Russian lead industry says hazard waste reform to harm operations

The Russian lead business community said the inclusion of the metal in the country's hazard waste management reform overlooks the high market value of reclaimed lead and effectively bans a well-functioning infrastructure that already ensures 100% of spent lead batteries being collected and utilized.

A dozen Russian lead and lead battery manufacturers signed a letter seen by S&P Global Platts and sent to the country's Prime Minister, the Federation Council and the Industry and Trade Ministry, where they urged the government to take measures to prevent a slump of the country's lead industry, if the existing system of handling used lead batteries is stopped.

Specifically, the petitioners have asked for excluding lead-acid batteries from the scope of articles 14.1-14.4 of the Federal Law on industrial and household waste.

The articles place spent lead-acid batteries -- the main source of input for the production of lead in Russia -- under waste of I and II hazard classes, the management of which will be reshaped and subordinated to a centralized entity.

The main flaws of the suggested reform, according to the lead industry advocates, is that it puts out of work thousands of retailers involved in supplying spent batteries. This in turn incentivizes the growth of a black market, and compromises lead producers' access to reclaimed material as it cuts off long-established economic ties between the generators of waste, its processors and end-users.

Proposed changes

From March, Russia is set to introduce an all-federal program streamlining I and II hazard class waste management. State nuclear company Rosatom was appointed to take on the overall management through its subsidiary, the Federal Environmental Operator.

The FEO will be made responsible for the collection, transportation and recycling of hazard waste, including spent lead-acid batteries disposed by enterprises and households alike.

In line with the new rules, companies will have to hand in spent batteries for free, as well as to cover expenses for their utilization in the form of tariffs that are yet to be determined by the operator. Making them pay environmental fees will hike the cost of batteries for the general population, the industry representatives said.

The FEO will hold tenders to select regional operators, and such an entity awarded the contract for collection services -- enveloping each federal constituency -- will have to set up the infrastructure for hazardous waste sorting and accumulation.

The risk of the proposed program is that it replicates the principles of solid municipal waste management in a way that does not ascribe any value to lead waste. This must be handed over for disposal without remuneration, the letter said.

They premonish that by stripping spent batteries off their economic value and taking away from hundreds of thousands of people the income they used to raise through collecting and selling batteries, the program lays a basis for the sector's participants to migrate to doing business off the books.

Reclaimed lead sole input

Russia has no capacities for the production of lead from primary raw materials of ores and concentrates, according to the letter. Of all the 200,000 mt/year secondary lead produced in the country, 80% is made from inputs reclaimed from batteries, and the remaining 20% from other lead-containing waste, such as scrap.

Spent lead-acid batteries do not end up in landfills and are not thrown away. They are an asset that is historically sold daily on the free market, with its value formed off quotations on the London Metal Exchange. The actual collection of old lead batteries in Russia and their recycling has already reached 100%, the representatives added.

Also, the new program is limited to the stage of recycling and exclude producers of lead-containing products from the chain. Therefore, it is not clear whether and how these main end-users of reclaimed lead will continue getting this critical feedstock, they said.

Neither lead plants nor the federal operator are able to rapidly set up their own infrastructure, and have it ready on each allocated territory by March, to accept and treat batteries in amounts sufficient to ensure high utilization rates at lead plants.

Implementing the new lead-acid battery disposal program will take a long time and entail significant costs, both for the state and for lead plants. The associated expenses will elevate prices of lead and lead-containing products.

Meanwhile, if the existing infrastructure for the accumulation of batteries goes out of use, their collection and processing is going to be suspended, disrupting the feed supply to manufacturers of lead and lead-based batteries, cables, cartridge and other products.

That pause will work in favor of foreign lead and lead products suppliers, defeating the state's goal of replacing imports with homemade analogues, the industry groups said.