Special compensation for small appliances and refrigerators
Challenges for our recycling partners selling metals and plastics
Last year our recycling partners were faced with the challenge of a collapse in metal purchase prices. They also had to contend with the continuing problems in plastics sales. The indices used in the remuneration model (BDSV, LME) were only partially able to compensate for these changes. Together with our recycling partners, SENS eRecycling analysed the situation and came up with a countermeasure. The difficult situation that recycling partners were facing was eased by special compensation for small appliances and refrigerators amounting to CHF 1.1 million.
The collapse in metal prices last year was not only a major challenge for our recycling partners, but also for the entire European recycling industry. Ample supplies from the aluminium and copper smelters led to a significant reduction in prices of secondary metals. The increased deductions for aluminium and copper in particular have caused problems for recycling companies. Because the indices (BDSV, LME) in the remuneration model are based on primary metals, they do not reflect the deductions. This meant that the price changes were not included in the remuneration models for the take-back systems. Plastics sales were another thorny issue. The price pressure on plastics from waste electrical and electronic equipment has increased again and revenues have halved in some cases compared to previous years.
A working group set up by SENS eRecycling worked to address this extraordinary situation. The working group consisted of recycling partners, representatives of the SENS Foundation and an independent consultant. It collected facts, analysed data and promptly drew up a proposal for the Finance Committee. The analysis showed that the 50 per cent buffer contained within the remuneration model already partially covers the increase in deductions for metals and that the price change for plastics is not currently taken into account. Using the market data collected, the working group determined that small appliances and refrigerators were the categories most affected by the plastics sales problem.
In April, the Board of Trustees approved the working group’s proposal on the recommendation of the Finance Committee. Special compensation of CHF 30.00 per tonne for small appliances and CHF 10.00 per tonne for refrigerators was introduced with retroactive effect from January 2020. Based on the quantities invoiced last year, the total special compensation distributed amounts to around CHF 1.1 million.