U.S. CRT Glass Management. A!bellwether!for!sustainability!of!electronics!recycling!in!the!United!States!!December!5,!2012!

Transcription

1 U.S. CRT Glass Management AbellwetherforsustainabilityofelectronicsrecyclingintheUnitedStates December5,2012

2 U.S. CRT Glass Management 1 CONTENTS EXECUTIVE SUMMARY 4 Background 4 Summary 5 DEFINITIONS 8 ELECTRONICS RECYCLING LEGISLATION IN THE US 9 CurrentLegislativeLandscape 9 HowLegislatedTakeBackProgramsDiffer 10 EvaluatingLegislatedTakeJBackPrograms 11 California sarfprogram 11 StateControlledManufacturerTakeJBackModel 13 PrivatelyControlled(OEM)ManufacturerTakeJBackModel 15 StateTakeJBackVolumes 17 MARKET FACTORS IMPACTING CRT RECYCLING 18 GlassJtoJGlassMarkets 18 LeadSmelters 20 FACTORS CONTRIBUTING TO CRT GLASS STOCKPILING 22 TakeJBackLegislationAttractsNewRecyclers/AttractsUnscrupulousActivity 22 OEMsDrivingDownCosts 23 LackofeJRecyclerMonitoring 24 MakingManufacturerTakeJBackWork OnPaper 26 AirPounds 26

3 U.S. CRT Glass Management 2 GhostWeight 27 Stockpiling AnARFProblemToo 28 COST OF CRT GLASS RECYCLNG 29 CURRENT CRT VOLUMES & EFFECTIVE CAPACITY FOR CRT RECYCLING IN NORTH AMERICA 31 CRTGlassIndustryEstimatesonStockpiles 31 EstimatedRecyclingCostsforTakeJBackGlassStores 32 US CRT PROCESSORS 33 CURRENT & FUTURE US CRT GLASS PROCESSORS 34 TAKE-BACK CRT GLASS VOLUMES AND EFFECTIVE MARKET CAPACITY 36 CRTVolumesfromLegislatedTakeJBackPrograms 36 LeadedGlassVolumeandEffectiveMarketCapacity 37 OtherPotentialCapacity 38 FACTORS CONSTRICTING EFFECTIVE CAPACITY OF CRT GLASS MARKET 39 ThreatofCompetitionfromLandfills 39 California semergencylandfillrule 40 FutureDiminishingSupplyofUsedCRTsWorldwide 41 ADDRESSING THE STOCKPILING PROBLEM: ACTION PLANS FOR STATES AND THE FEDERAL GOVERNMENT 41 StatesActionPlan 41 FederalActionPlan:AllStockpilingisNotCreatedEqual 42 TheCRTRule 43 SuggestedImprovementsintheCRTRule 43

4 U.S. CRT Glass Management 3 STEPS FOR IMPROVING TAKE-BACK PROGRAMS 44 UnderstandingtheTrueCostofRecycling KnowtheMath 44 DesigningTakeJBackProgramRequirementstoMinimizeFraud 45 PreventingGhostWeight 45 EliminatingPaperTransactions 45 ThirdJPartyMassBalanceMonitoring 45 LessonsLearned 46 THE CASE AGAINST LANDFILLING: THE RACE TO THE BOTTOM 47 PreventingInvestmentinNewTechnology 47 Lossof$BillionsinRecoverableResourcesJ$BillionsinRemediationCosts 47 JobLoss 47 ImpactsonNationalProgressineJRecycling 49 NEPSI 49 ejrecyclercertification 49 TheObamaProclamation 49 USEPAWasteManagementHierarchy 50 Steps to Nationally Sustainable e-waste Management 51 IncreasingTakeJBackQuantity,ImprovingQuality 51 DivertingeJWastefromLandfills 53 About TransparentPlanet 54 ConsultingServices 54 ThirdJPartyMassBalanceMonitoring 54

5 U.S. CRT Glass Management 4 EXECUTIVE SUMMARY Background Sincestatesbeganlegislatingelectronicsrecycling,or takejback programsin2003,vulnerabilitiesin theprogramshavecontributedtoanumberofproblems.minimalornonjexistentprogramoversight coupledwithstrainsoncathoderaytube(crt)marketshasproducedlargeinventoriesofcrtglass thatarebeingstoredbyrecyclersratherthanrecycled.neithertheresponsibleagenciesinstates wherethesestockpilesreside,northeelectronicsmanufacturersthathiretherecyclerstorunthe takejbackprogramsinmanystates,havebeenmadefullyawareofthisgrowingandveryexpensive problem. InAugustof2012,anumberofCRTtubeprocessorsandCRT glassprocessorsbegandiscussinghowtheymighteffectively informstates,manufacturersandthefederalgovernmentof theproblemandeffectchange.theycontacted TransparentPlanetforassistanceinfacilitatingdialogamong thecompaniesandproducingareporttobeissuedby TransparentPlanetontheirbehalf.Theirgoalwasnotto implicateanypartyinparticular,buttoexplaintheconfluence offactorsleadingtotheproblemsandtoworkwiththeparties todevelopandimplementviable,longjtermsolutions. The$purpose$of$this$report$is$to$ daylight$the$problems$and$ stimulate$discussion$and$action$ among$all$stakeholders$toward$ developing$long9term$solutions.$ AlloftheCRTrecyclershadwitnessedtheglassstorageproblembecomingincreasinglyproblematic atagrowingnumberofclientlocations.manycompanieswithlargeinventorieswantedtoshipthe glass,butwithperjpoundtransportationandrecyclingcostsrangingfrom$.13to$.53/pound (dependinguponmaterialcondition),somewerelookingatexpensesinthehundredsofthousandsof dollars.asaresult,thestockpilessimplycontinuedtogrow. Atthesametime,Californiaproposedtoimplementanemergencyregulationtoallowforhazardous wastelandfillingofcrtglass,citinglackofcapacityinthecrtrecyclingmarketasthereason.yetall ofthesecrtrecyclershadavailableprocessingcapacityandwerelookingformorematerialto process. TheCRTrecyclersneededtogettheattentionofthestatesandthemanufacturerstomakethem awareofthegrowingproblemofstockpilingandtoinformthemthattherewascapacitytoproperly processalloftheglasscomingfromlegislatedprograms.whattheydidnotwanttodo,however,was

6 U.S. CRT Glass Management 5 toimplicatetherecyclersholdingtheinventoriesortheelectronicsmanufacturers,bothofwhomare alsocustomers.theycommissionedtransparentplanettogetthemessageoutontheirbehalf. ThefollowingreportwascompiledonbehalfofCEO sandseniorexecutivesofeight 1 (8)companiesin thebusinessofrecyclingcrtsfromtvsandcomputermonitors,incooperationwiththeelectronics TakeBackCoalitionandtheNationalCenterofElectronicsRecycling.Participantsinclude representativesofthelargestprocessorsofcrttubesandcrtglassintheworldalongwithsmaller businessesexperiencingthesamechallenges. Thisreportshouldbeconsidereda workinprogress.sincetheseproblemsarenew,itislikelythat additionaldatawillbecollectedandcontributionsbymorestakeholderswillhelpfurtherframethe pictureofthecurrentstateofcrtrecyclingintheus.thepurposeofthisreportistodaylightthe problemsandstimulatediscussionandactionamongallstakeholderstowarddevelopinglongjterm solutions. Summary Disposalofcathoderaytubes(CRTs),themaincomponentoftelevisionsandcomputermonitors, posesthebiggestchallengeamongalltypesofobsoleteelectronics.theglasstubescontainan averageof4poundsoflead,whichisverytoxic.whendisposedof,federallawsregulatecrt sasa hazardouswaste. Toaddressthisgrowingandtoxiccomponentofthesolidwastestream,24USstateshavepassed variousformsoflegislationmandatingrecyclingofcrtsandotherejwaste.allbutoneofthese programs(california)requiresmanufacturerstopaythecostofrecyclingdesignatedproducts. TheseprogramsbegantoemergeatthesametimethatmarketconditionsforrecyclingCRTswere rapidlychanging.salesofcrtdevices(tvsandmonitors)begantofallasflatpaneldeviceswithlcd screenscameonthemarket.newunitsalesacceleratedin2009duringthedigitalconversionoftv broadcastsignal. WithshrinkingdemandforCRTproducts,thedemandforusedCRTglassfor glasstoglass recycling alsobegantodisappear.statetakejbacklawsdidnotanticipatethekindsoffraudulentactivityand stockpilingofcrtglass(collectedforrecycling)thatwouldresultfromthedisappearingmarketsfor 1Asofthedateofthisreport,10companiesareparticipatinginthisprocess.Two(2)areCRTglassprocessors,7areCRT tubeprocessorsandoneperformsbothtubeandglassprocessing.

7 U.S. CRT Glass Management 6 CRTglass.Fraudulentactivitycanbeaddressedwithspecificprogramfixes,butstockpilingofCRT glassistheresultofanumberoffactors,nottheleastofwhichisthatglassthatonceproduced revenueforrecyclersnowcostsmoneytorecycle. AsidefromdisappearingglassJtoJglassmarkets,anumberof otherfactorsarecontributingtostockpilingofcrtglass.takej backlegislationwithminimalornooversightofrecyclersinvites illicitactivitiesthataddcostsandundermineprograms.this reportshowsthatcloseroversightcancorrectproblemsthat havecompromisedtheintegrityofsometakejbackprograms. CRTindustryexpertsestimatethat660millionpoundsofCRT glassarecurrentlybeingstoredatlocationsthroughouttheus. Itwillcostbetween$85millionand$360milliontoresponsibly recycleallofthisstockpiledglass,dependinguponthe conditionoftheglass. CRT$industry$experts$estimate$ that$660$million$pounds$of$crt$ glass$are$currently$being$stored$ at$locations$throughout$the$us.$$ It$will$cost$between$$85$million$ and$$360$million$to$responsibly$ recycle$all$of$this$stockpiled$ glass. Therearecurrently16companieswith24USfacilitiesprocessingCRTtubesinpreparationforfinal recovery.noneoftheseareoperatingatcapacityinspiteofwhatwouldseemtobeahugemarket demand.theysimplycannotcompetewithstockpiling. Thereare3leadsmeltersinNorthAmericaandoneglassJtoJglassoperationinIndiathatcurrently servicetheuscrtrecyclingmarket.thesealsoserveotherglobalcrtrecyclingmarkets.threenew companieshaveenteredtheusmarketandareinvaryingstagesofreadinesstowardrecoveringlead andglassfromcrts. WithsuchdemandforCRTrecovery,onemightassumethata muchlargernumberofnewcrtrecoverybusinesseswouldbe emerging.butwiththenumberofcrtstoeventuallydeclineas manufacturingofnewcrtsdeclines,investorsarehesitantto supportrecoverytechnologywithafeedstockdestinedto disappearoverthenextdecadeorso.theyarealsowaryof competingwithlandfillingofcrtglass,whichisstilllegalfor householdgeneratedwasteinanumberofstatesandhasbeen approvedincaliforniaasameansofeasingthebacklogofglass there.however,withatleast10yearsofstrongdemand remaining,savvyinvestorsshouldseeahealthyreturnon investment. Problems$with$state$take9back$ programs$must$be$addressed$ now$to$eliminate$stockpiles$ while$traditional$crt$glass$ markets$remain$viable.$ $

8 U.S. CRT Glass Management 7 ThereareCRTglassrecoverytechnologiesthatproducereusableleadandglassproductsratherthan feedstockfornewcrts.someofthesearealsocapableofrecoveringnonjcrtmaterials,soa diminishingcrtfeedstockisnotasgreataconcern.yet,littleisbeingdonetosupportdevelopment ofthesetechnologiesandthethreatofcompetitionfromlandfillshasallbutextinguishedsome entrepreneurs expectationsforraisingcapital. TheonlycompanyintheworldwithonJgoingdemandforCRTculletforuseinmanufacturingnew CRTsislocatedinIndia.Thecompany saffiliateoperationinmexicothatprocessescrtglassfrom NorthAmericaforfinalrecoveryinIndiaispermittedtoimport108,000tonsperyearofCRTglass fromtheusintomexico.yetthatcapacityhasnotbeenreached,asmanyrecyclersintheus(their primarysourceofmaterial)continuetoaccumulatematerialratherthanshipforrecycling.and companyrepresentativesreportthattheimportpermitcanbereadilyexpandedifmorematerialfrom theuswasavailableforrecycling. Rightnow,thereisawindowofopportunitytotakestepsto ensurethatleadedglassfromcrtsdoesnotbecomedestined forlandfillsafteryearsofprogressinpreventingthat.problems withstatetakejbackprogramscanbeaddressedsothatglass startsmovingoutofstockpilesandintoexistingmarkets.these stepsmustbetakennow,whileoldcrtscanstillbeconsumed forproductionofnewcrts.ifactionisdelayeduntilthat marketdisappears,theretrulywillbeatsunamiofcrtswithno viablerecoveryoptions.butiftakejbackprogramsareworking effectivelyandlandfillinginstatesisbanned,newcapacitywill becreatedtoproperlyrecovertheglass,conserveresources, createjobgrowthandprotecttheenvironment. If$action$is$delayed$until$the$ glass9to9glass$market$ disappears,$there$truly$will$be$a$ tsunami$of$crts$with$no$viable$ recovery$options.$ $

9 U.S. CRT Glass Management 8 DEFINITIONS AdvanceRecycleFee(ARF).Alegislatedrecyclingprogramwhereconsumerspayafeeintoa recyclingfundwhentheypurchasecertainnewelectronicdevices.thefundisusedtoreimburseej wasterecyclersandcollectorsforcostsrelatedtorecyclingcoveredproducts. CRTtubeprocessor AcompanythatreceivesintactCRTtubes,andproductscontainingthetubes (e.g.tvsandmonitors)andpreparestheglassforfinalprocessing.thiscanbeaccomplishedby separatingthefunnelglassfromthepanelglass,sometimescleaningtheglass,orshreddingtheglass forshipmenttoleadsmelters. CRTglassprocessor CRTGlassProcessorsusuallyreceiveglassfromCRTtubeprocessorsthathas beenpreparedforfinalrecovery.manyalsoreceivewholetubes,actingasacrttubeprocessoras well.crtglassprocessorssendglasstobemanufacturedintonewcrtsorforprocessinginlead refineries. Cullet Glassthathasbeensortedandcleanedtofurnacespecifications,renderingitfurnaceready andreadytoberecycled. Effectivecapacity Thecapacityofafacilitytoprocessmaterialconsideringvariousexternalfactors includingpermitandregulatoryrestrictionsandfeedstockpricing. ExtendedProducerResponsibility(EPR) Aconceptthatholdsthemanufacturersofproducts responsiblefortakingbackandrecyclingtheiroldproductswhenconsumersnolongerhaveusefor them.thisreportspeakstoeprlawsforelectronics,buttherearealsoeprlawsforotherproducts. ElectronicsTakeBackCoalitionA(ETBC).AnonJprofitnationalcoalitionintheUSthatpromotes greendesignandresponsibleejrecyclingincludingdevelopmentofpublicpolicyrequiringthatoems takeresponsibilityforthefulllifejcycleoftheirproducts. GlassAtoAglassrecycling ManufactureofnewCRTsfromrecycledCRTglass. LiquidCrystalDisplayA(LCD).Newer,flatJpaneltechnologymadewithliquidcrystals,whichhas replacedcrtsintvsandmonitorsandisalsousedinsmartphonesandmanyotherelectronic devices. Massbalance Anaccountingoftheweightofallmaterialsthatflowintoandoutofelectronic recyclingfacilities.whatgoesinshouldequalwhatgoesout.imbalancescouldsignalstockpiling. NationalCenterforElectronicsRecycling (NCER).AnonJprofitorganizationdedicatedtothe developmentandenhancementofanationalinfrastructureforejrecyclingintheus.

10 U.S. CRT Glass Management 9 OriginalEquipmentManufacturerA(OEM).Manufacturersofelectronicscoveredbytheprograms. AlsocalledBrandOwners. Primaryrecycler TheelectronicsrecyclerthatcontractsdirectlywiththeOEMtoservicetheOEM s ejrecyclingobligationsinagivenstateorstates. ResourceConservation&RecoveryAct (RCRA).Generallyreferstoaseriesoffederallawsand regulationsthatgovernthemanagementofhazardouswaste,solidwasteandundergroundstorage tanksintheu.s. Stockpiling StorageoflargeinventoriesofCRTglasseitherinboxes,bagsorinstoragepiles. ELECTRONICS RECYCLING LEGISLATION IN THE US Current Legislative Landscape TwentyJfiveUSstatescurrentlyhaveelectronicstakeJbacklegislation,providingconsumerswitha meansforrecyclingobsoleteelectronics.twentyjthreeoftheseemployvariousformsofelectronic ProducerResponsibility( EPR )legislation,which,underanumberofscenarios,requireelectronics manufacturerstopaythecostofrecyclingthoseelectronicsmandatedundereachlaw.onlyone state,california,employsanadvancerecyclefee(arf)programwhereconsumerspayarecycling feewhentheybuyanewproduct.themoneyisplacedinafundandthendistributedtorecyclersand collectorstopaythecostofrecyclingvideodisplaydevicesincludingtvs,computermonitors,laptops andsoforth. Onestate,Utah,requiresmanufacturerstoeducatethepublicaboutrecyclingbutdoesnotrequire thattheydoanycollectionorrecycling. StateswithtakeJbacklaws 2 andthedatesenactedareasfollows: 2003:California 2004:Maine 2005:Maryland 2006:Washington 2007:Connecticut,Minnesota,Oregon,Texas,NorthCarolina 2 NationalCenterforElectronicsRecycling:

11 U.S. CRT Glass Management :NewJersey,Oklahoma,Virginia,WestVirginia,Missouri,Hawaii,RhodeIsland,Illinoisand Michigan 2009:Indiana,Wisconsin 2010:Vermont,SouthCarolina,NewYork,Pennsylvania 2011:Utah TwentystateshavepassedsolidwastelandfilldisposalbansonCRTs.Seventeenofthoseareineffect asofthedateofthisreportand19willbeineffectbyjulyof2013.eighteenofthestateswith electronicstakejbackprogramshavebannedlandfillingofejwaste. How Legislated Take Back Programs Differ Although23stateshaveenactedtheEPRmodel,therearemanydifferencesamongtheprograms. Eachstatechooseswhichelectronicdevices(CED)willbeincludedinthelegislation.Moststatescover TVs,monitors,laptopsanddesktopcomputersforfreetakeJback,whileothersalsocoverprinters,cell phonesandvariousotherdevices. SomeoftheEPRstates setcollectiongoalsfor manufacturers.oftenthis isapercentageofthe numberoftvsand/or otherproductsthata manufacturerhassoldinto thestate sconsumermarketduringthepreviouscalendaryear. InIndiana,forexample,manufacturersmustrecycle60%ofthe weightofvideodisplaydevicessoldintotheindianamarket. Therearemanyvariationsontheseformulas. How$e9recyclers$are$hired$and$ paid$has$a$significant$impact$on$ how$well$the$programs$work$ and$whether$fraudulent$activity$ may$be$involved.$$ AlltheEPRstatesrequirethatoriginalequipmentmanufacturers(OEMs)paythecostofrecyclingthe productscovered.therearedifferences,however,inwhethertheoemsorthestatesselectthe recyclersanddecidehowmuchtherecyclerswillbepaid.thisdifferencehasasignificantimpacton howwelltheprogramsworkandwhetherfraudulentactivitymaybeinvolved.

12 U.S. CRT Glass Management 11 HOW E-RECYCLERS ARE HIRED AND PAID Stateselectsrecyclerandestablishespricing:CT,ME Independentprogrammanagershirerecyclersandestablishpricingonbehalfofthestate: VT,WA Twostatesdoacombinationofbothoftheabove:OR,RI In3states,localgovernmentsorOEMsselectrecyclersandestablishpricing:MD,NC,WV Inallotherstates*,theOEMsselectrecyclersandestablishpricing:IL,IN,HI,MI,MN,MO, NJ,NY,OK,PA,SC,TX,VA,WI *Insomeofthesestatesrecyclersarerequiredtoregisterwiththestate. Evaluating Legislated Take-Back Programs California s ARF Program SinceconsumerspayarecyclingfeewhentheybuyanewvideodisplaydeviceinCalifornia,thereisno costtooemsorrequiredprograminvolvement.althoughmostmanufacturersviewthisaspositive, theenvironmentalcommunityhascriticizedthismodel.theybelievethatthatrequiringoemstopay forrecyclingoftheirproductsincentivizesdevelopmentofproductsthatareeasiertorecycleandless toxic,thusreducingrecyclingcosts.thisistheconceptbehindtakejbacklegislationcalledextended producerresponsibility(epr),themodelmoststateshaveadopted.

13 U.S. CRT Glass Management 12 Californiaistheonlystatethatcoversonlytherecyclingof videodisplaydevices andnototherej waste.thatmeansrecyclersandcollectorsarereimbursedbythestateforvideodevicesonly.but consumerswanttorecycleawholerangeofdevicesandtheyoftenbringthemtocollectionevents alongwiththeirvideodisplaydevices.thishasresultedinahugeburdenforrecyclerswhowindup takinglowornegativevalueejwastealongwiththecrtdevicesfromconsumers.sincethereisno moneyintheprogramforthenonjcrtdevices,manytimestheonlyprofitableoptionforrecyclingis toshipthesematerialstodevelopingcountriesthatwillpayasmallpriceperpoundforthescrap. Unfortunately,thesecountriesgenerallylacktheinfrastructuretoprocessthehazardous components,resultingtosignificantharmtohumanhealthandtheenvironment. Californiahastheonlystateprogramthatestablishedthepricerecyclersarepaidwithinthe legislation.whenthelawwasenactedin2004,recyclerswerepaid$.48/poundandweretopay collectorsdeliveringmaterialtothemataminimumrateof$.16/pound.the$.29/poundintendedto coverrecyclingcostsshouldhaveprovidedacomfortableprofitmargin.

14 U.S. CRT Glass Management 13 In2008,thepricepaidtorecyclerswasreducedto$.39/pound.Whilethatshouldhavestillsupported properrecyclingwith$.16goingtocollectors,competitionforthecoveredproductsbecamefierce andrecyclersbeganofferingmoreandmoretocollectorstogetthecoveredproducts.today,some recyclersarepayingcollectorsashighas$.29/pound,leavingtoolittleforresponsiblecrtrecycling afterthevaluablecommoditiesaresold. Thefeethatconsumerspayalsosupportsstateoversightoftheprogram.CalRecycleapproves participatingrecyclersandcollectorsandrequiresextensiverecordkeepingforthoserequesting payment.thisoversighthelpstoreducefraudulentactivity.somemayconsiderthelevelofoversight anegativeaspectoftheprogramduetohighcost.evenwiththehighlevelofoversight,other programweaknesseshavecontributedtostockpilingofcrtglass. TheCalifornialawrequiresthatrecyclers cancel CRTtubesandshipthetubesorglassinorderto qualifyforpaymentfromthestate.cancelingthetubeusuallyinvolveseithersimplydrillingaholein theglasstubetoreleasethevacuumorfurtherprocessingbyseparatingpanelglassfromfunnelglass. Therequirementfortheglasstobeshipped,however,doesnotspecifythatitbeshippedtoaglass recoveryfacility,onlythatitbeshippedoffjsite.assuch,somerecyclershavebeenshippingtooffjsite warehousesandstoringtheglassratherthanshippingformorecostlyrecycling. Finally,sincecancelingtubesrendersthedeviceunJrepairable,theCalifornialawhasbeencriticized forpreventingreuse,whichsavesenergyandconservesresources. State Controlled Manufacturer Take-Back Model InConnecticutandMaine,thestatesselecttheparticipatingrecyclersandapprovepricingproposed bytherecyclers.thishelpspreventoverlycompetitiveforcesfromdroppingthepricebelowthe thresholdthatcansupportproperrecycling.recyclersparticipatinginthesestateprogramsfeelthat thereisadequateprogramoversightandfinancing.theoems,ontheotherhand,believethecosts aretoohighandthattheinabilitytochooserecyclersornegotiatepricingrewardsinefficient companies.

15 U.S. CRT Glass Management 14 Intheseprograms,however,eventhoughthestatesapprovethepricing,therecyclersmustcompete againsteachothertosecurecontractswiththemunicipalitieswherethecoveredproductsare collected.sincetheyarenotcompetingonprice,theymustofferotherbenefitstomunicipalitiesto beatoutcompetingrecyclers.someoffertotakeitemsnotcoveredundertheprogramsatnocharge andmanytimesoffertopayfortheseitemstogetthecompetitiveedge.thisdoesnotnecessarily meanthatthisleadstostockpilingofcrtglassorotherprogramimbalances.however,ifabovej marketpricesareofferedfornonjcoveredproductsinordertosecurebusiness,theamountofmoney leftforproperrecyclingofcrtscouldbecompromised.

16 U.S. CRT Glass Management 15 Thestatesmaintainprogramoversight,requiringrecyclerstosubmitaggregateinformationonall shipmentsannually.althoughthisshouldhelpreducefraud,lackofreportauditingoronjgoingthirdj partymonitoringofmassbalance 3 canstillresultinstockpilingofcrtglass. Privately Controlled (OEM) Manufacturer Take-Back Model ThelargestnumberoflegislatedtakeJbackprogramsfeaturesystemswheretheselectionofand paymenttorecyclersiscontrolledbyoems.theseprogramshelpincentivizeoemstodesignmore recyclable,thereforelesscostlytorecycle,products.mostofthestatesestablishaggressivecollection goalsforeachoem,oftenresultinginhighcollectionrates. Whilethelawsinsomestates,particularlythosewithcollectiongoals,haveclearlysucceededin drivingupthevolumeofejwastecollectedbytheoemprogramsforrecycling,theyhavebeenless successfulinassuringthatresponsiblerecyclingisoccurringwithwhatisbeencollected. 3 SeeDefinitions

17 U.S. CRT Glass Management 16 PuttingprogramresponsibilityfullyinthehandsofOEMswithlittleornostateoversighthasledtoa myriadofproblemsinthesestates.althoughmanyoemshavepublicpoliciessuggestingstrict requirementsoftherecyclerstheyhire,includingauditing,thehighlycompetitiveenvironmentoften drivesdownprices,particularlyforcrts,toalevelthatindustryexpertsbelievecannotsupportproper recycling.attractedbyrevenuefromoems,somerecyclersbidbelowjmarketpricestorecyclecrt products,sellallthevaluablecommoditiesandthenstockpiletheglassinhopesthatlargevolumes willcommandaffordableprices.totheirchagrin,however,theyfindthatasmarketsforcrtglass continuetodecline,thecostforcrtrecyclingcontinuestorise. Themosttroublesomeoutcomeofthisprogrammodelistheproliferationoffraudulentreporting. Thisincludesfabricatedpapertransactions,someofwhicharenowcommonlyreferredtoas Air Pounds.Thisiswhenrecyclersinflatetheweightofmaterialscollected( GhostWeight )inorderto giveoemsthenumberstheyneedtomeetcollectiongoalswhileoverchargingformaterialsthatwere nevercollected(seepages26,27).

18 U.S. CRT Glass Management 17 State Take-Back Volumes Theabovedata,suppliedbytheNationalCenterforElectronicsRecycling(NCER)indicatesthat600 millionpoundsor300,000tonsofelectronicswererecycledinlegislatedtakejbackstatesoverarecent 12Jmonthperiod.Industryexpertsestimatethat60%oftheweightofmaterialscollectedinthese programscomesfromtvsandmonitors,indicatingthat180,000tonsoftvsandmonitorswere collectedduringtheperiod.

19 U.S. CRT Glass Management 18 MARKET FACTORS IMPACTING CRT RECYCLING CurrentoptionsforCRTglassrecoveryincludeleadsmeltingand glasstoglass recycling. TherearetwokindsofglassinaCRT: panelglass, fromthefrontpanelofthetube(thisusuallyhasa leadcontentbelowregulatorylimitsondisposal)and funnelglass fromtherestofthetube(which hasveryhighleadcontent).leadsmeltersareinterestedinrecoveringtheleadfromcrtfunnelglass andcanusethesilica(glasscomponent)asa fluxingagent tohelpremovecontaminantsandpurify thelead.therearecurrentlythreeleadsmeltersinnorthamerica;twoincanada,locatedinbritish ColumbiaandNewBrunswick,andoneintheUSlocatedinMissouri. GlassJtoJglassrecyclingusesCRTglassthathasbeencleanedofthetoxicphosphorpowdersinside thetubesandseparated(panelandfunnel)toproducenewcrtproducts. Glass-to-Glass Markets In2004,whenCaliforniapassedthefirsttakeJbacklawintheUS,newCRTmanufacturerswerepaying recyclersabout$205/tonfortheircrtglass.today,thosethatremainarechargingrecyclersabout $200/ton.Thisrepresentsanetlosstorecyclersof$405/ton.Whatwasonceanincomesourcefor recyclersnowcostsmoneytoprocess.

20 U.S. CRT Glass Management 19 In1999,manufacturingfacilitiesin12USstateswereproducingCRTglassandusingrecycledglassfor aportionofthecontent.therewerealso14manufacturersaroundtheworldmanufacturingcrt tubesand23companiesusingthosetubesinnewcrtbasedtvsandmonitors. Today,onlytwoplants,bothinIndia,continuetomanufacturetubes(SamtelandVideocon)andonly VideoconstillproducesCRTbasedTVsandmonitors.Theresultisashiftfromrecyclersbeingpaidfor CRTglasstorecyclersbeingchargedforCRTglass.

21 U.S. CRT Glass Management 20 Asrecentlyas2010,Indianfactorieswereshipping5CRTbasedproductsforeveryoneLCDproduct. LCDproductshipmentsnowexceedCRTproducts.ThistrendwillcontinueuntilCRTbasedproducts arenolongeralessexpensivealternativetolcdproductsandwillnolongerbeproduced. Lead Smelters WithglassJtoJglassmarketsdiminishing,competitionforrecyclingcapacityatleadsmeltershas becomefierce,allowingleadsmelterstochargemoreforcrtglass. SincethefirstUStakeJbackprogramwasimplementedin2004,leadsmeltersfeeshaverisenfrom $125/tonto$225/ton.

22 U.S. CRT Glass Management 21 Leadsmeltersarealsonowimposingstrictermaterialacceptanceparameters.TwoofthethreeNorth Americanleadsmeltersnowonlyacceptproperlypreparedleadedfunnelglassandnolongeraccept panelglass.

23 U.S. CRT Glass Management 22 FACTORS CONTRIBUTING TO CRT GLASS STOCKPILING Take-Back Legislation Attracts New Recyclers/Attracts Unscrupulous Activity WhenstatespasstakeJbacklaws,privateenterprisespayattention.Theylearnthatthereismoneyto bemadeinelectronicsrecycling.inexperiencedentrepreneursfigurethatvalueinbasemetals, preciousmetalsandevenplasticsthatcanbepulledfromejwaste,coupledwithmoneyfromstatesor OEMs,isawinningbusinessproposition.Someoftheseentrepreneursareinexperiencedinthecosts ofmeetingenvironmental,healthorsafetyrequirementsormanaginghazardousmaterialssuchas leadedcrtglass. Atfirstglance,arecyclercouldcalculaterevenuesfromevery TVormonitorreceivedataround$14.50/unit.However,when thecostsofglassprocessing,collectionandtransportationare properlyfiguredin,only$4.00inrevenuemayremain.ifthey addalloftheoverheadcostsofproperlymanagingan electronicsrecyclingbusiness,thenetrevenueisnegative.this makesitveryenticingtojust setjaside thecostofmanaging theglasswhileenjoyingrevenuefromthecommodities. Whilethiscanoccurasaresultofinexperience,thereare recyclerswithplentyofexperiencethatunderstandthemathall toowellandaresimplytakingadvantageofan opportunity. Thisactivityisthesinglelargestcontributortostockpilingof CRTglassinlegislatedtakeJbackstatesandcanbereadily addressed. Recyclers$ setting$aside $the$cost$ of$managing$crt$glass$while$ enjoying$revenue$from$ commodities$is$the$single$ largest$contributor$to$ stockpiling$crt$glass.$

24 U.S. CRT Glass Management 23 OEMs Driving Down Costs SincetheinceptionoflegislatedtakeJbackprogramsin2004,pricespaidtorecyclersforcollecting coveredproductshavedeclinedover55%goingfromahighof$.48whenthecalifornialawwas implementedtoalowofabout$.25forstatejrunprogramsandfromabout$.26/poundto$.15/pound foroemjrunprograms.oemsoperatingvoluntarytakejbackprogramsasaservicetocustomers (mailjinrecycling,etc.)arenowsecuring nocharge recyclingcontracts.whentheseprograms began,recyclerswerepaidanaverageof$.11/pound.

25 U.S. CRT Glass Management 24 IntakeJbackstateswhereOEMsareresponsibleforhiringandpayingrecyclers,pricingforrecycling hasbecomefiercelycompetitive.crttubeprocessorsandcrtglassprocessorsexperiencethefull costsofrecyclingthesematerialsandthusquotepricesthatreflectthat.mostagreethat$.20/pound istheminimumrequiredtopayforproperrecycling(notincludingthecostofcollection).but,more oftenthannot,recyclersbidpriceswithunjsustainablemargins,havingnointentionofrecyclingthe glass.theallureofservicinglargejvolume,brandjnamefortune500customersenticesunrealistic andunsustainablepricing. Lack of e-recycler Monitoring TheadventofthirdJpartycertificationprogramsforelectronicsrecyclers(eJStewardsandR2)has improvedthequalityofservicesofferedbyejrecyclersoverall.althoughtherequirementsoftheej

26 U.S. CRT Glass Management 25 StewardsandR2standardsdiffer,bothrequirethatrecyclesruntheirbusinessesunderaplanJdoJ checkjactqualitycontrolprotocolthatimprovestheintegrityofthebusinessoverall. However,whatmostcustomersofeJrecyclersdonot understandisthattheseoncejajyearcertificationauditsarenot asubstituteforonjgoingoversight.thefederalgovernment, manystatesandmanyotherlargegeneratorsofejwastehave placedalloftheirfaithincertificationprogramsandhave abandonedadditionaloversight.still,inmanystates,no certificationisrequiredatall. Certification$auditors$are$not$ required$to$validate$that$the$ materials$and$volumes$ reportedly$shipped$to$ downstreams$have$been$ received.$ ThirdJpartycertificationauditorsarerequiredtocheckarecycler sshippingrecordsanddetermine whetherornottherecyclerhasknowledgeofthecapabilitiesandregulatorystatusofdownstream processors.thecertificationauditorsmustreviewshippingrecordstoverifythattherecycleris shippingtothefacilitieshe/sheisclaimingtoshipto.theauditorsarenot,howeverrequiredto validatethatthematerialsandvolumesreportedlyshippedtodownstreamshavebeenreceived.as such,arecyclercancreateshippingdocumentsforthepurposesoftheauditwhilesendingmaterial offjsiteforstorageortootherdownstreamsthatmightnotmeetcustomerrequirements.thisisso prevalentthatthereisanameforit: alibiloads.thatis;sendingafewloadstoawidelyapproved downstreamprocessor,usingthatpaperwork(the alibi )topassanauditandsendingalargervolume toadownstreamthatlikelywouldnotpasscustomerorauditmuster. AshardasstatesandOEMshaveworkedtoqualifyrecyclersin theirprograms,auditingelectronicsrecyclersremainsa dauntingtask.electronicsrecyclersarelargelyunregulatedso allthatcustomershavetorelyonisthediligenceand experienceofauditors.yeteventhemostexperiencedauditors cannotusuallydetectwhetheroutboundshipmentsactually meetcustomerrequirements. Fabrication$of$shipping$ documents$is$so$prevalent$that$ there$is$a$name$for$it:$ alibi$ loads.$ ThisproblemcouldbeaddressedbythirdJpartymassbalancemonitoring.Thisiswherean independent,thirdjparty(neithertheshipperorreceiver)verifiesthatthevolumethatwasclaimedto havebeenshippedwastheamountthatwasactuallyreceivedbyaparticulardownstreamprocessor. ThisstrategycanprovideoversightofmaterialmovementintoandoutofeJrecyclingfacilitiesand independentlyverifywiththedownstreamsthatthetypesandvolumesofmaterialsindicatedas shippedwere,infact,receivedforfinalprocessing.currently,nostateejrecyclinglawsrequirethird partymassbalancemonitoringofcollectorsorejrecyclersengagedinstateprograms.

27 U.S. CRT Glass Management 26 Making Manufacturer Take-Back Work On Paper ManystatesestablishrecyclinggoalsthatOEMsmustmeet,oftenbaseduponapercentageofthe devicesthataparticularmanufacturersellsintothestatemarketinagivenyear.forsome manufacturers,thismeanscollectingandrecyclingasmanyas20millionpoundsofejwasteina programyear. OEMsoftencontractwithasingleprimaryrecycler,orwithalimitednumberofrecyclers,tomeet theircollectionandrecyclinggoals.becausetherecoverygoalsaresohigh,fewifanyindividual recyclercansinglejhandedlycollectandservicethosevolumes.inordertomeetcontractobligations withtheoem,theylookforotherrecyclersthathavemanagedtakejbackmaterialstogeteitherthe physicalmaterialsforprocessing,ortosimplygetthepaperworkevidencethatmaterialsfromtakej backcollectionswererecycled. ThesesoJcalled papertransactions canlegitimatelyhelpprimaryrecyclersmeettheircontractual obligationswiththeiroemcustomers.unfortunately,itiswidelyreportedthatmanyofthese transactionsarenotlegitimate. Air Pounds Someofthesubcontractedrecyclerssellthesamepaperworktonumerousprimaryrecyclers.Thishas becomesoprevalentthatthesearenowcommonlyreferredtoas AirPounds.Anotherdeceiving practicethatisreportedlycommonplaceisrecyclerscollectinganumberofpoundsofmaterialand claimingtohavecollectedmuchmore.noneoftheoemsorstatesrequireweightslipdocumentation formaterialcollected.

28 U.S. CRT Glass Management 27 IntheaboveillustrationofanAirPoundsscenario,bothRecyclerA(top)andRecyclerC(bottom)are payingrecyclerbforweightneededtomeettheircontractualobligations.theresultisrecyclerb gettingpaidtwiceforthesameweightandthetakejbackprogramcomingupshortof15million poundsonmaterialthatwassupposedtohavebeenrecycled. Ghost Weight TheillustrationbelowdescribesaGhostWeightscenario.Inthiscase,therecyclercontractedwiththe OEMat$.11/pound.Therecyclercollected25millionpoundsbut fudged theweightscollected, invoicingtheoemfor50millionpoundsinstead.theresultistheoempayingdoublewhatwas quoted.furthermore,legitimaterecyclersthatcompetedforandlostthisbusinessmayhavequoted lessthan$.22/poundbutcouldnotcompeteagainstthedeceptivepriceof$.11/pound.

29 U.S. CRT Glass Management 28 Stockpiling An ARF Problem Too Withbetterrecordkeepingandprogramoversight,theabovescenariosarenotasprevalentin California sadvancerecyclefee(arf)system.otherprogramchallenges,however,havecontributed toabacklogofglasswhichrecentlyleadtothe emergencyrule thatwillallowforhazardouswaste landfillingofleadedglass. UnderCalifornia ssb20/50legislation,$.39/poundisearmarkedtopayregisteredglassrecyclersto recyclevideodisplaydevices(tvs,monitors,laptopsandportabledvdplayers).ofthatamount,

30 U.S. CRT Glass Management 29 recyclersmustpaycollectorsatleast$.16/pound,butrecyclersthatarealsocollectorsmaykeepthe full$.39/pound. Whenthelegislationpassed,manynewrecyclersjumpedintothemarket,makingcompetitionforthe glassquitefierce.firstrecyclersbeganofferingtoacceptitemsfromcollectorsandthepublicthat werenotcoveredundertheprogramatnocharge.sincemostejwastegeneratedfromtheresidential marketisofveryloworevennegativevalue(vcrs,printers,smallhouseholdappliances,etc.)taking theseitemsforfreewaschallengingbutprovidedanavenuetogettingthecrtglassthatwouldbring revenuefromthestateprogram.overtime,recyclersbeganofferingcollectorsmoreandmoremoney perjpoundtocompetefortheirglass.today,recyclersarepayingcollectorsbetween$.20and $.29/pound,leavingverylittleifanymarginforproperCRTrecycling.Somerecyclersthatwereoverly aggressivewithpricebeganstoringglasshopingfordipsinpricethatwouldprovideanopportunityto shiptheglass.asstatedearlier,however,thecostofcrtglassrecyclingisgoingup,notdown. California smovetoallowhazardouswastelandfillingofleadedglassisanattempttoclearoutthese stockpiles. COST OF CRT GLASS RECYCLNG Onaverage,thecosttoprocesswholeCRTtubeshasbeenaround$.10/pound.Processingmixed, brokentubes,wherethepanelglasshasnotbeenproperlyseparatedfromthefunnelglass,has averaged$.25/pound.finally,glassthathasbeenhaphazardlystockpiledandcontaminatedwith plastics,metals,dirtandothercontaminants,couldcost$.50/poundtocleanandsortinpreparation forrecovery.

31 U.S. CRT Glass Management 30 Atcurrentfuelprices,transportationforanyoftheseclassificationsofmaterialsgoingtoarecycling facility 4 averages$.03/pound. 4 Leadedglassdestinedforapermittedhazardouswastefacility,suchasalandfill,mustbe shippedincompliancewiththeresourceconservation&recoveryactatahigherrate/lb.

32 U.S. CRT Glass Management 31 CURRENT CRT VOLUMES & EFFECTIVE CAPACITY FOR CRT RECYCLING IN NORTH AMERICA CRT Glass Industry Estimates on Stockpiles TheCRTrecyclersthatproducedthisreportcompiledthedataontheslidebelow.Sincemanyofthe stockpilesresideatoperationsthatdonotprocesstubesorglass,crtrecyclershavebeencalledinto theseoperationstoevaluatethestoredglassforpurposesofremoval.

33 U.S. CRT Glass Management 32 Estimated Recycling Costs for Take-Back Glass Stores

34 U.S. CRT Glass Management 33 US CRT PROCESSORS ThechartbelowlistsallknowncompaniesthatprocessCRTtubesinpreparationforfinalrecovery(at theglassprocessors).

35 U.S. CRT Glass Management 34 CURRENT & FUTURE US CRT GLASS PROCESSORS Thecompanieslistedbelowinblackcurrentlyprovideglassand/orleadrecoveryservicestoUSeJ recyclers.thoseingreyhavepermitsfornewoperationsandareinvariousstagesofreadiness. ClosedLoop,basedinArizona,isrunningapilotJscalerecoveryoperationandiscommercially acceptingglassinpreparationoftakingtheoperationfullscale.closedloopexpectstheazfacilityto beinfullproductionbytheendof2013andwillhaveacapacitytoprocess21,000tonsofleadedglass peryear.

36 U.S. CRT Glass Management 35 ECSRefiningisprocessingtubesatbothitsCaliforniaandTexasoperationswithanautomatedand patentedprocessformechanicallyseparatingpanelfromfunnelglass.thefocusisonproducinga highjqualityglassfrompanelglassandseparatingtheleadedglassforfinalrecoveryatanew150ton perdayfacilityintexas.ecstexascurrentlyoperatesthelargestsecondaryleadsmelter 5 intheus.a newsubsidiary,conecsuswillberunningthenewglassfurnacethatwillproduceleadandcleanglass fromfunnelglass.ecsiscurrentlyprocessingtubesatbothlocationsandisaccumulatingglassfor launchoftheglasssmelter,expectedinlate2013. NuLifeGlassrecentlylaunchedanewCRTglassfurnaceattheirSittingbourne,Kent(UK)plant. OperatedbySWEEPKuusakoski,theKentplantrecyclers10tons/dayofleadedCRTglass.The companyhasobtainedpermitstobuildasimilarplantoutsideofbuffalo,ny. 5 Produceleadfromleadbasedmaterials,notfromore.

37 U.S. CRT Glass Management 36 TAKE-BACK CRT GLASS VOLUMES AND EFFECTIVE MARKET CAPACITY CRT Volumes from Legislated Take-Back Programs Asstatedearlier,approximately180,000tons/yearofTVsandmonitorsarecurrentlybeingcollected inlegislatedtakejbackstates.atanaverageof55.8pounds/unit,thisproduces132,474tonsof CRTs/year.

38 U.S. CRT Glass Management 37 ThetableaboveshowsthebreakdownofCRTcomponents(leadedfunnelglass,panelglassand metals)andthenumberoftons/yearproducedfromthetakejbackprograms. Leaded Glass Volume and Effective Market Capacity Currently,CRTglassprocessorsservicingtheUSmarkethaveaneffectivecapacitytoprocess135,300 tonsofleadedglass/year.asindicatedinthechartbelow,whennewmarketscomeonline(closed Loop,ECS,NuLife),anadditional79,200tonsofcapacitywillbeaddedspecificallyfortheUSmarket (allusbasedoperations).

39 U.S. CRT Glass Management 38 Itisimportanttonote,howeverthatcurrentmarkets(primaryleadsmelters,TDM)alsoservice CanadaandMexicosothecurrentcapacityisnotreservedforUSvolumealone.Inaddition,the numbersonthechartabovedonotincludeallofthecrtjbasedproductsgeneratedforrecyclingfrom businesses,institutionsandotherorganizations(thisnumberhasnotbeenquantified).assuch,what mayappearasacurrentsurplusincapacityislikelyasignificantandyettobequantified,shortage. Other Potential Capacity AdditionalcapacityhasbeendemonstratedatprimarysmeltersinMexico,includingTorreon/Penoles andsoutherncopperinnacozari.however,currentpurchaseordersfromtheseoperationsare limitedorprivateandnotsolicitedfromrecyclerswithstockpiles.thiswouldpresumablychangeif eitherthepriceofleadincreasedorifsmelterswereabletocommandahigherrecyclingfee. CoppersmeltersintheUSA,suchasPhelpsDodge,couldutilizeCRTculletthesamewaybutarenot solicitingmaterial.engineersatamexicancoppersmeltercitedconcernsoverbecomingclassifiedas a"wastetreatmentfacility"asreasonfortheircautionoverusingcrtglass.oneexpertsuggested thatthecapacityofcoppersmelterstoconsumecrtglasscouldbesignificantifthesmelterswere guaranteedtheycouldusesecondaryrecycledculletinthesamewaytheyuseleadore;thatis, withoutregulationsinexcessofgroundwatermonitoringandotherexistingrequirementsthatapply tomanagementofslagandextractedores.essentially,thesesmelterscouldeffectivelyconsumecrt culletthatmeetstechnicalsmeltingrequirementsifregulatoryburdens,andthereforeexcessive risks/costs,wererelieved.

40 U.S. CRT Glass Management 39 FACTORS CONSTRICTING EFFECTIVE CAPACITY OF CRT GLASS MARKET Althoughasignificantnumberofentrepreneurshavedevelopednewtechnologiesforrecovering materialsfromcrts,veryfewhavesuccessfullysecuredinvestmentcapitalforstartupfortwo reasons: 1. Threatofcompetitionfromsolidandhazardouswastelandfills 2. FuturediminishingsupplyofusedCRTsworldJwide Threat of Competition from Landfills Asindicatedonthemapbelow,30USstateshavenotbannedCRTsandotherelectronicsfromsolid wastelandfills.althoughcrtscanbeclassifiedashazardouswasteundertheresourceconservation andrecoveryact(rcra)andthereforecannotbedisposedofinsolidwastelandfills,eparegulations exempthouseholdsandother smallquantitygenerators fromhazardousregulations.assuch,crts generatedbyhouseholdscanbelegallydumpedinasolidwastelandfillaslongasthestatewherethe landfillresidesdoesnotbancrtdisposal.so,with30statesstillallowinglandfilling,andlandfilling costingfractionsofpenniesperpoundvs.recycling,ejwastelandfillingposesasignificantthreatto thecrtrecyclingindustryandtotheenvironment.

41 U.S. CRT Glass Management 40 California s Emergency Landfill Rule InresponsetogrowingglassstoresatstateregisteredeJrecyclingfacilities,Californiarecently approvedanemergencyregulationrelatingtosb20/50,thestate sejwasterecyclinglaw,allowingfor hazardouswastelandfillingofcrtglass.althoughlandfillingofanytypemeansalossofvaluable resources,hazardouswastelandfillingdoesnotposethesamecompetitivethreattocrtrecyclingas solidwastelandfillingdoes.onapricejperjpoundbasisitcanbelessexpensivethanrecycling,but oftenthecostofcomplyingwithrcraregulationsputitonpar,orevenmoreexpensivethan recycling.however,dependingonindividualhazardouswastelandfillpricingandfreightcosts, investorsstillviewitasathreattotheviabilityofnewrecoveryoperations.moreover,on environmentalissues,ascaliforniagoes,otherstatestendtofollow,bodingatroublingtrendforthe futureofcrtrecovery.

42 U.S. CRT Glass Management 41 Future Diminishing Supply of Used CRTs Worldwide Asindicatedonthechartonpage18,thenumberofnewCRTJbasedproductsbeingmanufactured worldwideisrapidlydeclining.assuch,thesupplyofcrtglassforrecycling,althoughoverwhelming atpresent,willeventuallybegintodecline.withthecostofnewcrtglassrecyclingplantsstartingat around$3million,investorsareconcernedthatfuturedeclinesinglasssupplycouldidletheseplants. However,thetremendoussupplyavailableoverthenext10Jplusyearswilllikelyensurearobust returnoninvestment. Toaddressinvestors concerns,someentrepreneursareexpandingtheapplicationofrecovery technologiestoothermaterialssuchaslcddisplaysandfluorescentlampstofurtherattract investment.plasmaarctechnologyisonesuchtechnologythatcannotonlyrecovercrtglassbut alsopreciousmetalsandrareearthmetals 6 whichareamongthemoststrategicallyvaluablemetalsin theworld. ADDRESSING THE STOCKPILING PROBLEM: ACTION PLANS FOR STATES AND THE FEDERAL GOVERNMENT States Action Plan Thefirstcourseofactionforstatesistoinvestigaterecordsof materialflowsintoandoutofejrecyclingoperationsengagedin thestatetakejbackprogram,whethertherecyclersarehiredby manufacturersorbythestate.thismayrequirehiringofthirdj partyauditorswithspecificexperienceintheejrecycling industry.thegoalhereistoidentifystockpilesthatmayexistat theejrecyclersprimaryplaceofbusinessoratoffjsitestorage locations. Discovery$of$glass$stores$might$ be$expedited$with$an$amnesty9 type$program$to$entice$e9 recyclers$with$inventory$ problems$to$proactively$seek$for$ assistance.$ Thenextstepistodeterminethecauseofthestockpileandtherecycler splanforremovaland disposition.iftherecyclerdoesnothavethefinancialwherewithaltorecovertheglass,thestatemust 6 Rareearthmetalsareasetof17chemicalelementsintheperiodictable,considered rare sincemostdepositsorrare earthoresarewidelydispersedandnotconcentrated.manyareusedinelectronicapplicationsandareextremelyvaluable. $

43 U.S. CRT Glass Management 42 thendeterminewhatregulatoryactionand/oralternateformsoffinancingcanbetappedtorecycle thestockpile. Anotheroption,whichmayexpeditediscoveryofglassstores,maybetodevelopanamnestyJtype programtoenticeejrecyclerswithinventoryproblemstoproactivelyseekassistance.theamnesty couldrangefromrelieffrompenaltiesrelatedtospeculativeaccumulationtimestooffersofloansor otherfinancialassistancetowardhavingtheglassrecycled. Preventingstockpilinginthefirstplaceisthebestcourseofaction.Manyofthestockpilesresideat demanufacturingfacilitiesthathavenocapabilitiesforprocessingcrttubesorglass.assuch,thereis noreasonforaccumulationorstorageofcrtsatthesefacilities.thirdjpartymassbalancemonitoring canhelpensurethatmaterialsareregularlyflowingoutoftheseoperationsandnotbeingstoredfor anyreason. Federal Action Plan: All Stockpiling is Not Created Equal ItisimportanttonotethatallstockpilingoraccumulationofCRTglassisnotalwaysproblematicand maybeanecessarycomponentoffinalglassrecovery. ThefocusofthisreportisonstockpilesofCRTsthathaveessentiallybeen setjaside eitherinhopeof adropinthecostofrecyclingor,insomecases,withnointentionofrecyclingatall(planned abandonment).however,therearecaseswhereaccumulationisanecessarypartofstartjupforanew processoraccessingmarketsthatmayhaverelativelylowconsumptionratesbuthavelongjterm needforleadedglass. Glassandleadrecoveryoperationsrequirelargevolumesof materialtogetnewplantsupandrunning.largejscalefurnaces requireaminimumof6j12monthssupplyofprepared,furnacej readymaterialspriortostartjup.afurnacewilltakeuptoaone monthsupplyoninitialfeedtostarttheunit,thenrequiresfeed continually24hoursadayfor3j5yearsbeforelinersmustbe replaced.largefurnacescannotbeshutdownwithoutcausing damage,thusreservingfeedstockformarketfluxuationsor otherdisruptionsininboundmaterialflowsisessential. As$the$supply$of$CRT$glass$ dwindles,$demand$by$smelters$ will$remain$constant$well$into$ the$future.$ $ The3leadsmeltersservicingtheUSCRTmarket(DoeRun,TeckResources,Xstrada)reportthat althoughtheirabilitytoconsumecrtglassiscurrentlylimitedto~27,300tons/year,theyhavelongj

44 U.S. CRT Glass Management 43 termneedsoftheglassforuseasafluxingagent.so,asthesupplyofcrtglassdwindles,their demandwillremainconstantwellintothefuture.assuch,stockpilingglasstofilllongjtermlead smelterneedswillbenecessarytoconserveresources(miningforleadorfluxingagents). The CRT Rule In2006,theUSEPAissueditsfinalCRTRuledesignedtostreamlinerequirementsformanagingCRTs andtoencouragerecycling.therulesetforthrequirementforcrtsdestinedforexportmarketsand establisheddomesticrequirementsforstorageandaccumulationofcrts.itprohibited speculative accumulation,requiringthat75%ofthevolumeorweightofcrtsreceivedwithinacalendaryearis recycled.theintentwastopreventoperationsfromtakinginmorethantheycouldprocesswhich couldleadtostockpileabandonmentandassociatedenvironmentalcleanupcosts. In2011,theEPArespondedtothegrowingnumberofinquiriesregardingthespeculative accumulationrequirementswiththefollowingclarificationforcrtrecyclers: Legal$options$for$recyclers$for$CRT$glass$ $ (1)$If$recyclers$are$planning$on$storing$glass$longer$than$is$allowed$under$the$CRT$ rule,$they$can$and$should$apply$for$a$variance$for$extending$the$speculative$accumulation$ time$(see$40$cfr$260.30$(a)$and$260.31(a))$prior$to$storing$the$crt$glass$longer$than$the$ speculative$accumulation$time$is$met;$and/or$ $ (2)$Recyclers$are$allowed$to$dispose$of$the$glass$in$HW$landfills$(if$the$State$does$not$ have$a$landfill$ban).$ Suggested Improvements in the CRT Rule Topreventstockpiling,onlyCRTtubeandglassprocessorsshouldbepermittedtostoreglass. DemanufacturersthatdonotprocessCRTglassortubeshavenoreasontostorematerial.CRTglass processors,however,haveastrongbusinesscaseforstoringmorematerialthanisallowedunderthe speculativeaccumulationrules.properlyclassifyingejrecyclersbytheircapabilities (demanufacturer/recycler,crttubeprocessor,crtglassprocessor)willhelpidentifythosewith legitimateneedsforstorageandthosewithout.rulespertainingtoeachshouldbeestablished accordingly.

45 U.S. CRT Glass Management 44 STEPS FOR IMPROVING TAKE-BACK PROGRAMS WhilecurrentstoresofCRTglassarebeingidentifiedandaddressed,itwillbeimportanttofully evaluatethecurrentstateofmanufacturertakejbackprogramsandidentifyareasforimprovement. Thiswillrequireacollaborativeeffortamongstates,OEMsandrecyclers.Areastobeaddressed include: 1. Understandingthetruecostofproperrecycling 2. Designingprogramrequirementstowardpreventingfraud 3. ThirdJpartymassbalancemonitoringofcollectorsandeJrecyclers 4. LessonslearnedfromdifferingelectronicstakeJbackschemes Understanding the True Cost of Recycling Know the Math Transportation,managementandproperrecyclingofCRTsand CRTglassisacumbersomeandrelativelycostlyventure. UnderstandingthetruecostofCRTrecyclingcanhelpstates andoemsidentifypricingproposalsthatmaynotsupport responsiblerecycling. Know$the$Math:$$CRT$recycling$ bids$below$$.20/pound$should$be$ carefully$scrutinized.$$ Atcurrentcommodityprices,theaverageTVormonitorcontainsbetween$.05and$.13/poundin valuefrommetalsandplastic;depending,forexample,uponwhethertheunitisawoodenconsoletv oracomputermonitor.industryestimatesplacecostsassociatedwithpropermanagement,handling andrecyclingatabout$.32/pound.california scurrentrecyclingandcollectionreimbursementrateof.39/pound,basedupon7yearsofprogramexperience,andcanada sprovincialprogram reimbursementratesbetween$.30and$.45/poundsupportthis.assuch,statesandoemsmight expecttopayaminimumof~$.20/poundforpropertv/monitorrecycling.proposalswithpricing below$.20/poundshouldbecarefullyscrutinized. $

46 U.S. CRT Glass Management 45 Designing Take-Back Program Requirements to Minimize Fraud Asexplainedearlier,weaknessesinmanytakeJbackprogramshaveledtorampantfraudulentor misleadingpapertransactionsincluding GhostWeight, AirPounds andothers. Preventing Ghost Weight Thequickestwaytoprevent GhostWeight (claimsofhavingcollectedmorematerialthanwas actuallycollected)istorequirebillsjofjlading(shippingdocuments)andweightslipsfromcertified commercialtruckscalesthatverifyweightsofmaterialscollected.thesedocumentswouldhavetobe submittedwitheachinvoiceandauditedfromtimetotimeforauthenticity. Eliminating Paper Transactions Allowingprimaryrecyclerstopurchaserecordsfromotherrecyclersorfromcollectorsasevidenceof recyclingisamajorflawinlegislatedtakejbackprograms.prohibitingpapertransactionsalltogether wouldeliminatethemostsignificantcauseofprogramfraud. Stateprogramsshouldrequirethattheonlyacceptablerecyclingrecordsarethosebasedupon auditableandverifiableevidenceofphysicalmaterialtransactingbetweencollectorsandrecyclers, recyclersandprocessorsandbetweenprocessorsandfinaldestinationfacilities.verificationcanbe accomplishedbythirdjpartymonitoring. Third-Party Mass Balance Monitoring EventhemostdiligentgeneratorsofeJwastethatcarefullyscrutinizeandmonitoreJrecyclingvendors canbecomethevictimofdeceptivepracticesthatputthetheirorganizationatrisk.requiringthirdj partyejrecyclercertification(ejstewardsorr2)isagoodfirststeptowardensuringresponsible recycling.thesecertificationsqualifyacompany scompliancewithindustryjacceptedbestpractices.

47 U.S. CRT Glass Management 46 Theydonot,however,auditmostgeneralbusinesspractices.WhetherarecycleriseJStewards/R2 certifiedorregisteredundertheinternationallyrecognizediso9000(businesspractices)oriso14000 (environmentalpractices),allofthesethirdjpartyprogramsonlyinvolveannualauditsfor compliance.monitoringactivitytherestoftheyearisleftuptotheejrecycler scustomers. ThirdJpartymassbalancemonitoringisanewconceptfortheeJrecyclingindustryandentails verificationbyanindependentpartyofallshipmentsflowingintoandoutofejrecyclingfacilities.the systemsshouldprovideauthorizedclientswithcontinualaccesstoinformationondownstream materialflows.ifarecyclerisstoringmaterialforanyreason,itwillbecomeevidentonthemass balancemonitor;i.e:morematerialhasbeenreceivedbythefacilitythanhasbeenshippedfor recycling(andverified). RequiringrecyclersinvolvedinstatetakeJbackprogramstoregisterforthirdJpartymonitoringand usingtheinformationprovidedbythesystemtooverseerecyclerswilllikelybeanefficient,effective andinexpensivemeansofpreventingunwantedstockpilesfromoccurring.additionally,oemsusing recyclersthatareregisteredonamassjbalancemonitoringsystemcouldadaptanew'ecojlabel'to brandtheirproductsassuch,helpingconsumersidentifyproductssupportedbyatrulyaccountable recyclingprogram. Lessons Learned ThefailureoftheNationalProductStewardshipInitiative(NEPSI)in2004(p.49)forcedindividual statestodeveloptheirownplansforremovingejwastefromthesolidwastestream.theresultisa varietyofprograms,allwithparticularstrengthsandweaknesses,whichhaveservedastestjbedsfor bestpracticesandresults. Statescannowdrawfrom8yearsofexperienceinimplementingtakeJbacklegislation.The25states thathaveyettoimplementtakejbackprogramscanbenefitfromuponthisexperience.

48 U.S. CRT Glass Management 47 THE CASE AGAINST LANDFILLING: THE RACE TO THE BOTTOM Preventing Investment in New Technology Asstatedearlier,CaliforniahasapprovedanemergencyruletoallowdisposalofleadedCRTglassin hazardouswastelandfills.thereasonscitedforthisrulearethatconstraintsinglassmarketshave causedstockpilingandthatanalternativeisnecessaryasatemporaryreliefjvalve.theruleisintended tobeineffectfortwoyears,afterwhichtimethestatehopesthatnewrecoverytechnologiesbe availableandthatlandfillingwillbenolongernecessary. TheproblemwiththislogicisthatlandfillingofCRTglassisa majorfactorpreventinginvestorsfromsupporting developmentofnewglassandleadrecoveryfacilities.and, historyhasshown,thatascaliforniagoesonenvironmental issues,sogoesthenation.evenifhazardouswastelandfilling doesnotattractmanyejrecyclers,theimpactoninvestmentin newtechnologywillbepalpable. The$negative$impact$of$ landfilling$on$investment$in$new$ CRT$recovery$technology$will$be$ palpable.$ $ Loss of $ Billions in Recoverable Resources - $ Billions in Remediation Costs CRTglasscontainsleadandotherresourcesthatcouldbelostforeveriflandfilled.Theenergy requiredtoobtainorcreatethesematerialsissignificantlyhigherthanrecoveringthemfromscrap CRTs.EventhestateJofJtheJartinlandfilldesigncannotensurethatfuturegenerationswillnotbe strappedwiththetremendouscostsassociatedwithremediatingleakinglandfills. Job Loss AlmostallUSCRTprocessingoperationscurrentlyoperateonasingleshift.Althoughthenumberof jobsinthissectoroftheejwasteindustryhasyettobequantified,notonlywilllandfillingimperil currentemployment,butgrowthinthesectorandsupportindustrieswillbenonexistent.diverting

49 U.S. CRT Glass Management 48 recoverableresourcestolandfillsimpactsavailabilityofjustthetypeofjobsthataremostneededin theus. Anotherlookatthelandfillbanmapprovidesastarkexampleofhowlandfillbanspromotejob growth.theyellowstarsrepresentlocationsofcrttubeandcrtglassprocessorsintheus.assuch 18ofthe24CRTfacilitiesarelocatedinstateswithlandfillbanswhereasonly6arelocatedinstates withoutlandfillbans.

50 U.S. CRT Glass Management 49 Impacts on National Progress in e-recycling NEPSI In2000,theUSEPAlaunchedtheNationalElectronicProductStewardshipInitiative(NEPSI),amultiJ stakeholderefforttodevelopauniformnationalelectronicstakejbackstrategy.theprocesscostthe USEPAandstakeholdershundredsofthousandsofdollarsintime,travelandmeetingexpenses.After over3yearsofnegotiation,thetalkshitastalematewhentheusepaceasedtofundtheprocessand stakeholderscouldnotagreeonwhetheraneprorarfprogramwouldbethebestnationalmodel. Failure ofthenepsiprocessforcedstatestodesigntheirownprogramstoaddressejwastedisposal issues.althoughthisrelegatedthejobofcontrollingejwastedisposaltothestates,thenepsidialog servedtoestablishtheframeworkfortwotakejbackmodelsthatquicklybegantobeadoptedby states. e-recycler Certification In2005,theUSEPArespondedtodemandbytheUSeJrecyclingindustrytodevelopbestpracticesfor managementofejwasteinrecyclingfacilities.theusepaagainconvenedamultijstakeholder processandfinanciallysupportedfacilitationandmeetings.theprocessensuedforalmost3yearsand resultedintheresponsiblerecyclingpractices,orthe R2 Standard 7. The Obama Proclamation OnNovember15 th (AmericaRecyclesDay)2010,President ObamaissuedaProclamationestablishinganinteragencytask forcetoprepareanationalstrategyforresponsibleelectronics stewardship,indicatingthatthatthefederalgovernment,the largestgeneratorofejwasteintheworld,wouldleadby The$federal$government s$ commitment$to$using$only$ certified$e9recyclers$was$an$ important$first$step.$now,$ taking$steps$to$insuring$$the$ integrity$of$e9recycler$ certification$is$essential.$ 7 ThegroupdividedoverrequirementsandrestrictionssurroundingexportofhazardouseJwastetodevelopingcountries. Thisresultedindevelopmentofacompetingstandarddesignedtoprohibitsuchexport;theeJStewardsStandard.

51 U.S. CRT Glass Management 50 example.theresultingtaskforcepledged,amongotherthings, thatfederalagencieswouldonlyusecertifiedejrecyclers(r2or ejstewards)formanagementoffederallygeneratedejwaste.thiscommitmenttobestmanagement practicessetanexampleforothergovernmentalbodies,privatebusinessesandindividualconsumers tocommittoresponsibleejrecycling. AlthoughthisisanimportantfirstJstep,ensuringtheintegrityofeJrecyclercertificationprogramsis essential.thiscanbeaccomplishedviaonjgoingthirdjpartymassbalancemonitoringofcertified recyclers USEPA Waste Management Hierarchy Finally,theUSEPAhascommittedtoandstronglypromotesitswastemanagementhierarchy establishedshortlyafteritsinceptionin1970.

52 U.S. CRT Glass Management 51 Thehierarchyestablishesrecyclingamongthemostpreferredmanagementoptionsandranks disposalastheleastpreferred.willtheusepastandbyandallowstatestolandfillhazardousbut valuableelectronics,turningthewastemanagementhierarchyupsidejdownafter40years? Steps to Nationally Sustainable e-waste Management ImplementationofsustainablesolutionsformanagingeJwasteintheU.S.requirescarefulexecution. WidelyacceptedgoalsofminimizingimpactonhumanhealthandtheenvironmentintheU.S.and abroadrequirestwobroadinitiatives: 1) IncreasethequantityofeJwastebeingrecycledandthequalityofthatrecycling 2) DivertingalleJwastefromlandfills Increasing Take-Back Quantity, Improving Quality TakeJbacklawspassedbymanystateshaveproventobesignificantdriversofincreasedeJwaste collectionvolumes.theselawshavebeenpassedin24statesandcollectionprogramshavebeenup andrunninginmostofthosestatesforanumberofyears. Nextstepsbythestatesshouldinclude: a. Implementingadditionaloversightandaccountabilitymeasurestoaddresstheproblems raisedinthisreport:theprogramsshouldfocusonthequalityofrecyclingasmuchasthe quantityofrecycling.stateswithlawsnotrequiringrecyclerstobecertified(r2and/orej Stewards)couldnowaddtheserequirements.(Manylawswerepassedbeforethesestandards andcertificationprogramswereupandrunning.)whencommerciallyavailable,thirdjparty massbalancemonitoringallcollectorsandrecyclersparticipatinginstateprogramsshould alsoberequired. b. Harmonizationbetweenthestates:Someaspectsofthestateprogramscouldbebetter harmonizedbetweenthestatestomakethemabitmoreuniformandlessonerousforoems andrecyclers. c. StateswithouttakeAbacklawsshouldpasslegislationtoimplementprograms.

53 U.S. CRT Glass Management 52

54 U.S. CRT Glass Management 53 Diverting e-waste from Landfills WhileitmayseemlogicaltoproposeanationallandfillbanoneJwaste,therealityisthatinstateswith weakornotakejbackprogramsthiswouldsimplyresultinmoreejwastebeingexportedto developingnations,andpossiblyillegaldumping. MoststateswithstrongeJwastelawshaveimplementeddisposalbanstokeepeJwasteoutoflandfills orincinerators.thelawstypicallytakeeffectayearortwoaftertakejbackprogramsareupand running.thelogicistobuilduprecyclinginfrastructurebeforeremovingthedisposaloption.states thathaveyettoimplementtakejbackprogramsshouldfollowsuit.

55 U.S. CRT Glass Management 54 About TransparentPlanet TransparentPlanetwasestablishedin2008toservicetheelectronicsrecyclingindustrybyimproving businessesanddrivingpositiveindustrychange. Consulting Services Consultingservicesincludestrategicbusinessplanningfornewandexpandingbusinessesandworking withspecialinterestgroupswithintheelectronicsrecyclingindustrytofostersolutionsonspecific issues. Third- Party Mass Balance Monitoring TransparentPlanetisdevelopingtheindustry sfirstthirdjpartymassjbalancemonitoringsystem wherematerialflowsintheejrecyclingsupplychainaremonitoredandverified.byclosingthegap wherecertificationprogramsleaveoff,transparentplanetregisteredrecyclersoffercustomers effectiveandeconomicaloversightofejrecyclingactivities.