As you know, it has been a few years since I left as VP of Electronicycle (name changed to ERI in 2007) in Gardner, Massachusetts, to start my own collection and processing company, Good Point Recycling, in Vermont. But I have always offered the guarantee that we will use ERI in Gardner as our vendor. When I was asked why ERI was not a "Pledge Signer", it was sometimes difficult for me to explain the position of the company president - and many other companies - that a "Pledge" was a "promise not to lie" and that an enforceable civil contract was a better tool. Good Point Recycling has to date always used CRT glass processors which were under enforceable civil contracts with state government or state association.
Once Basel Action Network actually offered to inspect and vet and certify, rather than just collect "Pledges" (including some notorious operators in the past), ERI has become the first company in the United States to pass their certification. (See article)
Since I started here, we have delivered over half of our material, or about 7,000 tons, to ERI, since we could not process the lead and barium CRT glass ourselves at the costs they offered. We obtain the same annual report on their downstream end markets that they delivered to Massachusetts state government, ensuring you obsolete and regulated material is handled responsibly. We have also audited CRTP and more recently RMG of NH and EcoInternational of NY, and approved them, primarily using the "CRT Glass Test" developed by American Retroworks and promoted by BAN in 2004. Since we manage plastics and CPUs and hard drives in-house, our external audit process is simplified.
Since ERI's CRT recycling is by far our greatest expense outside of Vermont payroll, costing us well over $5,000 per week, we were relieved that the BAN audit verified what I have vouched for. For the manufacturer takeback program we use in Malaysia (an ISO14001, former CRT monitor manufacturer who no longer buys new CRTs, only ones we inspect for reuse quality), we also performed an audit last October. The BAN audit of our primary CRT destruction market and the ISO audit of our primary CRT reuse market are nice bookends to the processing, testing, repair, and demanufacture of the rest of the material into plastic and metals and repair/refurbish product. Our continuous goal is to monitor the 78% of the material we process domestically and to audit the percentage that we sell on the export market.
Also a note of caution, however... the rates at ERI have nearly doubled during the past 12 months as CRT glass markets have constricted and moved (primarily to Mexico, almost all CRT glass in the NE now goes to Mexico by rail, and we have opened our own facility in Mexico to take some advantage of that). So far we have not passed those along, and we are actively searching for more economic means to serve your environmental interests.
We have also begun posting film and photos of our own processes, our end products, and our overseas markets (the 22%) online. As one of the most active members of the "Fair Trade Exports" organization, WR3A.org, we got a grant to film even more of those processes, and we are currently working on another short film explaining our efforts to be accountable.
The biggest single threat to our environmental efforts are costs. The math is fairly simple: If we are taking in material at 15 cents at our door, and delivering it to ERI at 14 cents, and paying 6 cents to transport it, we have to be adding value somewhere. This is a tightrope for us. Thankfully, most of our clients are exceptionally fair at leaving the good material like laptops and CPUs in the mixed ewaste we collect, and you pay our bills almost without exception. If we get a whole load of cherry-picked electronics, without CPUs or good monitors, that is a complete loss even at 20 cents per pound, and that continues to be our biggest concern.
We now have a bill accrued at Electronicycle which is over 90 days payable, and over $30,000. With about $1M per year in gross receipts, this isn't a fire alarm yet, but we have had to take steps to bring this bill down, including attrition and layoffs, and we have not given many raises or bonuses since Earth Day 2008. We are redoubling our reuse and repair efforts, adding more materials (like film plastic, books, and lamp recycling), and winning more contracts in Arizona. I personally went off of payroll completely, which is a luxury afforded by my better half.
The economics are pretty well known at this point. Goodwill Industries (a great organization I have partnered with off and on during the past 15 years) is now collecting CPUs and monitors only under a grant from Dell. We are trying to win that contract, but the price is below 10 cents per pound... which is completely doable since there are no TVs in the load. Two very good and reputable companies have held one day events in Chittenden County already this year, both charging far more per pound than we charge but working with sponsors whose business we competed for but didn't win.
All of this is fair in love and war and competion, as long as the bills get paid. Whatever happens at Good Point Recycling this year, it has been a great decade working with you. We hope to keep working with you as time goes on. As long as we all pay our bills, audit our markets, and make sound choices about reuse and repair, recycling will continue to improve and those participating in your recycling programs will have confidence in your efforts.
I've been writing about S.77. Most of my friends in the industry say it's going to go very badly for us (manufacturers can buy credit for 3 years, and processors can only hold credit for tonnages for 6 months, so it is mathematically simple for a handful of OEMs to choose which recyclers are going to stay in business).
There are 3 reasons offered for Ewaste product stewardship, and one reason it will pass. It is not the claims of higher diversion in Minnesota Vs. Vermont, those numbers are easily explained. Minnesota proponents are measuring the quality of a lawnmower by the weight of the grass it cut... Prior to 2008, Good Point collected 14,000 tons, so of course our 2008 tonnage per capita was less than a state that just got started collecting. Someone told me the Small Dog (free) collection event proves people won't pay the price of a haircut to recycle their TV, that they are somehow different than tires, white goods, and other bulky items collected for a fee. I say if I held a competing one-day event down the street, and paid participants $20 each for their computer, the Small Dog lot would be empty. That doesn't prove that people won't recycle for free, people just respond to the best deal.
The second reason offered for Product Stewardship legislation is philosophical. If the manufacturers have responsibility, it closes the loop. Sounds nice but it's hogwash. Display manufacturers all outsource everything. There are factories in Malaysia and Indonesia and China which assemble monitors on behalf of many different companies, they put one company name on the monitor in the AM shift and another in the afternoon. The assembly was all outsourced in the 1990s. The disassembly will also be completely outsourced. As a matter of fact, our export markets for good monitors are the ONLY kind of actual manufacturer takeback program there is (companies who used to assemble on behalf of X now buy back the monitors and refurbish them for sale under the assemblers own name). The assembler is no longer contracted out or subservient, and within a few years... Voila! Acer! Lenovo! So the irony is that the Manufacturers most likely to support takeback legislation are more likely doing it to keep the material from going back to the same factories, they are insisting on 100% destruction. I've been told in no uncertain terms that if Good Point Recycling doesn't shut down our reuse operations, we will not be a recycler for certain manufacturers, even if our fees are lower when we repair and reuse.
The third reason? Money. Advanced Recycling Fee looks like a tax and the computer retailers won't support it. But the districts need cash. So we understand, our business model is going to get sold back to the OEMs in return for fees we were charging. That's fair enough I suppose.
When I don't know what to do for sure, when in doubt, tell the truth. That frequently got me beat up as a kid. I got really good at being beat up. No one could get beat up like I could.
Obviously, I have also blogged in the past about the cautions raised by Vance Packard in his 1960 book "the Waste Makers", which ranks with Rachael Carson's "Silent Spring" as a message that sobered up a generation about the planet and growth. But I also buy mutual funds with stock in electronics manufacturing, and I worship the productivity that computers and internet have brought to us since then.
Here is my observation about legislation, generally. Wonderful activists become enamoured with recycling systems. "Universal Waste" was the call in the 1990s, as it was the hazardous waste companies who held the podium when the questions were about ewaste and CRTs. Then Waste Bans in the late 1990s, followed by California ARF and retailer involvement in the earlier part of the decade.
Now several manufacturers are rolling out takeback programs. It might work out great. But to legislate their involvement is kind of a "marriage", and the rights and obligations of each party have to be looked at carefully. My experience is that I can develop a strong relationship with a representative of a manufacturer, but that their hands can become tied or they can get sent elsewhere.
If the manufacturers are somehow obligated, they have to have a say in how things are handled. If they have a say in the handling of the "ewaste", they want the valuable surplus property too. And they sure don't want ink cartridges sold to refillers, laptops refurbished, and other "counterfeit" or "piracy" or "used" or "market cannabalization". So they steer the business away from reuse to shredding companies with "zero tolerance" export policies.
And that is perfectly reasonable if they are footing the bill. Let's try that for a few years. But legislation is kind of a marriage. Are we so certain this will work out that we want to commit it to law without sunset?
I would feel much more comfortable if we focus the trial on TVs, which have a very limited reuse market and a very high stake costs and environmental impact. I'm 47, and my experience is that when I speak out cautiously to moderate legislation - whether it is packaging in MA 1992, or bottle bill, or Universal Waste, or Zero Export, or Advanced Recycling Fee, or now "Manufacturer Takeback", that I alienate 30% of my friends. Another 30% give blank stares. But the 40% remaining, whether they agree or disagree, give me credit for being accountable, transparent, and with integrity intact.
I am basically concerned that environmentalists who know little enough about the "secondary market" are willing to trade it back to OEMs in return for 15 cent per pound off solid waste costs. Not enough questions. The used car economy is 7 times the size of the new car economy, and the social costs of destroying working and resellable equipment may be considerable. Perhaps my children will live in a society with no personal property at all, the copper and aluminum and steel will belong to the original equipment manufacturer, they will just have a license to use their computer, and an agreement to return it when they are done. It might be great. It's available now, and it's called "leasing". But giving the manufacturers control over the laptops and cartridges in return for getting rid of the CRTs seems more like something to try out in a contract for a year or two, not something to legislate.
227 Pond Lane,
Middlebury, Vermont, 05753
Testimony on Senate Bill 77 – Electronics Recycling
House Natural Resources Committee
Presented by Robin Ingenthron
CEO, Good Point Recycling
April 22, 2009
Thank you Representative, and other Members of this committee, for considering the issue of Electronics Recycling. Special thanks to Betty Nuovo, who informed me of the testimony and invited me here today. Vermont was not the first state to take up legislation of electronics scrap, and will not be the last. Our challenge is to take this on, do it right, and take the time necessary to edit and redraft the legislation.
I have looked at surplus electronics from many perspectives. With a degree in International Relations, I studied at the United Nations in Geneva, and understand the difficulty and complexity of trade and "non-tariff barriers" to new manufacturing. As a former Peace Corps Volunteer in Africa, I know both the elation of bridging the digital divide, and the heartbreak of a trade in toxic junk. As recycling director of Massachusetts DEP, I helped pass the nation's first disposal ban on CRTs - cathode ray tubes. And in this decade, I put my money where my mouth is, and invested in Good Point Recycling of Middlebury, an important employer, green jobs creator, and environmentally sound end-market for used electronics.
Good Point Recycling is now one of the premier electronics recycling companies in the USA. We have been a consultant for Dell, a contractor for Sony, a consultant for EPA, but almost all of our income is from municipalities, and the scrap we resell. We managed over two thousand tons of electronics in 2008. We collect TVs, computers, cell phones, Ipods, anything with a cord. We started with "events" in 2001, but today 83% of Vermonters can recycle a TV at least five days per week in their county, for less than the cost of crossing the Washington Bridge in New York. When I started, TVs cost 60 cents per pound to recycle, as they still do in California. Now we collect them for 25% of that cost, which is less than the price of a haircut. But our partners, the counties of Vermont, are under financial pressure.
One option you have is to take the legislation passed a year ago in Minnesota, and implement it immediately in Vermont. Minnesota is the "twitter" of ewaste legislation now. Two years ago it was Maine, and two years before that, California. California and Maine are now considered passe, yesterday's legislation, mostly because they have to tax consumers to pay the expense of breaking good computers that could have been resold.
I'm not here to complain, there are wonderful intentions here. But my advice is to eat this elephant a bite at a time. S.77 tries to take on everything at once, from TVs to iphones. If it were passed 10 years ago, we might still have never heard of Acer or Lenovo, as it's primary danger is regulating a lighting fast industry which evolves faster than regulators in Waterbury can say "retail restriction".
That does not mean that there are not several very good elements in the bill that will improve Vermont's infrastructure. Some will help my company and some will invite competition from out of state, which is welcome and good. But for evidence that there is good and bad in the bill, I will read you 4 highlights.
1) Good. A waste ban on disposal. Massachusetts banned CRTs in 1999. Tires, white goods, auto batteries, and air conditioners have been banned much longer than that, and achieved 85% recovery - all of them - two decades ago. Ban ewaste and our industry will gobble it up.
2) Bad. "Anti competitive conduct". Manufacturers are NOT friendly to reuse, resale, and market cannabalization. I invest in those companies and am not badmouthing them, and Planned Obsolescence may be a forgotten term to some people in this room. But there is no reason for a waste disposal bill to allow collusion banned by the SEC.
3) Good. TV recycling. TVs are 65% of our tonnage, and 95% of our costs. They are unique in that the CRT TV is a bit of a dinosaur with declining reuse potential. The marketplace, while growing, is not so diverse that a Lenovo or Acer TV manucturer will be taken away from Vermont consumers. Waste CRTs are the most expensive and tempting trash to export. If the cost of CRT TVs is borne by manufacturers, my company will be able to recycle for free.
4) Bad. Everything that distracts from #1 and #3 above. Market shares calculations, cell phones, advanced math, registration of manufacturers of MP3 players, sorting of keyboards, measuring steel yard scrap as a percentage of data provided by a manufacturer... As a former regulator, I predict that the state will spend 80% of its time administering 20% of the widgets covered in the legislation. The more the bill tries to do, the more potential for unforeseen consequences. And it is difficult to explain, but the OEMs themselves have requirements of the recyclers they choose. Destruction of refillable ink cartridges, sorting of keyboards with company name on them - they require things, and because they bring the money Vermont's legislature tells them to bring, Good Point must follow their instructions or lose the business.
What "distractions" have impacted Minnesota? Bankruptcy, for one. Manufacturers could take credit for so many types of electronics surplus, from off lease laptops to mainframe computers to CPUs sent to scrap metal yards, that they easily met their "mandated" tonnage without even collecting the TVs.
I honestly believe you could get this bill onto one or two pages. You might be able to cover the costs with an advanced disposal fee, paid out to the Districts which may be taking on more responsibility. If not, I strongly suggest that you implement the regulations in stages, incrementally increasing coverage each year.
You can do a waste ban immediately, there is plenty of industry capacity to take everything, and my company has to bid on material in Boston and New York to keep our people employed.
You can begin coverage of TVs only next year. You might find that you get free recycling just by addressing CRT TVs.
You can begin monitors and all display devices the next year... buy you may find that with the cost of TVs taken care of, that there's no need.
You can add printers later. My company can collect CPUs - the metal desktops - for free right now, we only charge for mixed e-scrap to spread out the cost of recycling broken CRTs.
In closing, Senate Bill S.77 has a sporty engine, but too much luggage. Details and formulas hurt the bill, and it will bring unforeseen consequences, miles of red tape, and high costs to consumers if it is passed as is. But I do think you should focus on the TVs, which are being replaced by flat panels and digital broadcast ready units. There is a windfall of electronics scrap to be dealt with. I just urge you to K.I.S.S., and deal with the problem without trying to regulate every afterthought.
We started in 2001 by collecting used computers, only, for 21 cents per pound, and employed just a few job training staff from a local counseling service. We trucked just about everything down to a larger CRT recycling company in Massachusetts, but sorted the material and did light work to earn a better rate.
We started with one-day events in Addison County, Lamoille River, and Mad River Solid Waste Districts. When they saw we could do the work, more districts called us. Pretty soon all the counties in Vermont had outgrown the "one day event" programs and started collecting computers as a regular part of their district solid waste management programs.
As we promoted the larger cities to permanent collection and moved the "events" to rural areas, we found new efficiences, and were able to reinvest savings or pass cuts on to clients. Eliminating the reliance on events also eliminated a lot of bottlenecks and allowed us to set up milk runs and regular collection routes, and to plan on training more Vermonters to do more of the work here in Middlebury. As our costs came down, we added TVs, first at the same rate as computers, and then later dropping our rates to 18 cents per pound in 2004.
By 2007 we only had to do "Events" for promotional reasons, when a sponsor wanted to show they cared and take on some of the costs. Free recycling is like free ice cream day (today) at Ben and Jerry's - a lot of fun, and long lines, but not really sustainable. When the kudos are handed out, the hard work lasts all winter.
Good Point Recycling eventually included transportation in the costs, and got our door price (for material delivered straight to our dock in Middlebury) down to 12 cents for TVs, monitors and computers. Word got out, and last year we managed 2,008 TONS of e-waste, from all the states of New England and New York as well. Today we collected for an event in Lake Placid, tomorrow Massena, we collect in Montreal, Connecticut, and hopefully next weekend in Long Island New York.
Today Good Point Recycling has 50,000 s.f. of warehouse, 5 trucks, 20 staff, and is a consultant for the federal government, OEMs and overseas. But we haven't forgotten our mission - helping Vermont job trainees, helping reduce the "digital divide", helping to set Fair Trade standards for world recycling programs.
The big obstacles are the General Mining Act of 1872, which subsidizes the mining of copper, aluminum, gold, paladium, and other metals we recycle... at the cost of bankrupting Superfund (hard rock mining produces 45% of all toxics released by all USA industries). Then the "export everything" companies, which don't hire the people to check and test used electronics, and pass "toxics along for the ride". And now we are having to navigate between big out of state companies which are looking at our Vermont program and wondering how we got where we are.
This is the hardest year to stay in business. Scrap prices during the past six months fell to pre-world war II levels. One of the sponsors of our largest recycling event of 2008 flatly refused to pay more than 9 cents per pound, and hired an out of state company (for 25 cents per pound) when we begged on hands and knees for the balance (to 12 cents) in 2009. They seem really proud to pay the out of state company $60k for the work we asked $33k for. Fortunately, that is rare. Every other Vermont client has paid their bills and worked with us to compromise on costs and figure out ways to create a win-win. Although our environnmental costs, insurance costs, and overhead are high, we find that most of our clients don't try to get a free lunch, and in return we help them out whenever they can.
Some of the larger OEMs have recognized what Vermont has to offer. They see that 84% of Vermonters can recycle a TV or computer 6 days per week, and very few residents have to wait on a "One Day Event" to clean out their surplus electronics.
Once a year or so, some manufacture or corporate do-gooder comes along and sponsors an "EVENT" to clean out ewaste. People hear about an upcoming event. They stop driving to the pay-to-recycle depot. And you get a line of 200 cars. And the recycler gets an overtime everything-at-once headache and less material at the regular drop-offs for the next few weeks. These were appropriate to get the infrastructure started, and may still be the only way to get e-waste collected in other parts of the country.
But it kind of looks like Starbucks "Free Coffee" day on the parking lot. By far, more TVs and computers are recycled at the regular $10-per-TV program open 6 days per week in their county. The attraction is the word free, it doesn't prove that people won't pay the regular fee every 5 years or so when a TV goes ka-blooey. If I held an event and paid $5 per TV on the same day as a free program, I'd have a line of cars, but it wouldn't prove that people won't recycle for free.
The trick is to make TV recycling commonplace and convenient, and not to charge any more than a bridge toll. Most Vermonters have been to New York City once in the past five years, but not many could recall the George Washington Bridge toll if you asked them.
The biggest e-waste collection event of the past year was probably Sony's. They collected TVs and computers from 3,494 cars in Foxborough, Massachusetts last September, over 500 tons. There are other OEMs sponsoring events in Vermont. I am not against these "events", but the coupon program is a way to channel manufacturer involvement to support an ongoing, established, common-sense program. We don't have "events" for mattresses, white goods, refrigerators, auto batteries, or tires, and those are collected at about 85% rates throughout the country. Our little coupon program, we hope, will strengthen the existing infrastructure, lower fraud, and let every participant know who is participating in the solution.
Old approach: "Mosquito bad. Malaria bad. Kill mosquito!"
Result: DDT, and resistant mosquitos. Short term gratification from flying bugs.
New: "Malaria gestates in very old mosquitos which are beyond reproductive age. We should target times/seasons/pesticides at this small group of mosquitos."
The result will be less malaria and less resistance, but will also mean less short-term-gratification. Difficult to sell to humans.
Once upon a time, auto batteries (which are 80% of the big heavy things made of lead) were mostly made from lead taken out of lead mines. The lead mines created lead dust and created the most toxic places in the USA. Lead mining was the bete noire of the environmental movement.
As an alternative to lead mining, environmentalists promoted lead acid battery recycling. We set up lead acid battery collections all over the USA, banned lead from disposal under RCRA. And it is considered a huge success. By the end of the 1990s, 85% of all lead batteries were recovered and accounted for, and as a feedstock they replaced lead mining. Between 65% and 75% of every lead output in the USA today, for batteries or bullets or hospital aprons, is made of recycled lead. The lead mines which bankrupted Superfund were on the outs, investment in recycling lead was in. Like laundromats, lead battery recycling becomes almost boring. AAA holds the biggest lead acid battery collections. Expect an editorial in Consumer Reports, perhaps.
So far, so good. If it had happened this year, it would be all over twitter.
Now like most metal mining, most metal refining, and most heavy manufacturing investments, production of big heavy items made of lead (like batteries) has gone overseas. That genie is out of the bottle. There is no UN program to keep Malaysia from mining, or from buying USA lead mine ore (or semi-refined ore). The most polluting industry on the planet - hard rock mining and refining - has gone to developing countries.
Well, at least those countries are really good at recycling. Even better than we are. They don't throw any metals away, ever. And the percentage of recycled lead in a new battery in China could be expected to be even higher than USA batteries.
Nope. Turns out Greenpeace and BAN.org say that sending a lead battery from the USA back to the manufacturer in Asia is illegal. We can only mine lead and send the mined lead there. That's legal, you see, because mined ore is a "commodity". Recycled ore, even if it's cleaner and environmentally preferred and unanimously supported as the best available technology for obtaining lead... that's "waste". So the Ayatollahs of Ewaste have gotten battery recycling back in the news.
Banning sale of recycled lead batteries back to lead battery manufacturers is a stupider idea than boycotting coffee to help poor coffee farmers. The scientists at the United Nations Conference on Trade and Development tried to start a program to upgrade and modernize recycling in developing countries, so they wouldn't have to mine, but would improve their recycling practices.
It earned UNCTAD a place on BAN.org "Hall of Shame". Naughty, naughty UNCTAD.
Outcome? OCEAN MINING INVESTMENTS announced in Malaysia!!! Yay!!! And higher recycling costs for used batteries collected in the USA!! Brilliant!!!