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By Michael Mann, Financial Times

EUROPE, 11 April 2002 -- White goods and electronics manufacturers will be responsible for financing the disposal and recycling of old appliances under new laws backed yesterday by the European parliament.

The assembly voted through a number of amendments to tighten the draft rules and enshrine the concept that manufacturers should only pay for handling their own waste products. The move follows intense lobbying from the domestic appliance industry and environmental groups.

The definitive shape of the legislation will now have to be finalised in a special "conciliation" committee made up of members of parliament (MEPs) and the 15 EU governments, which share decision-making powers on the issue. Member states have taken a vaguer line on producer responsibility, allowing for collective financing of waste disposal by all companies.

The Waste Electrical and Electronic Equipment directive forms the latest stage of the European Commission's drive to turn the "polluter pays" principle into law.

The Commission says electrical waste is the fastest-growing part of the waste stream and represents a big environmental threat. Industry groups have estimated that the proposals could require up to Euros 15bn (Dollars 13bn, Pounds 9bn) in new investment, as well as Euros 40bn to deal with equipment already on the market and Euros 7.5bn in annual running costs.

Parliament backed plans for producers to be responsible for their own products, saying this would act as an incentive to design better products. But it provided for the possibility of collective schemes if individual financing proved too burdensome.

It supported a temporary fee on the sale of new products to finance waste already on the market and called for producers to issue a financial guarantee when they sell a product to cover disposal. This countered fears that companies could be left to pay for the disposal of goods sold by companies that disappear. "MEPs have got the balance right," said Pascal Leroy of Ceced, which represents household goods makers. "Manufacturers should only have to pay for their own waste."

But Mr Leroy said this would be "impossible for the foreseeable future because of the problem of identifying and sorting waste". Parliament also voted to bring forward by a year to 2006 a ban on hazardous substances such as mercury, lead and cadmium, unless no alternatives are found. It backed the Commission's ambitious recycling targets of at least 75 per cent of the average product weight of large household goods being recycled or reused.

The vote was welcomed by industry groups, the Commission and Green MEPs.