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Valpak WEEE compliance fee method chosen by Defra

A compliance fee methodology for waste electrical and electronic equipment (WEEE) proposed by compliance scheme Valpak has been selected to determine the 2016 fee, the government has revealed.

Valpak WEEE compliance fee method chosen by Defra
The compliance fee system was established in 2013 to reduce producer costs while meeting requirements for them to cover the collection, treatment recovery and recycling of WEEE. Previously, producer compliance schemes (PCSs) sometimes had to pay over-the-odds to collectors to get evidence of collection, whereas now, the fee seeks to create a greater connection between producer fees and the real costs of recycling.

Instead of being sanctioned when they haven’t met their requirements, PCSs can pay a top-up fee calculated by a government-approved mechanism, rather than shelling out to collectors.

One methodology for calculating the compliance fee for the current year is chosen annually, based on factors including the method’s likelihood to encourage schemes to meet collection targets, economic analysis of the method, costs of administration and the timescale for the method’s implementation.

Valpak’s mechanism was one of two proposed for the 2016 compliance fee. The other was submitted by the Joint Trade Associations (JTA), a group of nine trade associations from the electronics sector, that had provided the chosen methodology for both the 2014 and 2015 fees.

The Department for Environment, Food & Rural Affairs (Defra), taking responsibility for the WEEE compliance fee for the first time this year after the government’s environmental regulation team was transferred from the now-defunct Department for Business, Innovation & Skills last year, chose the Valpak proposal after a consultation period late last year. Accountancy firm Grant Thornton will provide administration of the fee.

Following selection of the compliance fee to be used, schemes must now carry out their compliance by the end of March.

Details of the methodology

The Valpak proposal was designed to support the government in improving the WEEE system by discouraging PCSs from making excessive charges by over-collecting WEEE, and encouraging the schemes to take all steps to meet their targets without resorting to the compliance fee.

Through the proposed methodology, schemes will be required to provide direct collection and treatment cost data by stream, with the compliance fee calculated separately for each scheme and each WEEE stream, using a combination of the weighted average collection and treatment costs and an amount to reflect the direct operational costs that schemes would avoid if they were not reflected in the fee.

The proposal has been amended to require submission of net cost data relating only to directly collected WEEE from local authority designated collection facilities (DCFs) by the schemes using the fee mechanism.

The fee will also be escalated depending on the degree that a scheme falls short of the national target set by the government for each WEEE stream. This means that a greater fee would be payable for a shortfall that is more significant compared to the government’s requirement.

Valpak’s original proposal for the 2016 WEEE compliance fee can be read on Defra’s website.

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