1. Overview of Electronics Recycling and the Electronics Legislative Study Scott Mouw NC DEQ NCACC Environment Steering Committee January 28, 2016

2. Short History of Electronics Law Lengthy legislative process ~2002 - 2010 Advanced recycling fee (used for white goods/tires) considered early but failed to gain support, leading to producer responsibility approach Stakeholder process produced a hybrid electronics management producer responsibility law Principle parties involved in crafting compromise bill: NCACC, NCLM, NCDENR, Retail Merchants, computer manufacturers TV companies largely absent from final deliberations NC law a variation of 24 state electronics producer responsibility laws around the U.S.

3. Main Components of the Law Computer and television manufacturers register annually with the state: TV Manufacturers -$2,500 Computer manufacturers – $15,000, $7,500, or $2,500, depending on levels of direct recycling activity All registration funds go into the Electronics Management Fund Computer manufacturers must have annual plan that include free takeback mechanisms from consumers (e.g., mail-back) and provisions for Level II or Level III services TV manufacturers must recycle a portion of all TVs recycled in NC equivalent to their individual market share Both computer and TV manufacturers report annually to state DEQ uses Electronics Management Fund to administer program and disburse annual per capita payments to eligible local governments with an approved plan using certified processors Disposal bans on televisions and computer equipment

4. Some Key Presumptions Underlying the Legislation Local government-based collection system would provide the most convenient way for citizens to recycle a broad range of electronics. Computer manufacturer mail-back and Level II collection points would take some collection burdens off local programs. Combination of electronics management fund distributions and TV manufacturer support would cover a substantial portion of local costs.

5. Reasons to Recycle Electronics Returns commodities and products to the general economy Energy efficient feedstocks for manufacturers worldwide Part of overall effort to reduce long-term dependence on solid waste disposal and landfills Diverts hazardous materials from solid waste landfills – lead, mercury Helps grow the state’s recycling economy NC home to major electronics processors with substantial investments in plant and equipment Meets citizen demand for alternatives to disposal

6. TV and Electronics Collection FY 09-10 – FY 14-15 Overall Recycling of Electronics FY2009-10 (tons) FY2010-11 (tons) FY2011-12 (tons) FY2012-13 (tons) FY2013-14 (tons) FY2014-15 (tons) Six Year TOTALS Manufacturer television collections NA1,754.232,732.961,623.542,460.26 2,834.12 11,405.11 Manufacturer computer equipment collections NA2,895.823,996.032,098.881,843.43 1,193.3712,027.53 Local Government television 993.483,019.398,264.918,739.479,314.9410,025.6639,364.37 Local Government other electronics 3,580.154,432.156,423.585,419.815,470.995,050.7726,797.30 Total Tons4,573.6312,101.5921,417.4817,881.7019,089.6219,103.9289,594.31 Total Pounds Per Capita 0.982.54.43 3.663.873.84

7. Changes in TV Technology Three Main Generations of TVs CRTs Dominant technology for many years with sales essentially ending in 2010 Bulk of TVs collected so far have been CRTs – an unknown quantity remains Main material of concern: lead in panel and funnel glass LCDs First generation of Flat Panel Display (FPD) televisions – approximately 174 million LCD TVs were sold between 2001 and 2014 Picture is backlit by small fluorescent lamps Main material of concern: mercury in the fluorescent lamps LEDs Newest mainstream FPD TV technology, now dominating sales Contain neither lead nor mercury, but still require dismantling in recycling process

8. Image courtesy of Electronics Recyclers International (ERI)

9. Recent Issues in Commodity Markets Almost every commodity is seeing weak market conditions Affecting recycling commodities across the board Affecting pricing for normally positive value materials in the electronics stream Does not mean there is no demand for the material, just prices are low Cathode Ray Tubes (CRTs) seeing greatest value challenge in the electronics stream Cattle (lb.)-19.7% Corn (bushel)-9.6% Gold (troy oz)-10.4% Hogs (lb.)-26.4% Natural Gas (Btu)-23.4% Oil, heating (gal)-41.6% Oil, lt sweet crude (barrel)-31.3% Silver (troy oz)-11.3% Soybeans (bushel)-14.1% Wheat (bushel)-20.4% Commodity Price Changes in 2015 Change % since 2010 Copper (lb.)-24% Gold (tr oz.) 2.8% Silver (tr oz.)-13% Steel (tons)-13% Aluminum (lb.)-18% Glass (lb.)-80%

10. The CRT Situation When CRTs were being manufactured, glass-to-glass recycling was the best recycling option Last CRT manufacturing plant in world, Videocon, temporarily and possibly permanently closed Largest next market – lead smelting CRT glass functions as fluxing agent; yields some lead to the process Three large North American smelters – Glencore, Teck Resources, Doe Run Smaller lead extraction smelters developing – e.g., Nulife Copper smelters may be another outlet Other industrial commodity processors Dlubak and Closed Loop Specialized product users – tile manufacturers/processors in Europe Many industry observers believe there is adequate CRT capacity and market seems to be evolving Consumer Technology Association currently conducting a study of CRT market capacity

11. Summary of Market Conditions Low overall commodity values, raising net costs for collection programs across U.S. and abroad Televisions and monitors of all types will entail processing costs (won’t end with CRTs) Idea that “There is no market for CRTs” does not appear to be accurate

12. TV and Computer Manufacturer Registrations FY10-11FY11-12FY12-13FY13-14FY14-15FY15-16 # of Registrants3036353331 27 (to date) Fee Total$75,000$90,000$87,500$82,500$77,500$67,500 TV Manufacturer Registrations Computer Manufacturer Registrations FY10-11FY11-12FY12-13FY13-14FY14-15FY15-16 # of RegistrantsTotal Fees # of RegistrantsTotal Fees # of RegistrantsTotal Fees # of RegistrantsTotal Fees # of RegistrantsTotal Fees # of RegistrantsTotal Fees Level One34$495,00036$532,50036$532,50030$450,00027$400,00026$430,000 Level Two1$15,0005$45,00010$82,50028$232,50029$222,50028$217,500 Level Three1$10,0000$00 0 $0.00$00 TOTALS36$520,00041$577,50046$615,00058$682,50056$622,50054$647,500 Average Fee/Registrant $14,444.44$14,085.37$13,369.57$11,767.24$11,116.07$11,990.74 Total Revenue if All at Level One $540,000$615,000$690,000$870,000$840,000$810,000

13. Data on Level II and Mailback Programs – Recovering a Small Portion of Overall Tons Fiscal Year Manufacturer Collection Programs Local Government Collection Programs: Other Electronics Percentage of Manufacturer Recovery of Total Recovery Mailback Manufacturer Level II Recovery FY 2010-1129.604,432.15.66% FY 2011-125.0738.358,264.91.52% FY 2012 -133.7727.705,419.81.58% FY 2013-145.4268.815,470.991.34% FY 2014-154.9445.325,050.77.98% TOTAL48.8180.1828,638.63.79%

14. Electronics Management Fund Fiscal Year Beginning Fund Balance Fiscal Year Revenues Expenditures Ending Fund Balance Funds Used for Program Administration Funds Used for Distributions to Local Government FY 2010-11$0.00$987,500.00$5,000.00$465,500.03$516,999.97 FY 2011-12$516,999.97$585,000.00$37,538.16$600,000.03$464,461.78 FY 2012-13$464,461.78$462,500.00$40,628.83$483,390.68$402,942.27 FY 2013-14$402,942.27$705,000.00$64,169.02$600,000.00$443,773.25 FY 2014-15$443,773.25$1,027,500.00$77,389.44$690,174.76$703,709.05 FY 2015-16$703,709.05 Projected $1,000,000 Projected $78,000 Projected $800,000  Bulk of revenues come in late in the fiscal year after fund distributions to local governments

15. TV Manufacturer – Recycler Relationships Manufacturers give “quota” to electronics recyclers to help meet their recycling obligations, subsidizing the cost of processing Processors then go out and source TVs, mostly from local government programs but also other sources (e.g., Goodwill) Manufacturers not always giving quota to NC based recyclers who handle bulk of local government TVs in NC Manufacturers don’t always pay recyclers full cost of processing, requiring recyclers to pass along charge to local programs

16. DEQ Study Main Elements of the Study, per Statute: Changing waste stream, including the transition from CRT televisions to flat screen televisions Current status of North Carolina’s recycling system, including costs and financing issues and options that may be available to reduce costs and establish sufficient funding to cover necessary costs Opportunities for more efficient and effective recycling systems Any other issue the Department deems relevant DEQ directed to consult with “North Carolina League of Municipalities, the North Carolina Association of County Commissioners, the Consumer Electronics Association, the Retail Merchants Association, and representatives of the recycling and waste management industries.” Report due on or before April 1, 2016 to Environmental Review Commission

17. Status of Study DEQ conducting research on key aspects of the study: Local program costs (survey out now) Processor survey – TV quota and processing costs TV/Electronics generation CRT and related markets State electronics recycling contract RFP will yield useful data Aiming for internal draft by mid-February

18. Tried and True Techniques for Cost-Effective Programs Choose qualified recycler with connection to manufacturer programs Handle materials efficiently Avoid double handling – containerize/palletize materials on the go Consolidate small loads into big loads Get weight on a truck Work closely with electronics vendor on sortation and packing Discourage scavenging Open collection program to higher value materials Commercial and institutional materials Cell phones Make citizens aware of other options (retailer programs, mail-back)

19. Pictures of Best Management Practices

20. Thank You! Scott Mouw NC DEQ 919-707-8114 scott.mouw@ncdenr.gov