Farewell, Old Fridge: Appliance Recycling Takes Off in Israel

A private company is getting its foot in the market before importers and manufacturers set up syndicates. At least the environment will benefit.

A new industry is set to arise on January 1 when the electronic waste recycling law takes effect. The opening of a multimillion-shekel market providing 500 to 600 new jobs will push Israel another step toward protecting the environment, but it could also drive up the cost of living. Either way, the law will create a new type of business for collecting, sorting, transporting and recycling.

Under the new law, appliance makers, importers and distributors bear the cost. Before the bill was passed, the chamber of commerce federation warned that recycling costs could add hundreds of shekels to product prices, but the Environmental Protection Ministry put that figure at an average of only NIS 1.50 per item.

The truth appears closer to the lower number, based on the experience of a pioneer in the sector, MAI Electronics Recycling. The company recently published its price list, which ranges from NIS 2.30 for recycling small office equipment like printers or scanners, NIS 11.10 for a television and up to NIS 38.40 for a refrigerator.

“There won’t be a deposit fee, so it will depend on the importer,” says MAI Chief Executive Dan Helman when asked if the costs will be passed on to the consumer. “The price we charge reflects the recycling cost of each product, taking into account transport, logistics, handling and the product’s social sustainability value.”

Starting in January, manufacturers and distributors will be required to recycle 15% of the quantities they sell. Each year the percentage will rise 5% until reaching 50% in 2021.

Trade-ins will be available for large household appliances. This means vendors will have to buy a customer’s old refrigerator when selling him a new one. Importers and manufacturers will have to display the details of this on every product and report to the regulator total sales of each product. Importers who don’t meet the recycling quota will be fined NIS 3,000 per ton.

Conflicting interests

As with other types of recycling, the state expects vendors to establish cooperatives to deal with the process. But this time a private company is trying to get ahead of the importers and manufacturers before they start a recycling nonprofit or syndicate.

Behind MAI Electronics Recycling are Helman, who previously managed mutual funds, Amnon Shechori from the high-tech world, and Malkiel Rachamim, a former deputy head of the Gush Etzion Regional Council.

“Electrical appliance and electronics importers, manufacturers and distributors have conflicting interests,” says Helman. “Proper environmental care of computers, for example, can generate a lot of value because the metals are expensive. But there isn’t much value in the environmental treatment of refrigerators. One vendor won’t want to finance the other; they’ll be at odds,” he says.

“On the other hand, recycling is measured based on weight, not type of appliance. It’s easier to collect one refrigerator than 20 computers, so we have a pricing advantage for appliance importers. When there’s a third party not connected to the sides it’s always easier.”

Most electronic waste – televisions, refrigerators, batteries – goes untreated, polluting land and water and posing health hazards. In 2010 about 85,000 tons of electrical and electronic waste was thrown out. MAI estimates that the average Israeli produces 12 to 16 kilograms of this waste a year, with the figure rising.

It is estimated that 50% of electronic-waste items weigh more than 10 kilograms each and are more than 50 centimeters long, with 15% of them computers, printers or cell phones. Among the largest importers are Electra, Brimag, Newpan, Ralco, HP and Lenovo.

Helman says his company aims to have 3,000 collection points by 2018. As a first step MAI started a pilot program with Delek Israel Fuel for placing four electronic waste collectors at its service stations. The next stage is an agreement with major supermarket chains to use their parking lots and shopping carts for collecting electronic waste.

As for logistics, Helman says MAI has agreed with the postal service when it comes to light items. Heavy items will be collected by the municipalities or the vendor, with the company collecting from them via shipping containers.

Do it like the Swiss

How will MAI contend with freelance collectors or junk dealers?

“The new law forbids this activity; it’s a criminal offense,” says Helman. “On the other hand, you can exploit market forces. If he brings the junk to the metal scrapyard I’ll encourage the scrapyard owner to take an environmental approach and separate the plastic. I’ll pay him a shekel for each item and then I’ll have done my part.”

The third part of the process is waste treatment. Everything will be brought to a sorting facility to be classified under six categories: heating or cooling products, televisions, lightbulbs, large appliances such as washers and dryers, small items and computer equipment. For the time being, MAI plans to have three manual sorting facilities.

Two treatment plants will later be established, one for machines, one for processes such as drawing the mercury out of lightbulbs and separating batteries from plastic.

Most European countries weren’t successful in their first years of similar legislation. Even after six years, few have surpassed the 35% recycling mark. MAI decided to learn from a country that succeeded – Switzerland – where 85% of the waste undergoes recycling. Helman hired a top Swiss official as a consultant.

“To succeed you must get the public on board,” Helman says. “We learned from the Swiss that everyone involved must have a seat at the roundtable.”

MAI estimates that to justify its financial model it will need to recycle at least 10,000 tons a year. This could mean losses in the early years; does the company have the means to absorb those losses?

Helman says the firm has financial backing and notes the benefits in the law. “The lawmakers recognized the difficulty involved and therefore established a gradual process,” he says. “And we’ve been preparing for a while now.”

Abdullah Shama