Recycling and e-Waste Export Control are the Best Ways to Curb Counterfeiting

According to the U.S. Environmental Protection Agency (EPA), the average American household uses about 24 electronic products such as personal computers, mobile phones, televisions, and e-readers. With an ever increasing supply of new electronic devices, Americans discard more than two million tons of obsolete electronic products annually.

The proper disposal of this electronic waste (e-waste) is currently a major concern for two reasons: 1) the large volume of such waste that is generated and 2) because of the heavy metals and toxic substances it may contain; things like LCD monitors, circuit boards and batteries may contain substances such as arsenic, lead, lithium and mercury. According to a UN study up to 60 elements from the periodic table can be found inside e-waste items, as well as flame retardants and other toxic chemicals.

Recycling electronics reduces the energy spent in new product manufacturing, cuts the pollution that would be generated during manufacturing and also decreases the amount of valuable and limited raw materials that must be extracted for the creation of these products.

Scaling up recycling programs for e-waste would be beneficial for other reasons as well. Recently I came across an interesting article in National Defense Magazine (“Electronic Waste Rules Could Help Thwart Flow of Counterfeit Parts,” Feb 2015) about how recycling could—one can argue should—be a major weapon in the fight against counterfeiting. The authors of the article, Jim Burger (Thompson Coburn LLC), Henry Livingston (BAE Systems) and Tom Sharpe (SMT Corp) describe how counterfeiters overseas remove components from e-waste and re-purpose them for sale as supposedly legitimate parts:

…workers pull apart the e-waste by hand, often in backyards and dump sites. The e-waste is often heated over open fires to loosen electronic components so they are easier to remove from the circuit boards to which they are soldered. Because e-waste contains toxins, these processes create serious health and environmental hazards for the workers and the community at large. The parts are then dumped on sidewalks for sorting. The process is messy, so the components are washed in a river or left outside in the rain.

After drying in the open air, the parts are shipped to larger facilities that are set up for counterfeiting. The parts may be sanded or put through an acid wash to remove part numbers, then re-coated in a process known as “blacktopping” to hide identifying product information. Because chips are sensitive to moisture and static electricity incurred from improper handling, packaging and storage, the counterfeit process threatens already unreliable used components. In addition, the acid eventually eats away at a microchip’s internal parts.

The authors conclude:

By allowing an unchecked flow of e-waste exports, the United States is contributing to the feedstock used to create counterfeit electronic parts that can find their way into the DoD supply chain and can also present a public health and safety risk. Congress must go on the offensive against counterfeiters by enacting a comprehensive policy on e-waste exports.

Recycling in the U.S. could diminish the impact caused by exports of e-waste to developing countries that lack appropriate safeguards. It is estimated that more than 5,000 containers worth of e-waste is shipped to developing countries each year.

Unfortunately, though many attempts have been made no Federal e-waste recycling mandate currently exists. Nor is their Federal regulation controlling the export of electronic waste to developing countries, in part because of concern that such legislation would violate World Trade Organization regulations. Some opponents also claim that this type of regulation would harm the fragile economies of developing countries that currently trade in e-waste and therefore will widen the so-called digital divide by diminishing these countries’ access to affordable electronics. Still another reason why legislation has languished in Congress is because of concerns that e-waste export bans would interfere with the legitimate trade of various metals.

There is better news on the state legislative front. More than half of U.S. states have established an e-waste law and it is estimated that 65% of the population of the U.S. is now covered by a State e-waste recycling law.

Of particular interest to the MarketEYE audience, there are federal regulatory recycling rules for circuit boards within the United States. In general, circuit boards are subject to a special exemption from Federal hazardous waste rules. Whole unused circuit boards are considered unused commercial chemical products, which are unregulated. Whole used circuit boards meet the definition of spent materials but also meet the definition of scrap metal. Therefore, whole used circuit boards that are recycled are exempt from hazardous waste regulations.

Shredded circuit boards are excluded from the definition of solid waste if they are containerized prior to recovery. These shredded circuit boards cannot contain mercury switches, mercury relays, nickel-cadmium batteries, or lithium batteries. If these materials are not treated this way, then they are considered hazardous waste and must be treated as such.

There is a substantial effort taking place to recover valuable metals from used PCBs. For example, copper can be recovered from PCBs using a sequence of processes including milling, burning, acidic treatment and galvanic deposition. In a paper entitled “Characterization of Printed Circuit Boards for Metal and Energy Recovery after Milling and Mechanical Separation,” published in Materials (June 2014) the authors (Waldir A. Bizzo and Renata A. Figueiredo from the University of Campinas in Brazil and Valdelis F. de Andrade, from Brazil’s National Service of Commerce in São Paulo) analyzed PCBs from discarded computers to determine their metal content. The analysis showed that these PCBs consist of approximately 26% metal, made up mainly of copper, lead, aluminum, iron and tin, as well as other metals such as cadmium and nickel. Comparison with the results of prior studies indicated that the concentration of precious metals (e.g., gold and silver) has declined over time (probably as a result of cost).

The EPA estimates that in the United States only 11 to 14% of e-waste is sent to recyclers. The Coalition for American Electronics Recycling estimates that more than half of U.S. e-waste is shipped offshore. Both of these numbers are unsatisfactory. If we are going to get serious about stopping the flow of counterfeit parts and dealing with the environmental impact of unprocessed e-waste then clearly more needs to be done.