2. Paint Product Stewardship Initiative Presentation to Retailers Scott Cassel, PSI Executive Director/Founder December 13, 2007

3. December 13, 2007 PSI Retailer Presentation 2 What is the Product Stewardship Institute? Non-Profit based in Boston Membership 43 State members 50 Local agency members Board of Directors: 7 states, 4 local agencies Multi-stakeholder product stewardship network Adjunct Council: Business, Environmental/Organizational

4. December 13, 2007 PSI Retailer Presentation 3 PSI Full and Affiliate State Members

5. December 13, 2007 PSI Retailer Presentation 4 PSI Projects  Paint  Mercury Thermostats  Fluorescent lamps  Electronics  Pharmaceuticals  Radioactive Devices  Telephone books  Gas Cylinders  Tires  Beverage containers  Motor oil

6. 5 What is Product Stewardship? “Product Stewardship" is a principle that directs all those involved in the life cycle of a product to take shared responsibility for reducing the health and environmental impacts that result from the production, use, and end-of-life management of the product. December 13, 2007 PSI Retailer Presentation

7. PSI Role in Paint Dialogue  Research/technical competency  Forum for multi-stakeholder dialogue  Design and implement pilot projects  Clearinghouse for paint product stewardship policies and programs 6

8. December 13, 2007 PSI Retailer Presentation Reasons for Paint Dialogue  Threat of multiple state legislation (CA, MN)  Coordinate interests of all stakeholders  Efficiency: One set of laws, regulations  Coordinate goals, objectives, strategies  Share information (laws, regulations, policy, programs)  Collaborative vs. Confrontational 7

9. December 13, 2007 PSI Retailer Presentation 8 Why Paint? 64 million $8 $512 million Estimated # of gallons/year leftover in U.S. Estimated average cost/gallon to manage Estimated total cost to manage leftover paint  20% of current sales are oil-based  30-40% oil-based being returned at HHW facilities  Little recycled paint being purchased This is not sustainable!!

10. December 13, 2007 PSI Retailer Presentation 9 Why Manage Latex Paint?  Collection of oil-based paint was always agreed to  Most states prohibit disposal of liquid wastes  Liquid paint is not accepted by waste mgt companies  Still developing consensus on latex paint management  Focus on collecting in rural locations and collecting small amounts left in can

11. December 13, 2007 PSI Retailer Presentation 10 Why Manage Latex Paint?  Government perspective:  Latex paint is a valuable resource like any other recyclable  Residents cannot distinguish between latex and oil-based paint  Drying paint is resource intensive – small amounts possible  Industry perspective :  Latex is not hazardous so less need to collect  Is it worth the cost?

12. December 13, 2007 PSI Retailer Presentation 11 Lifecycle Assessment/Cost Benefit Analysis  NPCA funded/managed – PSI facilitated  Seeking consensus  Comparing environmental and economic costs of dry and dispose to reuse and recycle – full lifecycle  Tool for decision making by PPSI group – Identify scenarios when cost-effective (or not)  Apply to rural areas and where small amount left in can  Completion expected March/April 2008

13. December 13, 2007 PSI Retailer Presentation 12 Key Dates oSept. 2002 – PSI presentation to NPCA oSept. 2003 – Completion of Paint Action Plan oSept. 2004 – Completion of 4 meetings oMarch 15, 2005 – 1 st MOU Signed oMarch 15, 2007 – end of 2-year 1 st MOU oMarch 21, 2007 – NPCA Board Resolution oOct. 24, 2007 – 2 nd MOU completed/available to sign oNov. 1, 2007 – beginning of 3-year 2 nd MOU

14. December 13, 2007 PSI Retailer Presentation 13 The 1 st MOU was…  A first step toward a nationally coordinated leftover paint management system  8 Projects  Raised $1 million +  Demonstrate potential to reduce the volume of leftover paint and the cost of managing leftover paint

15. December 13, 2007 PSI Retailer Presentation 14 Financial Investment (not including in-kind or HHW collection costs) oState and local government$685,000 oNPCA$465,000 oU.S. EPA$230,000 oDunn-Edwards $35,000 oPSI Foundation Grant $30,000 oRecycled Paint Mfrs $27,000 oOrganizations $6,000 TOTAL: $1,478,000 (est. to date)

16. December 13, 2007 PSI Retailer Presentation 15 1 st Paint MOU Project Portfolio 1.Source Reduction Survey/Pilot 2.Reuse Manual/Pilot 3.Infrastructure Report 4.Recycled Paint Standard (Green Seal) 5.Recycled Paint Marketing 6.Recycled Paint Regulatory Issues – White Paper 7.Sustainable Financing Options 8.Lifecycle Assessment and Cost/Benefit Analysis (LCA/CBA)

17. December 13, 2007 PSI Retailer Presentation 16 Infrastructure Report  Infrastructure report evaluated best ways to collect, consolidate, transport, and process leftover paint in U.S.  Using infrastructure report as basis for performance goals.  Collection points needed for convenience (2,000 to 11,000)  About 1 site per 10,000 households  Phased implementation over time to meet highest performance goals.  Cost to collect, aggregate, transport, recycle = $8.59/gal

18. December 13, 2007 PSI Retailer Presentation 17 Infrastructure Report  Use of existing government infrastructure  Need for additional collection locations  Encourage diversity of collection sites (private) for public convenience

19. December 13, 2007 PSI Retailer Presentation 18 2 nd Paint MOU 3-year continuation of partnership (until November 2010) November 2007 to July 1, 2008 (no later than) Design and develop industry-run Paint Stewardship Organization (PSO) and Demonstration Project in Minnesota. January 1, 2008 Establish performance goals for source reduction, reuse, collection, and recycling for the Demonstration Project.

20. December 13, 2007 PSI Retailer Presentation 19 2 nd Paint MOU July 1, 2008 (no later than) Implement Demonstration Project in Minnesota funded by “consumer-based cost-recovery system.” April 2009 to September 2009 Evaluate the Demonstration Project. Roll out to other states July 2009 – OR, WA, VT January 2010 – CA July 2010 – IA, FL, NC, IL

21. December 13, 2007 PSI Retailer Presentation 20 2 nd Paint MOU Financing system is key remaining element Manufacturer payment into industry-run PSO. Payment covers collection, transportation, recycling/disposal costs. Payment recovered from consumers. Fee can be invisible or visible – left to manufacturers and retailers to decide.

22. December 13, 2007 PSI Retailer Presentation 21 2 nd Paint MOU NOT discussing a fee collected at retail into a government fund (e.g., CA electronics law). Legislation likely needed to address anti-trust and free rider issues Goal: Consensus on legislation

23. December 13, 2007 PSI Retailer Presentation 22 Next Steps  Sign MOU 13 signed to date (expect over 75) Lowe’s only retailer to sign 1 st MOU  Negotiate financing system (mfr/retailer focus)  Complete LCA/CBA  Establish framework for PSO  Design Demonstration Project in MN – Retail committee members needed  Design Project Evaluation Coordinated by PSI through the PPSI stakeholder group

24. December 13, 2007 PSI Retailer Presentation 23 Final Thought  Paint management program will happen.  Retailers have great opportunity for collaborative program replicated in 50 states.  Current program has certainty.  Retail risk  Different state programs – more costly and not as effective without full collaboration  Some states might push mandatory retail collection  Best to fully engage in 2 nd Paint MOU !!

25. December 13, 2007 PSI Retailer Presentation 24 For More Information Contact… Scott Cassel PSI Executive Director/Founder 617-236-4855 scott@productstewardship.us www.productstewardship.us