Broken Promises: Extended Producer Responsibility in the USA. Douglas Smith Sony Electronics Inc June 2011

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1 Broken Promises: Extended Producer Responsibility in the USA Douglas Smith Sony Electronics Inc June 2011

2 The great majority of mankind are satisfied with appearances, as though they were realities, and are often even more influenced by the things that seem than by those that are. --Niccolo Machiavelli, Italian philosopher, humanist and writer

3 Outline Sony s Road to Zero Life Cycle Approach Milestones and Measuring From End of Life through Supply Chain US Extended Producer Responsibility Outsourced Public Services Diffused cost : concentrated benefit Industry incentive: Lower cost Sustainability versus EPR

4 April 2010, Global Environmental Goals Road to ZERO 1. Zero environmental footprint by Mid-range environmental targets for 2015

Innovation for the next generation Sony Global 2015

waste generation: -50% (from 2000) Improve waste

-30% (from 2000) Reduce energy consumption of products:

5 Innovation for the next generation Sony Global 2015 Goals Reduce mass of products: -10% (from 2008) Reduce waste generation: -50% (from 2000) Improve waste recycling rate world-wide: 99% Reduce water consumption: -30% (from 2000) Reduce energy consumption of products: -30% (from 2008) Dye-sensitised solar cell Waste CDs for new electronics

6 Customer Service Recovering Value Sony Style Trade-in/Recycle Program Trade-in any brand of eligible products Receive an offer for the product s trade-in value Get a Sony Style gift card for the value of the trade in Free TV takeaway at time of delivery Laptops Cameras Camcorders MP3 Players Game Systems Mobile Phones

7 1996 Sony Product Stewardship Policy Product Stewardship is the environmental responsibility for the fate of a product through its life cycle from manufacturing to end of life. Sony recognizes that as a manufacturer of electronic products it shares with its customers the product stewardship responsibility. It is the policy of Sony to encourage and promote environmentally sound recycling of all electronic waste. Sony will seek to recycle all waste generated in the manufacture of its electronic products. Sony will design, manufacture, label and package products in a manner that will facilitate the recycling of the products once their useful life is over. For each of the products and components manufactured by or sold by Sony under the Sony brand, Sony will determine the most environmentally sound end of life recycling method or, if applicable, the most

8 The False Promise Giving the manufacturers the financial responsibility for managing their old products gives them a strong incentive to redesign their products to remove the toxic materials that make recycling challenging and expensive. (

9 The Realities 80% of Products Sold by 10% of Retailers Collection by Manufacturer is nearly impossible Collection and Transportation are unrelated to product design yet exceeds 50% of EPR cost Recycling other brands and extinct product types yields no learning opportunity Funding collection and recycling of TVs yields no learning opportunity for IT company Gov t directs EPR cash flow from manufacturers but is not called a tax Consumers nationwide are paying higher price for products

10 WEEE Core Concepts Ignored in US Producers should finance collection from collection facilities The responsibility for the financing of the management of historical waste should be shared by all existing producers in collective financing schemes to which all producers, existing on the market when the costs occur, contribute proportionately. USA is only Country to ignore these basic concepts

11 EPR Cost Allocation Market share works. CA, MN, WEEE, Canada, others Return share Only IPR works Transportation and collection are fixed based only on weight and exceed 50% of cost Maine 2006 Sony report: Marketed to Retailers 8,380 pounds of Monitors Paid for recycling 34,147 pounds of Monitors Being billed to recycle 4 pounds for every pound sold Minnesota: Sony is paying recycle printers to reach quota, but never made a printer

12 Hundreds of State Differences Fees Action dates: CY, FY, and PY Allocation method RS, MS, calculation, waste sort 80%, 60%, lb/capita, true-up between plans Covered Electronic Devices (CED) 4, 7, or 9 displays IT and/or TV MP3 and video game Free ride for non-ceds Covered Entities (CE) Residents, business, schools, nonprofits CA: creates jobs, control fraud ME: state runs program Selects recyclers, fixes price and uses triple enforcement threat WA: quasi gov t runs program WA, OR: Fanciful convenience IN: small business is $10 million/yr WA: small gov t (<50) entitled to free service TX, HI, OK, VA, MO, WV: Mailback

13 Cost Disbursed to 100% of Population Benefits Concentrated to 25% of population RED: 25% population absorbing 75% of Expense 23 States and CA paying recycling fees with no benefit Share1 Upper Midwest good freedom factor Blue states, limited scope EPR Yellow: 2011 programs

14 Manufacturers prevented from Takeback in ME, CT and WA Environmental Departments run the programs. Recyclers are selected authorized to bill manufacturers at state approved price. The state Attorney General guarantees payment from manufacturers..any nonpaying manufacturer is liable to the State for costs incurred by the State in an amount up to 3 times the amount incurred as a result of such failure to comply. The Attorney General is authorized to commence a civil action against any manufacturer to recover the costs described in this subsection, which are in addition to any fines and penalties established pursuant to section 349.

15 By the numbers: Washington State 38,548,674 = pounds collected in (19,274 US tons) $9,944,425 = Internalized Fees collected from manufacturers At $0.245 per pound, collected $9,444,425 plus additional $500,000 from $2,023,700 = Landfill diversion savings Seattle landfill rate is $105 per ton. Applied to 19,274 tons $944,720 = Sales Tax Revenue Internalized fees are taxable. Sales tax in Seattle is 9.5% 2.17% = WA % of USA Population manufacturers. $215,794 = WA customers paid this much of internalized fees $ 9,728,631 = Subsidy from customers in other 49 states $45.08 = Receives this much for every $1 spent by WA consumers

16 EPR Extra Profit and Revenues Its only about the money Annual Savings to County: $380,000 vendor costs $170,000 income to county $550,000 TOTAL SAVINGS Snohomish County Case Study: $550,000 Savings Per Year

17 Its really just about the money In Maine, which has had an EPR law for electronic waste since 2004, municipalities save $1.5m-3m annually because manufacturers have picked up the cost of collection, according to the Natural Resources Council of Maine. ( )

18 Approved Prices for Connecticut DEP Approved Covered Electronic Recyclers (CER) The approved CERs are authorized to bill manufacturers at the rates indicated below. The recycling fee is for eligible costs related to the transportation and recycling of covered electronic devices. The separation fee is for devices set aside at the request of a manufacturer. Recycler Approved Recycling Fee Approved Separation Fee Universal Recycling Technologies LLC 23 cents 16 cents WeRecycle 34 cents 27 cents eco International 19 cents 13 cents RMG Enterprise Inc. 30 cents 17.5 cents Metech Recycling Inc. 25 cents 30 cents Electronic Recyclers International 38 cents 20 cents

21 EPR Tax: Consumer Pays for 46 TV State run programs States allowing more freedom Maine: $18.70 Minnesota: $7.61 Washington: $19.59 Illinois: $4.20 Connecticut: $23.75 Rhode Island : $9.40 New York: $20.17 New Jersey: $10.71 California: $10* (POS tax) Indiana: $7.99

22 Does EPR Regulation Improve Collection and Recycling? NCER PCCI: Program Lbs Per Capita 2010 LBs Per Capita 2009 LBs Per Capita 2008 LBs Per Capita 2007 LBs Per Capita 2006 California Maine Delaware (no regulation) Hennepin County Branford, CT (no regulation until 2011) Frederick County, VA Average

23 EPR Result in WA: No Design Influence The Washington Materials Management Finance Authority, which runs the state plan in Washington is required by statute to report on Design For Environment (DFE) improvement opportunities. Cathode Ray Tube (CRT) glass recycling is an expensive obstacle. However, the thin flat panel displays have already replaced CRTs as preferred design choice before the law was passed. Elimination of difficult to separate laminates will lead to improved potential for selling the recovered commodities. Elimination of leaded solder. This was phased out by most companies by 2003, again, before passage of the Washington EPR law. Faster assembly techniques should result in faster disassembly techniques. This is something design engineers have been working at for decades. These responses are not a new revelation exclusive only to processors in Washington State. They are consistent with independent surveys conducted by non governmental agencies, manufacturers, and environmental research organizations within our regional area and nationwide.

24 What is best path Forward Based on my efforts to date I am of the opinion that it would be more effective to attempt to coordinate participation of Washington State manufacturers and processors on a national level. John Friedrick, WMMFA Executive Director. ( /docs/2009annualreportfromwmmfa.pdf)

25 Sony Recommendations Harmonized Regulations at Federal Level OEMs take financial responsibility once collected Product Design No hazardous materials High recycled content Consumer involvement Active Participants Collection Use existing infrastructure Most efficient recycling efficiency of scale

26 Sony or make.believe is a registered trademark of Sony Corporation. Names of Sony products and services are the registered trademarks and/or trademarks of Sony Corporation or its Group companies. Other company names and product names are the registered trademarks and/or trademarks of the respective companies.

Oregon E-Cycles Biennial Report

Legislative Report Oregon E-Cycles Biennial Report March 2012 Last Updated 3/1/12 By: L.Pickerell This report prepared by: 811 SW 6 th Avenue Portland, OR 97204 1-800-452-4011 www.oregon.gov/deq Oregon