In 2010, Waste Electrical and Electronic Equipment (WEEE) volumes in the EU-27 for IT and telecommunications equipment were estimated at 750 thousand tonnes. Over the next four years, total WEEE volumes in the EU-27 are expected to grow cumulatively
by more than 10%.3 Yet looking at volumes of waste generated does not reveal the true value embedded in consumer electronics waste. While not being particularly significant in terms of weight, mobile phone waste has considerable value embedded in its materials and components. Typically weighing less than 150 grams, a mobile phone is packed with valuable materials such as gold, silver, and rare earth metals. Given today’s low collection and recycling rates, nearly all of this material is lost. In Europe alone,
for example, 160 million discarded but uncollected devices represent a material loss of up to USD 500 million annually. With collection rates in Europe hovering around 15% and mobile phone designs becoming increasingly integrated, there is hardly any component reuse or remanufacturing, and the secondary mobile phone market (while fast growing) is almost negligible at around 6% of the primary market.4
In order to understand the economic implications of circular activities in the mobile phone market, we applied our circularity calculator to a standard low-cost mobile phone valued at USD 36.5 We first assessed the economics of different circular options for mobile phones and subsequently considered associated environmental benefits (with a focus on carbon emission savings).
In today’s world with low collection rates, partially attributable to contract schemes that, in the majority of cases, do not require customers to trade in old devices after the typical 24-month period, we did not identify a lot of economic potential except for the obvious phone resale. Yet this circular option also suffers under today’s limited return incentives and inadequate reverse logistics, in that many collected devices are in poor condition both functionally and in terms of appearance. Further, demand for used devices strongly varies between handset make and model.
With the advent of shortages of some rare earth6 and precious metals, the recycling of mobile phones has gained momentum over the past year. Now, the share of phones being channelled to recycling has risen to 9%, but only a small fraction of the more than 20 different materials they contain is ultimately recuperated.7
To maximise the economic benefit of keeping mobile phones or at least certain components in a tighter circle at a profit for the manufacturer, only a few things would need to change in the short term (Figures 1 & 2):
Improving overall collection from 15% to 50% (close to the proposed WEEE regulation target of 65% by 2016).8 A better collection system would allow manufacturers, remanufacturers, and vendors to gain scale, which would justify investments in larger, more streamlined facilities and hence further improve the attractiveness of these circles by increasing their efficiency. Collection can be encouraged with lease/buy-back models, an improved customer dialogue, and, under certain circumstances, with deposit system, and will need to be complemented with more semi-automated treatment and extraction systems or better pre-sorting before shredding (to catch reusable phones and materials). For greater efficiency when moving into the ‘advanced’ circularity stage, the phone industry would need to form joint collection systems (e.g., with original equipment manufacturers (OEMs), operators, retailers, manufacturers, reverse logistics companies). Such concerted efforts are essential to fully overcome interrelated quality leakage points along all reverse value chain steps.