Proposed Recycling Mandate Could Benefit Investors

The introduction of mandatory electronics recycling laws could create a money-making opportunity for savvy investors.

Recently, U.S. Senators Jim Talent (R-Mo.) and Ron Wyden (D-Ore.) introduced the Electronic Waste Recycling and Promotion and Consumer Protection Act, which would require the recycling of all electronic equipment containing a display screen greater than four inches or any computer system unit.

If the bill were to pass, more than 150 million tons of old monitors, televisions, and computers would be sent to electronic recyclers, who currently process only about 15,000 pounds of waste electronics annually. Among the companies that could benefit from this legislation are Waste Management's (WMI) Recycle America Alliance and the Australia-Based Sims Group (SIMEF.PK).

Were this legislation to pass these companies could see millions of dollars in new revenues. By way of example, the bill would establish an $8 per unit tax credit for companies that recycle at least 5,000 display screens or computer system units per year. The credit would help to offset the cost of recycling this material. Since the Senators estimate that 500 million computers may be discarded in the next few years that could mean a revenue stream of $4 billion to recyclers.

There is also a $15 tax credit for consumers who recycle their old HP's, Dell's, IBMs, and the like, provided they use qualified recyclers like the aforementioned Recycle America Alliance and Sims Group.

Furthermore, the bill, if passed, will modify the U.S. Environmental Protection Agency's (EPA) Universal Waste Rule to classify computer monitors, PDAs, some video game consuls, etc. etc. as "universal waste" which will make it easier for recyclers to collect, transport, and process.

The Wyden and Talent bill would also encourage the expansion of a national recycling infrastructure which may also bring recycling companies which do not currently process electronic waste into this potential booming market.

According to a statement from Senator Talent's office, some states are developing e-waste recycling programs (California and Maine would be examples); however, no such program exists on a national level. A unified, national program may ultimately be desirable for consumers because manufacturers and retailers frequently have a difficult time adhering to different standards under various state laws. Under the current system, states that do not enact their own recycling laws can become dumping grounds for those that ban e-waste disposal.
A number of groups have expressed their support for the approach taken in the Wyden-Talent e-waste recycling bill, including the National Recycling Coalition, the Environmental Technology Council, the Consumer Electronics Retailers Coalition, Waste Management Corporation, Hewlett Packard Corporation and Intel Corporation.
The bill is expected to be referred to the Senate Finance committee, of which Senator Wyden is a member.