Amid rising awareness of environmental protection, manufacturers that are incapable or resistant to adopting "green manufacturing" will find themselves gradually losing markets, starting with Europe this year.
From Aug. 13, under the Waste Electronic and Electrical Equipment (WEEE) Directive passed by the EU in late 2002, Europeans will no longer be able to throw out old electronic equipment with the rest of the trash. Instead, brand-name electronics and electrical equipment producers will be required to take back products that users are finished with -- including items such as computers, cellphones, televisions and washing machines -- and pay for them to be recycled or disposed of.
Then, just as electronics makers are adapting to the extra expenses and responsibilities under the WEEE, another EU regulation -- the Restriction on Hazardous Substances (RoHS) Directive -- will go into effect on July 1 next year. This regulation bans six substances, including lead and mercury, from electronics products.
Six months after that, the US state of California plans to enact its own version of RoHS, and China also has similar laws in the works.
For Taiwan, the new EU policies are expected to affect the more than 30,000 manufacturers that export 44 types of electronic and electrical products to Europe every year, according to a study conducted by the Ministry of Economic Affairs.
Last year, Taiwan exported about NT$250 billion (US$8 billion) in goods to the EU that are subject to the rules, accounting for 2.45 percent of the nation's GDP, the ministry said.
The new requirements bring added costs, but industry watchers also note an opportunity -- the green rules offer a new area where a company can gain a competitive advantage. Likewise, firms that aren't prepared for the new rules will pay a price. Suppliers without compliant products risk losing customers, and brands found selling products that violate the rules will face fines -- even prison time in some EU countries. But despite the approaching compliance deadlines, surveys indicate a lack of awareness of the directives, especially among smaller companies.
Unprepared?
A survey conducted by the Taiwan Electrical and Electronic Manufacturers Association (電電公會), early this year showed that only 5 percent of electronic and electric makers conform to the WEEE regulations, while only 3 percent have come up with products that are in accordance with the RoHS standard.
Another survey released by the Ministry of Economic Affairs' Industrial Development Bureau in March showed that 63 percent of domestic manufacturers have started to prepare for the WEEE regulations, while 87 percent said they have begun to comply with RoHS.
"Few local manufacturers, especially small and medium ones, are ready for the new policies due to concern over the costs," said Lin Hung-tuan
Part of the lack of preparation for the directives originates in Europe itself, at least for the WEEE. The WEEE directive sets minimum standards and each EU country must pass their own laws to meet these requirements, in contrast to the RoHS requirements, which will be universally implemented in all EU member states.
As many countries have not yet passed their own set of laws to meet the WEEE requirements, the compliance deadline is being pushed back in some places. Britain, for example, earlier this year postponed the deadline for WEEE compliance until January 2006, saying it needs more time to set up the necessary infrastructure. The EU's biggest market, Germany, has announced a similar schedule.
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