis are given below.
1. Project IRR indicates that the project is capital intensive. Though IRR, NPV are
positive, they are not high enough to attract financial investment from private
sector.
2. If the land is allocated at subsidized rate or comes free then maximum increase
in project IRR is deserved.
3. In case interest rates decrease then project IRR increases.
4. If customs duty on equipment is not levied then project IRR increases.
Consumer Behavior
Consumer behavior reflects the attitude of the consumer for E-waste management. It
has been well established that consumers want value of their E-waste and may prefer
exchange schemes where retailers offer them discounted price of the brand new item in
exchange of their old electrical and electronic equipment.
2.2 Business Model
The three different types of E-waste business models, which can be implemented, are
described below.
4. Conventional E-waste Recycling Model
5. Public Private Partnership (PPP) based E-waste Business Model
6. Extended Producer Responsibility Based Business Model
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Conventional E-waste Recycling Model
Conventional recycling model is based on recycling of E-waste purchased by recycler
from generator. The entire model is based on conventional business model, where
recycler recovers money by selling by selling the products. The salient features of
existing model are given below.
1. Recycler establishes E-waste recycling facility.
2. Recycler purchases input raw material from the E-waste generators.
3. Recycler recovers money by selling the E-waste fractions/ final product to
smelters.
4. Recycler has its own collection and transportation system for input raw
material.
5. Recycler finances the entire cost of collection, transportation and recycling
through its own resources or through loans.
Recycler can avail of existing incentives available for industrial promotion offered by
different government agencies. However, the application of these schemes is dependent
on classification of this type of business activity.
Public Private Partnership Business Model
Project on Public Private Partnership (PPP) Project model is based on a contract or
concession agreement, between a Government or statutory entity on the one side and a
private sector company on the other side, for delivering an infrastructure service on
payment of user charges. Therefore, government participates to mitigate risks in order to
promote infrastructure services. The features of this model are described in terms of
definitions, eligibility criteria and government support as given below.
Definitions
1. Private Sector Company means a company in which 51% or more of the
subscribed and paid up equity is owned and controlled by a private entity.
2. Lead Financial Institution means the financial institution (FI) that is funding the
PPP project, and in case there is a consortium of FIs, the FI designated as such
by the consortium.
3. Total Project Cost means the lower of the total capital cost of the PPP Project:
(a) as estimated by the statutory entity that owns the project, (b) as sanctioned
by the Lead Financial Institution, and (c) as actually expended; but does not in
any case include the cost of land incurred by the government/statutory entity;
4. Viability Gap Funding or Grant under this model means a grant one-time or
deferred, provided under this Scheme with the objective of making a project
commercially viable.
Eligibility
(a) The project shall be implemented i.e. developed, financed, constructed, maintained
and operated for the Project Term by a Private Sector Company to be selected by
13

a statutory entity through a process of open competitive bidding;.
(c) The project should provide a service against payment of a predetermined tariff or
user charge.
(d) The concerned statutory entity should certify, with reasons;
(i) that the tariff/user charge cannot be increased to eliminate or reduce the
viability gap of the PPP;
(ii) The Project Term cannot be increased for reducing the viability gap; and
(iii) The capital costs are reasonable and based on the standards and
specifications normally applicable to such projects and that the capital costs
cannot be further restricted for reducing the viability gap.
Statutory Support
(1) The total Viability Gap Funding under this scheme shall not exceed a certain percent
of the total project cost.
(2) Viability Gap Funding under this scheme will normally be in the form of a capital grant
at the stage of project construction.
In this model, the recovery of the revenue for the services rendered is dependent on the
user fee, which in case of E-waste management could be recycling fee, which may be
recovered from the consumer.
Extended Product Responsibility Based Business Model
The entire business model in Europe is based on “Extended Producer Responsibility”,
where the producing organizations are responsible for E-waste take back and treatment.
The business model is an integrated model consisting of E-waste collection,
transportation and treatment. The conceptual guidance for financing each of these
schemes has been provided by EU directive. These guidance features as per EU
directive are given below.
1. Producers are responsible for the costs of picking up E-waste from collection
facilities and for refurbishing waste products for reuse or for recycling and
recovery.
2. When producers put a new product on the market, they must provide a financial
“guarantee” that waste management of the product will be paid for. Producers
can get waiver on this guarantee by participating in a producer responsibility
organization (PRO), paying recycling insurance, or setting up a special bank
account for this purpose.
ICT sector and brown and white goods sector have different preferred business models
with regard to E-waste management. In Europe, brown and white goods producers are
comfortable with the schemes set up to address brown and white goods, while the IT
producers are comfortable with those schemes set up to address IT goods. The major
difference in business model lies in the method of charging fee/ money for E-waste
management. The fee structure consists of different options. These options include
actual costs of recycling, projected costs of recycling per category and cross
subsidization. Cross subsidization occurs if the fee charged on one category of E-waste
14

is higher than its recycling costs. The differential is used to pay for the recycling of
another category of E-waste, whose recycling costs are higher than the fee charged.
Table 2.2 gives an example of fee structure.
Table 2.2: Established European WEEE Schemes (EU/EEA): Flexibility of Cost
Models
Scheme Number
of Cost
Models
Type of Cost Allocation
Recupel 1 Fixed Fee Model – All categories.
(Belgium)
NVMP
(The
Netherlands)
ICT Milieu (The
Netherlands)
EI Retur
(Norway)
EI Kretsen
(Sweden)
SWICO
(Switzerland)
Funding for supply chain
1 Fixed Fee Model – Certain categories excluded
1 Debiting Model – ICT products. Real costs are calculated on a
month-by-month basis and divided amongst members on a
market share basis, calculated monthly.
3 Fixed Fee Model (EE Bransjen) – According to type and
volume of product placed on market (Brown Goods).
ICT Model (IKT Retur/IT Retur) – Actual Costs are calculated
month by month and divided amongst members on a current
market share basis.
Fixed Fee Customer Model – White Goods (Hvitevareretur). A
fee is levied by customs on import and passed to PRO Spell
out what it means!
3 Debitting Model – Preliminary Cost. A preliminary cost (per
unit, per kg or % of sales values) is fixed for the year. These
fees are compared against actual costs at year-end and
difference settled..
Debitting Model – ICT products. Real costs are calculated on
a month-by-month basis and divided amongst members on a
market share basis, calculated on the preceeding year. Costs
per unit will therefore vary on a month-by-month basis.
Other Debitting Model. Special fixed fee debiting models have
been developed for specific product groups – e.g. light bulbs
(2500 SEK per year).
2 Fixed Fee Models: ICT Products. Fixed fee tariff banded
according to sales price. 12 fee bands with no fee for products
under 50CHF.
Fixed Fee Model: Consumer Electronics/Photographic. Fixed
tariff according to product category. 5 fee levels with no fee for
price below 50 CHF.
The fee charged catalyses financial flow along the E-waste supply chain. This financial
flow meets the costs of E-waste collection, transportation and treatment. Examples of
funding of E-waste stakeholders along the supply chain in Netherlands, Japan and
Switzerland are shown in figure 2.1, figure 2.2 and figure 2.3.
The salient features of Netherlands NVMP (PRO) supply chain model are given below:
15

1. Producers/ Importers pay NVMP to manage their E-waste responsibilities under
Dutch legislation. A fixed fee is paid to NVMP for each product placed on the
market. This fee is passed on to the consumer with no mark up. The scheme
covers household E-waste.
2. Households pay a visible fee on the purchase of new EE products. Households
also pay a local municipal waste tax to fund general waste collection and
operation of municipal sites. Households may return E-waste free of charge to
municipal collection sites. Municipalities provide some kerbside collection.
Households may also return E-waste to a retailer/distributor free of charge on the
basis of 1:1 new for old purchase. Retailers may charge for collection of the old
product from household.
3. Retailers are obliged to take back E-waste on a new for old basis from
consumers. They may then transfer the E-waste to a municipal waste site, direct
to the regional sorting stations (RTS) or pay for collection by NVMP.
4. Municipal collection sites receive E-waste and take responsibility for delivery to
regional sorting stations operated by the municipalities and NVMP. Municipalities
are not reimbursed.
5. Regional sorting stations receive E-waste free of charge and sort for collection
and treatment. NVMP makes a financial contribution to the operation of RTS.
6. Transport contractors are responsible for the collection of E-waste from the RTS
and delivery to treatment plants and recycling firms. Contractor invoices on the
basis of weight. Logistics are organized in house by NVMP.
7. Treatment and recycling contractors take receipt of E-waste and process.
Contractors invoice NVMP on the basis of actual treatment costs.
The salient features of Japanese supply chain model are given below:
1. Consumers pay an end-of-life fee for product disposal and treatment as opposed
to the producer responsibility concept in the E-waste Directive. This fee is paid to
the retailer, and passed on to one of two industry consortia who are responsible
for the collective management of E-waste in the specified categories.
2. Retailers are obliged to take back goods on a new for old basis. This applies both
to replacement products, but also to products from non-identical product
categories. It is estimated that 80% of waste is currently collected through the
retail stream.
3. The Association for Electric Home Appliances (AEHA) is a trade group
responsible for orphan products. Some collection services are also
subcontracted to AEHA, who operate in isolated or rural areas not served by
retailers.
4. Each Industry Consortium manages approximately 200 consolidation and bulking
centres across Japan. These are privately owned and managed, although
16

etailers, local government or another designated organisation is obliged to
deliver goods from the retailer.
5. Each consortium operates approximately 12 treatment centres for different
project types and groups. Transport from the consolidation to treatment centres
is outsourced.
The Swiss system is based on EPR, both legally and operationally i.e. producers and
importers are both physically as well as the financially responsible for an environmentally
sound disposal of E-waste. The salient features of Swiss E-waste supply chain model
are given below:
1. The entire operative responsibility is shared with the two PROs–SWICO and
S.EN.S, who manage and operate the system on behalf of their member
producers.
2. Secured financing of the collection and recycling is ensured by way of the
Advance Recycling Fee (ARF) charged on all new appliances. The ARF is used
to pay for the collection, the transport and the recycling of the disposed
appliances. The ARF can range from a minimum CHF (Swiss franc) 1 on small
items, such as hair dryers and electric shavers, to up to CHF 20 for TVs or CHF
40 for refrigerators. Both SWICO and S.EN.S have distinct categories of products
according to the approximate cost of recycling them. It is seen that the largest
portion of the ARF goes to the recyclers.
3. The Swiss ARF is an intergenerational contract between appliances purchased in
the past and those that will be purchased in the future, similar to a pension
system. Therefore, it requires accurate estimations of how much waste will be
generated and how many new products will be sold.
4. SWICO and S.EN.S have official collection points around Switzerland in addition
to the thousands of retail locations which have to take back old equipment free of
charge, irrespective of the brand or year of manufacture. It becomes easier for
consumers to dispose their E-waste at appropriate locations.
5. By having common collection points, the PROs are better able to manage
logistics, benefit from economies of scale and provide a consumer friendly, allinclusive
solution instead of a prohibitively expensive brand specific one.
6. Both material and financial flows are controlled at every stage, as shown in figure
2.3. The independent controls not only deter free riders, but also give credibility
to the entire system. It also ensures participation of retailers and consumers.
Financial guarantee
Producers have to provide a financial guarantee for fulfillment of their take back
obligation for electrical and electronic products placed on the national market after the
effective date of the local legislation (so called “New waste”) by giving evidence of a
guarantee (e.g. blocked bank account/insurance) for future E-waste management costs.
In most European countries an additional financial guarantee is not needed if the
producer is member of a collective scheme.
17

Household (2)
Retailers (3)
Producers/Importers (1)
Municipal Collection
Sites (4)
Regional Collection
Stations (5)
NVMP
Financial Flow WEEE/ E-waste Flow
Transport Partner (6)
Treatment Partner (7)
In house logistics (7)
Source: Chapter 5, Financing Mechanism for WEEE/E-waste management, Volume 2, E-waste Manual, United Nations Environmental Programme, Division of Technology, Industry
and Economics, International Environmental Technology Centre, Osaka/Shiga.
Figure 2.1: Financial Model of Netherlands NVMP – A Collective EU Collective Compliance System
18

Household (1)
AEHA (3)
Retailers (2)
Consortium Collection
Sites (4)
Manufacturer Consortium
Consortium Treatment
Centre (5)
In house logistics
Financial Flow WEEE/ E-waste Flow
Source: Chapter 5, Financing Mechanism for WEEE/E-waste management, Volume 2, E-waste Manual, United Nations Environmental Programme, Division of Technology, Industry
and Economics, International Environmental Technology Centre, Osaka/Shiga.
Figure 2.2: Financial Flow Model of Japanese E-waste Take back System – A Consumer/Retailer based system
19

Raw Material
Producers
SAEFL (Swiss federal Agency for Environmental, Forests and Landscaps)
SWICO, FEA EEV, VRST, SRF SKH, ASCI,
kf
EEE Manufacturers
& Importers
SWICO
Environmental
S.EN.S
Society & Non-Governmental Organisations
Distributors &
Retailers
ARF ARF
Consumers
Control Direction of Material Flow
Direction of Financial Flow
ARF- Advanced Recycling Fee
Direction of Dialogue and influence
Source: Deepali Sinha-Khetriwal, Philipp Kraeuchi, Markus Schwaninger, A comparison of electronic waste recycling in Switzerland and in India,
Environmental Impact Assessment Review 25 92005)492-504, ELSEVIER
Figure 2.3: Financial Flow Model of Swiss E-waste
Retail
Stores
Collectio
n Points
FVG
Transportati
Recyclers
Disposers
20

2.3 SWOT Analysis
The analysis of the above three models indicates that there are three mechanisms for E-waste
management out of which two mechanisms are at extreme levels i.e. conventional E-waste
recycling model and EPR based business model. Strength, Weakness, Opportunities and
Threat (SWOT) analysis of these two extreme mechanisms has been carried out to understand
the applicability under the current business environment. This analysis has been summarized in
table 2.3. The common points, which can be inferred from this analysis, are given below.
4. Regulatory intervention is required in implementation of both the models.
5. Government participation will boost the implementation of both the models.
6. Potential of leakage exists in both the systems i.e. they are not foolproof system.
Though EPR system offers the potential of reduction of leakage of waste to informal
sector, it is also not 100% foolproof. The recent EU report on the implementation of
WEEE directive in member countries clearly states the gap in WEEE collection
efficiency.
The major point of difference in the implementation of the two models is the “money flow” i.e.
“who” pays ‘whom”. In Combodian context, the EPR system will lead to a complete shift in
“consumer behavior”. The existing consumer, which is used to receive the “best salvage value”
of their E-waste, will start giving it “free of cost” and start paying “Recycling Fee” at the same
time. The major barriers, which are expected to implement this system, are given below.
7. Is the consumer ready at the moment to adopt the system or ‘shift’ in attitude?
8. If yes, then what is the time line for implementation?
9. Does the regulatory monitoring system have capacity to monitor this system?
10. Who will be responsible for leakages and implementation of penal provisions?
11. Who will be responsible for ownership of imported E-waste seized at the point of
entry in the country?
12. How many E-waste recycling facilities will be viable under this system and how the
E-waste collection and transportation system will be organized considering intra
province or province state issues?
A summary mapping of the “sensitivity analysis” versus the three models is given in table 2.4.
The following inferences can be drawn from this mapping.
1. A clear “trade off” exists between the government participation in terms of land/
subsidy/ customs duty & octroi waiver/ income tax rebate/ interest rate rebate on one
hand and input raw material cost, rights to sell recovered material and recycling fee
on the other hand.
2. The timing of this trade off can be linked to time taken to shift ‘consumer behavior”.
This provides the basis for either supporting the recyclers for a particular period of time
or lead to development of PPP model for E-waste management.
21

Table 2.3: SWOT Analysis
Strengths Weakness Opportunities Threats
EPR Conventional EPR Conventional EPR Conventional EPR Conventional
Limited Material Risk:
1. Mandates
availability
of raw
material
either free
or at
subsidized
rates
2. Ensures
constant
revenue
stream in
terms of
recycling
fee and
ownership
of
recovered
material.
3. Monitoring
and
compliance
s is
stronger.
4. Producers
are made
responsible
for
addressing
pollution
1. Market
based
which
require
limited
regulatory
intervention
.
2. Can easily
absorb
historical
and
orphaned
E-waste.
3. Complete
control over
transportati
on.
4. Can be
monitored
and made
compliant to
existing
regulatory
system.
5. Easy of
monitoring
due to
existing
capacity of
regulators.
1. Leakages do
exist e.g.
collection
efficiency
has been
reported to
be around
40% in EU
2. Orphaned &
historical Ewaste
are
difficult to
channelize
into formal
E-waste
recycling
stream.
3. Requires
time for
implementati
on in
Combodian
context due
to large
geographical
area.
4. Needs
capacity
building to
implement in
Combodian
context.
5. Requires
change in
consumer
behavior.
1. Availability
of raw
material is a
constraint.
2. Revenue
stream is
subject to
market
fluctuation
and
dependent
on only
recovery of
base and
precious
metals.
1. Long term
pollution
abatement
approach
based on
3Rs.
2. Producer’s
will be
motivated
for more R
& D
especially in
the context
of design for
environment
.
3. Integration
with
international
regulatory
regime.
1 st conventional
step
1. Provides
stepping
milestone for
developing
E-waste
management
in the
country.
2. Promotion of
recycling in
waste
management
3. Technology
transfer and
increase of
knowledge
base.
1. May
become
monopoli
stic
May not survive
the market
risks.
22

Table 2.4: Summary Mapping of model versus instruments/incentives
Business
Instrument / Incentive
Model Land as Government Custom’s Income Interest Input
contribution Subsidy Duty/ Tax Rate Raw
/ Nominal
Octroi Rebate Subsidy Material
Cost
waiver
Cost
Right Over
Material
Recovered
23
Recycling
Fee /
User Fee
Conventional √ √ √ √ √ √ √ X
PPP √ √ √ √ √ √ √ √
Extended
Produces
Responsibility
√ √ √ √ √ X √ √
2.4 PPP based E-waste business model in Combodia
Though Combodia has no experience of implementing PPP models in infrastructure sector,
the proposed E-waste recycling project can be formulated and implemented along the PPP
mechanism. The salient features of this proposed model is given below.
5. The project should fall under the category of urban infrastructure. In case, it is not
included in this category then efforts should be made to included it under urban
infrastructure category.
6. Any state statutory/ government agency can become partner in the project both
in terms of provision of land on concession basis and/ or equity partnership.
7. 20% to 40% of the project cost can be contributed by the government in order to
make it viable.
8. “User Fee” or “Service Fee” can be in the form of annuity transferred from the
government to the recycling project operators every year. This annuity can be
transferred by the authorized government agency in proportion to the recycled Ewaste
by recycler every year.
Under business to business (B2B) model
The company/commercial establishment earns on the sale of this PC as E-waste. After
earning this revenue it pays 20% as tax (income tax) to the government and retains 80%.
Therefore, user fee could come either from tax component alone or from the revenue
retained by the company or a combination of both. The possible options for levying this user
fee can be the point of transaction, which will prevent its leakage to informal sector. This will
also deter business/ commercial/ organized sector to sell E-waste to informal sector.
Mechanism for implementation
1. Recovery of the user fee at the point of sale can be transferred to a fund specially
created for E-waste recycling.
2. This fund can be managed by the government agency or an independent fund manager.
3. Money from this fund can be transferred to the recycler as per approved annuity based
on statement of accounts submitted by the recycler to statutory entity.

PPP model can provide ideal solution at the time when the E-waste management is entering
into implementation stage where the situation appears to be in transition. One of the major
advantage of this mechanism could be that this user fee can be levied at the time of sale of
brand new electrical and electronic equipment and transferred to the same fund in case of
EPR regime. The management of the fund can also be transferred to an independent fund
manager under EPR regime. The timing of this transfer will be in line with PPP contract
conditions, when government wants to exit out of the model and transfer all its roles and
responsibilities to an entity in EPR regime. A rough estimate of this exit could be after eight
to ten years depending upon the financial indicators, when the E-waste recycling facility
becomes profit generating entity.
24

3.0 Recommendations
CHAPTER 3: RECOMMENDATIONS AND TIME LINE
Summary of general and specific recommendations as per earlier analysis are given below.
3.1 General Recommendations
1. Restrict disposal of E-waste to other than formal sector recycler and its further
leakage should be prevented.
2. Monitoring of E-waste inventory covering all the sectors.
3. Prevention of leakage of E-waste from formal sector.
4. Capacity building of the regulatory authorities.
5. Attempts should be made by stakeholders to formulate E-waste definition. This could
be restricted to few E-waste items to start with and lead to further inclusion of other
items.
Timeline: Recommendation 1 should be implemented immediately. Recommendation 5
should be implemented immediately. Recommendations 2, 3 and 4 should be implemented
periodically.
3.2 Steps involved in Implementation of Business Model
1. Government should decide the business model. It should support the E-waste
recyclers as per business model. This also includes provision of land for establishing
such facility.
2. If PPP model needs to be implemented then computation of user fee, establishment
of recycling fund and its management needs to be formulated.
3. Incentives through standalone or a combination of instruments like customs/ other
duty waiver, reduced interest rates and income tax needs to be formulated for
recycling facility.
4. Identification of land for establishing such type of facility.
5. Regulatory clearances from statutory agencies EIA and recycler’s registration.
6. Formulation of bidding documents/ tender papers for PPP model including
prequalification criteria, selection criteria, BOQ and budgetary estimates.
7. Finalization of tenders and selection of private partner.
8. Establishment of facility and trial runs.
9. Commercial operations of the project.
Timeline: Recommendation 1 should be implemented immediately. Recommendations 2, 3
and 4 should be implemented within three months after deciding the business model.
Recommendations 5, 6 and 7 should be implemented within one year. Recommendations 8
and 9 should be completed within two years.
25