LEGISLATION: Proposed Recycling Rules Create Obstacles

Not satisfied with "take-back" policies that apply only to package recycling, environmental officials in Germany, Sweden, the Netherlands and the European Union (EU) are busy developing proposals to ex-tend the program to automobiles and electronics. If these stewardship measures find their way into law, American companies' ability to sell products in the European market is likely to be further hampered.

U.S. manufacturers already have adapted to a dizzying array of European packaging laws. These requirements have forced companies to change product and packaging design and to pay collection and recycling fees. Product makers, in turn, have insisted that raw material suppliers and component fabricators meet new specifications and standards as well.

Whether the "producer responsibility" notion takes hold in the United States will probably depend on the outcome of the November elections. For now, the new Euro-pean approaches are enough to incite trade disputes even more belligerent than the ecolabeling brouhaha. Domestic manufacturers have charged that European labeling protocols often favor European-made products. Still, in spite of the likely economic fallout, European officials seem bent on finding new ways to apply the stewardship concept without seriously considering whether a problem exists.

Five years ago, Germany created a packaging collection monopoly - Duales System Deutschland - that collected fees from packaging manufacturers who failed to recover their products after consumer use. Other countries, France and Austria, for ex-ample, were quick to adopt comparable rules. Unfortunately, it was easier to transplant the concept than to exactly match the requirements country by country. As a result, a pastiche of these systems soon developed, threatening unity a-mong the EU nations. Finally, last year, the EU adopted its own legislation that reconciled many conflicts and smoothed over various rough spots.

Seemingly convinced that its member countries can cooperatively manage product-recovery rules, the EU is forging ahead with a proposal requiring makers of cars, light trucks and motorcycles to take back and recycle their vehicles. In addition, the draft EU di-rective would force these manufacturers to reclaim vehicles that were sold years before the proposed law's effective date.

Even though 75 percent of the typical European car already is recycled, manufacturers will have to meet an 85 percent standard by 2002 and a 95 percent standard by 2015, according to the proposal.

The potential stewardship rules for the electronics sector will apply to nearly every object powered by electricity, from appliances to x-ray machines. For instance, Germany has proposed that, beginning in October, manufacturers should collect and recycle out-of-use electronics free of charge to the consumer. Meanwhile, last December, Netherlands officials told industry groups to prepare "voluntary" plans that could get underway by year's end. For their part, Swedish environmental officials want manufacturers to be responsible for recovering and reusing "all end-of-life electronics, regardless of the [production date]."

If EU member states continue to rush headlong into their separate notions of "responsible production," the EU governing body will be obliged to end the inevitable squabbling and confusion by enacting its own "harmonizing" legislation.

Even in Europe, there's still no "free lunch" in recycling. If individual countries or the EU itself force companies to reclaim and recycle their products, then the cost can be internalized only if collection and recycling are included in the products' prices. The scheme could work for new products, but not for products already in use. For the latter items, manufacturers will assume retroactive liability.

Although ready to pile still more costs on manufacturers, European regulators simply don't know whether scrap electronics are a problem and whether stewardship rules are the best solution. For example, a recent Dutch and Ital-ian report concedes that data on electronics is "very incomplete" and that electronic scrap represents only "a small portion of the total quantity of waste generated yearly." In fact, electronics constitute only about 2 percent of total EU waste for 1992, while vehicles account for about 0.2 percent, according to the report.

Nevertheless, the report warns about "a fast-growing mountain of [electronics] scrap that may endanger health and the environment." Ultimately, it urges take-back rules to exploit the recycling technologies that exist for many products and to force the creation of plants and infrastructure.

Finally, the proposed stewardship rules pose an especially daunting obstacle for U.S. firms, particularly companies with little experience coping with foreign market rules and no systems to collect and recycle old products.