Transaction costs in WEEE recycling value chains: an analysis of WEEE recycling under collective and individual producer responsibility

Sammanfattning: Increasing waste electrical and electronic equipment (WEEE) has become a global issue that raises social and environmental impact concerns, and recycling and using recycled materials is proposed by policymakers and academics as a solution. Nevertheless, barriers still exist and result in low collection and recycling rates and underdeveloped recycling markets. This paper aims to first understand how WEEE recycling value chains are structured, from WEEE collection, pre-treatment, recycling to using recycled materials in new products. To give a more holistic view, two types of waste management approaches are examined: Sweden for collective producer responsibility (CPR), and Dell Technologies for individual producer responsibility (IPR). Then, this paper seeks to analyse how transaction costs associate with the use of recycled materials and how they influence the upscale of WEEE recycling. Qualitative research is adopted in this research, and data is collected via literature review and fifteen interviews with practitioners. The results show that the WEEE recycling value chain is fragmented and dispersed with multiple stakeholders involved. WEEE is transported between regions before converting into recycled materials. In the phase of using recycled materials, transaction costs are associated with due diligence (searching for and assessing buyers and sellers), negotiation on quality and prices and lastly, monitoring and verification of environmental benefits. Both actors under CPR and IPR have to overcome transaction costs when adopting recycled materials. Even though transaction costs of WEEE recycling are unavoidable, stakeholders driven by solid incentives proven that transaction costs can be overcome and closed-loop recycling is possible. Nevertheless, transaction costs still hinder WEEE recycling and outweigh the benefits of recycling. In light of this, policymakers should initiate more stringent regulations to nudge the transitions, and two strategies are proposed based on findings: optimise recycling outcomes so the benefits outweigh transaction costs, or eliminate transaction costs with policy instruments.