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E-waste Business Model, Policies and

Regulations in India
Amit Jain1
Abstract E-waste business model evolves from recycling
industry operating under policy and regulatory framework in a
country. In India, environmental policy and regulatory
framework is emerging from pollution control to pollution
prevention with an increasing implementation of business model
under public private partnership. In this context, an assessment
of conventional E-waste recycling under the existing regulatory
and emerging extended producer responsibility (EPR) regime
with an option of public private partnership (PPP) as an interim
intervention in the state of Maharashtra has been carried out.
Further, mechanism of its establishment and operation both
during short and long term have been identified for complete
transition to EPR based regulatory regime.

Maharashtra was identified as the next step during 2006-07


[2]. An assessment of viable business model for the E-waste
recycling facility consisting of conventional E-waste recycling
under the existing regulatory regime and extended producer
responsibility (EPR) regime with an option of public private
partnership (PPP) as an interim intervention was carried out
considering current and emerging policy and regulatory
regime in the country. The objective of this assessment was to
concurrently identify a combination of viable policy,
regulatory and market based interventions for establishing
environmentally sound recycling infrastructure for E-waste
management.

I. INTRODUCTION

II. APPROACH AND METHODOLOGY

-waste has grown as a major waste stream in India during


current decade. Year 2005, national level E-waste
generation estimate is about 146180 tons per year, which
is expected to exceed 400,000 tons per year by 2011 [1].
Geographically, Mumbai Metropolitan Region (MMR) and the
state of Maharashtra had been identified as the highest Ewaste generator in the country with current projections
ranging from 18,963 tons to 137,417 tons in MMR and from
56,901 tons to 292,157 tons in Maharashtra till 2020 [2].
Indian scrap and E-waste recycling industry mapping using
tracer technique indicated that E-waste recycling
infrastructure in MMR region consists of E-waste dismantlers
in informal sector, who are linked to informal metal recyclers
operating in other cities in India [2] [3]. These operations are
leading to emissions of toxics, occupational hazards,
economic losses and leakage due to inefficient management
and recycling of E-waste. The geographical distribution of
informal sector recycling industry over a vast area without
organized E-waste collection and transportation system leads
to inefficient E-waste management resulting in economic
losses due to loss of material in the material flow chain.
Further, the toxic footprint and occupational hazard also gets
geographically distributed whose intensity depends on the
scale and extent of recycling [4]. Therefore, strengthening of
policy and regulatory regime and creation of compliant Ewaste recycling infrastructure, which can arrest and control the
geographical distribution of toxic footprint, has been identified
as the primary need for E-waste management in a given
geographical region. In this context, establishment of a
scientifically designed E-waste recycling facility in

At first, existing policy and regulatory regime was reviewed


and evaluated in terms of expected future trends. This
evaluation is followed by identification of business risks.
These risks have been quantified and used for sensitivity
analysis of different recycling scenarios based on parameters
like internal Rate of Return (IRR) and Net Present Value
(NPV) obtained from cash flow analysis to arrive at optimum
scale of E-waste management operations. The next step
included summary mapping of the sensitivity analysis
versus the three business models under the discussed
regulatory regime. Further, standard strategic evaluation
technique of Strength, Weakness, Opportunities and Threat
(SWOT) analysis has been used to identify the business model
for implementation.

1
Author is with IRG Systems South Asia Pvt. Ltd., 103 Thapar House,
Community Centre, Gulmohar Enclave, New Delhi, 110049, India. phone: 9111-41759510; fax:91-11-41759514; e-mail:amit@irgindia.com

III. RESULTS AND DISCUSSIONS


Year 2005 E-waste inventory generation trends shown in Fig.
1 indicate significant increase in E-waste generation beyond
year 2011 resulting in six year period for policy and regulatory
interventions and establishment of E-waste management
infrastructure in the country [1]. An evaluation of policy and
regulatory environment shows declaration of National
Environment Policy in 2006 followed by publication of Ewaste guidelines in 2008 and amendment of Hazardous Waste
(Management, Handling and Transboundary Movement)
Rules [1] [5] [6]. National environment policy emphasizes
development of an action plan for development and
implementation of viable models of public-private
partnerships for setting up hazardous waste management
systems in India. E-waste was partly included in the schedule
IV of Hazardous Waste (Management, Handling and
Transboundary Movement) Rules 2008 [6]. The existing rules
require authorization from respective state pollution control

board under Air; Water Act and Hazardous Waste


(Management, Handling and Transboundary Movement)
Rules 2008 and environmental impact assessment (EIA)
clearance from ministry of environment and forest (MoEF),
Government of India for establishing E-waste recycling
facility. This regulatory intervention has triggered legal
establishment as a registered recycler of an E-waste
dismantling and recycling facility in India.
In Maharashtra, E-waste generation estimates from personal
computers (PC) is expected to increase from 9,135 tons in
2008 to 81,448 tons in 2020.The total E-waste generation from
PC in MMR is expected to increase from 5,260 tons in 2008 to
46,903 tons in 2020. Any recycling facility cannot be designed
on 100% E-waste capture rate of E-waste generation.
Assuming 50% E-waste capture efficiency, it is expected that
E-waste generation from Maharashtra will range from 4568
tons in 2008 to 40,724 tons in 2020. This provides the basis of
designing first and second level E-waste recycling facility at
MMR with a capacity of 5,000 tons per year during first phase
and an additional capacity addition of 5,000 tons per year
during second phase after two years. ELCINA, industry
associations
for
electronics
have
estimated
that
service/commercial sector accounts about 80% of the total
market penetration of computer and IT hardware in India.
ELCINAs report on consumers behavior for E-waste
summarize that at household level, 65% of the individuals
look for best monetary or exchange value for their old
products. Only 2% of individuals think of the impact on
environment while disposing off their old electrical and
electronic equipment. At corporate/ business level, 60% of the
companies/ offices look for best monetary value for their old
computers while only 6% of the organizations were found to
be disposing off their computers in environmentally friendly
manner. 11% of the replaced computers enter E-waste stream
through scrap dealers, 21% of the replaced computers enter Ewaste stream through second hand market while 48% of the
replaced computers enter E-waste stream exchange and buy
back scheme [7]. Therefore, the major E-waste items, which
are expected to drive the development (planning / design /
implementation) of E-waste management system in India will
be personal computers. Since 50% of the computers (E-waste)
replaced through exchange and buy back scheme lands up in
formal sector at the retail outlet, therefore, this quantity can be
easily captured and recycled in the formal sector. As the
chances of prevention of leakage are higher at the retail outlet
in the E-waste material flow chain, E-waste collection system
should start at this point. This analysis indicates that 50% Ewaste collection efficiency under B2B (Business to Business)
in service/commercial sector can initially support recycling
plant design capacity of 25 tons per day with 100% capacity
expansion in the fourth year and 100 tons per day in the tenth
year. Three types of E-waste collection mechanism at
household, commercial, corporate levels and in cyberspace
have been proposed to capture 50% E-waste considering
consumers preference to get the best value of their old
products. Initially, collection mechanism of recyclers will
drive the E-waste collection and transportation system to
minimize its leakage, which is expected to be gradually

supported by collection mechanism for households and


commercial sector under emerging EPR regime.
The proposed E-waste recycling system as per E-waste
guidelines will consist of first, second and third level of
treatment technology, where third level treatment is limited to
precious metal recovery. A gap analysis of treatment
technology indicates that precious metal recovery technology
from E-waste recycling is lacking in India. Option analysis of
smelting and hydrometallurgical based technology options,
which are available for precious metal recovery under the
existing circumstances in Maharashtra/India, has been carried
out and summarized in table 1. This analysis indicates that a
high capital intensive and large scale of operation is required
for smelting of E-waste fraction. Literature cites that one of
such facility in Europe has treated about 300,000 tons per
annum of input raw material and has posted 3.8 billion
turnover during year 2007 [8]. In this facility, E-waste is one
among 200 different types of input raw material and
contributes only 10 % of the total input. The input E-waste
raw material to such facility is in the form of printed circuit
board. It may be noted that even in the best of E-waste
collection scenario with 90% collection efficiency, India will
be able to generate about 3,60,000 tons of E-waste. If printed
circuit board constitutes about 10% of the E-waste collected
then only 36,000 tons of raw material is available for recycling
in the best case scenario. This amount is not adequate to
sustain smelting based metal recovery facility, which will
require other different types of metal waste along with Ewaste for recycling. Further, 90% E-waste collection
efficiency has not been achieved even in best of E-waste
management system elsewhere. In such scenario, if the
decision criteria are applied to only E-waste management in
India then second option of hydrometallurgical/
electrowinning for precious metal recovery appears to be
viable. Even in such scenario, the scale and timing of
establishment of such facility needs to be determined. This
will be linked to E-waste inventory and availability of raw
material.
Financial viability (IRR/NPV) for two scenarios with scenario
1 consisting of first and second level of treatment and scenario
2 consisting of first, second and third level treatment
considering business risks show week viability with IRR value
lower than 25% and a payback period of 9 to 10 years. The
project is most sensitive to land prices followed by interest
rates, customs duty, subsidy and octroi with an incremental
IRR improvement ranging from 5 % to 25 %. This analysis
also indicates that if lower quantities of PC are dismantled
then financial viability goes down significantly, thereby
recommending higher incentives to white goods recyclers.
Financial viability is also sensitive to input raw material and
output price fluctuations.
At operational level, conventional E-waste recycling model
and EPR based model are the two extreme models with PPP
model falling as an interim intervention [9] [10]. SWOT
analysis of both the extreme models shows that regulatory
intervention and government participation is required in their

implementation. Further, potential of leakage exists in all the


three models. Though EPR system offers the potential of
reduction of leakage of waste to informal sector, it is not
100% foolproof. The major difference in the implementation
of the two models is the money flow i.e. who pays
whom. In Indian context, the implementation of EPR system
will require a complete shift in consumer behavior.
Summary mapping of sensitivity analysis versus the three
models is shown in table 2. The mapping indicates that a clear
trade off is required between the government participation
in terms of land/ subsidy/ customs duty & octroi waiver/
income tax rebate/ interest rate rebate and input raw material
cost, rights to sell recovered material and recycling fee.
Further, the timing of this trade off is linked to time taken to
shift consumer behavior from money receiver to money
payer. This provides the basis for either supporting the
conventional recyclers for a particular time period or lead to
development of PPP model.

IV. CONCLUSIONS
The major factor for implementing PPP model is the level
of government participation, which can be in terms of
provision of land on concession basis and/ or equity
partnership. Further, user fee or service fee collected by
the government under this model can be in the form of annuity
transferred from the government to the recycling project
operator every year. The recovery of this fee can come either
from tax collected 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/ sale,
which will prevent its leakage to informal sector. This will
also deter business/ commercial/ formal sector to sell E-waste
to informal sector. The collected user fee can be transferred to
a fund specially created for E-waste recycling, which is either
managed by the government agency or an independently.
Money from this fund can be transferred to the recycler as per
approved annuity, based on statement of accounts submitted
by the recycler to regulator. One of the major advantages of
this mechanism could be that this user fee can also be levied at
the time of sale of brand new electrical and electronic
equipment and transferred to the same fund in case of
implementation of EPR regime. The timing of this transfer
will be in line with PPP contract conditions, when government
entity prefers to exit from the model and transfers all its roles
and responsibilities to other entity in EPR regime. A rough
estimate of this exit has been estimated to be eight to ten years
in India. Therefore, PPP model can serve as a viable transition
mechanism to an EPR based regime for E-waste management
in Maharashtra and India.

REFERENCES
[1] Central Pollution Control Board (CPCB). Guidelines for
Environmentally Sound Management of E-Waste. CPCB,
Ministry of Environment & Forests, Delhi, India, 2008.
[2] Maharashtra Pollution Control Board, Report on
Assessment of Electronic Wastes in Mumbai Pune Area,
Mumbai,
India,
March
2007.
http://mpcb.gov.in/ewaste/ewaste.php
[3] Amit Jain and Rajneesh Sareen; E-waste assessment
methodology and validation in India, Journal of Material

Cycles and Waste Management, Volume 8, Number 1 /


March, 2006, Springer-Verlag.
[4] Chapter 3: Current Practices of WEEE/E-waste
Management,E-waste, Volume II, E-waste Management
Manual, UNEP, DTIE,IETC, Osaka/Shiga, Dec 2007
[5] Government of India, Ministry of Environment and
Forests, National Environment Policy 2006, Delhi, India. 18th
May 2006. http://www.envfor.nic.in/nep/nep2006e.pdf
[6] Hazardous Wastes (Management and Handling) Rules (as
amended on 6/1/2000,21/5/2003 and 2008).The Gazette of
India, No. 465, 28/7/1989, 1989.
[7] ELCINA Electronic Industries Association of India. Study
on Status and Potential for E-waste Management in India,
Department of Scientific and Industrial Research (DSIR),
Government of India, India, February 2009.
[8] Johri Rajesh, E-waste: Implications, Regulations and
Management in India and Current Global Best Practices,
TERI Press, 2008
[9] Extended producer responsibility in a non-OECD context:
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in India, Panate Manomaivibool, Resources, Conservation and
Recycling 53 (2009) 136144.
[10] PF II Division, Department of Expenditure, Ministry of
Finance, Government of India, Guidelines for formulation,
appraisal and approval of Public Private Partnership (PPP)
Projects costing less than Rs.100 Crore, India.
http://www.pppinindia.com/pdf/guidelines_projects_lessthan_
hundred_crore.pdf