Producers Fear EU Recycling Order May Cost Billions

Manufacturers in Europe claim they face billions of dollars a year in extra costs from new European Union environmental directives as they struggle to recycle thousands of metric tons of old cars, fridges and other household electrical goods.

The directives look set to create mountains of abandoned goods before recycling equipment is ready for use.

According to the directives, manufacturers will bear the cost of collecting and recycling fixed percentages of the goods. They have asked ministers to think again about burdening the already depressed sector with more costs.

Local authorities have also voiced alarm that they will be left to dispose of dumped cars and goods.

The row surrounds the end of life vehicles directive and waste from electrical equipment directive, due to be implemented fully in 2006. The latter covers household goods from washing machines to mobile phones.

They follow new EU regulations on CFCs that cover fridge disposal. Together, they set out how these goods must be disposed of and who bears the cost.

The Federation of Electronics Industries estimates costs for the electrical equipment directive will dwarf the others with an initial cost of implementation of £5bn in the first year, likely to be 2006, and £1bn annually thereafter.

An oversight by ministers in the implementation of CFC regulations has done little to reassure manufacturers that the government is thinking ahead.

Ministers assumed the regulations did not extend to domestic appliances and signed up, only to be informed last year that household fridges were included. That has resulted in local authorities hoarding thousands of discarded fridges until recycling equipment comes on line in the spring.

"Manufacturers are very concerned about the crippling costs they will face from this new law which will do nothing to help them remain able to compete with goods produced outside the EU," said Helen Woolston, head of environment at the Engineering Employers Federation.

"The proposals are too wide in scope and pay no heed to the range of products and markets likely to be affected. UK government needs to help firms now to prepare for domestic implementation of this directive."

The Conservatives say there is no evidence that the government has learned from the "fridge fiasco" and is rushing into more regulations without looking at the costs.

"Complete lack of foresight has led to mountains of rotting fridges leaking CFCs into the environment and burdening the country with a huge unnecessary cost," said Jonathan Sayeed, Conservative environment spokesman.

"We now face the prospect that the disposal of cars and of electrical equipment will lead to similar problems." The Financial Times