1. New State E-Scrap Programs: A Business Opportunity Or A Business Bust For Processors? Jason Linnell E-SCRAP 2007

2. Overview NCER Overview State Laws Comparison of Key Elements –Reporting/Registration Requirements –Financial/Operational Requirements – Who Pays? –ESM Guidelines –Timelines Key Considerations

3. 1)The coordination of initiatives targeting the recycling of used electronics 2)Participation in pilot projects to advance and encourage electronics recycling 3)The development of programs that reduce the burden of government through private management of electronics recycling systems Non-profit 501c3 Located in Parkersburg, WV area MARCEE Project, NERIC NCER’s Mission: Dedicated to the development and enhancement of a national infrastructure for the recycling of used electronics in the U.S. through: About Us

4. States with Mandated Programs California (2003) Maine (2004) Maryland (2005) Washington State (2006) Minnesota (2007) Oregon (2007) Texas (2007) North Carolina (2007)

5. Key Elements Comparison REGISTRATION

6. CA: Yes, need to become registered collector, recycler or both CT: Yes, need to be approved recycler ME: Yes, consolidator approval process, or work as consolidator’s recycler MD: No MN: Yes, registration form for collectors and recyclers Registration Requirements

7. NC:No, but may be included in manufacturer plans OR:No WA:Yes for collectors and processors, must be “in compliance” TX:No Registration Requirements

8. Key Elements Comparison ESM REQUIREMENTS

9. CA: Yes, need to follow DTSC UW handler regs CT: TBD by DEP, EPA Plug-In is baseline ME: Yes, must give sworn statement MD: No MN: No, but must certify downstream follows applicable law Specific ESM Guidelines

10. OR:Yes NC:No, but must be described only in manufacturer plans TX:Yes, DEQ to adopt ISRI or other standards WA:Yes Specific ESM Guidelines

11. Key Elements Comparison FINANCIAL

12. CA: State pays $.20/lb collection, $.28/lb processing, extensive documentation CT: must bill each manufacturer actual count, rates approved by state ME: must bill each manufacturer actual count + orphan*, rates approved by state  2006: 115 manufacturers received bills from 3 consolidators MN: must get manufacturer/s contract, rates set in contract or via bid Who Pays & Other Financials

13. NC:Unclear, “collectors” to have costs covered OR:State DEQ via “contractor program” or individual/joint manufacturer plans,; rates via bids WA:Authority board or its designee; or independent plan, rates via bid TX:manufacturer pay chosen recyclers via contractual agreement or bids Who Pays & Other Financials

14. Key Elements Comparison RECYCLING RESTRICTIONS

15. Restrictions CA: “cancellation” in state, export notifications CT:Follow Plug-in at minimum, no export for disposal ME: no energy recovery/combustion, export documentation as part of ESM requirements MN: no incineration, no prison labor

16. NC: none OR: no incineration/energy recovery (smelting allowed) WA: no incineration/energy recovery (smelting allowed), no prison labor TX: none, indirect prison labor ban Restrictions

17. Timelines/ Deadlines July 1, 2007: Pounds “recycled” in MN can count toward manufacturer yearly goal January 1, 2008: Manufacturers (including TV manufacturers) must pay registration fee in MD January 1, 2008: Manufacturers must declare standard or independent plan participation status in WA January 1, 2008: Standard and Independent Plans due in WA

18. Timelines/ Deadlines June 30, 2007: Pounds recycled in MN after this date do not count on FY 07-08 manufacturer September 1, 2008: Manufacturers file 07-08 registration forms, including penalty for not meeting goal September 1, 2008: TX requirements can be enforced And the BIG Deadline ….

19. Timelines/ Deadlines January 1, 2009 Plans must be fully operational in WA Plans must be fully operational in OR Manufacturers start paying for CT returns Manufacturer start paying collectors in NC

20. Impact & Considerations

21. E-Scrap News Survey: 90-100 recyclers surveyed 29.16% of respondents currently operate in CA or ME 54.08% of respondents say they have plans to operate in one or more of the states that have passed e-scrap legislation. Buyer Beware: Some registered CA recyclers have dropped out, In ME only 3 of 6 consolidators were operational in 2006 (with one taking over 95%) In MN, existing contracts with locals do not guarantee payment/contracts from manufacturers Jumping In?

22. Producer Managed or Just Paid? Exception is CA: ARF system managed by state gov’t Producer Paid: ME and CT, possibly NC Manufacturers don’t direct collection flows or choose recyclers Producer Managed: MN, OR, TX, and WA Manufacturers can choose collectors/recyclers and their volume, set prices via bid

23. A driving consideration in producer-managed systems like Minnesota, Washington Less of an issue in systems where prices are set or regulated by the state like California, Maine, Connecticut Processing Price Pressure

24. Prepare for significant float on invoices! CA currently down to 26 days to approve claim ME delays in getting approved vendor status with manufacturer accounting departments With desktops, CT adds numerous new manufacturers to receive and unknown number of recyclers to send bills Should be less concern with direct manufacturer/ group contracts Get Out Your Oars!

25. The Collector Squeeze Collectors in CA are becoming more sophisticated in making arrangements w/ recyclers  Drive among recyclers is getting supply, and collectors control much of the supply in California Concern about collection costs is driving manufacturers to make direct arrangements with collectors in Minnesota, Washington

26. State-based Limitations California’s “cancellation” requirement means recyclers have to be in state  Allows State Gov’t audits In general, states can’t audit out of state entity  Workarounds to require certification from manufacturer/plan No similar requirements in any other states  WA encourages use of local infrastructure  Interstate commerce Clause issues Export management options limited

27. Price pressures are strong on recyclers and collectors Recyclers must be auditable and have transparent operations Probably facilitates recycler consolidation  Manufacturers say “the smaller the recycler the bigger my auditing costs”  Smaller recyclers will not be on most manufacturer radar screens for systems like Texas, North Carolina Characteristics of Producer Managed Systems

28. A new niche service industry is developing rapidly to service manufacturers subject to these new mandates Is *not* developing as non-profit, trade assn model Roles in new industry overlap, trajectory still unclear  Manufacturer owned and operated?  Electronic Manufacturers Recycling Management Company, LLC (Panasonic, Toshiba, Sharp)  Managed by traditional processor?  Sony/Waste Management initiative  Managed by specialty service provider?  Product Ecology LLC (Alcorn Consulting, Strategic Counsel LLC, NCER) Characteristics of Producer Managed Systems (cont)

29. Characteristics of All State Legislated Systems Reuse is an uncomfortable fit in state-mandated recycling systems  Desired and encouraged, but not paid for Non-covered devices will be there, what to do?  Within guidelines, do you accept or reject? Trend is toward making producers pay, if not giving operational responsibility Requirements are different in every state

30. Thank You! Jason Linnell, NCER Phone: (304) 699-1008 jlinnell@electronicsrecycling.org Visit us on the web: www.ncerwv.org & www.ecyclingresource.org