MESSAGE FROM THE CEO AND GENERAL MANAGER

PEDRO NAZARETH

MESSAGE OF CEO

In 2022, Electrão again surpassed itself. In 2023 we want to continue to do more and better. But the results of recycling systems depend on a multitude of factors. This is an equation with several variables and the formula is not exclusively held by the Producer Responsibility Organizations (PRO).

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PACKAGING

BATTERIES

ELECTRICAL EQUIPMENT

The challenges facing the waste sector in this area are multiple and are now framed by the recently published Strategic Plan for Urban Waste (PERSU 2030).

Electrão remains committed to improving the overall results of packaging recycling, namely in plastic and glass, and therefore integrates innovative collaboration platforms, such as the Portuguese Pact for Plastics and the Glass+ Platform.

Also, in 2022 Electrão developed a study of characterization of waste that results from the activity of urban cleaning and concluded that there is, in this universe, a great potential for recycling with packaging with little contamination index. Packaging separation projects based on urban cleaning can thus significantly increase recycling, precisely in plastic and glass.

The expansion of the scope of activity to the sphere of used packaging of non-urban origin will be another of the major changes in this recycling system that will imply a model of operation and articulation of the different agents. Until now, the system only promoted the collection and recycling of urban packaging in collaboration with municipal waste management systems, but it will now have to include the main agent of the non-urban circuit, the waste management operator.

The new deposit refund scheme has not yet come into operation on a large scale, at the national level, but the effects have already begun to be felt in the packaging recycling system, because of the pilot projects that have been developed all over the country. Electrão has integrated and continues to promote one of these pilot projects -the "MAFRA recycle a valer+" - in collaboration with several partners.

Many beverages packaging, like cans and plastic bottles, less than three liters, are now included in the new model, but there is a part that will continue to be sent to the traditional recycling bins and, unfortunately, to the common garbage. The system is not yet operationalized in Portugal and Europe is already discussing a new regulation for this flow.

Given the need to improve the collection and recycling results of batteries at European level, this flow will soon be guided by a new Community regulation, linked to the action plan for the circular economy and the European Union's industrial strategy, which will bring more news. The changes to be made apply not only to environmental protection, but also to ethical and social issues related to the importation of some materials.

The new rules call for minimum levels of raw materials critical to the digital and ecological transition, such as cobalt, lead, lithium, and nickel, to be recovered through recycling and incorporated into new products.

Batteries will have to be easier to remove and replace, which will impact product life cycles.

The planned changes are intended to improve collection and recycling results in this area, with the imposition of even stricter targets, which will be a major challenge for the entire value chain, from design to consumption to end-of-life management systems.

We accept that stabilizing a text for new licenses for used batteries in the context of the imminent adoption of a new European regulation for this flow is a challenging task, to say the least.

The European Union is preparing to adopt the regulation on critical raw materials, which aims to meet the demand for certain materials considered strategic for the sovereignty of the European Union and for the operationalization of the digital and energy transition.

Some of these elements are present in electrical equipment, which will imply increase collection and recycling. In Portugal this reality forces us to face the problems of the sector that are well identified and continue to prevent the achievement of good recycling results, in particular, those related to the illegal market, the lack of supervision and the lack of accountability of the different actors in the value chain.

It is public that there are many black-market operators who illegally divert and process waste from formal channels with serious damage to human health, environment and economy. It is therefore urgent to invest in a modern inspection system that uses digital instruments. An example of the innovation needed in this field are the GPS that Electrão used in the context of the WEEE Follow project and that allowed to confirm the size of the black-market: 3 out of 4 used equipment placed on the public road are diverted to this informal circuit.

And because the Producer Responsibility Organizations coexist in a competition regime, which requires adjustments to promote the balance of the system, it is urgent to find a mechanism that can make compensation decisions effective, which CAGER has been not able to operationalize.

The regulatory framework, too dense, holds the Producer Responsibility Organizations hostage, limiting creativity and innovation to achieve what the licenses impose: more and better recycling. The extension of license periods will allow Producer Responsibility Organizations to plan for the longer term. At the same time, a serious effort must be made to simplify administrative processes. It makes no sense to maintain the levels of regulatory complexity that deviate from the essential.

In this complex equation, good results do not depend exclusively on the entities, which have the role of organizing, operationalizing and financing the system, including the expansion of the collection network, to increase the quality of the service and the execution of communication and awareness campaigns to enhance better results.

The final product is the result of the performance of a group of actors. It starts with the consumer, but also includes enterprises, waste management operators, municipalities, retailers, installation and maintenance companies and supervisory bodies. Each agent in this value chain has a decisive role in the results and this responsibility can under no circumstances be diminished.

PEDRO NAZARETH

CEO

RICARDO FURTADO

MESSAGE FROM THE DEPUTY DIRECTOR-GENERAL

Innovation was the watchword in 2022. The operating results speak for themselves. In 2022, Electrão collected 40% more used electrical equipment, 14% more portable batteries and 2% more packaging, compared to the previous year.

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2022 was a year especially dedicated to innovation at Eletrão, which contributed to the good results achieved in operational area, as described by Eletrão's General Director, Ricardo Furtado.

In 2022, Electrão collected 40% more used electrical equipment, 14% more portable batteries and 2% more of packaging, compared to the values achieved in the previous year.

36% of the used electrical equipment collected was sent to partners with Cenelec certification, the most demanding in the world of recycling.

Electrão is also assuming an increasingly relevant role in the management of some critical fractions of the treatment of electrical equipment, which must be eliminated within controlled processes.

In 2022, Eletrão collected small electric equipment by post and consolidated the project of collecting large household appliances door to door, an initiative currently in force in some municipalities of the Lisbon Metropolitan Area. It contributes to minimize the illegal circuits and prevents these materials from being placed on public roads and diverted to the black market.

Eletrão has strengthened its collaboration with waste management operators, which helps explain the good results achieved, and continues to invest in diversified storage to ensure more safety and comfort at collection points.

RICARDO FURTADO

Deputy DIRECTOR-GENERAL