1. Resource Recycling Magazine State of Affairs in Electronics Recycling Advancing Electronics Recycling in the Midwest December 11, 2002

2. Resource Recycling Magazine Outline l Description of the issue l Current status l Four prevailing myths l Nine issues and forecasts l Discussion

3. Resource Recycling Magazine Description of the Issue l E-scrap is a sleeper waste l Rising attention to e-waste issues l Concern over loss of resources: -- base metals (copper, aluminum, etc.) -- precious metals (gold, silver, palladium, etc.) -- plastics -- glass

4. Resource Recycling Magazine Description of the Issue l Concern over toxicity, especially from the lead used in CRTs: -- 4 to 8 pounds of lead in TVs and computer monitors -- largest single source of lead in municipal solid waste (about 30%) -- funnel glass can contain as much as 75 ppm of leachable lead

5. Resource Recycling Magazine Description of the Issue l Magnitude of the problem: -- two million tons per year of e-scrap -- 20 million PCs become obsolete per year -- e-scrap is accumulative -- low recovery rate from homes, small businesses, etc.

6. Resource Recycling Magazine Current Status l About 500 U.S. firms provide e-scrap recycling services: -- brokering -- sale of whole operating units -- refurbishing -- disassembly to remove reusable parts -- disassembly to capture recyclables -- shredding

7. Resource Recycling Magazine Current Status l Barriers exist in e-scrap recovery: -- scrap moves to cheapest reclaimer -- declining value of scrap (less gold, silver, etc.) -- plastics are a problem for many reclaimers -- unstable political and regulatory climate inhibits investment

8. Resource Recycling Magazine Current Status l Institutional/corporate recovery: -- large generators with high-end equipment are fairly well served -- large-scale international reuse market seeks this scrap -- yields from demanufacturing are high (hard drives, circuit boards, etc.)

9. Resource Recycling Magazine Current Status l Smaller generators are provided fee- based service l Capture of residential e-scrap requires governmental involvement l E-scrap is the waste of the decade (beverage containers in the ’70s, paper in the ’80s, organics in the ’90s)

10. Resource Recycling Magazine Current Status l Local collections are increasing: -- in about 1,000 communities in 2002 -- typically one-day event -- about one percent participation -- at a cost of about $300 per ton -- programs tend to be in suburban communities -- trend toward permanent sites

11. Resource Recycling Magazine Current Status l Rising involvement of OEMs -- many already operate take back of leased units -- many are moving into fee-based recovery systems (Hewlett-Packard, IBM, Dell) -- others participate in local collection events (Panasonic, Sharp, Sony)

12. Resource Recycling Magazine Prevailing Myths l Myth 1: Rising volumes -- computer sales declined last year and also this year -- effect of Y2K investments -- slow down in introduction of new software and hardware -- consumer satisfaction with existing systems

13. Resource Recycling Magazine Prevailing Myths l Myth 2: Rapid technological change -- we’ve been hearing about HDTV for five years -- flat panel sales are restricted by high cost versus CRTs -- technological change is slower than commonly thought

14. Resource Recycling Magazine Prevailing Myths l No. of years to attain 25% of market YearYears Telephone187535 Automobile188555 Airplane190354 Radio190622 Television192526 VCR195234 Microwave oven195330 Personal computer197515 Cellular phone198315 DVD player1996 6

15. Resource Recycling Magazine Prevailing Myths l Myth 3: E-scrap management is an immense environmental problem -- some environmental groups overstate the effects of e-waste disposal -- the data in this field is very poor -- the politics of e-waste management have taken precedence over the science

16. Resource Recycling Magazine Prevailing Myths l Myth 4: There’s gold in garbage: -- OEMs are putting less recoverable materials in electronics -- even charities do not seek most types of obsolete working computers (those more than three years old) -- current reuse levels from e-scrap collection events are about 10 percent

17. Resource Recycling Magazine Issues and Forecasts: No 1 l Product stewardship is the prime issue l Take back systems operate in a number of countries (Belgium, Japan, The Netherlands, Norway, Sweden, etc.) l Japan’s system will expand next year l A European Union system will be implemented by 2006 l Canada is moving forth

18. Resource Recycling Magazine Issues and Forecasts: No. 1 l The National Electronic Product Stewardship Initiative may establish a similar system in the U.S. l Nearly 50 members are involved, principally from three sectors: industry, environmental groups, and state and local government

19. Resource Recycling Magazine Issues and Forecasts: No.1 l NEPSI agreement so far: front-end financed fee followed by cost internalization third-party national organization shared responsibility supportive federal legislation

20. Resource Recycling Magazine Issues and Forecasts: No. 1 l Forecast: -- NEPSI negotiations will take longer than planned -- a basic agreement will be reached for the recovery of CPUs, CRTs and TVs – it will be a shared-responsibility model; full producer responsibility is unlikely in the U.S.

21. Resource Recycling Magazine Issues and Forecasts: No. 2 l E-waste exports are an emotional issue l The BAN report and video were extremely powerful l But they over simplify the reality of e- scrap exports and over state the problem l However, e-waste generators are now very concerned

22. Resource Recycling Magazine Issues and Forecasts: No. 2 l Forecast: -- whole-unit, mixed-load shipments will decline -- shipments of individual scrap materials will continue -- domestic operations will change -- efforts will be made to gather better data on the extent of the problem

23. Resource Recycling Magazine Issues and Forecasts: No. 3 l But then, what do we really know about current domestic operations? -- lead glass processing concerns -- disease from processing scrap containing beryllium -- crude precious metals recovery methods -- fly-by-night operators living off of fees

24. Resource Recycling Magazine Issues and Forecasts: No. 3 l Forecast: -- certification efforts will rise (IAER environmental audit, ISO 9000 and 14000 certification, ESM systems, etc.) -- some states will get involved (NC, PA) -- this will lead to an increase in processing costs

25. Resource Recycling Magazine Issues and Forecasts: No. 4 l Legislative momentum is at hand l Major bills were considered in several states (CA, MA, NC, NY, etc.) l Generally focus on CRTs: -- impose a fee on sales of new CRTs -- use funds to establish recovery systems

26. Resource Recycling Magazine Issues and Forecasts: No. 4 l Forecast: -- as part of a strategy to exert additional pressure on OEMs and retailers, several states will approve measures -- given recent Hewlett-Packard announcement, California will be the principal battle ground

27. Resource Recycling Magazine Issues and Forecasts: No. 5 l Regulatory approaches are being considered: -- again, they typically focus on CRTs -- they commonly entail adding CRTs to universal waste rules -- however, Massachusetts has banned CRT disposal -- EPA has introduced a draft regulation

28. Resource Recycling Magazine Issues and Forecasts: No. 5 l Forecast: -- concern was heard that the proposed EPA rule will increase exports -- thus, adoption of EPA rules will take longer than anticipated -- a number of states will adopt interim rules (OR, WA, etc.)

29. Resource Recycling Magazine Issues and Forecasts: No. 6 l Prison labor concerns will be in the news this year l Some consider e-scrap prison factories to be “high-tech sweat shops” l That said, UNICOR is a major player in the reclamation industry

30. Resource Recycling Magazine Issues and Forecasts: No. 6 l Forecast: -- this issue will not garner the attention generated by the e-waste export issue -- pressure will be exerted on e-scrap generators to avoid the use of prison factories

31. Resource Recycling Magazine Issues and Forecasts: No. 7 l Current collection and processing methods are inadequate l Recovery levels are low and costs are high l Processing fees are moving upwards l With so much up in the air, investment levels remain weak

32. Resource Recycling Magazine Issues and Forecasts: No. 7 l Forecast: -- we’ll plod along for another few years -- permanent collection facilities will grow in number -- states will increase their role, through grants (FL, IA, IN, NE, NY, OH) or statewide coordinated campaigns (CO, MD)

33. Resource Recycling Magazine Issues and Forecasts: No. 7 l Forecast: -- the product stewardship end game in the U.S. and Canada will determine the ultimate collection and processing system -- the final system will be unlike today’s

34. Resource Recycling Magazine Issues and Forecasts: No. 8 l The marketplace will change l Many folks are watching e-scrap issues for possible business opportunities l Forecast: -- industry consolidation will occur -- just as it has in electronics manufacture

35. Resource Recycling Magazine Issues and Forecasts: No. 8 l The majority of the market for some electronics is held by just two firms: -- PCs: Dell, H-P/Compaq -- Cell phones: Nokia, Motorola -- Fax machines: Panasonic, Brothers -- Printers: H-P/Compaq, Lexmark

36. Resource Recycling Magazine Issues and Forecasts: No. 9 l We may be producing ever-harder-to- recycle electronics l If OEMs are not involved in the recovery system, they may not receive sufficient design-for-recycling (DfR) economic pressure

37. Resource Recycling Magazine Issues and Forecasts: No. 9 l Forecast: -- a shared responsibility model will not provide much momentum for DfR -- however, OEMs are international players -- and OEMs in Japan and elsewhere operate e-scrap processing systems – DfR will be addressed internationally

38. Resource Recycling Magazine Discussion l Contact information: Jerry Powell, Editor E-Scrap News P.O. Box 42270 Portland, OR 97242 (503) 233-1305; 233-1356 fax jpowell@resource-recycling.com