What’s in the blue box? And what does it teach us about innovation?

The recent launch of a new super-efficient e-waste recycling technology in Australia by Ai Group member PGM Refiners is a good news story in itself – a local company taking the best of overseas technology to radically improve local practice. But it also suggests broader lessons for how innovation is done, and how ready policy makers should be for technology to upset assumptions.

Australia produces growing amounts of e-waste each year – everything from televisions and computers to lightbulbs and toasters. Much of it contains valuable materials, but the process of disassembling the products and separating the materials can be slow, labour-intensive and therefore expensive. Flat panel TVs provide more valuable materials than old CRT TVs with leaded glass, but they can still contain a hundred screws or more that must be carefully removed to disassemble the device without releasing toxic mercury vapour.

The Swiss-derived BLUBOX technology inside the big blue box now installed by PGM (see picture above) automates the process. TVs and other devices fed into the unit are simply broken up in a sealed environment where all mercury is collected and fragments of different materials can be separated and sorted.

The system can process the equivalent of 300 LCD displays per hour – during which time a human recycler might disassemble just two. That higher productivity should bring recycling costs down.

It’s an impressive system, and the installation in Melbourne is one of the first handful in the world. Dr Karl Baltpurvins of PGM’s majority owner, Toxfree, explained at the launch that while imaginative management and committed staff are essential to innovation, government policies also have a crucial role to play, particularly in waste and sustainability. Co-investment by Sustainability Victoria helped make the business case for a risky investment in a fairly new technology stand up.

Meanwhile, the market for recycling, and the drive towards better solutions, is heavily shaped by government-imposed landfill acceptance standards, by the imposition of landfill levies and use of the funds, and by the product stewardship scheme applied to TVs and computer equipment by industry and government.

These are matters worth thinking about as the Federal Government puts a new emphasis on innovation across all its activities. Where else is regulation closely bound up in incentives for innovation? And how should the potential for innovation outcomes change our estimates of the costs and benefits of government regulation?

Meanwhile, the BLUBOX technology also signals disruption for parts of the recycling industry. In 2014-15 the Federal Government became alarmed at the possible collapse of some social enterprises that employ disabled and disadvantaged people to do the labour-intensive work of recycling e-waste. The Government moved to raise the mandatory e-waste recycling targets, in part to stabilise the recycling sector by ensuring a steady flow of work.

But the desire for stability is hard to square with the drive for disruptive innovation. If BLUBOX pans out and spreads around the country, one machine can now do the work of 150 unskilled labourers in the recycling sector. Automated systems need workers too, but the skills are different and the numbers smaller.

On the other hand, the existing manual approach potentially exposes workers to mercury from easily-broken LCD backlights, unless stringent safety procedures are observed; automation reduces mercury risks.

In recycling as in so many other fields, technology brings benefits for price and performance – but it requires governments, businesses and individuals to get used to change. The next review of the National TV and Computer Recycling Scheme, due anytime from July this year, will have a lot to think about.

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Tennant is Principal National Adviser – Public Policy at Ai Group. He has worked heavily on climate and energy issues, advising Ai Group’s Leaders’ Group on Energy and Climate Policy and developing reports on natural gas supply, energy prices and energy efficiency. He also works on a range of issues related to manufacturing and innovation. Previously he was an adviser in the Department of Prime Minister and Cabinet, working on fiscal policy, stimulus and infrastructure.

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