May/June 2013
The first rigorous study of U.S. end-of-life electronics markets reveals a small volume of exports entering a global market for reusable devices and processed commodities.
By Ellen Ryan
Because the United States is the world’s largest market for new electronic products, it also generates a lot of used electronics—and a lot of interest in where those used products end up. Talk has circulated for years that U.S. collectors and processors “dump” large volumes of used electronics in poor countries overseas, and that electronics exported as repaired or refurbished are not, but these stories are largely anecdotal. No one has had reliable, comprehensive data on what happens to U.S. used electronic products after they’re discarded or, if they’re exported, where they go and what happens to them at their destination. Now the U.S. government has stepped in to provide the most detailed picture to date.
In March, the U.S. International Trade Commission (Washington, D.C.), an independent, quasi-judicial federal agency, released Used Electronic Products: An Examination of U.S. Exports. The agency produced the 250-page report at the request of U.S. Trade Representative Ron Kirk, who noted that the National Strategy for Electronics Stewardship recommends collecting such data to better manage electronic products through their life cycles. The agency’s researchers based the quantitative findings mainly on data they collected through a random, nationwide survey of 5,200 electronics refurbishers, recyclers, brokers, information-technology asset managers, and others who handle used electronic products, leaving out firms that employ fewer than 10 people. The commission supplemented that information with confidential, firm-level export data collected by the U.S. Census Bureau (Suitland, Md.). It also conducted interviews, heard testimony, and reviewed existing literature, including ReMA and other industry reports.
The variety of survey participants indicates the difficulty of tracking such information. The report identifies six ways an item might enter the used electronic product supply chain and four steps in that chain, and exporting could happen at any point in that process. That’s one reason it’s so hard to pinpoint what’s sold to whom, in what condition, and for what purpose. Another complication is the range of products involved: Computers, monitors, televisions, and mobile devices are perhaps the most common, but the supply of used electronic products, or UEPs, also includes computer parts and additional peripherals; audiovisual, telecommunications, and office and medical imaging equipment; whole and shredded circuitboards; wires and cables; and commodity metals, plastics, and glass.
The ITC report determined that most U.S. used electronics never leave the country. In 2011, only 7 percent of this material was exported when measured by value; 17 percent when measured by volume. By value, tested, functioning electronic devices were the most prevalent exports. By volume, scrap commodities were the most prevalent, with the metals, plastics, glass, and circuitboards from disassembled or shredded electronic products exported for use by overseas smelters or manufacturers. Notably, the researchers found that less than 1 percent of U.S. exports was shipped for disposal. Of the range of companies surveyed, about 25 percent said they are “directly engaged in exporting,” according to the report, and another 27 percent said they are “reasonably certain some portion of their UEP output was later exported by another organization.” Here’s a more detailed look at the report’s findings.
How Much Gets Exported?
The report, based on data from 2011, looked at both whole electronic equipment—working and nonworking—and its components. For both categories, exports were a very small proportion of the total. In other words, the majority of used electronic products collected in the United States remained in the United States.
The researchers looked at this market both by dollar value and by volume. By value, about $20.6 billion of U.S. used electronic products was sold in 2011. Exports were $1.45 billion, or 7 percent, of that total. Most of those (69 percent) were whole electronic products sold for reuse, which were worth $1 billion. The vast majority of those products (88 percent) were tested and working. The second largest category by value was exported commodity materials and parts not intended for reuse, which were worth $439 million, making them 30 percent of total exports.
Looked at by volume, the United States collected 4.4 million short tons of used electronic products in 2011 and exported 760,000 tons, or 17 percent of total collections. By this measure, most exports were scrap materials. Commodity scrap metals and parts not intended for reuse together were 91 percent of total U.S. exports of disassembled UEPs.
Who’s Exporting?
The survey compared characteristics of entities that export with those that do not export. As mentioned above, more than 25 percent of responding organizations reported exporting used electronics, and another 27 percent said they are “reasonably certain” other organizations later export some of their material. Though exports take place at all points in the used electronic product life cycle, the largest segment of exporters (41 percent) consisted of those who refurbish and repair devices, followed by those involved in wholesaling, brokering, and retailing electronics (27 percent). Twenty-seven percent of exporting entities reported holding some type of certification, compared with 15 percent of nonexporting entities. Among the types of firms that export, recyclers had the highest proportion of certifications, with 67 percent of exporting recyclers reporting they hold one or more industry certifications, such as the Responsible Recycling (R2) Practices for Use in Accredited Certification Programs for Electronics Recyclers, R2 combined with ISRI’s Recycling Industry Operating Standard™ (R2/RIOS™), or the Basel Action Network’s e-Stewards® program.
What Countries Receive Used U.S. Electronics?
Three-quarters of exported UEPs ended up in just four places in 2011. The largest proportion of exports—26 percent, or about 199,000 tons—went to a group of 11 Asian-Pacific nations excluding China, Hong Kong, and India. Within that group, the material primarily went to South Korea and Japan, according to the report, but smaller quantities went to Australia, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. China and Hong Kong together received 18 percent of exported material, about 133,000 tons; followed by Mexico, 129,000 tons (17 percent); and India, about 99,000 tons (13 percent). Less than 1 percent of used electronic products exported from the United States in 2011 went to Africa.
The researchers determined that just over half of exported used electronics, by weight, went to what’s typically considered the developed world—members of the 34-nation Organization for Economic Cooperation and Development (Paris), which include Canada, Mexico, most of Europe, Australia, New Zealand, Israel, Turkey, Japan, and South Korea. Large copper and precious metals smelters in some OECD countries—most notably, Belgium, Sweden, Japan, Canada, and South Korea—can refine the processed commodities from UEPs and recover individual metals, the report points out.
The largest non-OECD destinations were India, Hong Kong, and China, which, combined, received about 31 percent of exports by weight. These countries are likely to have major reuse markets for refurbished UEPs, the report states, and they also are “important manufacturing centers for electronic products, with demand for used products and parts for remanufacturing, as well as for raw materials derived from UEPs that can be used to manufacture new products.”
How Are Exported UEPs Used?
By weight, the largest proportion of exports (43 percent) was commodity materials intended for smelting or refining. Exports intended for resale as whole equipment or working parts—either after further processing or without further processing—together were 14 percent of the total. Though survey respondents selected “other” as the end use of another 14 percent of exported material, the report points out “that vast majority of those [uses] were described as exports destined for redistribution, repair, or recycling through specific channels (such as through warranty programs, tracked distribution networks, or other known channels for recycling activities).” Eleven percent of this material was exported for processing or disassembly. Respondents reported “unknown” as the end use of 18 percent, or 102,000 tons. Just 0.8 percent, or about 6,000 tons, of used electronics was exported for final disposal.
The survey asked respondents to what type of entities they ship their used electronic products, and these answers closely matched the end uses. More than 40 percent of UEP exports by weight went to commodity processors: just over a third to foreign smelters and metal foundries and about 7 percent to enterprises that reprocess commodity plastics. About 29 percent was shipped to enterprises that refurbish or remanufacture intact UEPs. A little less than 13 percent of UEPs went to entities labeled “unknown,” though the report suggests that category “likely includes various types of trading companies, such as brokers and resellers unknown to the exporter. … The involvement of such trading firms in the UEP industry often makes it difficult to identify the final end use of these products.”
What Affects the Decision to Export?
The survey asked respondents what factors affect their decision to export. Across the entire survey pool, market demand was the No. 1 factor encouraging exports, followed by commodity prices and overseas labor costs. The factors cited most often as discouraging exports were a commitment to keeping work in the United States and environmental concerns. About two-thirds of exporting companies said market demand encourages exporting, followed by commodity prices, knowledge of foreign markets, and foreign labor costs—each was cited as an encouraging factor by about one-third of this population. Entities that do not export cited environmental concerns and a belief in keeping work in the United States almost equally as factors discouraging exports—46 percent and 45 percent of this group, respectively—followed by certification program requirements.
The report describes several domestic and international factors that influence exports of U.S. electronic products. The United States has limited capacity to process the leaded glass from cathode-ray tubes and smelt copper and precious metals from the circuitboards in electronic products, which creates an incentive to send such products overseas, it states. Most CRT processing facilities are in Mexico and India, which are among the top destinations for U.S. exports of UEPs, but exports of CRTs are regulated by the U.S. Environmental Protection Agency (Washington, D.C.), which requires certain notifications and permissions from its officials and from the destination country. Further, 28 state electronics recycling laws “generally depress exports by changing the cost structure of the local UEP industry,” the report states. These include producer responsibility laws, consumer fees, landfill disposal fees, and disposal bans.
Outside the United States, market demand is a major driver of exports. In OECD countries, with the exception of Mexico, there is little demand for intact, functioning UEPs, the report states. Instead, such countries want the processed commodities, primarily copper and precious metals from circuitboards. In the rest of the world, there’s strong demand both for working and repairable UEPs for reuse and for scrap commodities—primarily metals, plastics, and glass—that can be used as manufacturing inputs. Of course, market demand is up against international trade regulations, most notably the Basel Convention, which uses a notification-and-consent system to limit or forbid trade in hazardous waste, including some materials found in UEPs. Though the United States has not ratified the convention and is not bound by its provisions, “a number of developing-country signatories agree not to import nonworking UEPs from OECD member countries,” the report states. Some individual countries restrict or forbid the importation of UEPs as well.
Addressing Informal Recycling
Although this study turned up no quantitative data on the informal and unregulated recycling of exported UEPs, the researchers came to several conclusions about the likelihood of U.S. electronics ending up in such facilities. Working used electronic products have a higher resale value than the recoverable materials they contain, the report states. Thus, “the end use for most working and repairable personal computers, cell phones, and other UEPs that are exported [from the United States] is initially a secondhand market.” At the same time, “it is likely that some portion of U.S. UEP exports are processed in the ‘informal’ recycling sector, either upon import or after a second or third useful life in the destination country,” and some disassembly of UEPs occurs with “little regard to health, safety, and the environment.”
The report suggests that conditions reported on a decade ago might not be as prevalent today. “Since concerns about informal recycling were initially raised in the early 2000s, there have been significant changes in both U.S. and foreign practices involving electronics recycling and exports,” it states. New recycling and smelting technologies and the growth of formal processing capacity in both the United States and abroad, most notably China, are most likely “diverting some material away from informal recycling.” Another section of the report points out that “an increasing share of material flowing into the informal processing sector in developing countries appears to be locally or regionally sourced, with less originating in the United States.”
The ITC’s research included a public hearing in May 2012 at which more than a dozen industry participants testified. At the hearing, Joe Pickard, ISRI’s chief economist and director of commodities, described an ISRI-sponsored study by International Data Corp. (Framingham, Mass.) in 2010, which estimated that electronics recycling generates annual revenues of $5.2 billion and employs 30,000 people in the United States. He also noted that electronics is the fastest-growing segment of the recycling industry and that the global market for scrap commodities has increased tenfold over the past two decades.
Given all that, it’s reasonable to conclude that the importance of electronics reuse and recycling will only grow. Pickard urged a focus on promoting “responsible recycling globally,” with efforts concentrated on “enhancing and promoting facilities that will receive and properly handle recycled materials anywhere in the world.”
Ellen Ryan is a freelance writer based in Rockville, Md.
The first rigorous study of U.S. end-of-life electronics markets reveals a small volume of exports entering a global market for reusable devices and processed commodities.