Critical raw metals inside the disposable e-cigarettes enticing Gen Z are more likely to be dumped than recycled.
It was the sickly sweet scent lingering outside the school toilets that first alerted headteacher Dan Cleary to an emerging trend when pupils returned after the summer holiday last year. Since then, rarely does a fortnight go by when he does not have to discipline a student for stashing a “vape”, or electronic cigarette, in their backpack or blazer pocket.
Over the past decade, sales of e-cigarettes have grown as vaping has cemented its status as a less harmful way to consume nicotine than traditional cigarettes. But in recent years, a new generation of brightly coloured single-use devices with flavours like “cotton candy” and “green gummy bear” have become incredibly popular among young people, including those not old enough to legally buy them.
Enticed by Chinese-owned disposable vape brands such as Geek Bar, Elf Bar and Lost Mary, 18 per cent of 15-year-olds in England and Wales were using e-cigarettes in February last year — an all-time high, according to the NHS. Overall, the number of 11- to 17-year-olds who were vaping in Britain more than doubled last year from 3.3 per cent in 2021 to 7 per cent.
The latest vaping craze is hardening fears that the devices could get underage users hooked on nicotine. But it has also created a whole new problem: tonnes of electronic waste.
Unlike Juul, the previous market leader which was blamed for sparking a “vaping epidemic” among US teenagers, these e-cigarettes cannot be reused or recharged. The devices are often discarded like cigarette butts outside the school gates, says Cleary, principal at Robert Smyth Academy in Leicestershire.
The materials in single-use vapes could have a valuable second life if recycled properly. Each device contains about 0.15g of lithium in its battery, a metal classified as a “critical” raw material by the US and EU. The International Energy Agency has warned it could be in short supply within two years as manufacturers race to scale up electric car production.
More than 90 tonnes of lithium were used in the production of the US$5 billion (NZ$8b) worth of single-use vapes sold globally last year, according to Financial Times estimates based on data from the research group Euromonitor, the consultancy ECigIntelligence and the electricals recycling non-profit Material Focus. That equates to enough lithium to supply more than 11,000 electric vehicle batteries. They also contained roughly 1160 tonnes of copper, enough for 1.6 million home electric vehicle chargers.
“If you wanted to invent a product to expose what’s rotten with the vaping industry, disposable vapes would be it,” says Shane MacGuill, head of nicotine research at Euromonitor.
The products are a major money-spinner, especially for companies based in Shenzhen, the heartland of China’s US$28b vapour industry. They have made entrepreneur Zhang Shengwei, 49, a fortune off the back of his majority ownership of Shenzhen iMiracle Technology and Heaven Gifts International, the companies behind both Elf Bar and Lost Mary.
Yet manufacturers globally have made little effort to enable the recycling of their products and prevent a precious resource from ending up in landfills. In the UK, the vast majority of smaller vape manufacturers and distributors are not registered to comply with legal obligations to fund recycling, according to new analysis by Material Focus shared with the FT.
Green Fun Alliance, a UK-based distributor owned by the company behind Elf Bar and Lost Mary, only registered late last year despite selling the products in the UK for about two years. Its £600m (NZ$1.1b) of sales accounted for more than 70 per cent of the UK disposable vape market in 2022. An Elf Bar representative says the brand is “dedicated to environmental protection”.
Policymakers are becoming increasingly agitated about the waste associated with the product on top of concerns over underage uptake. MacGuill believes regulation already approaching in Europe and parts of the US will quickly become “kryptonite” for the industry.
For countries such as the UK, which have historically adopted a laissez-faire approach to regulating vaping because of their focus on reducing cigarette use, single-use vapes pose an awkward question: do they now create more problems than they solve?
Throwaway trend
The surge in popularity of disposable vapes came about by accident. In an attempt to quell outrage from concerned parents and public health experts over Juul’s popularity among US teenagers, President Donald Trump placed restrictions on some flavoured e-cigarettes in 2020.
Manufacturers and users in the US swiftly migrated to disposable vapes as an alternative to prohibited flavoured nicotine products. With better batteries powering them, an improved atomiser to heat and disperse the vapour, and twice the flavour concentration of older vapes, disposable vapes quickly caught on in Europe. Even tobacco giants Philip Morris International and British American Tobacco have hopped on the trend, launching their own versions.
“Love them or hate them... they have pushed vaping into the mainstream,” says Liam Humberstone, technical director at Totally Wicked, a vape distributor which supplies major UK supermarkets Sainsbury’s and Asda. But he acknowledges the industry has been “slow to act” to address the environmental fallout from the products.
In the UK and EU, producers of electronics are legally obliged to fund the recycling of a tonnage equivalent to what they put on the market. But only 16 of 150 vape producers and importers in the UK analysed by Material Focus are registered to do so. BAT subsidiary Nicoventures and PMI are both registered.
Scott Butler, executive director of Material Focus, says it is “shocking” that other manufacturers had skirted the regulations. “As sales and profits have boomed, the environmental impacts of vapes have been disregarded,” he says.
The Scottish and Irish governments are considering an outright ban on the products, while EU regulations set to be passed this year will make replaceable or rechargeable batteries in all consumer products mandatory by 2027.
“The funeral date for the product is effectively already set” in the EU, adds Umberto Roccatti, president of Italy’s vaping industry association.
But the same is not the case for the UK, where a review of similar battery legislation has been delayed twice.
In the UK alone, 138m disposable vapes were sold last year, according to FT calculations based on NielsenIQ data.
The vast majority of the devices are unlikely to have been recycled. Sweeep Kuusakoski, one of the UK’s biggest electronics recycling plants, processes just 700 vapes a week.
The vapes sold in the UK last year contained enough copper to make 370,000 at-home electric vehicle chargers and enough lithium to produce more than 2500 EV batteries.
The batteries could be recharged at least 300 times if the vapes had a charging port.
“It’s crazy we’re even allowing a single-use product to use rechargeable batteries,” says Justin Greenaway, commercial manager at Sweeep Kuusakoski.
Most single-use vapes contain LEDs that light up as the user drags. These are unlikely to be recovered in the recycling process.
Recycling vapes is “very labour intensive”, says Peter Moody, managing director of Gap Group, a recycling business. Each vape has to be dismantled by hand because of the flammable batteries, and nicotine liquid necessitates extra health and safety considerations.
A recycling scheme introduced by disposable vape manufacturer Riot Labs in 800 vape shops across the UK had less than a 1 per cent take-back rate.
Ben Johnson, the company’s chief executive, describes disposables as the “fast fashion” of e-cigarettes. “We should be getting a lot more scrutiny on our environmental credentials as we’re a very wasteful industry,” he says.
Retailers selling more than £100,000 worth of vapes are obliged to offer take-back services for recycling, but when the FT visited a cross-section of supermarket brands in central London, none of the staff spoken to were aware of the schemes. Tesco, Sainsbury’s and the Co-op are introducing more training for staff.
Vapes are just one of many small electricals causing growing environmental headaches as household waste collection sites are not set up to handle them. The amount that manufacturers must pay towards recycling is also based on weight, despite the devices being fiddly and expensive to dismantle. Butler, of Material Focus, says the processes for recycling small electricals should be made “much easier”.
The Department for the Environment, Food and Rural Affairs says it strongly encourages consumers to dispose of electrical waste at local recycling centres or return them to retailers.
The health question
Ever since a landmark 2015 report by England’s public health body concluded that vaping was 95 per cent less harmful than smoking, UK health officials have supported the use of vapes as a smoking cessation aid.
Even the explosion in popularity of flavoured vapes among underage users has not shaken that stance. A UK government-commissioned review published last year doubled down on the position, saying the authorities “must embrace” vaping to help cut smoking rates.
The UK’s “permissive” approach has allowed disposable vapes to “run riot” as a consumer good, says Jonathan Grigg, chair of the European Respiratory Society’s tobacco control committee. “We were winning the battle against smoking, but at a stroke breathing stuff into your lungs has become attractive again. It’s very disheartening.”
If youth vaping is allowed to increase unchecked, underage vapers could pick up smoking later in life, anti-smoking advocates warn. A 2020 study by non-profit tobacco control group Truth Initiative found that 15- to-27-year-old vapers were seven times more likely to smoke than those who had never vaped.
“Unless something is done, at best we’ll end up with a generation of children with [nicotine-related] mood problems and attention disorders... at worst, they will all become smokers again,” says Sarah Brown, a consultant in paediatric respiratory medicine at a London hospital.
Increasingly, the UK looks like a global outlier on the issue. In November 2022, California voted to join four other states by imposing a ban on all flavoured vapes. In October, flavoured heated tobacco products will be banned across the EU, while the Dutch government will ban almost all flavoured vaping devices. The EU plans to introduce a bloc-wide vaping tax.
But Javed Khan, the former head of children’s charity Barnardo’s who led the UK government review, warns that a “knee-jerk” ban on flavoured vapes could “lose some people back to smoking”. Banning the sale of all vapes, as some 40 countries globally have done, “could easily put you back to square one”, adds Khan. The UK health department is exploring introducing an excise tax on vapes, according to officials, but it has yet to win the approval of the Treasury.
There is evidence to support Khan’s argument. Smoking rates have declined among young adults in the UK, according to a study published in the scientific journal Addiction. Between January 2021 and April last year, while vaping rates soared among 18-year-olds, smoking rates fell from 24.5 per cent to 19.5 per cent in that age category. Overall, inhaled nicotine use was stable.
“If you’re looking to eliminate nicotine, disposables are a disaster,” says Harry Tattan-Birch, a researcher in behavioural science at University College London who was behind the Addiction study. “But if the aim is solely to crush smoking rates then they seem to be helping.” These different ambitions “explain the rift” between certain countries on vaping laws, he adds.
The US FDA is yet to authorise a single flavoured vape in its latest review of 7.7m nicotine products, but many flavoured products remain on the shelves until a marketing denial order is issued. Brian King, director of the agency’s Center for Tobacco Products, says there is a “high scientific bar” to overcome to convince the regulator that the benefits of flavours for adults outweigh the risks to children.
The vaping economy
The latest vaping trend has in some ways brought the industry full circle. Patented in the early 2000s by Chinese pharmacist Hon Lik, the first vapes — plastic cigarettes that lit up with an ember glow — were also single-use, offering a finite amount of puffs before they stopped working.
The wispy vapour left smokers unsatisfied and big tobacco dismissed the devices as a fad. Over time, bigger tank-based vapes, pod-based devices and heated tobacco sticks became popular, with several start-ups securing excessive valuations by major tobacco conglomerates.
Yet it is Chinese-based vaping companies that have really cashed in on the disposable vape trend. Elf Bar and Lost Mary account for more than half of all vape sales in the UK, the brands’ second biggest market behind the US.
Elf Bar last year sparked controversy for allegedly working with influencers to court younger users on TikTok. Last month, major supermarkets, including Tesco and Sainsbury’s, removed Elf Bar products from stores, after it emerged that some contained above the legal limit of nicotine e-liquid. The company says some batches destined for other markets were inadvertently sold in the UK. Elf products are still widely available in convenience stores.
Through a sprawling web of investments, Shenzhen-based businessman Zhang, a vaping industry veteran, has at least a 70 per cent shareholding in the company behind Elf Bar and Lost Mary, and also a stake in the company behind Geek Bar, according to filings seen by the FT.
Two people briefed on company financials say Elf Bar and Lost Mary generated more than US$1.7b in sales last year. A company representative says this figure is “significantly exaggerated” but did not disclose an alternative number.
Zhang first entered the industry in 2007 when he launched Heaven Gifts International, a company which quickly became the best-connected global vape distributor in Shenzhen, with a sprawling network of retail partners worldwide. As a result, Zhang became “really powerful”, says a Shenzhen-based competitor.
Zhang is publicity-shy, in part to avoid unwelcome attention from President Xi Jinping’s rolling campaign to reform China’s business landscape, according to four people who know him. The Chinese state tobacco monopoly has clashed with the vape industry, and last year the Chinese government banned the sale, but not the export, of flavoured vapes.
When Trump’s flavoured vape ban came into effect, Zhang seized on the opportunity, investing in single-use vape manufacturers and the brands he backed quickly made a mark. The rival businessperson, who calls Zhang China’s “vape king”, says: “He’s the kind of person who’s very down-to-earth; you can’t tell he’s such a big boss.”
Big tobacco is trying to catch up. Tim Phillips, ECigIntelligence founder, says BAT and PMI had been suffering from “Fomo” — fear of missing out — before they launched Vuse Go and Veeba, their single-use vape offerings, last year. They “are definitely panicked about being late to the party with the disposable category”, he adds.
The large tobacco brands are hoping that the controversies surrounding Chinese-owned brands will allow them to make up ground in the flavoured disposables market.
In order to distinguish itself further, big tobacco presents itself as an ally of regulators. “If you want to be with the regulators and discuss and have a seat at the table, you need [a disposable vape product]... I am for regulation,” says Jack Bowles, BAT’s chief executive, justifying his decision to launch Vuse Go in 24 countries.
“We are in the path of slowly but surely building some trust between the regulators and the industry, and every time you hear something bad, it sends you back,” says Jacek Olczak, PMI’s chief executive.
Last month, BAT’s US subsidiary Reynolds wrote to the FDA pressing it to ban Elf Bar, among other single-use competitors. Following a trademark infringement lawsuit, Elf Bar is set to rebrand as EB Design in the US.
Bowles, of BAT, also says that concerns over the youth appeal of flavours, such as “berry blend” and “mango ice”, in its products are “minute compared to what you have on the rest of the market”.
Conscious of encroaching regulators concerned by both underage usage and the environmental damage, Heaven Gifts International, one of the companies behind Elf Bar, has been trying to hire lobbyists in the UK and the EU, according to three people approached by the company.
Those who have been in the fast-moving vaping industry for a while believe disposables will end up “mirroring” the “fast ascent and descent” of reusable e-cigarettes like Juul, whose valuation has cratered from US$38b to just above US$700m.
“Already regulators are growing less fond of [Elf Bar] and that will start cutting into its bottom line as the negative publicity grows,” says Peter Beckett, a former Juul public policy director and co-founder of forum Vaping.com. “But history says it won’t just be regulators that pose an existential threat. It will be the next big thing.”
Until then, back in Leicestershire, it is left to educators like Cleary to clean up the mess as more pupils pick up vaping habits. “I’d be really intrigued to know how people who produced these things are sleeping at the moment,” he says. “I suspect the wealth that they’re attracting might make that easier.”
- Additional reporting by Yuan Yang, George Parker and Jim Pickard in London
Written by: Oliver Barnes and Alexandra Heal
© Financial Times