Industry Data and Trends

1. Industry Data and Trends Walter Alcorn, ISEE 2006

2. History • In 2001 SAIC developed a simulation model of the electronics recycling industry as a decision support tool for the Polymer Alliance Zone of West Virginia • Model inputs were gathered from various recyclers, manufacturers and industry experts

3. 2001 PAZ Simulation Tool Assumptions • There was a lively, if precarious glass-to-glass recycling market • Remember Techneglas? • Mixed plastics was a cost to all electronics recyclers, not just the “no export” recyclers • Value of commodities were lower (steel, copper, aluminum) • SB 20 was just an idea

4. What’s up now? • Demand • Commodity prices, especially metals, plastics • Supply • E-waste volumes • In regulated states (CA, ME) • Everywhere else • Domestic recycling capacity • Exports?

5. Demand: Commodity Pricing Trends • CRB Metals Sub-Index of 5 markets: • Copper Scrap • Lead Scrap • Steel Scrap • Tin • Zinc • 1947 – 1973 prices moved within a range • 1974 – 2003 prices moved within a higher range • 2004 – 2006 priced moved dramatically higher, a new range???

7. Supply: Collection Volume Trends • Higher overall • Driven by: • Policy/regulation • Financed collection programs (for households) and • Volume potentially available

8. Policy & Regulation Drivers of Supply • State Mandates • CA, ME, MD, WA….. • State & Local Collection Programs • Hennepin County, Delaware, Massachusetts, and hundreds of local government collections • Regulation of business e-waste • Business users usually not allowed to dispose of old equipment as regular trash • Reuse patterns???

9. Mandatory State Program Volumes • California • Collected about 65 million pounds in their first program year (2005) • Most was collected during the second half of the year • With a population of 36 million that’s about 1.79 lbs./capita • ME, MD, WA Amounts Still TBD • Washington amounts TBD annually, plans to compete to reach % share threshold

10. State and Local Collection Programs • Hennepin County the most quoted • Developed as an extension of “traditional” recycling programs (bottles, cans, paper, etc.) • Funding for these programs comes from a variety of sources • EOL fees are common • Landfill tipping fees • Bottle bill proceeds

12. Volume of Electronics to be Recycled • A primary question of U.S. EPA’s draft Baseline Study • Two approaches • Review actual return amounts from existing programs (lbs./capita) • Project amounts theoretically available from historic sales • EPA Baseline Study to focus on amounts theoretically at end-of-life based on historic sales

13. Actuals: Per Capita Calculations from the NCER’s CDR • Massachusetts (2004) • 2.94 lbs./capita (average for the 197 towns/cities reporting to the MA DEP) • California’s first program year (2005) • 1.79 lbs/capita • Branford, CT (2004) • 1.61 lbs./capita (CRTs only) • Kirkland, WA (2004, curbside program) • 1.61lbs./capita • Snohomish County, WA (2004, transfer station) • 1.71 lbs./capita • Hennepin County, MN (2004) • 3.4 lbs./capita

14. Actuals vs. Projected • Actual returns from existing comprehensive electronics collection & recycling programs are less than half amounts projected from sales. Why? • Electronics are not trade-in items like car batteries, tires • Reuse patterns not well documented nor understood, particularly for business use products • There is something seriously wrong with projection models and/or data • Export?

15. Data compiled by ERG for EPA Baseline Study. Data for desktops and portable PCs from IDC WW Quarterly PC Tracker in October 2005. Data for flat screen and CRT computer monitors were based on ERG analysis of US Census data on shipments, imports, and exports.

16. Source: Data compiled by ERG for EPA Baseline Study 2006. TV data were obtained from Consumer Electronics Association Market Research, 2005. The number of flat screen TVs sold was derived from analyses of “Other TVs” (this category includes flat screen and monochrome TVs) in US Census data on shipments, imports, and exports, combined with CEA data on monochrome TVs.

17. A Clear Trend: the State Patchwork • Many “dead weight” costs being studied by the NCER as a NERIC initiative • National Electronics Recycling Infrastructure Clearinghouse • Who incurs these dead weight costs? • Industry • Government • Consumers

18. State Patchwork Costs Being Studied • Policing/excluding out-of-state e-waste • Inherent state-level enforcement limitations • The “continuous start-up” for industry compliance • New requirements forcing changes to IT systems • Compliance requirements trajectory unclear

19. State Patchwork Costs Being Studied (cont.) • Redundant program staff • Redundant brand counts (ME, WA) • Redundant fund administration • Redundant reporting, registration and recordkeeping requirements • Redundant program development engagements

20. State Patchwork Costs Being Studied (cont.) • Higher processing costs due to: • Lower economies of scale compared with national-scale volumes • Market fragmentation caused by state-restrictions on out-of-state processing • State Program Financing Overlap, Over-chargers and Free Riders • The “nexus” fee-collection problem in states with advance fees

21. State Patchwork Costs Being Studied (cont.) • Additional patchwork costs? • Ongoing survey of industry and government officials • The NCER seeks your input! • info@ecyclingresource.org • Website: www.ecyclingresource.org

22. What We Need • A harmonized national-level financing system • An efficient decentralized collection infrastructure • Systems that can evolve as needs evolve • National ESM Standards • Better data • Demand for recycled materials

23. Thank You! For more information, contact: Walter Alcorn walter@alcornconsulting.com 703-390-9200