[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
ELECTRONIC WASTE: AN EXAMINATION OF CURRENT ACTIVITY, IMPLICATIONS FOR
ENVIRONMENTAL STEWARDSHIP, AND THE PROPER FEDERAL ROLE
=======================================================================
HEARINGS
before the
SUBCOMMITTEE ON ENVIRONMENT AND HAZARDOUS MATERIALS
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
JULY 20 and SEPTEMBER 8, 2005
__________
Serial No. 109-33
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U.S. GOVERNMENT PRINTING OFFICE
22-988 WASHINGTON : 2005
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
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------------------------------
COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida Ranking Member
Vice Chairman HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia BART GORDON, Tennessee
BARBARA CUBIN, Wyoming BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES W. ``CHIP'' PICKERING, ALBERT R. WYNN, Maryland
Mississippi, Vice Chairman GENE GREEN, Texas
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
STEVE BUYER, Indiana LOIS CAPPS, California
GEORGE RADANOVICH, California MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania JIM DAVIS, Florida
MARY BONO, California JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon HILDA L. SOLIS, California
LEE TERRY, Nebraska CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey JAY INSLEE, Washington
MIKE ROGERS, Michigan TAMMY BALDWIN, Wisconsin
C.L. ``BUTCH'' OTTER, Idaho MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
Bud Albright, Staff Director
David Cavicke, Deputy Staff Director and General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Environment and Hazardous Materials
PAUL E. GILLMOR, Ohio, Chairman
RALPH M. HALL, Texas HILDA L. SOLIS, California
NATHAN DEAL, Georgia Ranking Member
HEATHER WILSON, New Mexico FRANK PALLONE, Jr., New Jersey
JOHN B. SHADEGG, Arizona BART STUPAK, Michigan
VITO FOSSELLA, New York ALBERT R. WYNN, Maryland
CHARLES F. BASS, New Hampshire LOIS CAPPS, California
JOSEPH R. PITTS, Pennsylvania MIKE DOYLE, Pennsylvania
MARY BONO, California TOM ALLEN, Maine
LEE TERRY, Nebraska JAN SCHAKOWSKY, Illinois
MIKE ROGERS, Michigan JAY INSLEE, Washington
C.L. ``BUTCH'' OTTER, Idaho GENE GREEN, Texas
SUE MYRICK North Carolina CHARLES A. GONZALEZ, Texas
JOHN SULLIVAN, Oklahoma TAMMMY BALDWIN, Wisconsin
TIM MURPHY, Pennsylvania JOHN D. DINGELL, Michigan,
JOE BARTON, Texas, (Ex Officio)
(Ex Officio)
(ii)
------------------------------
C O N T E N T S
__________
Page
Testimony of:
Breen, Barry, Deputy Assistant Administrator, Office of Solid
Waste and Emergency Response, Environmental Protection
Agency..................................................... 18
Brugge, Parker E., Senior Director and Environmental Counsel,
Consumer Electronics Association........................... 151
Davis, Gerald L., President & CEO, Goodwill Industries of
Central Texas, Inc......................................... 162
Denbo, Joel, Chair, Institute of Scrap Recycling Industries,
Inc........................................................ 130
Gallagher, Hon. Dawn R., Commissioner, Maine Department of
Environmental Protection................................... 46
Largent, Steve, President and CEO, CTIA-The Wireless
Association................................................ 139
McCurdy, Dave, President and CEO, Electronic Industries
Alliance................................................... 145
Mule, Hon. Rosalie, Member, California Integrated Waste
Management Board........................................... 97
Murray, Mark, Executive Director, Californians Against Waste. 168
Philbrick, Hon. Kendl P., Secretary, Maryland Department of
the Environment............................................ 33
St. Denis, Renee, Director, Americas Product Take Back,
Hewlett-Packard Company.................................... 181
Thompson, David A., Director, Corporate Environmental
Department, Panasonic Corporation of North America......... 154
Vitelli, Michael, Senior Vice President, Best Buy, on behalf
of Consumer Electronic Retailers Coalition................. 134
Wu, Benjamin H., Deputy Undersecretary, Office of Technology,
Department of Commerce..................................... 13
Material submitted for the record by:
Brandon, Carolyn, Vice President, Policy, CTIA-The Wireless
Association................................................ 192
Breen, Barry, Deputy Assistant Administrator, Office of Solid
Waste and Emergency Response, Environmental Protection
Agency:
Response for the record.................................. 107
Post follow-up response for the record................... 244
Brugge, Parker E., Senior Director and Environmental Counsel,
Consumer Electronics Association, response for the record.. 203
Council of State Governments/Eastern Regional Conference,
prepared statement of...................................... 274
Davis, Gerald L., President & CEO, Goodwill Industries of
Central Texas, Inc., response for the record............... 208
Denbo, Joel, Chair, Institute of Scrap Recycling Industries,
Inc., response for the record.............................. 213
Gallagher, Hon. Dawn R., Commissioner, Maine Department of
Environmental Protection, response for the record.......... 118
Largent, Steve, President and CEO, CTIA-The Wireless
Association, response for the record....................... 218
McCurdy, Dave, President and CEO, Electronic Industries
Alliance, response for the record.......................... 222
Mule, Hon. Rosalie, Member, California Integrated Waste
Management Board, response for the record.................. 113
Murray, Mark, Executive Director, Californians Against Waste,
response for the record.................................... 231
Philbrick, Hon. Kendl P., Secretary, Maryland Department of
the Environment, response for the record................... 123
St. Denis, Renee, Director, Americas Product Take Back,
Hewlett-Packard Company, letter dated October 6, 2005,
enclosing response for the record.......................... 195
Thompson, David A., Director, Corporate Environmental
Department, Panasonic Corporation of North America,
response for the record.................................... 235
Vitelli, Michael, Senior Vice President, Best Buy, on behalf
of Consumer Electronic Retailers Coalition, response for
the record................................................. 240
Wu, Benjamin H., Deputy Undersecretary, Office of Technology,
Department of Commerce, response for the record............ 108
(iii)
ELECTRONIC WASTE: AN EXAMINATION OF CURRENT ACTIVITY, IMPLICATIONS FOR
ENVIRONMENTAL STEWARDSHIP, AND THE PROPER FEDERAL ROLE
----------
WEDNESDAY, JULY 20, 2005
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Environment
and Hazardous Materials,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2123 of the Rayburn House Office Building, Hon. Paul E.
Gillmor (chairman) presiding.
Members present: Representatives Gillmor, Bass, Bono,
Otter, Solis, Allen, and Schakowsky.
Staff present: Mark Menezes, chief counsel for energy and
the environment; Tom Hassenboehler, majority counsel; Jerry
Couri, policy coordinator; Peter Kielty, legislative clerk; and
Dick Frandsen, minority senior counsel.
Mr. Gillmor. The subcommittee will come to order.
We have a somewhat unusual situation. The full Energy and
Commerce Committee is meeting at the same time on a markup
session that was expected to conclude this morning, but is
probably going to go all day. Consultations with the full
committee Chairman Barton felt it was important that we go
ahead with this hearing. And it is possible, however, because
they have a number of contentious votes expected down there,
that we will get a call and we will have to recess this briefly
so that we go down and vote and then we will come down and
reconvene.
We did have a couple of members who have been active in the
e-waste issue who expressed an interest in making a 2-minute
opening statement.
Mrs. Slaughter of New York, if you care to, you can either
do that up here or at the witness table or however you wish.
Ms. Slaughter. Thank you very much, Chairman Gillmor and
Ranking Member Solis, for holding this important hearing and
allowing members of the E-Waste Working Group to make the
opening statements.
Electronic waste, or e-waste, comes as a broad range of
discarded electronic products, including computers,
televisions, cell phones, and PDAs. In today's high-tech era,
e-waste has become one of the fastest growing sectors of the
countries solid waste stream, with Americans disposing of at
least 2 million tons of electronic products a year.
Management of e-waste products is of concern in part
because of their volume, but more importantly because they
contain large amounts of heavy metals and other toxic
substances, such as mercury and cadmium. As we will hear from
the EPA, these metals can be released into the environment,
causing irreparable harm to the air and waterways.
The bipartisan E-Waste Working Group was recently formed to
raise awareness in Congress on the issue of e-waste and to
jump-start talks on the need for a national approach to this
problem. This hearing is a good first step in these efforts.
California, Maine, and Maryland, and a growing number of
cities have passed legislation to mitigate the impacts of e-
waste. At least 20 additional State legislatures have followed
suit and begun debate on how best to approach e-waste disposal.
And the European Union is set to begin implementation of their
e-waste regulations in August. The United States, to date, has
done little to address the problem of e-waste on the national
scale. While retailers and manufacturers have created voluntary
recycling programs, they are too small in scope to make much of
a dent in the e-waste stream. No one wants a patchwork of
different State and local regulations that make it impossible
to deal effectively with e-waste and which can place our
manufacturers and retailers at a competitive disadvantage.
As the saying goes, an ounce of prevention is worth a pound
of cure, and a national policy will create a comprehensive
infrastructure for recycling e-waste and protect Americans from
the potential dangers that it poses. Additionally, a uniform
plan will help, not hinder, manufacturers' and retailers'
competitive edge in the marketplace.
As a member of the E-Waste Working Group, I look forward to
learning more about the EPA's efforts to craft an e-waste
strategy and hearing the different approaches we can take at
the national level. Thank you very much, Mr. Chairman, Ms.
Solis, for holding this important hearing. I appreciate how
busy you are, and we are very grateful to you for the time.
Thank you.
[The prepared statement of Hon. Louise McIntosh Slaughter
follows:]
Prepared Statement of Hon. Louise Slaughter, a Representative in
Congress from the State of New York
Thank you, Chairman Gillmor and Ranking Member Solis, for holding
this important hearing, and for allowing members of the E-Waste Working
Group to make an opening statement.
Electronic waste, or e-waste, encompasses a broad range of
discarded electronic products, including computers, televisions, cell
phones, and PDAs. In today's high-tech era, e-waste has become one of
the fastest-growing sectors of the country's solid waste stream, with
Americans disposing of at least 2 million tons of electronic products a
year.
Management of e-waste products is of concern, in part, because of
their volume, but more importantly because they contain large amounts
of heavy metals and other toxic substances such as mercury and cadmium.
As we will hear from the EPA, these metals can be released into the
environment causing irreparable harm to the air and waterways.
The bipartisan E-Waste Working Group was recently formed to raise
awareness in Congress on the issue of e-waste, and to jump-start talks
on the need for a national approach to the problem. This hearing is a
good first step in these efforts.
California, Maine, and Maryland--and a growing number of cities--
have passed legislation to mitigate the impacts of e-waste. At least 20
additional state legislatures have followed-suit and begun debate on
how best to approach e-waste disposal. And the European Union is set to
begin implementation of their e-waste regulations in August.
Yet the U.S. has done little to address the problem of e-waste on a
national scale. While retailers and manufacturers have created
voluntary recycling programs, they are too small in scope to make much
of a dent in the e-waste stream.
No one wants a patchwork of different state and local regulations
that make it impossible to deal effectively with e-waste, and which can
place our manufacturers and retailers in a competitive disadvantage.
As the saying goes, an ounce of prevention is worth a pound of
cure. A national policy will create a comprehensive infrastructure for
recycling e-waste and protect Americans from the potential dangers it
poses. Additionally, a uniform plan will help--not hinder--
manufacturers and retailer's competitive edge in the marketplace.
As a member of the E-Waste Working Group, I look forward to
learning more about the EPA's efforts to craft an e-waste strategy, and
hearing the different e-waste approaches we can take at the national
level.
Thank you again, Mr. Chairman, for holding this important hearing.
Mr. Gillmor. Thank you very much. It is good to have you
here.
And also, Congressman Thompson is here, so we would be
pleased to recognize you for an opening statement.
Mr. Thompson. Mr. Chairman, thank you very much. Ranking
Member Solis, thank you.
I have a statement that I will just submit for the record,
if it is all right, Mr. Chairman. I will just make----
Mr. Gillmor. No, without objection. Certainly.
Mr. Thompson. [continuing] a couple remarks, if I could.
First, I want to thank all of the members of the E-Waste
Working Group, and one is your very able committee member, Ms.
Bono, from California.
And I think we all come to this issue with the same thought
in mind. Myself, I have a bill that deals with this, but I want
to be really up-front with you and let you know I am not
married to that solution, that bill. I just want to be able to
work collectively to figure out how we are going to deal with
this very, very serious problem. Today, the life span of a
computer is about 2 years. You already heard Americans are
disposing of about 3,000 tons of computers each day. It is a
growing problem, and we need to figure out what we are going to
do to address it in a comprehensive manner.
As was mentioned in the earlier testimony, three States
have already passed State laws dealing with this. Twenty-six
other States are in the process of looking at State
legislation. And all this is going to do is create a patchwork
of solutions across the country. It is going to make it tough
on manufacturers. It is going to make it tough on retailers and
make it tough on consumers. So I think we have an opportunity
from the Federal level to step in and help put together that
comprehensive plan so we can turn e-waste into e-scrap and
solve this problem, or at least take appreciable steps in
solving this problem once and for all.
So I commend you, Mr. Chairman, for holding this hearing
and appreciate the fact that you are looking at the problem,
and I look forward to working with you as our working group
continues to do its work.
Thank you.
[The prepared statement of Hon. Mike Thompson follows:]
Prepared Statement of Hon. Mike Thompson, a Representative in Congress
from the State of California
Good afternoon and thank you for inviting me here today to comment
briefly on electronic waste--or ``e-waste''. I appreciate Chairman
Gillmor and Ranking Member Solis allowing me to be a part of the first
congressional hearing on the subject of e-waste, a subject I've been
involved with since I was first elected to Congress.
Electronic products are becoming smaller and lighter, but they also
are creating an ever-growing environmental and waste disposal problem.
That's because it's often cheaper and more convenient to buy a new PC
or cell phone than to upgrade an old one.
Today, the average lifespan of a computer is only two years and
Americans are disposing of 3,000 tons of computers each day. Consumers
Union, publisher of Consumer Reports, recently estimated that the
typical household could expect to discard approximately 68 electronic
items over the next 20 years including: 20 cell phones, 10 computers, 7
TVs, 7 VCRs or DVD players and several answering machines, printers and
CD players.
While e-waste contains a number of valuable materials that are
recoverable--including aluminum, gold, silver and other metals, it also
contains a witches' brew of toxic material--such as lead, mercury and
cadmium. If not properly disposed of these toxic materials can cause
health and environmental problems. For example, the glass of a typical
computer monitor contains six pounds of lead. When this glass is
crushed in a landfill, the lead escapes into the environment. According
to the Environmental Protection Agency (EPA), lead becomes hazardous to
human health when one is exposed to only 1.5 ounces of its dust.
There's a Native American proverb about stewardship, which says:
``We don't inherit the earth from our ancestors, we borrow it from our
children.'' To give you an idea of the potential legacy we are leaving
future generations, the National Safety Council has projected that
approximately 300 million computers are obsolete. If all 300 million
units were discarded, this would involve nearly one billion pounds of
lead, two million pounds of cadmium and 400,000 pounds of mercury.
We've done little to address the problem of e-waste on a national
scale. Although some retailers and manufacturers have created voluntary
recycling programs, they are too small in scope to make much of a dent
in the e-waste stream. Without a national recycling infrastructure--
collection programs, disassembly facilities and reprocessing plants--
consumers and businesses today are left with few choices for getting
rid of their old computers, cell phones and other electronic devices.
Most people shove them in a spare closet or corner and wait. When
people do try to dispose of their e-waste responsibly, all too often it
is shipped overseas. There, it and its toxins can land in riverbeds or
in the hands of unprotected workers.
The buildup of e-waste on the local and state level has led
California, Maine and Maryland to implement their own e-waste laws--
each very different from one another. Twenty-six additional states are
also considering e-waste legislation. As states continue to develop
their own approaches the need for a federal solution only grows.
Without federal action both consumers and businesses will have to
contend with an unmanageable patchwork of state laws. This might also
put many U.S. manufacturers at a competitive disadvantage if they have
to juggle multiple state regulations.
My colleagues and I formed the Congressional E-Waste Working Group
with the objective of investigating possible federal e-waste solutions
and educating Members of Congress about the issue. At our first event,
a forum entitled, ``E-Waste: Is a National Approach Necessary?'' we
invited all stakeholders, including consumers, manufacturers,
retailers, recyclers, environmentalists and nonprofits. All agreed to
the value of a national approach to e-waste.
I thank the subcommittee for bringing much needed attention to this
issue and to allow us to gather expert testimony on the problem of e-
waste. I--and other members of the E-Waste Working Group--look forward
to working with you to find a comprehensive way to reduce e-waste in a
way that considers the interests of all stakeholders.
Mr. Gillmor. Thank you very much.
And we will go a little bit out of order. A member of the
E-Waste Working Group and also a member of this subcommittee is
Ms. Bono of California, so we will move you up to the top of
the order as being part of the working group, and I recognize
you for any statement you may wish to make.
Ms. Bono. Thank you, Mr. Chairman.
I would like to thank you very much for calling this
hearing today. I appreciate your willingness to explore all
aspects of this issue. And unfortunately, as you all know, we
have a big markup going on downstairs, so we will be popping up
and down, and that is not an indication of our not caring about
the issue. But unfortunately, some demands that didn't meet
with our time. So I would really like to thank my colleagues
for testifying.
Recently, we have come across a wide array of proposed
solutions to the e-waste dilemma, from doing nothing, to
enabling the Federal Government to bear the burden, to
everything in between. Because this is our first official
Federal look at the issue, I believe that everything should
remain on the table. I am also interested in examining what the
actual amount of e-waste is and its implications on the
environment. There are varying opinions on its impacts. In
order to have a better understanding of what it is we are
dealing with, we need to address these basic questions. Because
many States have either mandated or considering a mandate to
recycle, I understand why both manufacturers and retailers are
looking for some kind of continuity. It puts our companies at a
disadvantage and raises the cost of this equipment on the
consumer if we had a number of different policies nationwide.
Finally, Congress needs to look abroad to see what kinds of
policies are employed by other nations that have moved ahead
with reducing e-waste. While the United States is not under any
obligation to mirror these exact policies, it is in our
interest to keep our high-tech companies remaining competitive
in these markets. If by doing so we also help our environment
here at home, all the better.
Mr. Chairman, yesterday, on the floor, I spoke briefly to
my colleagues about a recent Washington Times article, which I
think was entirely misleading. And one of my colleagues
suggested that the best way to handle the e-waste problem was
to suggest to all of those trying to dispose of computers and
televisions and printers and stuff to just simply take their e-
waste over to the Washington Times office and leave it there on
their doorstep. So it is obvious that that is not a real option
for us, but I look forward to our witnesses to hear what you
have to say.
And thank you for being here.
Thank you, Mr. Chairman.
Mr. Gillmor. Thank you very much.
As we have only two things going on at the same time for
all of us, I am going to request unanimous consent that all
members may have 5 days to enter opening statements into the
record. Some can not be here.
And the chair will recognize himself for the purpose of an
opening statement.
Our subcommittee today is making history by holding the
first-ever Congressional hearing on the subject of what our
Nation should do with the growing amount of electronic devices
that will need to be disposed of or recycled. It is not an
issue that is going to go away any time soon, particularly when
you consider that we are about to make the transition to
completely digital television. I believe members need to
understand the many facets of this issue in case there should
come a time when our committee may need to act.
In the past, our subcommittee has spent time looking at
waste disposal issues that have directly called into question
the amount of waste capacity we have in this Nation and whether
communities are able to develop comprehensive waste management
plans.
The decision we, as a government and a society, make about
the end-of-use activities of these products is no different.
Three States have acted, because they believe something needs
to be done about e-waste, and 23 other States have this on
their radar screens in some fashion.
If you look at the model of the Solid Waste Disposal Act,
which establishes a national structure and minimum guidelines
for the handling of waste streams, clearly one can see the
implications for electronic waste, from both the solid or
hazardous waste perspectives, not to mention Federal laws
dealing with recycling and recycled materials. In additional,
the Low-Level Radioactive Waste Policy Act gives Congress the
role of approving multi-State compacts that address this type
of waste, an interesting thought considering the actions of
some State coalitions.
Any way you look at this issue, though, the time is right
for us to examine the state of electronic recycling in this
country and whether a Federal solution should be considered for
electronic waste.
I am very pleased that the subcommittee has received an
overwhelming and a positive response from many quarters about
our desire to have this hearing. And in order to accommodate
the greatest diversity of witnesses as well as use the time we
have in the most efficient way, considering both of the
activities on the House floor and House-Senate conferences on
the energy and the highway bills, we are going to bifurcate
this hearing. Today will be the first part where we will hear
from the Federal Government and the three State governments
that have passed e-waste recycling laws.
Those are important perspectives, because we need to know
if voluntary initiatives or differing State standards are
preferable public policy outcomes, or whether they are economic
and environmental disasters waiting to occur.
Our second part of the hearing will be scheduled for when
the House returns in September, and at that time, we will hear
from electronics manufacturers, retailers, associations,
recyclers, charitable organizations, and environmental groups
who each have important, informed perspectives and many
experiences to share from both the domestic and international
activities.
I believe that this hearing should attempt to answer a few
simple questions. They include: How do various parties define
electronic waste? What are these parties doing to address the
concerns they have? What responsibilities do they believe the
public and private sectors share in addressing the e-waste? And
what responsibilities do all the stakeholders, including
private citizens have? Is the status quo of voluntary programs
or individual State laws adequate or appropriate? And what
role, if any, should the Federal Government play?
I look forward to the testimony of our witnesses and the
answers that they will give us on those questions.
And before I yield to Ranking Member Solis, so she can make
an opening statement, I would like to welcome a few people and
thank others. First, let me thank our distinguished panelists
who will testify for the committee today, including Mr. Breen
of the EPA and Mr. Wu from the Department of Commerce, the
environmental heads of Maine and Maryland, as well as a
representative from the California Waste Management Board.
And second, I want to thank the leadership of the
Congressional E-Waste Caucus for their presence today, Mr.
Thompson, Mrs. Slaughter. And I also want to congratulate Mary
Bono, a member of our subcommittee, who has worked very hard on
e-waste issues as a co-chair of the Congressional E-Waste
Caucus and has been very helpful and encouraging to me in
putting together this hearing.
I also want to alert the members that we have witnesses who
have made sacrifices to be with us today and are on tight lines
due to travel concerns, and we should try to keep that in mind
as we proceed.
And I am now very pleased to yield 5 minutes to the ranking
member of the committee, Ms. Solis of California.
[The prepared statement of Hon. Paul E. Gillmor follows:]
Prepared Statement of Hon. Paul Gillmor, Chairman, Subcommittee on
Environment and Hazardous Waste
The Subcommittee will now come to order and the Chair will
recognize himself for five minutes for the purposes of making an
opening statement.
Today, our Subcommittee makes history by holding the first-ever
congressional hearing on the subject of what our nation should do with
the growing amount of electronic devices that will need to be disposed
or recycled. This is not an issue that is going away any time soon--
particularly when you consider that we are about to make the transition
to completely digital television--and I believe Members need to
understand the many facets of this issue in case the time should come
where our Committee may need to act.
In the past, our Subcommittee has spent time looking at waste
disposal issues that have directly called into question the amount of
waste capacity we have in this nation, and whether communities are able
to develop comprehensive waste management plans.
The decisions we as government and society make about the end-of-
use activities of these products is no different. Three states have
acted because they believe something needs to be done about e-waste and
23 other states also have this issue on their ``radar screens'' in some
fashion. If you look at the model of the Solid Waste Disposal Act,
which establishes a national structure and minimum guidelines for the
handling of waste streams, clearly one can see implications for
electronic waste--from solid or hazardous waste perspectives--not to
mention Federal laws dealing with recycling and recycled materials. In
addition, the Low-Level Radioactive Waste Policy Act gives Congress the
role of approving multi-state compacts that address this type of
waste--an interesting thought considering the actions of some state
coalitions. Any way you look at this issue, though, the time ripe for
us to examine the state of electronic recycling in our country, and
whether a Federal solution should be considered for electronic waste.
I am pleased to announce that the Subcommittee has received an
overwhelming and positive response from many quarters about its desire
to have this hearing. In order to accommodate the greatest diversity of
witnesses as well as use the time we have in the most efficient way
considering the activities on the House floor and House-Senate
conferences on the energy and highway bills, the Subcommittee will
bifurcate this hearing. Today will be the first part where we will hear
from the Federal government and the three state governments that have
passed e-waste recycling laws. These are important perspectives because
we need to know if voluntary initiatives or differing state standards
are preferable public policy outcomes, or are economic and
environmental disasters waiting to occur. Our second part of this
hearing will be scheduled for when the House returns in September. At
that time, we will hear from electronics manufacturers, retailers,
associations, recyclers, charitable organizations, and environmental
groups who each have important, informed perspectives and many
experiences to share from both domestic and international activities.
Again, I believe this hearing should attempt to find answers to a
few simple questions. These include: How do various parties define
electronic waste? What are these parties doing to address the concerns
they see? What responsibilities do they believe the private and public
sector share in addressing e-waste? What responsibilities do all the
stakeholders, including private citizens? Is the status quo of
voluntary programs or individual state laws adequate or appropriate?
What role, if any should the Federal government play? I look forward to
the testimony of our witnesses and the answers they will give us on
these matters.
Before I yield to the Ranking Member of the Subcommittee, Mrs.
Solis, so she can make her opening statement; I want to welcome a few
people and thank others. First, let me thank our distinguished
panelists who will testify for our committee today, including Mr. Breen
from EPA and Mr. Wu from the Department of Commerce, the environmental
heads of states of Maine and Maryland, as well as a representative from
the California Waste management board. Second, I want to welcome as
well as thank the leadership of the Congressional E-Waste Caucus for
their presence today, Mr. Thompson, Mrs. Slaughter, and Mr. Cunningham.
Finally, I want to congratulate Mary Bono, a member of our
subcommittee, who has worked very hard on e-waste issues as a co-chair
of the Congressional E-Waste Caucus and who has been very helpful and
encouraging to me in putting together this hearing.
With that, I yield five minutes to Mrs. Solis.
Ms. Solis. Good afternoon, and thank you, Chairman Gillmor,
and thank you very much for having this first hearing on
electronic waste.
I also want to thank the previous speakers that came before
us to speak, Representative Slaughter, Representative Thompson,
and Congresswoman Bono.
I would like to also take this opportunity to recognize
Rosalie Mule, who is here from California, who has joined us to
serve on the second panel and also represents the California
Integrated Waste Management Board, and recognize also Carol
Mortenson, I believe, who is also here with her.
I want to thank the chairman for cooperating his staff and
ours in bifurcating this hearing so that we can consider
information from the large number of stakeholders that are
involved. And I hope we can continue to work in this manner. I
think it is very uplifting to know that at least on an issue
like this we can come together.
These issues include a number of which are discussed in the
conference meeting for the energy bill.
Mr. Gillmor. Excuse me. Excuse me.
We have got a vote on, and if it is all right with you, we
will recess very briefly, go vote, come back, and you can
finish your statement.
Ms. Solis. That is fine.
Mr. Gillmor. Okay. You don't get penalized time-wise.
[Brief recess.]
Mr. Gillmor. The committee will come back to order.
And we will continue with the statement of Ranking Member
Solis.
Ms. Solis. Thank you, Mr. Chairman.
And I do want to submit my statement for the record in its
full length, and I realize that we have some witnesses here
that may have to leave a lot sooner, but I do want to state my
opinion.
And that is that e-waste is the fastest growing portion of
our waste stream, growing almost three times faster than our
overall municipal waste stream. Six million desktop and laptop
computers in the United States will be obsolete. A pile of
these obsolete computers would reach a mile high, cover six
acres. That is the same as a 22-story pile of e-waste covering
the entire 472 square miles of the city of Los Angeles. E-waste
has become the new hazardous waste crisis. E-waste contains
toxic substances, such as lead, cadmium in circuit boards, lead
oxide, cadmium in monitor cathode ray tubes, and mercury in
switches.
So given these facts, we know that there is an urgency for
us to do something, and I am very proud that California has
been one of those leading States on this issue for many, many
years, and I was very pleased to see Congressman Mike Thompson
here, who I served with in the California legislature when we
were dealing with these issues some 7 and 8 years ago.
And I am delighted to have our witnesses here.
I will, with that, just relinquish my time and submit my
statement for the record. I request unanimous consent to do
that.
Mr. Gillmor. Without objection.
[The prepared statement of Hon. Hilda L. Solis follows:]
Prepared Statement of Hon. Hilda L. Solis, a Representative in Congress
from the State of California
Good afternoon. I would like to thank Chairman Gillmor for holding
this important hearing on electronic waste. I also want to thank our
witnesses for coming. I would like to recognize Rosalie Mule who will
join us on the second panel today from California's Integrated Waste
Management Board and recognize Caroll Mortensen who has joined her.
I want to thank the Chairman for the cooperation of his staff in
bifurcating this hearing so we can consider information from the large
number of stakeholders involved. I hope we can continue to work in this
manner to take up the number of issues important to this Subcommittee,
and fall within its jurisdiction.
These issues include a number of which are being discussed in the
Conference meeting for the Energy Bill. The Energy Bill includes
provisions on refinery revitalization, LUST, and hydraulic fracturing
involving the Safe Drinking Water Act, the Solid Waste Disposal Act and
Superfund. All of these statutes fall within the Subcommittee
jurisdiction yet we have not had any hearings or legislative markup. I
think that all members need to have the opportunity to address these
issues.
I also understand from my staff that you, Chairman Gillmor, will
personally be speaking to Chairman Barton about scheduling a
perchlorate hearing, per previous commitments. I appreciate that and I
look forward to that hearing.
I believe the need for the safe disposal of e-waste is evident. E-
waste is the fastest growing portion of our waste stream--growing
almost 3 times faster than our overall municipal waste stream. 600
million desktop and laptop computers in the U.S. will soon be obsolete.
A pile of these obsolete computers would reach a mile high and cover
six acres. That's the same as a 22-story pile of e-waste covering the
entire 472 square miles of the City of Los Angeles.
E-waste has become the new hazardous waste crisis. E-waste contains
toxic substances such as lead and cadmium in circuit boards; lead oxide
and cadmium in monitor cathode ray tubes; and mercury in switches and
flat screen monitors. Due to the hazards involved, disposing and
recycling of E-waste have serious environmental implications.
When computer waste is sent to the landfill or incinerator, it
poses significant contamination problems. Landfills leach toxins into
groundwater and incinerators emit toxic air pollutants. E-Waste also
has occupational implications for workers who are exposed to the toxic
chemical compounds.
The result is a growing challenge for businesses, local
governments, and residents, as they search for ways to reuse, recycle,
or properly dispose of E-waste. It is or should be a challenge to
manufacturers to find ways to produce these products without using
these dangerous materials.One thing is certain: E-waste is with us to
stay. We need to keep these harmful materials from ending up in
landfills and ultimately in our water supplies.
I am happy to see that California is setting an example with one of
the nation's first electronics recycling law. California enacted the
Electronic Waste Recycling Act in September 2003. Supporters of the
California law included environmental groups, local governments,
municipalities, and recyclers.
California's law requires consumers to pay an advance recycling fee
to retailers on the sale of computer monitors, televisions, and other
video devices containing toxic materials, after January 1, 2005. The
fees are to be used to reimburse recyclers for the cost of collecting
and recycling the covered video devices. I hope that Rosalie Mule can
provide us information on the implementation of the California law. I
understand that 20 other states are thinking of adopting E-waste
legislation. California's law could be looked at by these other states
as a model.
Unfortunately, E-Waste is also exported overseas to countries that
are least able to deal with them appropriately. Exporting E-Waste
pollutes the air, water and soil in countries that have minimum
environmental standards. I believe that it is unjust and inappropriate
to export pollution and contrary to the principles of environmental
justice. I am happy to see that the California law restricts the export
of covered e-waste to foreign destinations.
I am glad that we are having the first half of this hearing today
and look forward to both this and the second day of this hearing to
learn about the role of the federal government, state governments and
regional opportunities for handling E-waste. I also hope that we can
begin hearings on the other issues within this Subcommittee's
jurisdiction.
Thank you.
Mr. Gillmor. And thank you.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Charles F. Bass, a Representative in
Congress from the State of New Hampshire
Thank you Mr. Chairman. I appreciate you scheduling this important
hearing that affects a wide range of issues--including the environment,
waste management, commerce, and the technology industry. I think it
would be hard press for us to find one individual in this room that
does not have some piece of out-dated electronic equipment sitting in a
drawer, closet, attic, or basement in their home or office. Eventually,
this equipment will need to be disposed of and the question is whether
it will end up in our landfills or to be recycled or reused. Even
though there are currently alternatives to landfills, such as donations
to charities and recycling locations, most Americans do not have the
information or ability to access these other options for ``end-of-
life'' electronic products. Additionally, there is a lack of
infrastructure on the national level to handle the overall demand for
these alternatives. It is critical for our Committee to keep in mind as
we move forward in considering any federal action: how do we encourage
households to recycle; how do we create a market for recycling e-waste,
and how do we develop incentives to design more environmentally
friendly products.
This hearing comes at an opportune time since many local
communities and states are currently addressing how to handle their
growing e-waste stream. For example, the Northeast Recycling Council
and the Council of State Governments-East Region Conference have been
working on a collaborative effort in addressing how to regionally
handle e-waste. Last week, the group released draft legislation from
this effort and will be meeting again on July 25th with stakeholders
from all sectors impacted by e-waste to further discuss the draft. I
hope this Committee will make sure that groups like the Northeast
Recycling Council will be consider in future discussions on e-waste.
Additionally, the issue of e-waste is particularly relevant to our
Committee as we move forward to transferring over to digital television
and what the possible impacts that this transition may have on our
landfills. Even in absence of a transition, the continual advances in
technology that makes our electronic products out-dated is also placing
pressure on our landfills. There is a growing need for municipalities
to handle increasing amounts of electronic waste at the same time that
their landfills are becoming more and more constraint. Many of our
electronic products are bulky, not biodegradable, and contains
hazardous material that if released can be detrimental to the
environment. For these reasons, it is imperative that we address this
problem now.
I look forward to hearing from the second panel that represents a
wide range of approaches in handling e-waste. Additionally, each state
is implementing very different programs ranging from placing the
responsibility on producers to shifting the cost on to consumers at the
point-of sale. Each strategy has their own merits and drawbacks and
hopefully our witnesses will discuss theses differences.
Talking to various stakeholders from my state of New Hampshire,
there is a consensus that this problem can not be tackled by individual
state legislation, but that for any program to succeed that there needs
to be either regional efforts or introduction of a federal program.
Currently, in New Hampshire, each municipality handles their e-waste
items individually. Some communities accept e-waste in their municipal
landfill, while others set-up periodic donation/recycle collection
drives, and even other communities have set-up e-waste recycling
programs that either accepts the item with or without a fee. For
example, in my small town of Peterborough, television sets under 19
inches are accepted without a fee, while the owner is charged $5.00 for
recycling a larger televisions. However, the municipality has no
programs for computers, microwaves, stereos, fax machines, scanners,
and other telecommunication equipment.
It is important for this Committee to explore ways to encourage
environmentally conscious behavior throughout the life of the product.
There is a critical need to stimulate the industry to produce more
energy, environmentally-friendly products that can in turn be recycled.
But just as important is the need to produce incentives for consumers
to dispose of their products in s environmentally conscious manner,
rather than simply dropping it at their dump. Finally, no effort will
be truly successful if we do not consider incentives for the waste
management industry by reducing any existing barriers or burdensome
cost related to the reduction of e-waste with recycling and reusing
programs.
I like to thank our witnesses for joining us today and I look
forward to hearing their testimony on this important issue to all of
us.
______
Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy
and Commerce
Thank you, Chairman Gillmor for holding today's hearing on what I
understand is the first congressional survey regarding electronic waste
and the proper federal role on this important environmental issue. I
hope this hearing will not only help us figure out what to do with all
of those old computers, printers, and televisions that end up getting
stored in the basement or closet somewhere, but will also provide
valuable insight to what the states and agencies are currently doing to
address this problem.
The Commerce Department states that given the growth and
obsolescence rates of the various categories of consumer electronics,
somewhere in the neighborhood of 3 billion units will be scrapped
during the rest of the decade--or an average of about 400 million units
a year, including 200 million televisions and 1 billion units of
computer equipment. And with the rise of increased dependency on
computers and other electronic equipment, this problem is only expected
to escalate. I look forward to hearing what EPA and the Department of
Commerce have been doing on this matter and I also understand that a
few states have already undertaken action, with many proposals floating
in other state legislatures. This creates an interesting dynamic, and
while I don't feel the time is right for a comprehensive federal
solution, I look forward to hearing the current state of things and
what types of infrastructure and industry cooperation currently exist
among state, local, and federal waste enforcement officials.
Once again, I thank the Chairman for holding this hearing and I
yield back the balance of my time.
______
Prepared Statement of Hon. Lois Capps, a Representative in Congress
from the State of California
Mr. Chairman, thank you for holding this hearing.
The technological revolution brought with it a consumer demand for
constant upgrades to newer, faster and more advanced models of older
products.
Think about how quickly our technology has changed? Can any of us
remember using an eight-track stereo, a rotary phone, black-and-white
television set, or even a Commodore 64?
The pace of technological innovation continues to offer the
American public more and more choices. But for every I-pod, cell phone,
HDTV or laptop computer that goes home from the store, its outdated
predecessor gets moved to the garage or thrown out with the trash.
The lifespan of a computer used to be about five years, it's now
about two. Cell phones have an average lifespan of less than a year,
and in most cases stereo and television equipment is not even worth
repairing anymore.
According to the EPA, U.S. households have an average of two to
three unused computers and televisions in storage. Businesses are
estimated to have even more. The reason is most people simply do not
know how to go about disposing or recycling them.
A recent report conducted by the Silicon Valley Toxics Coalition
predicted that 500 million computers will become obsolete between 1997
and 2007. These obsolete computers alone will result in over 6.3
billion pounds of plastic and 1.6 billion pounds of lead in our
landfills and incinerators.
Cell phones can also add up to big problems. According to another
recent study, Americans discard about 130 million cell phones per year.
This figure adds up to be approximately 65,000 tons of trash.
Mr. Chairman, the U.S. led the technological revolution and I think
we ought to lead the way to safely manage computers and other
electronic devices at the end of their life. As we continue to dispose
of more and more e-waste each year, finding a national recycling
approach becomes more and more critical.
While some states, including my own state of California, have laws
to get recycling programs going, others are just beginning to talk
about how to deal with the accumulation of e-waste.
Without a national program, states will continue to create a
patchwork of different programs making it difficult for manufacturers,
retailers and consumers to adhere to.
As a public health nurse, I also believe we have a duty to assure
that e-waste is handled responsibly. Electronics contain toxic metals
such as lead, mercury and other dangerous compounds.
If not handled properly, e-waste can harm people and lead to
contamination of the land, air and water. The health effects of these
hazardous toxins are also well known. They include an increased risk of
cancer, as well as harm to the brain, nervous system and kidneys.
E-waste is a growing problem that is not going away. It is my hope
that with today's hearing we will begin to set the groundwork for a
useful and intelligent conversation on how best to tackle this rising
problem.
Again, I would like to thank the Chairman for holding this hearing
and I look forward to the testimony of the witnesses.
______
Prepared Statement of Hon. Gene Green, a Representative in Congress
from the State of Texas
Good afternoon. I would like to thank Chairman Gillmor and Ranking
Member Solis for holding this hearing on electronic waste.
There is no doubt consumer electronic products have changed our way
of life over the last 15 years.
Computers, cell phones, and other electronic products are a rapidly
growing part of our society and are crucial to our economy.
As technology advances, making new products obsolete within a few
short years, these products have also become a rapidly growing part of
our waste, causing concern among states and posing a potential
environmental problem.
Electronic equipment is the fastest-growing portion of the
municipal solid waste stream.
Estimates show that nearly 500 million computers will become
obsolete between 1997 and 2007.
The environmental liabilities of landfilling computers and
electronic equipment include the potential for the release of a variety
of toxic substances including mercury, cadmium, chromium, flame-
retardant plastics, and lead.
Each monitor, or cathode-ray tube contains from four to six pounds
of lead.
Because of these components, electronic waste has the potential to
pollute the air or groundwater if disposed of in an incinerator or
landfill.
Consumer electronic products already account for approximately 40
percent of lead found in landfills.
In my home state of Texas, an estimated 1.5 million computers are
discarded annually, with roughly 162,000 recycled, leaving more than
1.3 million units assumed to be stored or disposed of in landfills.
A major factor leading to low recycling rates of electronic waste
is a lack of education provided to consumers about recycling options
available to them.
To help address this, the Texas Natural Resources Conservation
Commission has started a campaign to make consumers aware of recycling
and donation options available to them so that electronic waste does
not end up in landfills or stored and unused where it loses its value
and its potential to be sold or reused.
Additionally, the Texas Department of Information Resources has
developed a guidance document for evaluating lease and purchase options
to reduce electronic waste in the workplace, and provides consumer with
information on where to donate or recycle used equipment.
While this is a good start to raise awareness, it is clear
electronic waste is a growing concern across the nation and needs to be
addressed.
I look forward to hearing from Secretary Wu and Secretary Breen for
their observations and recommendations on this issue, and I look
forward to hearing from the representatives from California, Maine and
Maryland to hear how their respective states have approached the
potential problems posed by electronic waste.
With that, Mr. Chairman, I yield back the balance of my time.
______
Prepared Statement of Hon. Tammy Baldwin, a Representative in Congress
from the State of Wisconsin
Thank you Mr. Chairman,
I am very pleased this subcommittee has decided to examine the
growing problem of electronic waste.
From CPUs and keyboards to copier machines and cell phones,
Americans are discarding huge amounts of waste in the form of obsolete
electronic products every year--the vast majority of which are not
being recycled or disposed of properly.
This is a problem because this is not ordinary waste. These are
products that contain highly dangerous materials such as mercury, lead,
barium, chromium and a host of other toxic substances that can pose
serious threats to the public's health and our environment.
Between 2.2 and 3 million tons of e-waste are tossed into landfills
every year. Less than 10 percent of this waste is being reused or
recycled. More than 50 million computers alone make their way to the
trash every year.
As consumers demand more advanced electronic devices, like fancier
cell phones and faster computers, the amount of e-waste seeping into
the environment will continue to rise.
Mercury contamination is a particular concern of mine because
pregnant mothers and young infants are highly susceptible to exposure
to this toxic element, which can cause chronic damage to the brain,
nervous system, spinal cord, kidneys, and liver.
Mercury is found in numerous components in electronic devices such
as switches, CPU monitors, and printed wiring boards.
I'm glad states like Maine, California, and Maryland are taking the
initiative to pass legislation that confronts the growing public health
threat of e-waste. However, I do believe it is time for the federal
government to adopt some national guidelines.
The lack of national standards has led to a patchwork of state laws
that have created confusion for retailers and consumers. Meanwhile,
there are few--if any--incentives for manufacturers to help remedy the
problem or invest in safer alternatives. Nor are there any
repercussions for their failure to act.
I hope today's hearing will prompt further Congressional action on
this important health and environmental issue.
Thank you Mr. Chairman for holding this hearing today.
Mr. Gillmor. We will begin with Benjamin Wu, who is the
Deputy Undersecretary of the Office of Technology, U.S.
Department of Commerce.
Mr. Wu.
STATEMENTS OF BENJAMIN H. WU, DEPUTY UNDERSECRETARY, OFFICE OF
TECHNOLOGY, DEPARTMENT OF COMMERCE; AND BARRY BREEN, DEPUTY
ASSISTANT ADMINISTRATOR, OFFICE OF SOLID WASTE AND EMERGENCY
RESPONSE, ENVIRONMENTAL PROTECTION AGENCY
Mr. Wu. Thank you, Mr. Chairman.
Chairman Gillmor, Ranking Member Solis, and Congressman
Bono, I appreciate the opportunity to appear before you this
afternoon. The growth of the American high technology sector
has been one of the greatest stories of the past 20 years. In
part due to the legislative leadership of this committee, the
U.S. technology industry continues to be a driver of economic
growth and quality of life by providing electronics products
that can educate us, entertain us, enthrall us, connect us, and
also make us more productive.
These electronic products are now ubiquitous in our
society. All one needs to do is attend this year's consumer
electronics show to understand that the rapid growth of
electronics products is the wave of our future, and sustaining
that innovative growth may very well determine our Nation's
ability to compete in the global marketplace.
So the preparation of consumer electronics products is a
modern day reality. And as Americans begin to replace early
generation electronics products that have reached the end of
their life cycle or choose to upgrade to newer models, the
issue of electronic waste disposal, or e-waste, is an issue
that lawmakers and policymakers must confront, especially since
it is believed that certain electronics products, especially in
the early generation products, contains toxins that make their
disposal potentially hazardous.
I commend you, Mr. Chairman, and your staff for holding the
very first Congressional hearing on electronic waste. The fact
that the Senate is holding a similar hearing next week, coupled
with the establishment of the House E-Waste Working Group this
past May, underscores its importance and the Congressional
desire to address this complex issue.
The Department of Commerce looks forward to working with
you and being of assistance to your subcommittee as you proceed
with future consideration of e-waste policies and legislation.
How and who decides e-waste solutions can dramatically affect
the U.S. technology industry's manufacturing and marketing
business models as well as their competitiveness.
As a portal for the U.S. technology industry, our
Technology Administration has heard the concerns from the
industry regarding the need for an industry-led consensus that
will give certainty to the U.S. high-technology sector. Toward
that goal, over the past year, we have worked to complement
EPA's already existing and outstanding activities to drive and
advance a consensus. We met with effective stakeholders,
convened a roundtable, put out a Federal Register notice for
comment, and will be issuing an overview of e-waste policy
issues to the subcommittee in order to educate and inform
Congress of relevant issues to be considered.
This overview, which is gleaned from lessons learned from
our Technology Administration activities, is expected to be
released by the time this subcommittee their second part of
this hearing in September. They include which products should
be considered for a--excuse me. The overview will provide a
background on the issue of electronics recycling, including an
explanation of the different components of recycling systems.
Mr. Chairman, electronic waste disposal and recycling is
indeed a multifaceted and an intricate issue, one which has not
easily been drawn into a consensus. While still ongoing,
despite several attempts encompassing several years, unanimity
and comfortable consensus have been limited. This is because
the issue involves many stakeholders, and the impacts of the
decision any government makes concerning electronics recycling
hold implications that are far-ranging, including environmental
impacts, but also extending to the impact upon the health of
U.S. businesses and their ability to compete internationally.
It is important that we involve all of the stakeholders who
may be affected by electronics recycling legislation so that we
will be able to fully understand the implications of actions
undertaken and provide the opportunity for all affected parties
to provide their input into shaping the most effective
solution.
In the United States, as has been mentioned, several States
have already begun considering a variety of legislative
proposals, with the three States appearing in today's second
panel having passed distinctively different approaches to
manage electronic waste. Accordingly, it is conceivable, at
this rate, that within the United States, there could be as
many as 50 different sets of regulations that could have a
significant impact on an important sector of the U.S. economy.
And that is why industry welcomes Congressional review.
In doing so, Congress will need to examine a range of
issues, including but not limited to, establishing financing
mechanisms that have been used for electronics and other
product recycling systems in the United States and other
countries around the world, such as a government-sponsored
recycling program, an advanced recovery fee, a fee paid by the
consumer at the time of the purchase that would offset the cost
of eventual recycling of the product, which is the basis of the
2003 law in California, a producer responsibility model where
each manufacturer will be responsible for its own products and
a certain percentage of orphaned products, a consumer mail-in
program, a deposit refund system, and/or several combinations
of the above possibilities.
Congress must also ensure that all stakeholders must be
considered in any national plan. And these stakeholders
include, but are not limited to, electronics manufacturers,
retailers, recyclers, environmental interests, and consumers.
Initially, in the early stages of trying to find a consensus,
the retailers were not included and were overlooked in this
process yet play a very important role, because of the impact
that they could have.
Additionally, Congress must weigh several other issues that
must be taken into consideration when devising a strategy for
electronics recycling. They include which products should be
considered for a program and how they should be gradually
phased in, how discarded products should be collected and
transported and by whom, how new products should be classified
and sold on the Internet without leaving brick and mortar
retailers at a competitive disadvantage due to mandated fees,
and how the problem of orphaned products should be addressed,
and how consumers can be encouraged to actively participate in
any established recycling program.
In the United States, 408 related to waste management,
recycling, and product stewardship that were introduced at the
State level in 2003, 50 more than in 2002. And so we can expect
more legislation to be introduced as other States gain interest
in this issue. Twenty-six States introduced 52 bills related to
electronics disposal. And we have heard industry's deep
concerns that leaving this issue to the State level becomes
problematic because of the cost of compliance with the
patchwork of international and State laws can be daunting.
E-waste is certainly an issue worthy of Congressional
review, and we applaud this committee for undertaking this
important issue. We are available to help educate and inform
the Congress on this complex debate and ensure that all
stakeholders' interests are taken into account in crafting a
solution.
Thank you, Mr. Chairman, and I would be happy to respond to
any questions you or members of the subcommittee may have.
[The prepared statement of Benjamin H. Wu follows:]
Prepared Statement of Benjamin H. Wu, Assistant Secretary for
Technology Policy, U.S. Department of Commerce
Chairman Gillmor, Ranking Member Solis, and members of the
subcommittee, I appreciate the opportunity to testify before your
subcommittee in the first Congressional hearing on electronics
recycling. I commend you on your leadership to address this important
issue--an issue that can dramatically affect the U.S. technology
industry's manufacturing and marketing business models, as well as
their competitiveness.
Mr. Chairman, the growth of the American high-technology sector has
been one of the great stories of the past 20 years because of its
contribution to our economic growth, our standard of living, and the
rise of ubiquitous consumer electronics improving the quality of our
lives. However, many consumer electronic products contain toxins that
make their disposal potentially hazardous. As the early generations of
these technology products have reached or are reaching the end of their
life cycle, it has become increasingly clear that lawmakers and
policymakers must deal with the issue of their disposal.
A recent report from the International Association of Electronics
Recyclers projects that given growth and obsolescence rates of the
various categories of consumer electronics, somewhere in the
neighborhood of 3 billion units will be scrapped during the rest of
this decade--or an average of about 400 million units a year, including
200 million televisions and 1 billion units of computer
equipment.1 E-waste comprises 1.5 percent of municipal waste
across the United States. It is a small but fast-growing portion. Some
researchers estimate that nearly 75 percent of old electronics are in
storage as consumers hoard them, feeling they have some value and
uncertain how to dispose of them.
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\1\ Product Stewardship Institute, http://
www.productstewardship.us/prod_electronics.html
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Electronics waste and recycling is an important and complex issue.
This issue involves many stakeholders, and efforts to comfortably
resolve the issue by consensus with all stakeholders, while on-going,
have had limited success. The impacts of the decisions the government
makes concerning electronics recycling holds implications that are far-
ranging, including environmental impacts, but also extending to the
impact upon the health of U.S businesses and their ability to compete
in the global marketplace. It is important that we involve all of the
stakeholders who may be affected by electronics recycling legislation
so that we will be able to fully understand the implications of actions
undertaken, and provide the opportunity for all affected parties to
provide their input into shaping the most effective solution.
Several characteristics of e-waste--their bulky nature, possibly
toxic constituents, the high cost of properly managing them--combine to
warrant special consideration of its removal. Many of these products,
especially televisions and personal computers, are not easily handled
with regular trash. Moreover, they take up space that is already at a
premium in landfills. Recycling is generally more expensive than
disposal, however, and recycling does not pay for itself. The costs of
collecting and dismantling these products may exceed the material value
of the recycled equipment because there is no efficient infrastructure
for collecting discarded electronics, nor were these products
originally designed with recycling in mind. About two million tons per
year of electronic waste, 20 to 50 million personal computers a year
for example, require disposal management. Internationally, a number of
countries have enacted legislation to manage electronic waste.
In the United States, several states are considering a variety of
legislative proposals, with three states having passed distinctly
different approaches to manage electronic waste. Accordingly, it is
conceivable that, within the United States, there could be as many as
50 different sets of regulations that could have a significant impact
on an important sector of the U.S. economy.
Various stakeholders have been participating voluntarily in multi-
stakeholder dialogues for several years, such as the National
Electronics Product Stewardship Initiative (NEPSI), trying to find a
national solution. The technology industry has been an active
participant in these discussions and has been working with the
Environmental Protection Agency (EPA) on a number of pilot programs.
As the portal for the U.S. high-technology industry, the Department
of Commerce's Technology Administration has worked with industry to
complement EPA's efforts to drive towards an industry-led consensus
that will give certainty to the U.S. high-technology sector. Towards
that goal, over the past year, the Technology Administration has met
with affected stakeholders, convened a roundtable, put out a Federal
Register notice for comment, and will be issuing an overview of e-waste
policy issues to provide Congress with information as you move forward
in considering this issue. This overview is expected to be released by
the time this subcommittee completes the second part of this hearing in
September, and provides background on the issue of electronics
recycling, including an explanation of the different components of a
recycling system and commonly used concepts and terminology.
Mr. Chairman, let me discuss with you the components of our
overview to help lay out the policy foundations for possible
Congressional consideration. It should be noted that Technology
Administration's overview does not make any recommendations as to
whether the United States should have a national system or whether one
system is better than another. Instead, it is designed to simply report
the various options under discussion and the reported advantages and
disadvantages of each.
The overview focuses on the range of financing mechanisms that have
been used for electronics and other product recycling systems in the
United States and in other countries. The financing models considered
include: a government sponsored recycling program; an Advance Recovery
Fee (ARF), a fee paid by the consumer at the time of purchase that
would offset the cost of the eventual recycling of the product, which
is the basis for the 2003 law passed in California; a producer
responsibility model, where each manufacturer would be responsible for
its own products and a certain percentage of orphaned products
(electronic waste produced by a company that is no longer in business
or cannot be identified); a consumer mail-in program; a deposit refund
system; and several combinations of the above possibilities.
The overview also presents stakeholders' views regarding these
various financing options and the role of government in enabling a
national electronics recycling system. The stakeholders that should be
considered in any national plan include, but are not limited to:
electronics manufacturers; producers; retailers; recyclers;
environmental interests; and consumers. The overview also lists some
steps being taken by some of these interests voluntarily to help
promote electronics recycling.
The overview notes several other issues that must be taken into
consideration when devising a strategy for electronics recycling. They
include: which products should be considered for a program, and how
they should be gradually phased in; how discarded products should be
collected and transported and by whom; how new products should be
classified and sold on the Internet without leaving brick-and-mortar
retailers at a competitive disadvantage due to mandated fees; how the
problem of orphaned products should be addressed; how worker safety in
the recycling process can be ensured; and how consumers can be
encouraged to actively participate in any established recycling
program.
The overview examines current and potential future Federal
regulations in the United States that govern the disposal of
electronics, and legislation that has been passed or proposed by the
States regarding electronics recycling. In the United States, 408 bills
related to waste management, recycling, and product stewardship were
introduced in state legislatures in 2003, 50 more than in 2002. Twenty-
six states introduced 52 bills related to electronics disposal.
Three states, California, Maine, and Maryland, have passed laws
requiring electronics recycling, yet with very different requirements
for manufacturers and retailers. California's legislation is based on
an advance recovery fee; Maine has implemented producer-financed
collection, recovery, and recycling of electronic waste; and Maryland
is mandating that manufacturers offer a take back program and pay a
fee. Other states have already banned disposal of CRT (Cathode Ray
Tube) Monitors in their landfills, or have commissioned study
committees to draft legislation and are expected to introduce
electronics recycling legislation shortly.
We have heard deep concerns from industry that solving this issue
at the State level may become problematic because the cost of
compliance with a patchwork of international and state laws can
dramatically affect the manufacturing, marketing, and business models
of the U.S. electronics sector and the transaction costs and business
models of our retail sector. Industry believes a national solution is
required to avoid forcing companies to comply with a potentially wide
variety of regulations that will drive up their costs and impede their
ability to compete internationally. Industry is focusing on efforts to
create a national system that will achieve the goal of increasing
recycling while not impeding interstate commerce.
The overview also analyzes how other countries have financed
national electronics recycling systems. At least 10 countries have
legislation on discarded electronics and more are developing
legislation. The Waste of Electrical and Electronic Equipment (WEEE)
Directive in the European Union (EU) covers the collection and
treatment of electronics, as well as large household appliances and
medical devices. The Restriction on Hazardous Substances (RoHS)
Directive in the EU bans the use of certain hazardous substances in
electronic equipment and was also incorporated into the California
State law. The EU Directives are having a significant effect on U.S.
industry. U.S. businesses selling into the EU market must comply with
the WEEE and RoHS Directives and most are changing their product line
worldwide to meet the new requirements of RoHS. Other countries,
including Japan and China, have taken steps to echo some of these types
of requirements within their borders. At the Sea Island, Georgia Summit
of G8 countries 2 in June 2004, Japan proposed the ``3R's
Initiative'' to reduce waste, reuse, and recycle resources and products
to the extent economically feasible. A 3R's Ministerial Conference was
held in Tokyo in April 2005, and follow-up work is expected to
continue.
---------------------------------------------------------------------------
\2\ Group of the eight major industrial nations consisting of
Japan, Russia, UK, France, Italy, Germany, USA, and Canada.
---------------------------------------------------------------------------
Additionally, the overview investigates parallels in other
recycling programs, analyzing recycling models from eight different
industries within and outside of the United States with items ranging
from batteries to carpets, and seeks to highlight successes and
failures to inform the policy debate surrounding electronics recycling.
The final chapter examines the financing models considered by
NEPSI, a group convened to find a single national solution to
electronics recycling in 2001 by the EPA, which included industry,
state and local governments, recyclers, environmental organizations,
and others. NEPSI dealt only with residential electronics recycling for
which the management costs fall largely on taxpayers and local
government.3 Over time, the NEPSI stakeholders realized that
a national law might be necessary to force otherwise reluctant players
to do their parts to make a national system work.
---------------------------------------------------------------------------
\3\ The cost of recycling unwanted electronics from commercial and
institutional sources is a cost borne directly by those organizations
which, generally, are required to meet Federal hazardous waste
management requirements if they dispose of large quantities of
electronics that meet the test for hazardous waste. Electronics from
household and small quantity generators, by contrast, are exempt from
hazardous waste management requirements.
---------------------------------------------------------------------------
Conclusion
We applaud the committee for undertaking this important issue. We
are available to help educate and inform the Congress on this complex
debate and ensure that all stakeholder's interests are taken into
account in crafting a solution.
Thank you Mr. Chairman. I would be happy to address any questions
you or the members of the committee may have.
Mr. Gillmor. Thank you very much, Mr. Wu.
And Mr. Breen, who is the Deputy Assistant Administrator,
the Office of Solid Waste and Emergency Response of the U.S.
EPA.
STATEMENT OF BARRY BREEN
Mr. Breen. Thank you, Mr. Chairman and members of the
subcommittee.
EPA is pleased to be here today to address electronics
issues, including management, reuse, and recycling. I will
summarize my testimony, however I ask that my entire written
statement be submitted for the record.
EPA has been involved with the improvement of electronics
design and recovery for more than 8 years now. This involvement
was prompted by several EPA concerns, including the increased
growth of electronics waste, the potential for exposure to
contaminants contained in that waste if it is not properly
managed, and the lack of a convenient, affordable electronics
reuse or recycling infrastructure.
Electronics waste is an increasing portion of the municipal
solid waste stream, although it contributes less than 2 percent
of municipal solid waste. EPA estimates that in 2003
approximately 10 percent of consumer electronics was recycled
domestically. The remaining 90 percent of used consumer
electronics were stored, disposed of in landfills or
incinerators, or exported. Discarded electronic products
contain a number of substances that can cause concern if
improperly managed, including, for example, lead from cathode
ray tubes, and mercury in flat panel displays.
To address a number of these issues, EPA has engaged in a
series of partnerships with manufacturers, retailers,
recyclers, State and local governments, non-profits and other
organizations, and other Federal agencies to encourage the
improved design of electronic products, develop an
infrastructure for the collection and reuse or recycling of
discarded electronics, and encourage the environmentally safe
recycling of used electronics. For example, EPA funded and
participated in a process with electronics manufacturers,
government technology purchasers, and other organizations to
develop EPEAT, the Electronic Product Environmental Assessment
Tool. EPEAT will help large technology purchasers identify
electronic products that are designed in a more environmentally
friendly manner.
We are expecting that EPEAT will be operating by late 2005
or early 2006 when manufacturers that meet EPEAT criteria will
be able to certify their products. The initial products
eligible for EPEAT certification will be desktop computers,
laptops, and monitors.
In addition, EPA has entered into a voluntary partnership
with manufacturers, retailers, and State and local governments
to develop Plug-In To eCycling to raise public awareness on
electronics recycling and to increase recycling opportunities.
In the first 2 years of this initiative, more than 45 million
pounds of unwanted electronics were recycled by Plug-In
partners.
Further, EPA launched several pilot programs last year with
manufacturers, retailers, and local governments. The pilots
resulted in more than 11 million pounds of used electronics
being collected in retail stores. For example, New England area
Staples, Seattle area Good Guys, and all Office Depot
locations.
EPA has also partnered with the Federal Environmental
Executive to launch the Federal Electronics Challenge, the FEC.
The Federal Government is such a large purchaser of information
technology products, it is a voluntary partnership of Federal
agencies committed to develop a more sustainable environmental
stewardship of electronic products. Twelve agencies have signed
a Memorandum of Understanding on electronics management, and
together, we represent 83 percent of the government's
information technology purchasing power.
Finally, EPA continues to work with a wide variety of
stakeholders to further the reuse and recycling of electronics
products. We hosted a National Electronics Meeting attended by
representatives from industry, governments, and non-profits to
discuss electronics management issues. As a result of the
meeting, collaborative strategies are being developed that
include the development of standards for electronics recyclers,
a nationwide electronics recycling data repository, and a
multi-State pilot program to support electronics recycling in
the Pacific Northwest.
Mr. Chairman, that concludes my summary of some of the
efforts that we are taking to encourage electronics management,
reuse, and recycling.
I will be happy to answer any questions that you or the
other members may have.
[The prepared statement of Barry Breen follows:]
Prepared Statement of Barry Breen, Deputy Assistant Administrator,
Office of Solid Waste and Emergency Response, U.S. Environmental
Protection Agency
Mr. Chairman and members of the Subcommittee, I am Barry Breen,
Deputy Assistant Administrator for the Office of Solid Waste and
Emergency Response at EPA. Thank you for inviting me to appear today to
discuss electronics waste and EPA's interest in electronics product
design and recycling. Last year, we appeared before this Subcommittee
to tell you about the Resource Conservation Challenge (RCC). In 2002,
we set in motion a plan of action to renew the emphasis on resource
conservation in the Resource Conservation and Recovery Act (RCRA). At
least since 1976, RCRA has included among its purposes a goal to
reverse the trend of ``millions of tons of recoverable material which
could be used [being] needlessly buried each year.''
Today, the RCC has become a national program, challenging all of us
to promote recycling and reuse of materials and to conserve resources
and energy. One key area of focus is electronics.
The use of electronic equipment has grown substantially in recent
years. According to the Consumer Electronics Association (CEA),
Americans own some 2 billion electronic products--about 25 products per
household. Electronics sales grew by 11% in 2004, and the same growth
is expected again this year.
Why We Care About Electronics at EPA:
EPA has been actively involved in helping to improve the design and
recovery of electronics for more than eight years now. Our interest in
electronics stems from three primary concerns:
1) the rapid growth and change in this product sector, leading to a
constant stream of changing offerings and wide array of obsolete and
discarded products needing an appropriate response;
2) substances of concern present in many products which can cause
problematic exposures during manufacturing, recycling or disposal if
not properly managed--the presence of these constituents has sparked
the search for workable substitutes and development of better
management practices; and
3) the desire to help encourage development of a convenient and
affordable reuse/recycling infrastructure for electronics, with an
initial emphasis on TVs and PCs.
Here I would like to provide some illustrative facts:
1. Increasing volume of electronic waste: Consumer Electronics--
including TVs and other video equipment, audio equipment and personal
computers, printers and assorted peripherals--make up about 1.5% of the
municipal solid waste stream (2003 Figures). This is a small, but
growing percent of the waste stream. Consumer electronics have
increased as a percent of municipal solid waste in each of the last few
years that EPA has compiled data.
2. Recycling is limited: EPA's latest estimates are that in 2003
approximately 10% of consumer electronics were recycled domestically,
up slightly over previous years. The remaining 90% of used consumer
electronics are in storage, disposed of in landfills or incinerators,
or exported for reuse or recycling. EPA is now taking a closer look at
the fate of all electronics waste such that the Agency can better
account for the amount of electronic waste stored, disposed, or
exported. But anecdotal information suggests that nontrivial amounts of
consumer electronics are in storage or exported, rather than going to
disposal in landfills.
3. Substances of concern in electronics: While industry is making
progress in making its products with less toxic materials, many
products may contain substances of concern such as lead, mercury and/or
cadmium. For example, older cathode ray tubes (monitors) in TVs and PCs
contain on average 4lbs of lead, although there are lower amounts of
lead in newer CRTs. These constituents do not present risks to users
while the product is in use; indeed, they are there for a good reason.
Lead shields users from electromagnetic fields generated while the
monitor is operating. Mercury is used in backlights in flat panel
displays to conserve energy. But the presence of these materials means
that some electronic equipment may present a risk if not properly
managed.
What We Are Doing About Electronics:
We are engaged in several broad scale partnerships with
manufacturers, retailers, other Federal agencies, state and local
governments, recyclers, non-government organizations (NGOs) and others
to encourage and reward greener design of electronic products, to help
develop the infrastructure for collection and reuse/recycling of
discarded electronics, and to promote environmentally safe recycling of
used electronics. I'd like to give you a little more detail about each
of these efforts.
1) Greening Design of Electronics
EPEAT: EPA funded and participated in a multistakeholder and
consensus-based process, involving electronics manufacturers, large
government IT purchasers, NGOs and others, to develop the Electronics
Product Environmental Assessment Tool (EPEAT). It was created to meet
growing demand by large institutional purchasers for a means to readily
distinguish greener electronic products in the marketplace. EPEAT is
modeled on other environmental rating tools like the LEED's Green
Building Rating system. It is expected to gain wide acceptance in
purchases of information technology equipment by federal and state
government--and eventually by other large institutional purchasers of
IT equipment.
The EPEAT rating system establishes performance criteria in eight
categories of product performance, including reduction or elimination
of environmentally sensitive materials; design for end of life; life
cycle extension; energy conservation; and end of life management.
The multistakeholder team that developed EPEAT has reached
agreement on the main criteria that will be recognized for
environmental performance. Now, the tool is being readied for use; as
part of this effort, a third party organization will be selected to
host and manage the tool. The aim is to have the EPEAT system up and
running by December 2005 or January 2006--at which time manufacturers
will be able to certify their products to the EPEAT requirements and
purchasers will be able to find EPEAT certified products in the
marketplace. The first EPEAT certified products will be desktop
computers, laptops and monitors.
ENERGY STAR: EPA recently made its best known brand, the ENERGY
STAR label, available for external power adapters that meet EPA's newly
established energy efficiency guidelines. Power adapters, also known as
external power supplies, recharge or power many electronic products--
cell phones, digital cameras, answering machines, camcorders, personal
digital assistants (PDA's), MP3 players, and a host of other
electronics and appliances. As many as 1.5 billion power adapters are
currently used in the United States--about five for every American.
Total electricity flowing through external and internal power
supplies in the US is about 207 billion kWh/year. This equals about $17
billion a year, or six percent of the national electric bill. More
efficient adapters have the potential to save more than 5 billion
kilowatt hours (kWh) of energy per year in this country and prevent the
release of more than 4 million tons of greenhouse gas emissions. This
is the equivalent of taking 800,000 cars off the road.
On average, ENERGY STARqualified power adapters will be 35 percent
more efficient. EPA is promoting the most efficient adapters since they
are commonly bundled with so many of today's most popular consumer
electronic and information technology products.
DESIGN FOR THE ENVIRONMENT (DfE): Over the years, EPA's DfE program
has worked numerous times with the electronics industry to help green
the manufacturing of electronics as well as electronics products
themselves. DfE has worked with the industry on ways to green the
manufacture of printed wiring boards, assessed the life cycle impacts
of CRTs and flat panel displays and has also recently assessed the life
cycle impacts of tin-lead and lead-free solders used in electronics.
One important ongoing project in this DfE realm is the joint
government industry search for substitutes for tin-lead solder that
have acceptable engineering performance and environmental attributes.
The DfE LeadFree Solder Partnership is providing the opportunity to
mitigate current and future risks by assisting the electronics industry
to identify alternative leadfree solders that are less toxic, and that
pose the fewest risks over their life cycle.
The draft final lifecycle assessment report for the tinlead and
alternative solders is available now for public review.
2) Encouraging reuse and recycling, rather than disposal, at
product end of life Plug-In To eCycling: PlugIn To eCycling is a
voluntary partnership to increase awareness of the importance of
recycling electronics and to increase opportunities to do so in the
United States. Through PlugIn, EPA has partnered with 21 manufacturers
and retailers of consumer electronics as well as 26 governments to
provide greater access to electronics recycling for Americans. In the
first two years, the Plug In program has seen the recycling of 45.5
million pounds of unwanted electronics by program partners--all of whom
have agreed to rely on recyclers who meet or exceed EPA's ``Guidelines
for Materials Management,'' EPA's voluntary guidelines for safe
electronics recycling.
Last year, we launched a number of pilot programs with
manufacturers, retailers and local governments to create more
compelling opportunities for consumers to drop off our old electronics.
These pilots succeeded in collecting over 11 million pounds of used
electronics and demonstrating that, when the circumstances are right,
retail collection can be a successful model:
The Staples pilot in New England collected over 115,000 pounds in
testing in-store collection and ``reverse distribution'' making use of
Staples existing distribution network. In this pilot, trucks dropping
off new equipment at Staples stores removed electronics that had been
dropped off and took them to Staples distribution centers rather than
leaving the stores with the trucks empty.
The Good Guys pilot in the Seattle area collected over 4,000
TVs--double the quantity expected--by offering in-store take back and a
low fee for drop-off countered by a purchase rebate.
Office Depot and Hewlett-Packard worked together to offer free
instore takeback of consumer electronics in all 850 Office Depot stores
for a limited time period. It resulted in 10.5 million pounds
collected, more than 441 tractor trailer loads.
We believe these and other pilots sponsored by industry, states,
and recyclers are generating critical data which will inform
policymaking on electronics recycling. These pilots have proved crucial
to testing out what works, what doesn't, where collaboration is
possible and where it is not, what kinds of opportunities really get
the attention of the consumer and what kind of material the consumer
wants to recycle. And very importantly, what it costs to get
electronics from the consumer into responsible recycling.
Federal Electronics Challenge: The Federal Government is a large
purchaser of IT products. To help the Federal government lead by
example the Federal Environmental Executive and the EPA launched the
Federal Electronics Challenge (FEC). The FEC is a voluntary partnership
program designed to help federal agencies become leaders in promoting
sustainable environmental stewardship of their electronic assets. As
FEC Partners, federal agencies agree to set and work toward goals in
one or more of the three electronics lifecycle phases--acquisition &
procurement; operations & maintenance; and endoflife management. As of
this month, the FEC has 54 partners representing facilities from 12
Federal agencies. All 12 Federal agencies are signatories to a national
Memorandum of Understanding on Electronics Management and, in total,
represent about 83% of the Federal government's IT purchasing power.
Recent National Electronics Meeting: Last spring, EPA hosted a
National Electronics Meeting to take stock of where we are with our
electronics programs and talk with stakeholders about what else is
needed. The goal of the meeting was to identify collaborative
strategies that will contribute to effective management of used
electronics across the country. Nearly 200 representatives from
industry, government, and the nonprofit community participated in this
meeting.
A few of the collaborative strategies being developed include the
following:
Developing standards for environmentally safe electronics
recyclers and a process for certifying these recyclers. EPA plans to
take a leadership role in convening stakeholders to develop such
standards.
Further development of a centralized data repository for
electronics recycling to collect nationwide market data/share by
manufacturers and provide information and status on national, state and
local ewaste initiatives (provides data on waste, geographic summaries
and process/implementation data). This effort is being chaired by the
National Center for Electronics Recycling (NCER) in partnership with
EPA and other interested parties.
Piloting a private multistate ThirdParty Organization (TPO) to
support electronics recycling efforts in the Pacific Northwest. This
project will explore how a multistate TPO could assume responsibilities
on behalf of manufacturers, like contracting for recycling services
across state lines. This effort is being chaired by the NCER and the WA
Department of Ecology with eight electronics manufacturers.
Even if the key collaborations noted above are implemented, there
will remain some gaps in needed infrastructure. In the course of
developing, implementing, and sharing information related to key
infrastructurerelated collaborations, EPA looks forward to working with
stakeholders to identify and plan to address other
infrastructurerelated efforts.
How EPA will Work with Other Organizations Moving Forward:
EPA has been working with a wide range of stakeholders in a variety
of fora, both domestically and, as appropriate, internationally. This
approach has worked well, and we expect to continue to follow it in
partnership with other federal agencies such as the Commerce Department
and with the Federal Environmental Executive.
CONCLUSION
I hope that I have given you a sense of EPA's electronics goals and
how we work with partners throughout the product chain to achieve
shared responsibility for a greener, recovery-oriented product cycle. I
look forward to answering any questions you may have.
Mr. Gillmor. Thank you very much, Mr. Breen.
Let me begin with a question for you, Mr. Breen.
The predominant Federal law that governs the disposal of
solid and hazardous waste, the Resource Conservation Recovery
Act, sets minimum Federal standards for the States to follow.
In your opinion, should the States be allowed to act on their
own with some sort of Federal guidance? Is that advisable? Or
would you rather see the Federal Government give a national
structure to electronic waste recycling?
Mr. Breen. We know certain things about the fate of
electronics in landfills. The typical landfill Ph is between
6.8 and 7.0, which is essentially about neutral. And we know
that that consequently does not lead to large leaching from the
metals in the electronics. We are thankful for that. However,
leaching could occur even at those fairly neutral Ph levels. Of
the, approximately, 2,000 landfills in the United States that
take municipal solid waste, most are now in compliance with the
1991 standards that call for a leachate collection system, so
even if there were leachate, that it would typically be
collected by the leachate collection system. If the leachate
collection system still missed it, what we find is that the
leachate that would reach ground water would typically be about
twice the drinking water standards, about two times drinking
water standards. But since we think the dilution factor would
be 10 to 1,000 times, States are in a fairly good situation to
make their own decisions on this in terms of what additional
standards are needed for landfills. We understand four States
have banned cathode ray tubes from municipal solid waste in
their State landfills. And that is a decision we respect, but
we also respect the decision of other States that, given those
facts that we and they see, that other means are necessary or
adequate to deal with this issue.
Mr. Gillmor. So basically, the evidence is there that is
necessary at this point.
Mr. Breen. Well, what I have laid out for you is certainly
evidence about landfills. There are concerns about incinerators
and other waste to energy streams, and if certain materials
were put into high temperatures and then incinerated, you could
have concerns that we would have to deal with, not only from an
environmental point of view, but just from an operational point
of view in terms of gumming up the operations of the system.
And then there are actually concerns about resource
stewardship, just taking a good common sense approach to take
care of valuable things. And in fact, Congress seems to have
called on that as a national policy when it wrote the Resource
Conservation and Recovery Act.
So the environmental issues are just one piece of a far
larger and, as Mr. Wu said, more complex issue than just the
environmental piece.
Mr. Gillmor. Let me ask Mr. Wu, and you can, if you wish,
jump in with an answer to this, also, Mr. Breen, but I expect
there will be some discussions about who should bear the
greatest responsibilities in an electronic waste and recycling
regime. Do you have an opinion as to where you think the most
sense for this to be placed is? Since individuals have to make
the choice to give up their unused electronic equipment, what
responsibility do they bear? What responsibility should the
manufacturer or retailer bear in this effort? And what role
does public education play in the process?
Mr. Wu. Well, I think that, obviously, as Congress moves
forward, there should be a balanced approach taken. I think
that all of the stakeholders want to see an equitable, a fair
and balanced process, one in which one party is not held
harmless over another. We see this issue being complicated by
business models for certain industries. You know, we have an
industry, for example, who are computer producers in which they
are facing global competition. In order to be as strong as
possible economically, they need to have huge economies of
scale and the razor-thin margins that they have to protect may
not be enough to sustain an advanced recovery fee that would be
imposed upon the consumer, especially if the international
competitors and manufacturers may not be held to such a same
standard.
The same with the retailers. The retailers, especially
smaller stores, such as RadioShack, don't have the ability to
inventory and warehouse a number of the disposable equipment
that may have been purchased there, and so that places an
inordinate burden on the brick and mortar stores. And then
there is the issue about the purchase and collection of the
fee, should there be one imposed, and Internet-based systems
sellers, such as Dell, Gateway, they may have an advantage over
the Best Buys and others that do sell. So because of the
business models, because of the parochial concerns each of the
manufacturers, the retailers, the recyclers, the consumers may
have, the search for a balanced approach is paramount, but
also, quite frankly, has been a little elusive.
Mr. Gillmor. Thank you very much.
Ms. Schakowsky from Illinois.
Ms. Schakowsky. Thank you, Mr. Chairman.
I apologize to our witnesses. As you probably heard, we
have a full markup going on in committee, and Ms. Solis, the
ranking member, is, I believe, speaking on the floor. So I
appreciate, though, being able to ask a couple of questions. If
they are redundant, again, I apologize for that.
I guess this is for you, Mr. Breen. The EPA, does it have
current authority to regulate e-waste?
Mr. Breen. It is actually a more complex question than it
might at first appear. We have authority over hazardous waste,
and we have not listed any of the typical items that you would
think of. We haven't listed cathode ray tubes. We haven't
listed cell phones. We haven't listed anything like that as
listed hazardous waste. There are some tests that would suggest
that some components would fail the toxicity tests, one of four
characteristics of hazardous waste: toxicity, corrosivity,
ignitability, and reactivity. In some cases, there is some
evidence that some components would fail the toxicity test. But
I think a harder question is whether it makes sense to approach
it in that way or to approach it in a far more collaborative
and flexible way, given what that means. And----
Ms. Schakowsky. Well, let me follow that up. It kind of led
into what I wanted to get at.
In a report by EPA regions four and five, the researchers
did find sufficient evidence that discarded electronic devices
with lead has a potential to be a hazardous waste. And every
device, lead concentrations exceeded the concentrations above
the threshold in at least one test, and most devices leached
above the threshold in a majority of cases. So if they are not
considered hazardous waste and you don't regulate e-waste, then
what is the consequence of having that stuff leaching into
our--I mean, don't we have to do something?
Mr. Breen. Okay. Thank you.
It turns out that in the amounts that would typically be
produced by households and small businesses, for example, that
sort of volume of electronic waste, so far, we are not finding
that if they went to municipal solid waste landfills that the
municipal solid waste landfills are incapable of taking them.
There may be other reasons to deal with them, but we are not
finding that MSW landfills are a problem if the waste goes
there, and it has to do with the Ph of the landfill. It tends
to be a Ph that doesn't trigger leaching in worrisome amounts.
It has to do with the leachate collection systems that are in
place, and then with the typical dilution that would happen at
the levels at which the waste would reach groundwater, if it
ever did.
Ms. Schakowsky. Now but we are expecting that there is
probably going to be increased quantities of these things, do
we not, as we go forward. So I understand we are at the
beginning of a process now to consider what to do, but looking
ahead, do you see that we are going to, fairly quickly, reach
beyond that point? I am looking at some of the questions that
Hilda had. Her District has three super fund sites and several
operating landfills. How do you anticipate the growing amount
of e-waste will impact these sites and their cleanup?
Mr. Breen. In fact, it does feel, on this one, like a
little bit of a shooting at a moving target. We are trying to
find out more about a problem, as the problem is evolving.
Ms. Schakowsky. Sure.
Mr. Breen. For example, a cathode ray tube several years
ago probably included 4 pounds of lead as shielding. The lead
is put in for very good reasons. It is shielding the cathode
rays so that the user isn't exposed to all of those cathode
rays coming at the user, and the lead is put in for very good
reason. Today, cathode ray tubes probably have about 2 pounds
of lead, but what we are seeing is that more and more computers
are moving from cathode ray tubes to LCD displays, liquid
crystal displays, in which lead is virtually non-existent
except in the solder and similar connections. But then the
issue becomes Mercury.
Ms. Schakowsky. Right.
Mr. Breen. A typical LCD display has, say, for example, 8
Mercury-containing devices in it, with each one having about
3.5 to 12 milligrams of Mercury. And to give you a sense, a
typical fluorescent light bulb, like the ones in the ceiling of
this room, would typically have about 3.5 to 4 milligrams of
Mercury in each one. So the problem is evolving, even as we are
trying to research what it is.
Ms. Schakowsky. Sure.
Mr. Breen. It makes it really hard to predict.
Ms. Schakowsky. So you are saying the technology is
changing, so we don't even know what the component----
Mr. Breen. The technology is changing, and the consumer
demand is changing. So, for example, what we are seeing is
convergence where, instead of having three devices, like I
walked in today with a Blackberry in one pocket and a cell
phone in another----
Ms. Schakowsky. Right. Right.
Mr. Breen. [continuing] what we are seeing is--by the way,
I should turn all of them off, Mr. Chairman, but what we are
seeing is them merging and so that you have one device, and
that has issues.
Finally, the international market seems to be driving some
of this, and people are coming into compliance with
requirements that other governments have already put into
place. So it is a little hard to make predictions.
Ms. Schakowsky. Thank you.
Mr. Wu. Ms. Schakowsky, if I could also add to Mr. Breen's
statement.
One of the points of consensus in all of our Technology
Administration activities in contacting the affected
stakeholders was that product stewardship should be a priority,
and product stewardship in terms of design in trying to have
industry voluntarily move toward less toxic materials to reduce
the impact to our environment, our industry is already doing
that, and we are seeing great strides in what they are doing in
terms of design and trying to reconfigure for environmentally
friendly materials. EPA has a terrific program to help
incentivize that kind of design function with the E-Star energy
efficient coding to make sure the consumers know. So it
becomes, really, almost a Federal seal of Good Housekeeping
Seal of Approval that this product is energy efficient, and
therefore it becomes more marketable. And so industry is moving
forward in trying to do that voluntarily but also with the
incentives that EPA is putting forward, we expect, and hope,
and the industry predicts, that there will be less, even though
we see a proliferation of electronics products, we will see
less of an impact on the environment.
Ms. Schakowsky. Thank you.
Mr. Gillmor. Thank you.
The gentlelady from California.
Ms. Bono. Thank you, Mr. Chairman.
Mr. Breen, I understand that counsel of State governments
has been working with 10 eastern States and the Northeast
Recycling Council to come up with a regional electronic waste
effort.
I was interested in EPA's efforts to pilot a private,
multi-State, third party organization to support electronics
recycling efforts in the Pacific Northwest. Has EPA worked with
the States in the northeast? And why does EPA consider regional
approaches rather than a national one to be meaningful ways to
approach these issues recognizing the interstate nature of
electronic sales and product take-back and refurbishment
programs?
Mr. Breen. The northeastern project that you are describing
is one that we are interested in finding out more about. I
think even this month there are new reports and new
announcements about that work. I am not entirely sure we know
whether regional or national or both.
Mr. Gillmor. I apologize. We are going to have to recess
briefly. And----
Ms. Bono. Mr. Chairman, if I might, they have been
answering so many of my questions as a member of the working
group, and understanding we are running up and down, I can
submit my questions in writing to the witnesses so they don't
have to stick around, if I am the last questioner.
Mr. Gillmor. Well, I think we have two more. We have Ms.
Solis and Mr. Otter.
Ms. Bono. Okay. I am sorry for trying to chair the
committee.
Mr. Gillmor. But however you want to do it, but I
appreciate that. But we better go vote.
[Brief recess.]
Mr. Gillmor. The committee will again come to order, and we
will resume the questioning by the gentlelady from California.
Ms. Bono. Thank you, Mr. Chairman.
I believe Mr. Breen was in the middle of a brilliant answer
at the time we broke.
Mr. Breen. Thank you.
I understood your question to ask whether regional versus
national solutions were preferable.
Ms. Bono. It seemed that the EPA had sort of endorsed
regional ideas before, and I was wondering why that would be
different than a national solution.
Mr. Breen. Thank you.
I don't think we intended to endorse one to the exclusion
of the other. We certainly worked with some regional
possibilities in some of our pilots. And there are good reasons
to think that regional might be better, because rural areas
might have different ways to collect than dense urban areas.
But I don't think we are in a position to say the jury is in,
that one is necessarily better than the other.
Ms. Bono. Well, thank you.
Can you comment a little bit on California's program so
far, then?
Mr. Breen. Thank you.
I don't think the jury is in on that one, either. I think
we are thankful that States, including California and Maryland
and Maine, have stepped forward to try some actual processes,
and we can all benefit from it. And there were good reasons for
adopting each one in each case, even though they are different
among them. But I don't think we know enough to say that there
are enough results that you could make comparisons yet.
Ms. Bono. Okay. Also, I know that some of the data that we
are operating off of is old. It is based on 1999 figures. Is
that true? And if so, what do we need to do to update our
information?
Mr. Breen. I am not sure which 1999 figures I can help you
with.
Ms. Bono. 1999 National Safety Council report, which
differs from the EPA's 2001 and 2003 Municipal Solid Waste
Facts and Figures report.
Mr. Breen. We do try to do Municipal Solid Waste reports
every 2 years, and the 2003 is actually our newest, because it
takes us that amount of time to assemble. I would be happy to
get back to you on the 1999 National Safety Council report, if
there is anything we can offer on that.
Ms. Bono. Thank you.
Mr. Wu, you mentioned that you are involved in the design
and development of new technologies, specifically, say, cathode
ray versus the LCDs and all. Are there regulations, is there
something here, that Congress ought to be doing to help with
that? Or right now, do you believe we are set with all that you
are doing in advising in that role?
Mr. Wu. Well, I think that developing incentives in the
private sector through programs that reward environmentally
friendly designs, such as EnergyStar, the EPEAT, the Green
Suppliers Network, all of those incentive programs at EPA and
overseas are very helpful in pushing industry to develop
standards. Mandating design standards generally tend to be
difficult, although some States have done so. The standards
development process within the United States is generally one
that is voluntary and market-driven. And so I think that design
mandates by Congress could be problematic and may inhibit
innovation in the long term.
Ms. Bono. Thank you.
Thank you, Mr. Chairman. I yield back.
Mr. Gillmor. And the chair recognizes the other gentlelady
from California.
Ms. Solis. Thank you. Thank you, Mr. Chairman.
I would like to request unanimous consent to submit two
statements by members of our committee, Congresswoman Lois
Capps and Congresswoman Tammy Baldwin.
Mr. Gillmor. Without objection, so ordered.
Ms. Solis. Thank you.
And I would like to ask Mr. Breen a question. This is
somewhat unrelated to this topic, but nevertheless, you might
be aware of it.
On June 16, Mr. Bishop and I sent Administrator Johnson a
letter requesting communications regarding the CHEERS, a human
exposure study. We did receive a videotape presentation that
the Administration made, but we are still awaiting other
communications, written statements that were made. And I wanted
to ask you, we made a formal request for that on June 27 of
this year and was wondering if you could tell me if we would be
able to expect a full response.
Mr. Breen. I will have to ask our folks to get back to you
on that. I don't have that myself.
Ms. Solis. Okay. Thank you.
Then I would like to go back to our subject matter here and
ask you, in May 2004, EPA, through the Resource Conservation
Challenge, noted that they were failing in their own national
recycling effort. They had set a goal for 35 percent. Where are
you at this stage?
Mr. Breen. The national recycling goal is 35 percent for
municipal solid waste, and we hope to reach that in the next
several years. At the moment, we are in the low 30's, and
actually, there is a fairly wide variation, as you can imagine.
Some communities are getting much higher than some others. Some
communities, for example, are hitting recycling rates in
between 55 and 60 percent, which is really amazing. But
nationally, we are still in the low 30's.
I honestly don't know if we are going to be able to hit 35
percent as a Nation. It turns out that that number is very
sensitive to things that nobody in government has much control
over. If the economy goes down, people tend to hold on to more
things and throw out less, and so the recycling rate actually
goes up in bad times and down in good times. And it is really
hard to find yourself wishing that the economy will go bad in
order for my particular program to hit a higher recycling rate.
So it is affected by a lot of things that we don't have that
much control over.
Ms. Solis. And what type of monitoring are you doing to at
least report back to us? I mean, if we are not going to achieve
that goal, then what kinds of measures are you undertaking to
do that?
Mr. Breen. Thank you.
We actually put that measure in our annual report, so we
report to you once a year on what the annual recycling rate is,
the most recent data we have. And we are doing as much as we
can think of, public service announcements. We are trying to
make it easier. We are offering technical assistance. We have
wonderful partners in the States on this. It is often to their
advantage, not just good public policy, but financial advantage
to State and local governments. And we try to help them in any
way we can.
Ms. Solis. In talking about recycling value and, you know,
depending on how the economy is, just to get a sense from you,
what would the value be for products like a cell phone when we
know, for example, aluminum cans are 10 cents.
Mr. Breen. Right.
Ms. Solis. A cell phone, a full size computer, a laptop
computer, an average sized telephone?
Mr. Breen. The numbers I have most confidence in are in the
recycling costs and value of desktop computers. And naturally,
there is a fair amount of regional variation, and it depends on
various things. But a good rule of thumb is that to recycle a
desktop computer costs about $15 and that the value of the
materials recovered from it are anywhere between $1 and $2.50.
And obviously commodity prices change from time to time on
their own, but $1 to $2.50 seems like where they typically
stand. So there is that delta.
Ms. Solis. And does that vary? Given that there are some
States that are already moving in this direction, is there a
sense of how that looks? Can we get information on that?
Mr. Breen. I will get you whatever we have. I don't know
how refined the data is to give it to you State by State, but
if we have got something, we will get it to you.
Ms. Solis. Okay. Very good.
One of the other questions I had was regarding what EPA is
doing to educate under-served communities about these kinds of
programs that are necessary. Language communities oftentimes
are not fully aware of these programs, and perhaps both of you
could address that, whatever efforts that are being undertaken
by Commerce as well as EPA to reach out to these communities.
Mr. Breen. We would like to reach them, just like everybody
else, and we often----
Ms. Solis. Is there any effort, in particular?
Mr. Breen. We often work directly with local governments
and State governments, rather than ourselves trying to do
anything directly. This is really 53 governments plus us.
Ms. Solis. And is there any kind of information, though,
that you could get from them? I mean, that would be a specific
question that you may be able to ask or at least provide us
with the information, because I know some States or locales put
information out in different languages.
Mr. Breen. I will try to follow-up on that.
Mr. Wu. The EPA oversees the programs, and so we would be
happy to assist EPA through either a minority business
development administration or any other ways to make sure that
the word gets out.
Ms. Solis. And I raise that, because in my own District, we
have a very high percentage of Asian pacific islanders who are
heavy users of computer equipment, and I have heard from our
constituents that this is a concern and something that they
definitely would like to see addressed.
Mr. Gillmor. We need to recess once more.
[Brief recess.]
Mr. Gillmor. The subcommittee will reconvene, and we will
resume the questioning by the gentlelady from California.
Ms. Solis. Thank you, Mr. Chairman.
Very briefly, I wanted to get a better understanding of the
European Union and what they are currently doing in terms of
eliminating lead in cell phones by 2006. That is a position
that they are taking. Is EPA looking at any similar type of
procedures or rules?
Mr. Breen. We are definitely watching with great interest,
as everyone is, what the European Union is doing. We don't have
any rulemaking development effort underway on that issue
ourselves, but on its own, that can drive a global market to do
things that it wouldn't otherwise do, just by having the
European Union take on that work.
Ms. Solis. Is that something of serious concern, though, to
possibly look at that more closely and----
Mr. Breen. Well, we are certainly studying it, but in terms
of developing a rulemaking on it, I think it would be premature
to take that up.
Ms. Solis. Thank you.
Mr. Wu. Congressman, if I could add, related to the EU
regulations and rules, the industry has voiced a concern about
what California did in adopting wholesale the Ross directive,
and the concern rests in adopting the EU standard, a standard
in which American industry didn't have an opportunity to have
notice, comment, or go through the process, which our standards
development process does, which is based on a transparency, due
process, and openness, and an interaction in order to draw to a
consensus for a standard. Not to debate the merits of the Ross
directive, but the fact that California adopted wholesale a
foreign standard, international standard has raised concerns
within industry.
Ms. Solis. So has Congress taken a position on whether or
not to look at these issues regionally, or----
Mr. Wu. For a State to adopt a foreign international
standard without an opportunity for American businesses to make
comment, it would be part of the process.
Ms. Solis. Well, it is part of the, you know, legislative
process in the State, and I know that. We can hear later from
our witness from California to talk more about that.
Thank you.
Mr. Gillmor. Very good. Thank you.
And we will now go to the gentleman from Idaho, Mr. Otter,
and then to our second panel.
Mr. Otter.
Mr. Otter. Thank you very much, Mr. Chairman.
Mr. Breen, under the project Plug-In To eCycling initiative
involved several programs that seem to be somewhat successful.
I think you mentioned them in your opening statement, Staples
in New England, and Good Guys in the Pacific Northwest, in a
nationwide program that was initiated by Hewlett Packard and
Office Depot. And at least the data that I have seen or has
been made available to me is that these voluntary programs were
not only consumer-friendly, but they were fairly successful.
Would the Environmental Protection Agency envision a program
that had flexibility for the States or flexibility for the
regions? Probably a follow-up question to the gentlelady from
California's question relative to a nationwide standard.
Mr. Breen. It seems as though there is a natural balance
that will need to be struck between flexibility on the one
level and at the same time predictability and some sense of not
having 50-some different regimes at 50-some different places.
But how that balance is struck and where is a hard one to know
right now. We are getting success in collaborative efforts, and
those collaborative efforts have had a wide variety of
stakeholders joining in on them, and that seems to have made an
important difference.
Mr. Otter. Hasn't the EPA been successful? Maybe it is the
Department of Commerce. Some Federal Government agency has been
successful in recycling other products that were injurious to
the solid waste disposal facilities? Batteries? Tires? Freon in
refrigerators?
Mr. Breen. Surely, yes. And in fact, one thing that you may
be thinking of is we now have a government contract, a Federal
Government contract where various Federal agencies can buy into
one particular contract to make sure that when they dispose of
their computers, they are doing it safely and properly and so
that not every agency has to replicate that. And we have
standards for safe recycling that we would share with anyone.
Mr. Otter. But that is a private sector operation.
Mr. Breen. Actually, the one that we have would be--it is
the private sector who is doing it, but it is a government
contract that would make it available.
Mr. Otter. Right.
Mr. Wu, are we running toward a conflict of national
policy? Lord knows, we have spent a lot of money trying to get
the United States wired, higher in technology and broadband use
than anybody else. We spent a lot of money doing that and a lot
of U.S. dollars. And plus, at the same time, we have tried to
lessen the tax burden on the private sector and on the
individual user of this high tech. Do we have national
government policies here in conflict if we are now looking at
taxing a new tax in order to diminish whatever impact the use
products may have?
Mr. Wu. Well, Congressman Otter, I don't think anyone is
necessarily advocating for a tax, but I understand your point
about the conflict within the policies as we move forward to
have an interconnected and a wired Nation. I think that, you
know, the President has clearly stated his goal for having the
Nation broadband accessible by 2007, and we are moving forward
with those efforts. We are making great advances in making sure
that under-served populations are part of the 21st century
economy and have the tools in order to provide that.
Mr. Otter. I think I understand where you are going, and I
appreciate that, but I am running out of time here, and I have
one other question that I wanted to ask. And that is, those who
benefit should do the paying, and I am kind of a user pay kind
of person. I think if I pay gasoline tax, it ought to be used
to lay asphalt on the highway. If I use my computer, and I am
the person that benefited or if I sold the computer and I am
the person that benefited profit-wise from it, then I ought to
have a responsibility for that. And I am aware now that, for
instance, we have got high-definition television coming at us,
and so there is probably going to be an onslaught here in a few
years of a lot of old television sets looking for a place to go
to surrender for the rest of eternity. But we also know that
not very many of those, if any of them, are being made in the
United States anymore. In fact, we have got international
commerce initiatives, like the Caribbean Basin Initiative, that
says if you build it down here, you can ship it into the United
States for free. Whenever the cost of this program finally hits
the marketplace for disposal, do you envision that having to
change our trade policies or importation policies?
Mr. Wu. If the policies are done fairly and everyone is
held harmless----
Mr. Otter. Well, we are going to argue all day long about
fairness. I don't think there is any fairness in CAFTA at all,
or NAFTA anymore. But what I am saying is many of the trade
policies that we have already established are going to prohibit
any kind of change in the trade that we had established prior
to establishing a new national policy on disposal of high-tech
equipment, wouldn't you agree?
Mr. Wu. Well, I think that the industry stakeholders and
others would be willing to have a cost share that is equal. But
there is a concern about the competitiveness. If international
companies and manufacturers are able to bring in their product
without an ARF or some sort of fee to help finance, you know,
the recycling, then it becomes difficult, and then it becomes a
competitiveness issue.
Mr. Otter. Maybe, if I could just get a yes or a no on
this, would you be more in favor of a private sector program to
solve this problem or a government program to solve this
problem?
Mr. Wu. I think that it would be optimal to have a market-
driven industry-related process.
Mr. Otter. Thank you. Thank you. I appreciate that.
Thank you, Mr. Chairman.
Mr. Gillmor. Thank you.
And that will conclude our first panel. Mr. Breen, Mr. Wu,
thank you very much for that very helpful testimony.
And we will invite our second panel to come to the witness
table.
And we would request, Mr. Wu and Mr. Breen, if members of
the committee could submit questions to you in writing and you
could respond, thank you very much.
We have representatives on this panel from the Maryland
Department of the Environment and the Maine Department of
Environmental Protection as well as the California Integrated
Waste Management Board. And I will start with Kendl, did I
pronounce that right?
Mr. Philbrick. Yes, sir.
Mr. Gillmor. Good, I usually don't. Kendl Philbrick, who is
the Secretary of the Maryland Department of Environment.
STATEMENTS OF HON. KENDL P. PHILBRICK, SECRETARY, MARYLAND
DEPARTMENT OF THE ENVIRONMENT; HON. DAWN R. GALLAGHER,
COMMISSIONER, MAINE DEPARTMENT OF ENVIRONMENTAL PROTECTION; AND
HON. ROSALIE MULE, MEMBER, CALIFORNIA INTEGRATED WASTE
MANAGEMENT BOARD
Mr. Philbrick. Thank you, Chairman Gillmor and Ranking
Member Solis for this great opportunity to testify before you
and the rest of the committee about Maryland's approach to
dealing with e-waste.
I would also like to commend you for conducting these
hearings. As Ranking Member Solis had mentioned, this is a
rapidly growing problem in all of the States within the United
States.
I am going to be brief in my remarks, but I would like my
whole testimony, if you don't mind, to be submitted for the
record.
Mr. Gillmor. Without objection, it will all be entered in
the record.
Mr. Philbrick. Thank you.
A little background on the status of eCycling in Maryland.
Electronics recycling, or eCycling, began in Maryland in
October of 2001 with the EPA Region 3 eCycling Pilot Project,
which gave Maryland and the other Region 3 States the funding
and other share ideas to begin collection and recycling of
these valuable materials.
Since the end of the EPA Region 3 project, MDE, the
Maryland Department of the Environment, has continued to
provide modest State cost share support to local governments.
In summary, over 3,900 tons of electronics, including
televisions, computers, and other electronics have been
collected through a total of 63 one and 2-day events, three
curbside events, and seven permanent or ongoing programs.
The legislative history here in Maryland goes as follows.
House Bill 375 entitled ``Environment Statewide Computer
Recycling Pilot Program'', signed into law by Governor Ehrlich
in April of 2005, defines certain terms and requires a
manufacturer to register with MDE and pay a registration fee.
The initial registration fee is $5,000, and a
manufacturer's renewal registration fee will be reduced to $500
in subsequent years if the manufacturer has implemented a
computer take-back program that is acceptable to MDE. These
fees will be used to provide grants to counties and
municipalities for implementing computer-recycling programs.
The law requires MDE to study and compare the environmental
and public health impacts of disposing and recycling cathode
ray tubes and review the effectiveness of the pilot program in
diverting computers and computer monitors from disposal in
landfills in the State through a report of its findings to the
Maryland General Assembly by December 1, 2008. The law itself
is scheduled to sunset December 31, 2010.
MDE is currently identifying computer manufacturers and
drafting regulations to clarify certain language in the new
Statewide Computer Recycling Pilot Program law. Challenges with
the implementation of this law include: one, uncertainty
regarding the number of computer manufacturers; two, inability
to determine if the registration fees will be sufficient to
even fund the pilot program; three, acceptability of
regulations for bill implementation; four, whether the
registration fee will encourage more computer manufacturers to
implement computer take-back programs; and five, impacts of
other States and Federal legislation initiatives on Maryland's
law; and last, the influence that the focus on computers may
have on collection of other electronics.
The Federal role, as we see it.
MDE sees the need for Federal assistance in the following
areas: a uniform national definition for electronics waste;
evaluation of the economics and the environmental impacts of
electronics recycling versus disposal to waive the true costs
of electronics waste recycling; useful data on the number and
types of stored electronics to identify the costs of recycling
these historic materials and estimating future costs; national
outreach and education programs to increase awareness of the
benefits of eCycling; standards for electronics recyclers to
protect workers and public from physical and chemical hazards
associated with eCycling; and last, Federal funding for solid
waste and recycling programs, which are not currently
supported.
Although the efforts of the National Electronics Product
Stewardship Initiative, NEPSI, have been deemed noble, that
collaboration did not result in a consistent and effective
national solution to the problem of electronics waste
management and recycling. The passage of significant
electronics waste legislation in California, Maine, and now
Maryland shows that there is a current demand for government
action. Waiting for a national one-size-fits-all approach is
inadequate.
As more citizens demand electronics recycling, additional
States will be forced to pass legislation, continuing the
hodgepodge, perhaps, of State laws. Electronic industry
representatives are partnering more and more with State
governments to find individually legislative solutions suitable
to the demands and the challenges of the electronic waste.
Most of us are watching the progression of the European
Union's requirements related to electronic waste, and some
manufacturers are already responding with new, less hazardous
processes and materials.
In conclusion, Maryland's law is new, and it will take
several years for the State to determine its impact. It is
important for States to stay involved on the national level and
share amongst each other the successes and its challenges. As
Governor Ehrlich is a very strong proponent of recycling,
Maryland offers support to Congress in its efforts to sort out
electronics waste and recycling issues.
Thank you again for the opportunity to address you.
[The prepared statement of Hon. Kendl P. Philbrick
follows:]
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Mr. Gillmor. Thank you, Mr. Philbrick.
And we will go to Dawn Gallagher, who is the Commissioner
of the Maine Department of Environmental Protection.
STATEMENT OF HON. DAWN R. GALLAGHER
Ms. Gallagher. Good afternoon, and thank you for having us
today.
I would like to briefly talk about the recycling program
Maine is using. It is based on a market approach without
creating a new bureaucracy.
Maine's approach is as follows. An individual has a TV or
they have a CRT that they want to get rid of. They take it to
their town. The town can either have a once-a-year, once-a-
month, or once-a-week pick up. The town then sends the disposal
of these items to a consolidator. The consolidator keeps track
of the manufacturers, and the manufacturers are then billed
either for the charge of transporting the items to the
consolidator or for the actual recycling. The manufacturer has
an opportunity to either take back the CRTs or televisions or
to have the consolidator have them recycled. So there is a lot
of flexibility that is being done.
We believe that this is kind of a paradigm shift that the
government is responsible for all end-of-life management of
solid waste generated by households. It takes on a new
approach. Our stakeholder group, over the last year and a half,
looked at three different methods and came up with the shared
responsibility.
In this shared responsibility, manufacturers are
responsible for either taking back the items or having them
recycled through the consolidator. The individual is
responsible for getting the computer or having the computer
picked up as waste at their own residence, and then the
municipality is responsible for getting it to the consolidator
itself.
The advantages are this. From a manufacturer's standpoint,
there is flexibility. They can either recover their own waste,
or they can consolidate and have the invoice being sent to
them. They can also change their method. Maine's rules allow
for manufacturers to get credit for recycling programs, such as
those that are done at Staples and other retailers.
If there is a consolidator involved, there is economies of
scale, of shipping, and other issues so that we are minimizing
the price to the manufacturers as well as to individuals. We
have a fair distribution of orphan costs. The manufacturers pay
orphan costs based upon the amount of market share that they
have in Maine. And they pay only their fair share. The State
limits the costs and we pick the low bidders for
consolidations. And as a matter of fact, we have consolidators
that are waiting in the wings to help us out with this
endeavor.
Municipalities have a flexibility, which is in the
collection and the transportation system. They can either pick
up things at roadside, or they can have them done at their
landfills or transfer stations, and there are limited costs
involved. If municipalities want, they can have an end-of-life
fee.
For the consolidators, there is a limited risk. The State
reimburses them for abandoned wastes and also provides new
business opportunities. And for the State, there is no new
bureaucracy, and we have the safe handling of consumer goods.
So what we have is something that provides an incentive for
the business to embark on a smart production or a cradle-to-
cradle philosophy. And it follows the hierarchy that we like to
use in Maine for our waste, which is reduce, reuse, and
recycle. It reduces the landfills and also increases its
capacity, and it reduces toxicity.
We believe that there should be Federal standards, as were
mentioned. We also believe that Maine's model may provide the
most optimal method of combining a market-based approach with
product stewardship.
Thank you very much.
[The prepared statement of Hon. Dawn R. Gallagher follows:]
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Mr. Gillmor. Thank you very much.
And we will go to Rosalie Mule of the California Integrated
Waste Management Board.
STATEMENT OF HON. ROSALIE MULE
Ms. Mule. Thank you, Mr. Chairman and Ranking Member Solis,
for inviting me here today to testify on this important issue
of e-recycling. And I do appreciate the opportunity to be here
before this subcommittee.
I am a member of the Integrated Waste Management Board, and
I am here today to discuss California's e-recycling program. I
will try to be as brief as I can in my remarks, and answer----
Mr. Gillmor. Before you get started, so that I don't have
to interrupt you in the middle, it appears we are going to have
to go vote, and then we will come right back.
Ms. Mule. Vote? Okay. Thank you.
Mr. Gillmor. Well, I was looking at the Clerk down at the
desk. He was making motions like we are going to vote. Oh, they
passed another amendment. Nevermind.
Ms. Mule. Okay.
Mr. Gillmor. Go ahead.
Ms. Mule. In 2001, California clarified that cathode ray
tubes are presumed to be hazardous waste and could not be
disposed of in landfills. In a survey commissioned by the
Integrated Waste Management Board, it was estimated that more
than 6 million old TVs, computer monitors, and other electronic
devices were being stockpiled in California homes alone. This
created a management and disposal issue that had to be
addressed.
In response to this dilemma, the Integrated Waste Board, as
well as other State agencies, local jurisdictions, industry
representatives, environmental groups, and other stakeholders
worked at various levels to seek a solution. Many options and
scenarios were explored, including those discussed at the
national level. In 2003, the California State legislature
passed Senate Bill 20, the Electronic Waste Recycling Act. The
first of its kind in the Nation, this law established a funding
mechanism to provide proper end-of-life management for certain
electronic products from all consumers, including households,
businesses, and schools.
The goal was to involve all stakeholders, including
industry, State and local government, and recyclers in the
system to remove the stockpiles and establish an
infrastructure, which would provide a sustainable, convenient
management option for these items. The program has flexibility
to add and remove electronic products to keep up with the rapid
growth and change inherent in this industry. It also has
provisions to address both the fee paid by consumers as well as
the payments made to collectors and recyclers to account for
fund condition and recycling markets.
At the State level, the program is a cooperative effort
between the Waste Board, the California Department of Toxic
Substances Control, and the State Board of Equalization. In
short, the Act calls for a $6, $8, or $10 fee paid by consumers
of certain covered electronic devices at the time of purchase.
These funds are used to make payments to authorized collectors
and recyclers of covered electronic devices and reimburse the
net cost of proper material management.
In the field, the system, which is truly a partnership of
stakeholders, provides for financial relief to local
jurisdictions who have borne the burden of management before
the passage of the Act, cost-free recycling opportunities for
consumers throughout the State, reduction and prevention of
illegal dumping, and elimination of the stockpile of waste
monitors and TVs.
Our program began on January 1 of this year, and the
implementation is proceeding as planned. Our projected revenue
for the first year is $60 million, and our first quarter
revenues, which was through March 31, we collected $15 million,
which places us in line with our projections. We have received
over $5 million in recycling payment claims, and we have paid
out over $2.6 million to recyclers.
The first quarter saw more than 13 million pounds of
materials recovered for recycling. These materials are being
handled by 260 authorized collectors and 38 authorized
recyclers. And they are authorized to ensure that they are
handling these materials in the manner that is protective of
public health and safety and the environment. The number of
collectors and recyclers will be expected to grow as the
program does increase.
California consumers are the other key component to our
program. Thus, the Integrated Waste Board is tasked with
providing outreach and education to California consumers to
explain the need for the Act and the resulting fees that they
are paying. To accomplish this, we established an e-recycle.org
website. It provides a one-stop information portal on e-waste
in general as well as specific provisions of the Act. And I
believe that we will be sending you, if we haven't already,
some information on our website.
Many different types of public education materials,
including downloadable point-of-purchase ads and banners have
been developed and are available for use by retailers as well
as others to promote our program.
Governor Schwarzenegger is supportive of the full
implementation of this groundbreaking legislation. He has
reaffirmed this commitment in the State of the State Address as
well as his continued support through the budget process. He
has tasked us to build a program that is sustainable and
workable for all involved and consistent with his charge to
protect the public health and the environment while
strengthening California's business economy.
With this support and the support of the stakeholders, we
are confident that this program will achieve its goals.
With that, I would be happy to answer any questions.
Thank you.
[The prepared statement of Hon. Rosalie Mule follows:]
Prepared Statement of Rosalie Mule, Boardmember, California Integrated
Waste Management Board
In 2002 it was determined that more than 6 million old TVs and
computer monitors and other electronic devices were being stockpiled in
California, in garages, storage and attics among some of the places. As
with many other states, California prohibits the disposal of these
items in landfills.
California, in response to the dilemma at hand, began working with
the National Electronic Product Stewardship Initiative to help find
solutions but was unfortunately, unable to reach agreement. Therefore,
the California State Legislature passed Senate Bill 20 which enacted
The Electronic Waste Recycling Act of 2003 which established a funding
mechanism to improve the proper end-of-life management of certain
electronic products. The goal, to eliminate these items, determined to
be hazardous to public health, from California's landfills and to
provide a easy and convenient method of proper disposition.
The subsequent program is a cooperative effort between California
Integrated Waste Management Board, the California Department of Toxic
Substance Control and the Board of Equalization. SB 20 calls for a 6
dollar, 8 dollar, or 10 dollar fee, paid by consumers of covered
electronic devices at the time of purchase. Payments are made to
authorized handler/processors of covered electronic waste to reimburse
the net cost of proper material management.
Combined, the collected revenue and the payment system are intended
to:
Provide financial relief to local jurisdictions
Provide cost-free recycling opportunities for consumers throughout
the state
Reduce/prevent illegal dumping
Reduce/eliminate the stockpile of waste monitors/TVs
The program began on January 1 of 2005, and we are now into our
seventh month. By the end of the first quarter, California has approved
over 260 collectors and more than 38 approved recyclers.
Our projected revenue for the first year was 60 million dollars.
Our first quarter revenues, January to March, collected 15 million
dollars which places us inline with our annual projections. Over 5
million dollars in recycling payments claims have been submitted to the
State. We are awaiting second quarter revenues that are due from
recyclers by July 31st and expect to be ahead of projected revenues as
more collectors and recyclers are approved and retail sales increase.
The first quarter also saw more than 13 million pounds of materials
have been recovered for recycling. Revenues generated are returned back
to recyclers at 48 cents per pound collected in which recyclers payout
collectors up to 20 cents per pound.
The CIWMB was tasked with providing outreach and education to
California consumers and in doing so established, in partnership with
DTSC and program stakeholders, eRecycle.org to provide a one-stop
information portal on e-waste in general and provisions of the Act in
particular. Public education materials including downloadable point of
purchase ads and banners have been developed and are available too.
Governor Schwarzenegger and the State of California have taken a
strong stand to eliminate these hazardous materials from our landfills
to protect the health and safety of our residents and visitors. We have
worked with manufactures and retailers to find a system that would best
address the issue and find a solution.
We believe the program is successful in that we are accomplishing
our goals of ridding landfills of hazardous materials and illegal
dumping of electronic waste. Considering we have built a 60 million
dollar enterprise from the ground up. Californians are accepting and
adopting the new fee's as we have experience with programs such as fees
on new tires and oil. While differences exist between that program and
our e-waste program, the need for a clean and healthy environment
continues to be a top priority for the people of California.
Mr. Gillmor. Thank you very much.
Let me ask you, Commissioner Gallagher, you mentioned, as I
understand that there is a fee on the manufacturers, and the
people who collect the electronics and keep track of it by
manufacturer, considering that manufacturers are outside of
Maine or outside of the country, I mean, how has that worked in
terms of a collection process? Is there a problem?
Ms. Gallagher. We actually have not had a problem with
that. We have actually identified about 87 percent of the total
manufacturers. And we also have what we would call abandoned
waste, and under the abandoned waste proposal, the State of
Maine would be authorized to go through our Attorney General's
office after the individuals and the companies and propose at
least treble damages.
Mr. Gillmor. You know, if you are buying something that was
made in Taiwan or China, I think it would be pretty hard to.
Actually, if you figure out a way to deal with that, maybe you
better tell us, because some of the trade laws that Mr. Otter
talked about earlier.
Let me ask the three of you if you are comfortable with the
present involvement by the Federal Government either through
voluntary programs or do you think that we at the Congressional
level ought to be looking at doing something on a national
basis that might help you?
Ms. Mule. I think I will go first.
Actually, in our law, it does provide provisions if, in
fact, the national law does come into play, that we would join
up with that law, under certain conditions. So we do have that
option to work with you. There are definitely advantages, at
least in my opinion, to having some type of a national law.
Ms. Gallagher. I would echo that. I do think that the
Federal Government needs to provide standards for us and
standards for the manufacturers. I think there has to be some
criteria. What we are lacking, and what you have seen today, is
a lack of consistency among the States on how to deal with
these issues. And while Maine believes that our model is the
best, we all do, it still would be beneficial to have some
consistency among the States.
Mr. Philbrick. I agree.
Mr. Gillmor. You know, the Council of State Governments has
released draft legislation that would propose a regional
electronic waste plan for several northeastern States, and I
understand that there are legislators from Maine that are
participating in those discussions. I guess how do you view
that draft legislation? And can your State law and that coexist
peacefully, I guess would be the question?
Ms. Gallagher. Well, certainly when Maine went about doing
its e-waste law, based on what the stakeholders said and what
some of the very progressive companies said, we elected not to
use an advanced recovery fee, which is what the draft
legislation uses. And we believe that we also needed to have
some shared responsibility. In fact, our legislation stated
that we had to have a shared responsibility. I guess that is a
question that we will have to take a look at, given that we
have gone through the process and what our State believes it
should be doing.
Mr. Gillmor. Well, yes, sir, Mr. Philbrick.
Mr. Philbrick. Although we are not participating in the
State program that you have mentioned, my feeling about the
regional approach is that it should be taken a look at. I think
the key to all of this is that we should make it as convenient
as possible to the consumer, a walk in the park, if you will,
for them to be able to return these kinds of materials to the
proper place where they can be disposed of and recovered
properly. And anything that would, in any way, frustrate the
consumer in terms of their ability to return these things to
recycling is going to end up with these things over along the
side of the road, in landfills where we would not want them, or
otherwise they would just continue to buildup in their
basements someplace. I think a regional approach might be
effective economically. I think, as Ms. Gallagher has
indicated, I think we need to take a look at that. There may be
some cost benefit in doing that. I think the devil would be in
the details, certainly.
Mr. Gillmor. Let me follow-up here. I am running out of
time, Mr. Philbrick, but you gave credit in your testimony to
the EPA for giving Maryland a ``shot in the arm'' to begin the
successful journey to the electronic waste law. And you singled
out their eCycling Pilot Project. Could you explain what EPA
did and why it was important?
Mr. Philbrick. I would love to, Mr. Chairman, but in 2001,
I was not the Secretary of the Department of the Environment.
But I will get back to you with an answer to that.
Mr. Gillmor. Okay. Well, I would appreciate that.
Mr. Philbrick. Yes, sir. I will give you that.
Mr. Gillmor. And my time has expired.
Let me go to the gentlelady from California.
Ms. Solis. Okay. Thank you, Mr. Chairman.
And I really am pleased to hear the testimony from our
witnesses, and I wanted to go back to California. We heard
earlier from the first panel from the Commerce representative
that California somehow created legislation without really
thoroughly speaking to all of the stakeholders regarding how
fees were set. Could you address that and give us a little
indication of how that all happened?
Ms. Mule. I think if you were to talk to the folks in
California, they would beg to differ. I think there was an
extensive stakeholder process throughout the development of
this legislation. There was some legislation that was passed a
year or 2 before, but it was vetoed by then-Governor Davis. So
again, the stakeholders did work together to come up with what
we now know as SB-20. So there was extensive stakeholder input
into the development of the program that we now have in
California.
Ms. Solis. How would California feel if, for example, the
Federal Government EPA did set a standard and their standard
was a lot less restrictive? What would California want?
Ms. Mule. Well, California, as you know, Congresswoman,
sets their own standards. And there are a number of instances
where, particularly in the solid waste field, where
California's standards are higher than that of Federal
standards. And so I believe that the States would have the
option to set higher standards and----
Ms. Solis. May not be penalized then, perhaps, or, you
know, have that ability in terms of States' rights to----
Ms. Mule. Right.
Ms. Solis. [continuing] be able to kind of direct what fits
them best----
Ms. Mule. Right.
Ms. Solis. [continuing] because California, obviously, is
very different from Maine----
Ms. Mule. Right.
Ms. Solis. [continuing] which is my next question.
Maine, how do you deal with imported products that come
from, say, countries that don't meet our current, say,
standards that would be acceptable that would have lower levels
of contaminants? How do you address that without getting caught
up in trade agreements here that might cite some red flags or
create some red flags?
Ms. Gallagher. Well, our law does not actually look at what
is in the computer. It just requires recycling of any computer
that we have. And we have to have certification from the
recyclers that, in fact, they are using strict environmental
State and Federal regulations in the recycling of the matters.
Ms. Solis. So I am still not quite understanding. Is there,
for example, few larger manufacturers that are out of, I guess,
the United States that kind of meet the standards? And what
happens if there is, say, Korean, just to throw that out,
products that are brought in? I mean, how are you actually
really able to get information that the equipment is not----
Ms. Gallagher. The manufacturer files a report with us. As
a matter of fact, that is what we are doing right now is
compiling all of the reports that have come into manufacturers.
We took a look at several other States, Florida and Minnesota,
that had done extensive work on finding manufacturers. And we
used that basic list as a premise for ours and a baseline for
ours. And so what we have done is identified the manufacturers
and have written them and have gotten back their plan for what
they plan to do with the e-waste.
Ms. Solis. And that is with manufacturers that are
representatives of outside the United States?
Ms. Gallagher. That is correct.
Ms. Solis. Really? Wow. That is interesting.
My question next is for Mr. Philbrick. Thank you for coming
and sharing what Maryland is doing.
How do you see our role in terms of what EPA can offer? You
did make some mention earlier in your testimony regarding EPA's
involvement, or somewhat involvement. Can you elaborate a
little bit more on that? What would be ideal?
Mr. Philbrick. Thank you.
I think some consistency in defining exactly what is e-
waste. What are we going to be tackling? Is it just televisions
and radios? Or are we going to start talking about PDAs? Are we
going to be talking about video cameras? What are we going to
be dealing with here?
I think in order to be sure that waste is removed from the
waste stream, I think we need to be talking about recycling and
not just what do we do with waste. I think we need to get this
stuff. There is value to be mined in this. I heard some
testimony from, I guess, EPA that said it would cost $15 per
laptop with only $2 worth of value. I asked my staff about
that, and we are looking at somewhere between 10 to 23 cents a
pound in cost, and we don't know, right now, what the value is
to be mined from that. So I think those kinds of studies would
be helpful on a national level so that we get a broad spectrum
of what is going on here. Otherwise, I think we are going to
end up with potentially 50 disparate things going on here, and
that may be great for that State, but that may not be good for
a region, or it may not be good for the whole country.
Ms. Solis. Thank you.
One last question just for all of you. You can think about
this.
I am very concerned about recycled cell phones or software,
whatever, not software in particular, but computers that are
then resold to other countries where they still may have a high
level of contaminants there and people who handle that as well
as those individuals that are on the receiving end in terms of
recycling to being exposed to that material and how well we are
actually providing assistance so that employees are aware and
safety measures are put into place. And maybe that is something
that you can respond to.
Mr. Philbrick. I have toured several what I will call
recyclers within the State of Maryland and looked at how they
handle this. On the one hand, it is great, because the people
that they are using to do this, the people who aren't
necessarily highly educated or whatever, you know, it is a very
labor-intensive effort. But I wondered the same thing that you
just asked. And that is I didn't see a whole lot of protection
going on for these folks who were pulling these things apart,
and I wondered if there is an accident, like if they break in
two or they open something and we have got mercury running
along the top, you know, so I think that that is something else
that needs to be carefully evaluated. I don't know if that is
EPA's responsibility or not, but it is something I think that
we have to look at.
These operators are operating very cautiously. They are
professional. They are doing the right thing, but I think there
are a lack of standards, if you will, or a lack of process in
how this stuff is supposed to be handled. And then where does
it go? What are we doing with the things that they are
collecting? My staff may know the answer to that. I don't
personally know, but I could get something back to you on that
as well.
Ms. Solis. If you could give us that information, I would
greatly appreciate it.
Ms. Mule. I can forward that to you. The Department of
Toxic Substance Control in California does have authorization.
They do authorize the collectors and recyclers to ensure the
very environmental protections that you are speaking of, and
they do go out and conduct inspections and ensure that the
workers are operating in a safe manner. So I will be happy to
share all of that information with you and the committee.
Ms. Gallagher. Maine's recycling group and the
consolidators receive a bid from the State, and so therefore,
we have between five and ten consolidators. And those companies
have to self-certify, plus they are inspected. And we can take
enforcement against them.
Ms. Solis. Okay. Thank you.
Mr. Gillmor. Thank you.
The gentlelady from California.
Ms. Bono. Thank you, Mr. Chairman.
And thank you all, again, so much for being here today.
Ms. Mule, one of the bigger challenges facing meaningful
environment protection is that government set up taxes or other
fees to generate revenue for a specific pollution problem, but
then only spend a fraction of the raised revenue to address the
problem. In your testimony, you say that we in California, our
first quarter revenues were $15 million, but our State only
received $5 million in recycling payment claims, roughly 33
percent payout of revenues. What is happening with that
additional $10 million for the first quarter? Where is that
extra $10 million? And this is going to be a problem in the
future where in California we are so cash strapped. Is this
going to be a fund that is dipped into for other purposes?
Ms. Mule. That is an excellent question.
And as I mentioned, the program started January 1 of this
year, so really we have completed just the first payment cycle
of this program. And we were all wondering the same thing. You
know, we had estimates of what we thought we would collect in
terms of the fees, and we just weren't sure what the payment
request would be. And what we are seeing, the trend in
California, at least, is that when someone buys a new
television, they don't necessarily get rid of their old one.
They hold on to it. So it is not a one for one exchange there.
And our law does have provisions where the Waste Board does
review those fees on an annual basis, and we can adjust them
accordingly, because if we are taking in more money than we
need, you know, we don't want to do that, but we don't want to
take in too little money at the same time. So the fees can and
will be adjusted accordingly.
Ms. Bono. Thank you.
Ms. Mule. Thank you.
Ms. Bono. Also, I, like most Americans, have got an extra
piece of electronics. The first place I go is to my local
charity. And I understand they are, once again, getting back
into the business of collecting and dealing with this. And I
think that goes back to Mr. Philbrick's comment. Instead of
calling this e-waste, if you call it e-scrap, I think there
would be, perhaps, a different understanding of the problem.
But are not-profits benefiting under the California law?
Ms. Mule. Yes, they are. Just to mention one off the top of
my head, Goodwill is an authorized recycler and collector in
certain areas of California, so yes. They are very actively
involved in this program.
Ms. Bono. Thank you.
And then last, in the Washington Times article, I don't
know how many of you have seen it, but I think maybe, perhaps,
Mr. Philbrick might have seen it close by, but the writer
closes with a comment about Congress has a responsibility to
uncover the facts and not to look for baseless assumptions and
misinformations spread by agenda-driven pressure groups, which
of course it goes through everything we do in Congress. But do
you believe the policies that each of your States have adopted
have been driven by baseless assumptions or misinformation
spread by agenda-driven pressure groups?
Mr. Philbrick. Thank you.
Not at all. As I had indicated in my testimony, last fall,
based on an earlier piece of legislation, the Governor
populated a work group study with industry, with consumers,
with local government, and a whole host of stakeholders to
study the problem. And in fact, at the end of the day, when
that committee got done, there was not consensus. And so we
advised that we should not have legislation. But some of the
legislators who served on that work group thought otherwise and
put legislation in. And all of those stakeholders worked very
closely together in this to craft the legislation, the pilot
program that Maryland has right now.
So I would like to say that it has broad input and
representation. But again, the proof is in the pudding, and we
are just now beginning. We are beginning to draft regulations
which we hope will be in place by October the 1st, and we are
going to have to see how it goes. That is why the report is due
in 2008.
Ms. Bono. Thank you.
Do the other two care to--you both shook your head no, but
I know the stenographer is probably looking for an audible
answer, if you could.
Ms. Gallagher. No.
Ms. Bono. Thank you.
Ms. Mule. No, not at all. As a matter of fact, the Waste
Board did commission a survey where that is how we found out
that there were 6 million electronic devices in people's homes,
just in people's homes alone.
Ms. Bono. Well, thank you.
And Mr. Chairman, I also just want to close and qualify the
Working Group's intentions are we are not behind any one bill.
We just really wanted to bring the problem to Congress and
raise the awareness and certainly think about all of these
answers that everybody has talked about and move forward.
So I think we have heard a lot of great ideas and I look
forward to working with all of you moving forward.
And certainly your leadership, Mr. Chairman, is greatly
appreciated.
And I yield back.
Mr. Gillmor. Thank you very much.
And the chair recognizes the gentleman from Maine.
Mr. Allen. Thank you, Mr. Chairman.
Welcome to all of you. Thank you, particularly,
Commissioner Gallagher, for being here.
Mr. Chairman, Maine is a small State, but we are very proud
that in a series of areas, whether it is education, healthcare,
or environmental protection, we feel like we are on the cutting
edge, and your presence here is affirmation of what you have
been able to achieve in your position and what Maine has done
in the past.
Some of the prior questions have a lot to do with it, and
how can this possibly work. And I wanted to give you an
example, on a larger scale, but not a large scale, from Europe.
And the size of the European market is really pretty
interesting. They have been able to dictate the components of
products made around the world, because they have a unified
market. But back in 2001, the Dutch by themselves decided that
they simply weren't going to have cadmium in higher levels than
those permitted by local law. And they turned away a whole
shipment of Sony Playstations because the video game's cadmium
was too high under their law. Sony lost about $100 million
worth of sales, but today, all of its Playstations have a lot
less cadmium, and they are back in the Dutch market.
I think I heard you, Commissioner Gallagher, this is really
a question, it seems to me that the Maine system is working
because it turns out that manufacturers who want to do business
in Maine or continuing to do business in Maine are readily
identifiable and can be located and that the program, as a
whole, is not so burdensome to them that they won't cooperate
with the State government and with municipal governments or
with consolidators when that is appropriate. Is that a fair
statement?
Ms. Gallagher. That is a fair statement.
We had initial legislation in 2004. We had to get some
clarifying legislation this past year, and all of the major
manufacturers came and supported the bill.
Mr. Allen. Maine is still a very small State.
Ms. Gallagher. We think big, though.
Mr. Allen. We do think big. But are there particular
challenges, any particular challenges in trying to enforce this
law, because we are only 1.3 million people?
Ms. Gallagher. I think the challenge comes from companies
wanting to have some consistency and perhaps wanting to not
take part. And so they look at Maine and say, ``You are not a
very big market, so we are not sure we have to play.'' But I
think once we get into regional organizations and also if we
are the first to jump off the cliff, then I think there is kind
of a notice to them. I believe that probably the biggest
problem that we will have will be on establishing, kind of,
orphaned and abandoned waste.
Mr. Allen. Yes. In your testimony, you say that a program
should not be more costly for the consumer. And do you think
Maine's approach, which holds manufacturers responsible for
their products from, as you said, cradle to cradle, will cost
less for consumers than an up-front fee, and if so, why?
Ms. Gallagher. I believe that it is much less than an
advanced recovery fee, and one of the reasons is that several
progressive companies, like HP, are already taking back a lot
of the computers and CRTs. And so for them, they have found
that they wouldn't be doing it if it weren't economically
viable. And so therefore, we have got a program in place and
will shortly begin that program, which will have the
consolidators getting a price per ton. But because we are
collecting them not individually and it is not an individual
consumer, there are economies of scale with that.
Mr. Allen. I see. When the bill was passed in the Maine
legislature, some members of the legislature felt that this
would actually create jobs in Maine, in addition to sort of
diminishing the waste stream, but it would create jobs. Can you
speak to that issue and how that has worked out?
Ms. Gallagher. With the consolidators coming on, it is
several small businesses, and as you know, Congressman, Maine
depends a lot on small businesses. And this will allow
individuals and smaller companies to put in a bid and to
compete for the five to ten different consolidators for the
various e-waste coming in.
Mr. Allen. Okay. Good.
Thank you.
Mr. Gillmor. I want to thank our panel for testifying. It
was very helpful. And as we work through this process, we
appreciate your contribution. I might ask if you would be
willing to respond to written questions from members of the
committee.
Ms. Gallagher. Yes.
Mr. Gillmor. Thank you very much.
Ms. Mule. Thank you.
Mr. Gillmor. And we stand adjourned.
[Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Response for the Record by Barry Breen, Deputy Assistant Administrator,
Office of Solid Waste and Emergency Response, Environmental Protection
Agency, to Questions of Hon. Hilda Solis
Question 1. How do the 1999 National Safety Council Report facts
and figures differ from EPA's 2001 and 2003 Municipal Solid Waste
Report's facts and figures?
Answer: There are some important differences in the way that the
electronics waste calculations were made in the National Safety Council
(NSC) report, Electronic Product Recovery and Recycling Baseline Report
(1999) and EPA's periodic reports entitled Municipal Solid Waste In the
United States (hereafter referred to as the MSW Characterization
Report).
The NSC report focused exclusively on discarded electronics. It
used sales data from 1992 through 1998 and projected sales for 1999
through 2003 to predict the number of units that would become obsolete
after their first use. At the time the NSC made their projections,
computer sales were very high and therefore the sales projections in
their analysis were much larger than the actual sales that took place
in subsequent years.
The MSW Characterization Report is a report periodically issued by
EPA that looks at the entire municipal solid waste stream. In 2001, EPA
added a specific new category of consumer electronics to its usual
methodology. In doing so, it examined actual sales data through 2001
and did not project sales. Another difference is that the NSC report
reported information in terms of units, as was its normal approach with
other wastes, while the MSW Characterization report reported consumer
electronics in terms of tons of material.
Furthermore, the MSW Characterization Report developed estimates
for several categories of consumer electronic products, including the
information product category comprised of computers, printers, modems,
word processors, fax machines, answering machines, telephones, and cell
phones. The NSC report examined only personal computers (laptops, CPUs,
and monitors).
Therefore the numbers from these two sources differ because: (1)
the two studies are working with different timeframes, and the NSC
sales projections were overestimates for the years in which data may
overlap; (2) the NSC report reported information in terms of units and
the MSW Characterization report reported numbers in terms of tons; and
(3) the Characterization Report estimated figures for a broader range
of products.
Question 2: Please provide information on the value of materials
recovered from recycled electronics products.
Answer: According to the 2003 IAER Electronics Recycling Industry
Report:
Commodity (e.g., copper, aluminum, steel) recovery values range from
$1.50 to $2.00
Parts (e.g., printed circuit boards, connectors) recovery can be as
high as $100 for a relatively new machine to nearly $0 for a
machine more than 10 years old.
Machine resale value varies greatly depending on the age and type of
machine (laptops can have double the value of a desktop).
Question 3: What is EPA doing to get the recycling message out to
minority and under-served communities?
Answer: On the subject of recycling in general, EPA is very active
in working with minority and under-served communities to get the word
out on recycling. Some examples include:
EPA has an active Hispanic program in the Office of Solid Waste
(OSW). Nearly everything published by OSW is published in Spanish and
English. (We are also beginning to publish selected documents in
Chinese and Korean as well). EPA also supports and attends a number of
Hispanic-oriented conferences throughout the year, namely LULAC and
NABE and has assisted in the development of the Agency's Hispanic
Portal. EPA is working with two Hispanic, woman-owned contractors to
ensure that our outreach materials and efforts are appropriate and
targeted for the Hispanic community. EPA's used oil campaign materials
were the first of their kind; i.e., specifically designed for Hispanic
owners and operators and employees of the automotive industry and the
Hispanic general population. EPA aired a recycling PSA on Hispanic
radio stations across the country that was narrated by the actor Erik
Estrada.
EPA is in the planning stages of a major outreach event at Miami
Dade College (Kendall Campus). Scheduled for November 2005, it will
include a number of training workshops and interactive activities for
all ages, focusing on solid waste management (reduce, reuse and
recycle). EPA is also in the beginning stages of developing a household
hazardous waste (HHW) campaign for the Hispanic community; it will be
field tested at a national conference in Tacoma, Washington in
September 2005 and the final stages of developing an ``English as a
Second Language'' curriculum based on the environment. This product
will be launched at the international TSOL conference in March 2006.
The Immigration and Naturalization Service (INS) has expressed an
interest in supporting this effort.
EPA has also developed targeted recycling outreach materials for
the African-American community, including radio PSA's with Usher and
other recording artists. We also have targeted outreach efforts for the
``aging'' population and have designed a number of outreach materials
that focus on this population's changing life styles and habits and
their potential effects on the environment. We work with the Agency's
aging program on this initiative and also support and attend
conferences specific to this audience (e.g., AARP and NCOA). Our EPA
regional offices in California are also focusing on getting the
recycling message out to Tribal governments and to the outer Pacific
Islands, two undeserved groups in EPA Region 9. EPA Region 9 has funded
household hazardous waste collection programs on Tribal lands and a
Regional Recycling Initiative for two outer Pacific Islands focused on
scrap metals and plastic.
With respect to electronics, EPA is just starting a group to focus
on increasing opportunities to reuse working electronics. This group
will be partnering with non-profits such as the National Cristina
Foundation and Compumentor who specialize in job training in
underserved communities and in making available affordable used
information technology equipment to help bridge the ``digital divide''.
The Federal Electronics Challenge is also encouraging federal
facilities to use GSA's ``Computers for the Learning'' program as a way
to donate excess computers. This program makes an effort to provide
computers for empowerment zones and enterprise communities.
______
Response for the Record by Benjamin H. Wu, Deputy Undersecretary,
Office of Technology, Department of Commerce
The Honorable Paul E. Gillmor
Question 1. Are you comfortable with the present involvement by the
Federal government--either through voluntary programs or existing
regulations--or do you think that Congress needs to rethink the role of
the Federal government in this area?
Response. Congress has an opportunity to take on a leadership role
that will benefit our nation's technology competitiveness and benefit
our environment. I believe that a national solution will require
statutory and legislative initiatives; therefore, Congress must play a
significant role in the e-waste debate and any actions taken. We stand
ready to work with Congress to inform and help shape the debate towards
a constructive resolution. If each state continues to develop a
patchwork of legislation, industry will be overburdened. It is
imperative that the federal government mobilize to fully consider
options for the crafting of a national solution.
Question 2. Where do you think it makes the most sense to place the
greater responsibilities in any electronic waste and recycling regime?
Since individual persons have to make the choice to give up their
unused electronic equipment, what responsibilities do you think they
should bear? What role does public education have in this effort and
have you seen any successes with public education efforts in these or
other recycling programs?
Response. A consensus-based, equitable, fair, and balanced approach
that is not overly burdensome is the ideal. Consumer awareness is
certainly a key component. Without the consumer properly handling and
disposing of e-waste, a national system will not flourish. There has
been success in some voluntary programs. For example, HP and Office
Depot ran a nationwide program in the summer of 2004 for seven weeks
and consumer awareness was certainly a key to the success of this
program. Consumers could drop off one piece of electronic equipment a
day for free at an Office Depot for recycling by HP. Through this
program HP received 10.2 million pounds or 425,000 items. However,
other programs that placed a significant burden on consumers have not
faired as well. For instance, HP and Dell customers may fill out a form
online describing the product they wish to mail back and agree to pay a
fee. The company sends packing materials and a label to the consumer
and arranges for pick up from the residence. The volume of product
collected in this program was dwarfed by the success of the HP and
Office Depot program where consumers simply had to drop off e-waste for
free.
Question 3. Some have argued that making products easier to
recycle reduces the costs of recycling and ultimately makes these
commodity products more affordable for using in future products.
Manufacturers argue that cost internalization is the only true
incentive that effectively encourages design changes. If you believe
this to be the case, how does an Advanced Recycling Fee (or ARF) or the
registration fee, like in Maryland, encourage or promote manufacturers
to design their products for recycling?
Response. A national plan should incentivize technology
manufacturers to design products for ease of recycling and thereby
reduce their costs. A system of shared responsibility is best to make
sure each party has an incentive to properly dispose of the e-waste.
Question 4. As you know, our world is becoming a more global
marketplace with goods and services easily moved among countries. In
addition, many countries have varying standards concerning how these
materials should be handled or disposed. What lessons have you learned
from activities either in other states or countries about how our
country can deal with this issue? What do we know about how these
activities are affecting our own domestic manufacturing, retailing, and
recycled products industry?
Response. Working collaboratively with and learning from foreign
partners will be key in a successful e-waste policy. Similar and
related efforts, such as the 3R's initiative (Reduce, Reuse, and
Recycle) have proven that international collaboration is central,
beneficial, and necessary. It is certainly true that materials can
easily move across state and international borders, and therefore a
policy one state or country makes will have effects on the surrounding
area. Decisions such as classification of materials will also be
important in determining how materials are treated across borders. E-
waste can fall in an ambiguous middle ground. Some groups may reuse and
remanufacture the e-waste, some may consider it normal waste, while
others may consider it hazardous waste, with each group having
disparate transportation regulations which could hamper a wide spread
solution and disadvantage certain groups or areas. In addition, the
regulations in one area can affect the competitiveness of companies
forced to comply with regional rules as well as affect widespread
manufacturing processes and therefore the types of products all markets
receive.
What is important to remember is that we need to involve all groups
in the decision making process. While Europe has acted on legislation
and has a national e-waste policy in place we must be careful when
adapting lessons learned in Europe to the American market, especially
if we are adopting wholesale EU standards which did not have the
benefit of U.S. input, notice, comment, and consideration.
Question 5. What work have you done with other international
countries and stakeholders regarding electronic waste and recycling?
Response. We have touched upon the e-waste issue at the Tokyo April
2005 G8 Ministerial Conference on the 3R's initiative (Reduce, Reuse,
and Recycle).
Question 6. Some of the State laws or bills put forward suggest the
need for collectors and recyclers to be ``certified'' by a set of
regulatory guidelines. Do you believe these regulations undermine the
contracts that businesses currently enjoy? Do you believe these
regulations unnecessarily burden the current commercial-to-commercial
relationships that are governed by company due diligence and
contractual obligations? Do you believe that this presents Commerce
Clause issues about a restriction on the free and fair trade of these
commodities?
Response. In establishing an e-waste policy, certain criteria must
be met to ensure that companies are complying with required practices
and operating on a level playing field. While ideally the private
sector would be self-regulating, it may become necessary to have
oversight into the recycling process to ensure certain standards are
kept. The government should work with the industry to find a solution
that ensures e-waste is handled properly without unnecessary burdens
while allowing them to remain competitive in the global marketplace.
Question 7. I think you were quite kind in your assessment that
``efforts to comfortably resolve the issue [electronic waste] by
consensus with all stakeholders, while on-going, have had limited
success. Could you please provide the Subcommittee with your own
experiences about how difficult bridging the gap of agreement can be?
Response. I have had the opportunity to engage affected e-waste
stakeholders on this issue over the past several years, coupled with
the industry-led efforts and EPA's leadership; I recognize that
consensus is being held up by each stakeholder's insistence on their
parochial and preferred business model. The ability to craft a national
solution lies in the leadership necessary to force a consensus among
the stakeholders. Having Congress play a significant role in that
regard is key.
Question 8. Obviously, you think there is an environmental issue
here because you claimed: ``Recycling is generally more expensive than
disposal and recycling does not pay for itself. The costs of collecting
and dismantling these products may exceed the material value of the
recycled equipment because there is no efficient infrastructure for
collecting discarded electronics, nor were these products originally
designed with recycling in mind.'' Since this is the case, why is the
Commerce Department trying to push a consensus plan on recycling of
these materials?
Response. Electronics recycling is an issue that is only going to
increase in significance in the coming years. A recent report from the
International Association of Electronics Recyclers projects that given
growth and obsolescence rates of the various categories of consumer
electronics, approximately 3 billion units will be scrapped during the
remainder of this decade. We are currently seeing the states take up
this issue, and several have passed legislation or are on the cusp of
doing so, thus it appears that without federal government action, it is
inevitable that the states will legislate heavily in this area. A
national solution is preferable for several reasons, including: the
economies of scale and cost savings of having a larger national
infrastructure; the benefit to companies to not be forced to comply
with a patchwork of legislation; the inefficiency and waste of tax
dollars in having this debate conducted hundreds of times at the state
and local level; and the inability of all affected parties to have
their interests represented if this debate is conducted hundreds of
times at the state and local level. Therefore, the e-waste issue is
important for the Department of Commerce not only because of the merits
of the issue and the environmental impact of the growing volumes of
electronic waste, but because state legislation is developing
significant concerns affecting U.S. industry and competitiveness.
Question 9. I was wondering if I could get you to be a bit more
specific about a few areas of the report that you mentioned in your
testimony? Specifically, which products should be considered for a
program, how should discarded products be collected and transported and
by whom; how should new products should be classified and sold on the
Internet without leaving brick-and-mortar retailers at a competitive
disadvantage due to mandated fees; how should the problem of orphaned
products be addressed; how can worker safety in the recycling process
can be ensured; and how should consumers can be encouraged to actively
participate in any established recycling program? Does the report
specify potential, future Federal regulation of electronic waste?
Response. These are all the central questions that must by answered
in establishing an electronics recycling program. Our soon-to-be-
released report does outline the interest of the various parties in
relation to all of these questions, and it provides the pros and cons
of each solution that has been proposed by the major groups looking
into this issue. The report does not specify potential future
regulations, but seeks to educate lawmakers concerning the complexities
of this issue and the interests of the stakeholders.
Question 10 Your testimony notes that you have ``have heard deep
concerns from industry that solving this issue at the State level may
become problematic because the cost of compliance with a patchwork of
international and state laws can dramatically affect the manufacturing,
marketing, and business models of the U.S. electronics sector and the
transaction costs and business models of our retail sector.'' This
would lead to a national solution. Do industries arguments have merit,
especially if you layer on any international obligations? Why?
Response. While international obligations remain an important
factor in U.S. business models, the U.S. market remains the strongest
in the world and having a single set of regulations to comply with will
greatly ease the burden that electronics recycling legislation will put
on industry. While the extent of the burden of a patchwork of
legislation would have on industry is still unknown, reviewing the
differences between the current laws and the diversity of proposed
solutions elsewhere, it appears that the state solutions are divergent
enough to create a major hindrance to U.S. competitiveness, and would
hinder the sale of electronics in the United States. Compounding the
difficulties facing companies are the layers of any international
obligations, especially if their business models rely on international
exports. Industry would then be faced with disparate domestic
requirements coupled with even more disparate international
requirements.
Question 11. Your testimony states that: ``Over time, the NEPSI
stakeholders realized that a national law might be necessary to force
otherwise reluctant players to do their parts to make a national system
work.'' Do you agree with this assessment?
Response. Ideally, voluntary participation by all the stakeholders
would be sufficient to solve the electronics waste issue. The
incentives may not be in place, however, to make sure all responsible
parties are willing to voluntarily participate in a solution. A
national solution may be necessary to ensure that all key participants
in the life of an electronic product, from the manufacturers to the
retailers to the consumers to the recyclers, play an appropriate role
in its proper disposal.
Question 12. You mentioned that the impact of governmental
decisions on electronics recycling can have far-ranging implications,
both environmental and on the health of U.S businesses and their
ability to compete in the global marketplace. Could you please discuss
the importance the European Union's directives on electronic waste and
how they operate? In your opinion, what does WEEE and RoHS mean for the
U.S. electronics manufacturers and consumers and what impact they will
have on our country and its trade balance? I am especially interested
in your perspective about certain states adopting parts of these other
country's regulatory regimes while some states do not.
Response. While the U.S. can benefit from the work done with WEEE
and RoHS in Europe, it is important that we create our own standards in
the U.S. and involve the U.S. stakeholders in the process of creating
these regulations. It is troubling that states would wholesale adopt
European standards, which U.S. industry have not had a chance to be an
active member of its consideration and adoption. When states endorse
adopt international standards which are adopted without active U.S.
participation, it becomes very problematic.
Question 13. Subtitle E of the Solid Waste Disposal Act (42 U.S.C.
6951 et. seq.) specifies the ``Duties of the Secretary of Commerce in
Resource and Recovery''. Is the Commerce Department using these
authorities to compile its data on electronic waste? If not, which
statute is the Department using to obtain this data?
Response. EPA is the agency which collects information and data on
electronic waste.
Question 14. Is the Commerce Department tracking other recycling
data, not related specifically to electronic waste, under Subtitle E of
the Solid Waste Disposal Act or another Federal statute? If so, what?
Response. No, not to my understanding.
The Honorable Charles F. Bass
Question 1. In talking with stakeholders in my state of New
Hampshire, one concern is in regards to importers and their obligation
to our e-waste. Some have suggested a possible ``dock tax'' collected
by the federal government on units entering the US for recycle
programs. Could you talk about the feasibility of such a program and
any problems with such a program under any of our existing trade
agreements?
Response. The question of a balance of equities, especially those
international companies which export to the U.S. may not be held to the
same requirements as U.S.-based companies is a valid issue. A so-called
``dock tax'' could have repercussions for trade and may be problematic
if it is considered a barrier to trade. Additionally, there would be a
logistics question regarding the tax requirements and who would be
subject to its implementation.
Question 2. Could you expand on the obstacles to interstate
commerce that could possibly arise if the federal government does not
implement a national program and allows each state to create their own
standards? What affect would this have on the industry and the ability
for consumers to have access to products?
Response. Companies that have to conform to a number of disparate
state regulations would unduly burden the ability of that company to
effectively engage in interstate commerce. The currently established
business models for manufacturing, distribution, and marketing would
have to be entirely revisited. These disruptions would have great
adverse impacts on a U.S. technology company's ability to conduct
interstate commerce.
Question 3. What barriers to interstate commerce do you see if
individual states are allowed to implement their own programs of
charging a fee at the point of sale? Do you see any barriers with sales
over the Internet? Additionally, could you discuss the feasibility with
such a program due to the fact that many electronic products are bought
in one state and disposed of in another locality?
Response. The effects of a patchwork of legislation could have a
significant effect on interstate commerce, especially near the state
borders. For instance, in the DC metro area, if Maryland passed a state
law that included an ARF similar to California's state law, consumers
could easily go to the District or Virginia to purchase electronic
goods and avoid the ARF, which could have had an immediate and
significant effect on retailers in Southern Maryland. Additionally, if
disposal requirements are eased in one state, they will likely become
flooded with electronic waste from neighboring states with stricter
legislation.
If each state decides to come up with their own solution, the state
will have an incentive to legislate not only towards the best solution
for all affected parties, but also may consider the affects on
interstate commerce which could skew the decision making process. Thus
the affect that interstate commerce could have on an individual state's
legislative considerations speaks towards the need for a national
solution. Internet sales will also need to be addressed and ensure that
these retailers operate on a level playing field.
Question 4. From the Department of Commerce's standpoint, do you
see any problems with implementing a national program in relation to
any of our existing international agreements or treaties concerning
trade or foreign waste?
Response. We need to be mindful of our international agreements and
treaties but I do not believe there are any current impediments towards
the development of a national solution.
Question 5. What difficulties would arise by implementing a program
that focuses on manufacturers' responsibility with foreign companies
that are not located in the United States? How would we ensure these
companies accept their responsibility and that they are properly
handling their electronic waste? For example, I would especially like
you to address a case in which a company accepts their end-of-life
product and exports it to another country where there are no safeguards
to ensure that the hazardous materials are being handled properly.
Response. Any electronics waste policy will have to be coupled with
agreements with any foreign entity that may be involved in disposing of
electronic waste. We will have to establish a mechanism to ensure that
all parties are complying with our regulations. We should work with the
recycling industry to develop the best means to accomplish this
oversight and regulation that will ensure all recyclers are operating
on a level playing field in competing for the business that will be
generated by national electronics recycling legislation.
The Honorable Hilda L. Solis
Question 1. I understand that the Department of Commerce will be
submitting to Congress an electronics recycling report that is based on
meetings with a group of stakeholders. There is a diverse group of
stakeholders interested in this issue--from state and local government
agencies, manufacturers, retailers, recyclers, environmental
organizations to name a few. Please provide detailed information on
which stakeholders were involved with the Department of Commerce and
how they were chosen? Did all stakeholders participate? What was the
process for the stakeholder involvement? Was this process open to the
public?
Question 2. Can you also provide more information about the
Roundtable meeting that Department of Commerce held September 21, 2004
on E-waste?
Response. On September 21, 2004, the Department of Commerce's
Technology Administration held a roundtable to examine some of the
major issues still outstanding between stakeholders. There were
representatives from affected stakeholders, including retailers who had
not been heard from before. Panelists included representatives of
electronics manufacturers, retailers, recyclers, and environmental
groups. The discussion focused on what products should be included in
electronics recycling, collection and funding mechanisms, and the role
of government in electronics recycling. The Technology Administration
then solicited comments from the public in the Federal Register on
October 20, 2004, on the same four areas which the Roundtable focused:
which products should be included in an electronics recycling program;
methods for collection, transportation and recycling; financing a
recycling program; and the role of the government in a recycling
program. The soon-to-be-released Technology Administration report is an
outgrowth of the Roundtable and response to the Federal Register
notice. It includes views expressed by the panelists from the
Roundtable, comments submitted by organizations in response to the
Federal Register notice, and information gathered especially for this
report. The purpose of the report is to provide policymakers with
background on the issue of electronics recycling; including state,
Federal, and international regulations and activities, models of
recycling efforts in other industries, and an analysis of some of the
most commonly discussed financing models.
Question 3. What type of process do you think would best enable
stakeholders to reach a national consensus on electronics legislation?
Response. A national solution that is equitable, balanced, and
takes into account all stakeholder responsibilities is the ideal.
Therefore, to achieve that goal, a participatory process that allows
for all stakeholders to voice their concerns and its impact would be
the best process.
Question 4. What roles can EPA and Commerce play that will
encourage agreement on national legislation?
Response. With the potential of its impact on our nation's
competitiveness, Commerce has the unique role of representing the
interests of industry within the federal government. The Commerce
Department, as well as the EPA, has already helped convene affected
parties to understand their various interests to help drive a consensus
towards a national solution. The report the DOC will soon release will
outline the interests of several of the stakeholders and articulate
their concerns. By facilitating a dialogue between affected
stakeholders the DOC can help EPA foster an agreement on national
legislation. EPA has the regulatory and program jurisdiction to be the
lead federal agency in any national e-waste solution.
Questionb 5. Which electronics financing model do you think might
work best in the United States, and why?
Response. Should Congress determine that a financing model is
necessary; a model that ensures all stakeholders bear a responsibility
in the proper disposal of e-waste and that all is done throughout the
lifespan of electronics products to ensure that the process is an
efficient one would be preferred.
______
Response for the Record by Hon. Rosalie Mule, Member, California
Integrated Waste Management Board
The Honorable Hilda L. Solis
Question 1. Under the California law, consumers pay a $6-10
advanced recycling fee at the time of the sale for a covered electronic
product. The fees are collected by the state and deposited into an E-
Waste account. The state then pays the collectors and recyclers out
this fund. Can you tell me what would California do if the demand for
recycling funds from collectors and recyclers exceeds what you have
collected? What happens if you have not collected enough money in fees
to pay the collectors and recyclers?
Response: California's Electronic Waste Recycling Act of 2003 (Act)
requires the State to occasionally review the fee level to ensure that
there are sufficient funds in the account to operate the program.
California Public Resources Code Section 42464(f) states, in part,
``On or before August 1, 2005, and, thereafter, no more frequently than
annually, and no less frequently than biennially, the board, in
collaboration with the department, shall review, at a public hearing,
the covered electronic waste recycling fee and shall make any
adjustments to the fee to ensure that there are sufficient revenues in
the account to fund the covered electronic waste recycling program
established pursuant to this chapter . . . ''
The program has operated for less than one year. The State has not
adjusted the fee from the original $6, $8, and $10 level because there
is not yet sufficient data to demonstrate trends in revenue or costs,
though presently revenue is outpacing costs while the recycling
infrastructure is still developing.
Question 2. Has your program set accountable goals for how many
products should be collected? If there are no goals, how does your
program encourage more electronics to be recycled?
Response: California's Electronic Waste Recycling Act of 2003 (Act)
requires the State to establish recycling goals. Specifically, the
California Public Resources Code Section 42475.4 (a) states, in part,
``The board shall annually establish, and update as necessary,
statewide recycling goals for covered electronic waste. In implementing
this section, the board shall do all of the following:
(1) Post on its Web site information on the amount of covered
electronic devices sold in the state in the previous year as
reported to the board.
(2) Post on its Web site information on the amount of covered
electronic waste recycled in the state in the previous year as
reported to the board.
(3) Develop and adopt recycling goals, with input from manufacturers,
retailers, covered electronic waste recyclers, and collectors,
that reflect projections of covered electronic device sales,
rates of obsolescence, and stockpiles.''
At this time, as the recycling infrastructure is still being
developed, the State has not set specific goals and has focused on
expanding access to recycling opportunities and increasing public
awareness. The overarching goal, established by the Act is to eliminate
current stockpiles of unwanted and obsolete covered electronic waste,
estimated at approximately six million units in residences alone, by
the end of 2007.
Question 3. Does your program have a system to track the amount of
E-waste that will be collected and recycled? Do you have any statistics
that show that more products are being recycled as a result of your
program?
Response: California has established a data system to track the
amount of covered electronic waste (CEW) processed and claimed for
payment. As of September 1, 2005, after eight months of operation, the
program has received claims for over 20 million pounds of CEWs
processed, representing activities by program participants conducted
through June.
While this represents a significant amount of material, there is
currently no way to compare or contrast this volume with what was
processed before tracking began, or to evaluate the amount of material
diverted through means outside of the system, such as asset recovery
for continued use or wholesale export. However, it is firmly believed
that more CEW is being recovered for processing in California now that
the program exists.
In addition to the data which the State collects as part of the
documentation submitted for recycling payments and manufacturer annual
reports, handlers of hazardous electronic waste in California are
required to submit an annual report identifying the amount of waste
handled and its disposition. A database is being developed to house
annual report data and facilitate analyzing it (including year-to-year
comparisons of recycling volumes). The Electronic Waste Recycling Act
has only been in effect since January 1, 2005 and annual reports for
calendar year 2005 are not due until February of 2006. While data on
the affect of the new law on recycling rates is not yet available, the
State is putting the tools in place to evaluate the effectiveness of
the law once the annual reports are submitted.
Question 4. What has been your experience to date of the
electronics law operating in your state? Does your state have enough
experience in implementing this law to suggest what you might change
about it?
Response: As noted above, the program has received claims for over
20 million pounds of CEWs processed, representing activities by program
participants conducted through June. All indications are that the
system is fostering the recovery and recycling of CEW, however it is
too early to tell what specific changes should be made to improve the
system. The State will be engaged in final rulemaking over the coming
year to evaluate existing emergency regulations and to adopt permanent
regulations.
Question 5. What is your advice for how to craft national
legislation that would take into consideration the different state
legislation already enacted? What aspects of your state legislation
would make it most difficult to incorporate into national legislation?
Response: The goal of a federal bill should be a national program
that includes all states in order to prevent a patchwork of programs
across the country and is mindful of states' ability to establish
management criteria. Such legislation should make clear what types of
electronic waste are and are not covered. (The basis for making this
determination could be something other than whether the waste meets the
criteria for classification as hazardous waste.) It is also important
that any national legislation to promote recycling of electronic waste
does not impair states' ability to establish their own criteria for
hazardous waste classification and management that are more stringent
than those of RCRA. National electronic waste legislation should also
address the exportation of discarded electronic equipment and residual
materials generated from the treatment of such equipment. The
establishment of export requirements and their implementation,
tracking, and enforcement would be most efficiently accomplished on a
national scale, rather than a state-by-state basis.
Inclusion of the following aspects in federal legislation would
satisfy the current requirements in statute necessary to supersede
California law; PRC 42485 (a)):
The establishment of a program for the collection, recycling, and
proper disposal of covered electronic waste necessary for the
effective administration of a national Advanced Recycling Fee
that is applicable to all cathode ray tubes devices sold in the
United States.
Is capable of providing adequate revenue to the state to support the
collection, recycling, and proper disposal of covered
electronic waste, in an amount that is equal to, or greater
than, the revenues that would be generated by the fee currently
imposed under California law (PRC 42464).
Require covered electronic device manufacturers, retailers, handlers,
processors, and recyclers to dispose of such devices in a
manner that is in compliance with all applicable federal,
state, and local laws, regulations, and ordinances, and
prohibits the devices from being exported for disposal in a
manner that poses a significant risk to the public health or
the environment.
The following are additional aspects that could be considered in
the course of national program development:
A product stewardship element that would require the entities that
design, make, sell, or use a product takes responsibility for
minimizing its environmental impact. This responsibility would
span the product's life cycle--from selection of raw materials,
to design and production processes, to its use and disposal.
Encourage manufacturers to create products with recycling in mind.
This would include reducing the amount of hazardous chemicals
currently used in the production process of electronic devices.
In addition, since all manufacturers will need to comply with
the EU's RoHS Directive by July 2006 (banning the use of some
hazardous substances) a component requiring manufacturers to
sell RoHS compliant products in the U.S. market should also be
considered.
The Honorable Charles F. Bass
Question 1. This Committee in the past has often discussed
interstate solid municipal waste. I would like to hear each of your
thoughts on what implications would result if all fifty states created
their own programs and standards in how to handle e-waste? What
complications would you see as a result of this on the flow of
interstate waste?
Response: The concept of all fifty states choosing to address the
electronic waste issue in their own separate way is actually the
reality of the situation even today. For instance, while some states
such as California, Maryland, and Maine have implemented state-wide
programs, others have decided to address the problem at the local level
or not at all.
Impacts of these programs on waste flow are dependent on the
program structure. California requires documentation to ensure that the
materials originated in California, in order to provide payments. This
type of system effects waste flow differently than a system that
accepts interstate waste.
In the absence of a national framework for dealing with the
problem, a patchwork of potentially conflicting solutions will continue
to emerge. For instance, manufacturers in one state may have an advance
recovery fee placed on their products, while the same manufacturers may
have to take back their products and pay for recycling in another. Not
only could this patchwork create interstate commerce problems, but it
also has the potential to place a substantial burden on recyclers,
refurbishers, and other stakeholders.
Question 2a. In talking with the New Hampshire Department of
Environmental Services, one of their concerns has been with the
mobility of items: where an item is sold is not necessarily the place
where it is disposed. Could you address the problems with charging a
fee at the point of sale for products bought over the Internet if a
national program is not implemented?
Response: While the concern is not without merit, this issue can be
addressed during the development stage of a state's program. For
instance, due to the resilient design of the California program, we
have the ability to accommodate e-waste products that were not
originally assessed a fee, such as ``legacy'' waste and products that
may have been bought over the Internet. The State believes that the
vast majority of Internet and catalogue retailers are participating in
the California Electronic Waste Recycling Program.
Question 2b. Additionally, could you discuss the problem with
individuals buying an electronic product from one state and disposing
of it in another? How would that affect the success of your program and
how have you addressed this problem in your own strategies?
Response: California's legislation, in establishing the fee,
contemplated that some devices, for which a fee was not charged would
enter California by being used by a consumer then discarded in this
state. It was further contemplated that ``legacy'' waste, which met its
end of useful life before the fee program was enacted, would also enter
the funded recycling system. The program is intended to be designed to
be strong enough to accommodate these types of e-waste for which fees
were not collected. California, however, has established rules which
allow only e-waste generated by California consumers to enter the
funded recycling system, by requiring documentation of the source of
all e-waste for which funding is claimed.
Question 3. Would you agree that if a national fee was imposed with
pro rata payments made to the states that this would be the most
efficient way to pay for such electronic waste programs?
Response: California believes that a national fee system with pro
rata payments made to the states would be effective. Nonetheless, how a
``pro-rata'' disbursement would be designed raises critical questions.
One concern, specifically for larger states, would be the ability of
such a payment system to ensure that the state's costs would be
covered, given the size and volume of devices disposed of in some
states compared to others. An initial pro-rata design based on
population could require a financial analysis after a period of time to
determine costs, usage, recycling frequency and rates, etc.
The Honorable Paul E. Gillmor
Question 1. Could you please tell me how you define ``electronic
waste'' and do you consider recycling these products more important in
order to avoid an environmental hazard or because you are worried about
preserving landfill capacity?
Response: Many types of electronic products that are widely used in
workplaces and homes contain hazardous substances like lead and
mercury. Products that reach the end of their useful lives or become
obsolete and contain enough hazardous substances are considered
hazardous waste.
Any electronic device that becomes a waste and fails California's
hazardous waste toxicity criteria is a hazardous waste which may be
managed as a ``universal waste''. California's universal waste
management requirements are consistent with the Federal Universal Waste
Rule requirements.
California's Electronic Waste Recycling Act of 2003 (Act) addresses
a specific portion of the electronic waste universe: video display
devices. The definition of ``electronic waste'' for purposes of the
system established by the Act only applies to video display devices
which California determines are hazardous waste when discarded.
Specifically, these are currently:
a. Cathode ray tube (CRT) devices (including televisions and computer
monitors);
b. LCD desktop monitors;
c. Laptop computers with LCD displays;
d. LCD televisions; and
e. Plasma televisions
California plans to test additional video display devices in the
future to determine which additional items, if any, should be covered
by the EWRA.
Preventing threats to human health and the environment, preserving
landfill capacity, and conserving valuable natural resources are all
important factors in why recycling of hazardous, electronic wastes
should be promoted.
Question 2. Since individual persons have to make the choice to
give up their unused electronic equipment, what responsibilities do you
think they should bear? What role does public education have in this
effort and have you seen any successes with public education efforts in
your states on these or other recycling programs?
Response: Since California has established a system that requires
convenient and cost free recycling opportunities and that these types
of waste can no longer go in to the landfill, the State has identified
that it is the individual's responsibility to avail themselves of these
recycling opportunities.
Public education about the proper handling of obsolete electronics
is key to the success of state e-waste recycling efforts. California's
primary consumer awareness effort is through www.eRecycle.org
(www.eRecicle.org in Spanish), and the State has promoted this website
through point-of-purchase information at electronic retail outlets as
well as radio and television public service announcements. Although it
is premature to gauge the success of this effort--it was initiated
prior to the collection of revenues from the retail fee on covered
electronic products--public response has been very positive. For the
most part, public concern seems to be focused on available recycling
opportunities rather than on costs (e.g., ``Yes, I know about the fee.
What I need to know is where to take my old stuff.'')
Question 3. In 1980, Congress enacted the Low-level Radioactive
Waste Policy Act. Under this law, a state is given the responsibility
to select disposal sites for low-level radioactive waste--a type of
waste that generally consists of low concentrations of relatively
short-lived hazardous waste. What intrigues me most though is that
several states have banded together to address this serious waste
concern. In fact, most states have set up and joined congressionally
approved interstate compacts to handle low-level waste disposal, while
others are developing single-state disposal sites. Recognizing the
interstate nature of electronics sales and product take-back and
refurbishment programs, is this model something that makes sense to you
or your state?
Response: A national system establishing a funding and/or take-back
program has merit, to avoid the impact of potentially disparate state
requirements on the manufacture and sales of electronic devices.
Different state requirements impact interstate commerce. While this
impact may be lawful, the market for electronic devices is not only
national, but global. Uniformity of requirements affecting this market
is desirable. Commercial, manufacturing, and funding concerns are and
would not be addressed by a regional approach. Only a national approach
would cure the impact caused by the diversity of state-by-state or
region-by-region programs.
Moreover, an additional concern emerges when regional or national
solutions are considered. The importance of maintaining hazardous waste
management standards is of distinct interest to California, due to the
fact that the state has more stringent hazardous waste management
standards than federal standards and those of many other states.
California feels strongly that its hazardous waste management
standards, and ability to enforce those standards, should not be
affected or lessened in the course of multi-state or national recycling
program development.
Question 4. California has been the first state in our country to
step forward with its own law on electronic waste. Being the first one
to act, especially because of the size of your state and the amount of
goods sold and the potential opportunities for recycling, means that
you have gleaned some important lessons. What do you think it is
important for us to know about electronic waste and recycling programs
that either is not reflected in your testimony or is not easily
apparent? What kind of investment, financial or otherwise, do
governments need to make in order to get viable programs operating?
Response: It is critical that any program establish clear
objectives from the start and specifically identify who is the intended
beneficiary. The Act assesses an advanced recycling fee on the sale of
all covered electronic devices (CEDs) regardless of consumer type
(residents, businesses, institutions, government, etc) and currently
does not delineate the generator sectors from which discarded material
is eligible. The net effect is that all covered electronic waste (CEW)
generated in the state is eligible to be part of the program, whether
or not the CEW from certain generator sectors historically required
financial support to be effectively recovered and recycled.
The Act actually covers only a limited segment of a far larger
electronic waste stream. At this time, CEDs are limited to video
displays greater than four inches, such as televisions and computer
monitors. The primary reasoning behind this is that cathode ray tubes
(CRTs) are considered a hazardous waste when disposed in California.
CRTs may be managed as a universal waste if recycled, but may not be
disposed in municipal landfills. This ``ban'' on disposal created a
significant cost burden on local governments to divert residentially
generated CRT devices. The Act was intended to relive this burden.
Other consumer electronic products, such as computer CPUs,
printers, phones and fax machines, also likely exhibit the
characteristics of a hazardous waste when disposed, and can be managed
as a universal waste if diverted for recycling. These items currently
are allowed a household generator exemption with regards to disposal.
While this may present some confusion in the minds of consumers
regarding what the Act covers, the funding available for what is
covered provides for the later expansion of a collection infrastructure
for other electronic wastes that are not currently part of the program.
California has attempted to tap market forces to develop the
network of collection opportunities intended by the Act. Instead of
requiring local government to provide services, the Act allows for,
even encourages, private investment, innovation and initiative to grow
the system, along with services that can and may be provided by local
government. Often these services are provided in concert between
private enterprise and local government.
In addition to administering the funding to develop the recycling
system, one of the most important investments government can make is in
information and public education; specifically making sure that the
community knows what opportunities and services are available and what
is expected of the public in return.
Question 5. There appears to be widespread cooperation by Internet
sellers to comply with the California law by collecting the fee on
covered products. Is your Board satisfied that it is capturing the fee
on a majority of sales via the Internet? If not, can you recommend how
Federal legislation should address this issue?
Response: To date, we are satisfied with the revenues we are
receiving from a majority of sales via the Internet and have received
no complaints from instate retailers. The healthy revenue is largely
attributable to fact that all of the major retailers in the State are
participating in the program. Although we do not know its extent, there
is some traffic in unbranded electronics sold by businesses located out
of State or out of the country.
National legislation could impose a national advanced recycling
fee. This would eliminate the problem of a state's authority to impose
its fee on out-of-state retailers. If national legislation enacted a
requirement that producers take back discarded electronics, then fee
collection would not be an issue. If national legislation authorized
separate state programs, then specific provisions requiring compliance
with state fee requirements and allowing the ``burden'' on interstate
commerce should be included.
Question 6. Your state's recycling law requires manufacturers to
notify retailers of covered products--for which manufacturers have
complained that the internal costs of complying with these
administrative and other paperwork requirements can be quite high--in
order to receive reimbursement. Has California calculated the costs of
these requirements on companies? If so, does the disincentive of
paperwork costs negate the fee the state reimburses?
Response: This question appears to conflate two or more aspects of
California's Electronic Waste Recycling Act of 2003 (Act). Under the
Act, manufacturers do have an obligation to notify retailers of what
products are covered by the law and to update this notification
annually as new devices are brought into the system. Manufacturers are
also required to report to the State annually regarding covered
electronic device (CED) sales data, retailer notification efforts, CED
hazardous material content, CED recyclability, design for recycling
efforts, and consumer information activities. However, there are no
reimbursements available for fulfilling these basic obligations.
The Act does contain a provision for CED manufacturers to receive
payments if they engage in recycling activities that remove devices
from the state. The amount of payment currently available is equal to
the advanced recycling fee that would be paid by a consumer for that
type of device. Generally this manufacturer payment is much less than
the recovery and recycling payments available through the covered
electronic waste (CEW) payment system and no manufacturers are
currently registered to participate in the manufacturer payment system.
Some manufacturers have partnered with recycling enterprises in
California to offer services through the CEW payment system.
The CEW payment system does require a certain level of
documentation to ensure that only California sourced CEWs are processed
and claimed for payment. Since the program is less than a year old, the
cost of complying with this ``paperwork'' is presently an unknown
component of the overall cost of participating in the program.
Participants are required to file ``net cost reports'' with the state
annually, and from those it is expected that more can be learned of the
administrative burden. However, in response to some initial concerns by
a major retailer that the notification requirements were too complex
and expensive, California adopted regulations which clarified and
streamlined some of the requirements on manufacturers pertaining
notification to retailers.
Question 7. Your state's law imposes a uniform tax on each category
of covered display sold in the state, and the state has established a
payment schedule of $0.48 (48 cents) per pound that the state
presumably pays to recyclers. The law, understandably, allows the fee
to be increased if there are insufficient funds to pay recyclers. Since
the law does not speak to the lowering of the tax, and a steady rate of
return is guaranteed, what incentives do you see to improve the system
over time?
Response: To clarify, the state imposes a fee, not a tax, on the
sale of a covered electronic device sold in California. Unlike a tax
that is deposited into the General Fund, the main purpose of this
specific fee is to mitigate the cost of handling California-generated
electronic waste.
According to PRC 42464 (e), at least every two years, the State
must review the covered electronic waste recycling fee and make any
adjustments to the fee necessary to ensure that there is sufficient
revenue in the fund to support Electronic Waste Recycling Program.
Based on our interpretation of the statute, the State not only has the
authority to increase the fee should the need arise, but can also
decrease fee if need be.
The IWMB shall base the adjustment of the fee on both of the
following factors:
1. The sufficiency, and any surplus, of revenues in the account to fund
the collection, consolidation, and recycling of covered
electronic waste that is projected to be recycled in the State.
2. The sufficiency of revenues in the account for the State to
administer, enforce, and promote the Electronic Waste Recycling
Program, plus a prudent reserve not to exceed 5 percent of the
amount in the account.
Question 8. Since the California law took effect this past January,
I understand that some local retailers have been acting as collectors
for end-of-life electronics products. Some argue that this provides the
retailers an apparent benefit from the program because it brings
potential customers back into their stores to turn in older, obsolete
products. Can you speak to any evidence that your Board has that
retailers in California, under the new law, can both divert products
from the electronics from the waste stream and also promote sales of
new products?
Response: Based on the information that we have received from a
variety of stakeholders, a majority of retailers in California have not
been acting as handlers of electronic waste. However, it may be
possible that some retailers have either partnered with approved
collectors or have collected the devices themselves for the purpose of
monetary gain. Many retailers' businesses cannot physically accommodate
the collection and storage of electronic wastes. Although, once
retailers evaluate the potential economic benefit of acting as an e-
waste collector, they may design new stores for this function.
______
Response for the Record by Hon. Dawn R. Gallagher, Commissioner, Maine
Department of Environmental Protection
The Honorable Paul E. Gillmor
Question 1. The issue of electronic waste and recycling can be
looked at from several different perspectives. Could you please tell me
how you define ``electronic waste'' and do you consider recycling these
products more important in order to avoid an environmental hazard or
because you are worried about preserving landfill capacity?
A. Maine law does not contain a definition for electronic waste. It
does, however, define ``covered electronic device'' and specifies that
those devices are subject to the provisions of the law. Recycling
electronic products is critical to avoid emissions of toxics from
incineration, to preserve landfill capacity, and most importantly to
recoup the commodity resources contained in the products and avoid the
environmental costs associated with mining and production of virgin
commodities.
Question 2. Since individual persons have to make the choice to
give up their unused electronic equipment, what responsibilities do you
think they should bear? What role does public education have in this
effort and have you seen any successes with public education efforts in
your states on these or other recycling programs?
A. All electronics function for a finite time. Consumers may be
encouraged to give up electronic devices prior to the end of useful
life by new developments in technology, or by planned obsolescence or
marketing by manufacturers. From a public policy perspective, consumers
historically have borne some responsibility for ensuring that the waste
they generate appropriately enters the waste management system, either
through personal delivery to a drop off point or through collections
funded by taxes. Public education is critical for informing consumers
how to get their electronic wastes into the recycling system. In Maine,
we have had great success educating the public in where to deliver
their mercury-added products for recycling by providing workshops and
educational materials to local jurisdictions.
Question 1. In 1980, Congress enacted the Low-level Radioactive
Waste Policy Act. Under this law, a state is given the responsibility
to select disposal sites for low-level radioactive waste--a type of
waste that generally consists of low concentrations of relatively
short-lived hazardous waste. What intrigues me most though is that
several states have banded together to address this serious waste
concern. In fact, most states have set up and joined congressionally
approved interstate compacts to handle low-level waste disposal, while
others are developing single-state disposal sites. Recognizing the
interstate nature of electronics sales and product take-back and
refurbishment programs, is this model something that makes sense to you
or your state?
A. There are a number of examples of waste management situations in
which potentially significant advantages in pursuing regional
solutions, and important disincentives to implementing single state
approaches, exist. The siting of a low-level radioactive waste disposal
facility is such an example. Sharing the cost and regulatory burden of
a disposal site makes sense when each state does not necessarily
require its own facility and a single site can be shared. The situation
with electronic waste management is somewhat different and, we believe,
can be effectively addressed by a single state to meet that state's
needs. Maine chose to move ahead with comprehensive e-waste management
legislation when it did because it was an element critical to
achievement of the state's broader toxics reduction and waste
management goals. That is not to say, of course, that implementation of
a consistent e-waste management program by multiple states (or all
states) might not be desirable. From Maine's perspective it would,
however, be important that such a program be cost effective for states,
be efficient, and employ the principles of product stewardship.
States have taken a variety of different positions with respect to
e-waste management programs and, to date, there has not been broad
agreement concerning a uniform management model that might best serve
the national interest. The majority of states have not yet made
legislative proposals concerning e-waste management systems. Although
Maine has been a participant in national and regional discussions
concerning e-waste management, it chose to implement a single state
program at this time because it believes the program can be efficient
and effective, and will contribute toward the achievement of the
state's environmental goals.
Question 2. The system that you described in your testimony
provides that local governments have responsibility to collect products
from households in Maine. It is also my understanding that the law
allows for manufacturers to get a credit toward their obligation for
setting up their own recycling programs. Is this correct and can you
explain the benefit that the state sees in allowing this opportunity?
A. Maine's e-waste law does not preclude manufacturers from setting
up their own recycling program, and it gives the Department
responsibility to determine each manufacturer's pro rata share of the
orphan waste stream. The Department is currently engaged in rule-making
to implement the law, and as part of that rule we have proposed to
credit manufacturers for units they collect from Maine households as
part of a manufacturer take-back program. This eliminates any
disincentive manufacturers may perceive for conducting manufacturer
take-back programs, and provides an incentive for manufacturers to
engage directly the consumers directly in take back. Manufacturers that
do this have direct control on the costs of recycling those units they
take back, thus providing a mechanism through which manufacturers can
minimize their financial obligations in the Maine collection and
recycling system. The more directly involved manufacturers are in end-
of-life management of their products, the more incentive exists to
apply private sector innovation to develop a product that has maximum
commodity value at the end of life.
Question 3. Under the framework of your state law, collected
products will need to be sorted out by brand names in order for
individual manufacturing to be billed. Could you please help our
subcommittee understand the expenses that are involved in the sorting
of these products. What do you recommend be done to keep costs such as
these under control?
A. Under Maine's law, consolidators must create an accounting by
manufacturer of collected products; a physical sort by manufacturer is
not required. We do not yet have cost estimates from consolidators on
the expected costs of performing this accounting as units are received,
although some have indicated to DEP staff in anecdotal conversations
that they expect a minor increase in record-keeping and billing costs.
To keep costs under control, in the draft rule the Department is
proposing to approve consolidators to participate in the collection and
recycling system in part based upon their costs; consolidators will
need to control costs to receive Departmental approval.
Question 4. On the issue of ``orphan'' waste--or waste which a
company that is no longer in business made. Please explain the reasons
for the choices made by Maine to handle the recycling of older products
whose manufacturer is now defunct. What would you recommend be done at
the Federal level, if anything, to ensure that such issues do not
create problems for long-time electronics manufacturers?
A. Under Maine's law, the costs for consolidation and recycling of
orphan wastes is shared by existing manufacturers proportional to the
percentage of their products in the waste stream. After much discussion
with a variety of stakeholders, this was perceived to be the fairest
way to distribute costs due to the unavailability of state-specific
sales figures. Allocation of orphan waste costs proportional to sales
may be possible in a national system, and would avoid the problem of
creating financial impacts disproportional to current revenues on
existing manufacturers.
Question 5. Your testimony states: ``Maine's `shared
responsibility' electronic waste program should be allowed to prove
itself during several years of implementation. If a national program
were established, it should not be more costly to the consumer. Such a
program should correctly assign end-of life product responsibility to
the manufacturers and should reward `green design' and environmentally
sustainable production processes. It should not create a new layer of
bureaucracy in the name of gaining environmental and public health
benefits.'' Does this mean that you would oppose any national solution
unless it exempted your State?
A. We may oppose a national solution if it is more costly to Maine
consumers and taxpayers and does not provide manufacturers with
incentives to maximize the commodity value of electronics at the end-
of-life, thus minimizing environmental degradation caused by the mining
of virgin materials.
Question 6. Your testimony states that your state ``law requires
manufacturers recognize the environmental impacts of their products.
Not only should manufacturers be responsible for ensuring the ``proper
handling, recycling and disposal of discarded products'', but they
should also ``reduce, and to the extent feasible, ultimately phase out
the use of hazardous materials in these products.'' Most Federal
environmental law does not get into the details of regulating
manufacturing, but rather deals with the outputs. You statement seems
to suggest that environmental law should govern manufacturing
processes. Is this correct? In addition, this statement suggests that
the manufacturer should be liable for every action by the retailer and
consumer as long as they are in possession of the electronics item. Is
this reasonable? Why?
Good environmental law sets standards that are protective of public
health and the environment and that promote environmental stewardship
while leaving it up to the private sector how best to achieve these
standards. In order to achieve protection of public health and the
environment, it can be appropriate to pass laws that restrict the use
of hazardous materials. These laws only preclude manufacturing
processes that utilize materials that pose an unacceptable risk to
public health and the environment. They also serve a public policy goal
of encouraging private sector entities to adopt a sustainable business
model that considers cradle-to-cradle product lifecycle minimizing
long-term liability for the manufacturer.
My statement as quoted above was not meant to imply that the
manufacturer should be liable for every action by the retailer and
consumer as long as they are in possession of the electronics item.
However, through green design manufacturers have the ability to
minimize any potential harm from their products no matter who is in
possession of them.
Question 7. Your testimony claims that Maine's e-waste law is not
an expansion of bureaucracy. I would agree with you that there are few
requirements placed on the state or its municipalities. How do you
respond, though, to arguments that the Maine law co-opts the private
sector and its infrastructure? Do electronics manufacturers and
retailers who operate in Maine consider the Maine law to be ``business
friendly''?
A. We are not aware of any claims that the Maine law co-opts the
private sector and its infrastructure. On the contrary, we expect that
implementation of the law will likely provide opportunity for private
sector expansion, since the demand for household generated e-waste
handling services is expected to increase. There are no electronics
manufacturers operating in Maine. Retailers, however, through the
Consumer Electronics Retailers Coalition (representing retail
businesses in all 50 states and including businesses such as Best Buy,
Target, Circuit City, Radio Shack and Walmart) have expressed strong
support for Maine's program, in part because the program does not rely
on a point-of-sale advance recycling fee.
The Honorable Charles F. Bass
Question 1. This Committee in the past has often discussed
interstate solid municipal waste. I would like to hear each of your
thoughts on what implications would result if all fifty states created
their own programs and standards in how to handle e-waste? What
complications would you see as a result of this on the flow of
interstate waste?
A. From a state perspective, there are two major complications that
would result from fifty different state systems. The first is confusion
on the part of the regulated community as to which requirements apply
in which states, increasing the amount of state resources that may be
needed for compliance assistance and enforcement. The second potential
unintended consequence is that different state systems could encourage
the cross-border shipment and misidentification of the state of
generation of specific e-waste units by persons looking to scam states
that may provide greater payment for recycling.
Question 2a. In talking with the New Hampshire Department of
Environmental Services, one of their concerns has been with the
mobility of items: where an item is sold is not necessarily the place
where it is disposed. Could you address the problems with charging a
fee at the point of sale for products bought over the Internet if a
national program is not implemented?
A. This is not an issue for Maine as we do not charge a fee at the
point of sale.
Question 2b. Additionally, could you discuss the problem with
individuals buying an electronic product from one state and disposing
of it in another? How would that affect the success of your program and
how have you addressed this problem in your own strategies?
A. The purchase of an electronic product in another state does not
affect the viability of Maine's program. Maine's law requires
manufacturers to share responsibility for ensuring recycling of their
products when generated as waste by Maine households. Manufacturers pay
directly for their share of the costs; Maine's system does not impose
and collect a fee from any party to finance the system.
Question 3. Would you agree that if a national fee was imposed with
pro rata payments made to the states that this would be the most
efficient way to pay for such electronic waste programs?
A. The imposition of a national fee may create some efficiency by
standardizing the source of funding. However, providing pro rata
payments to the states will require all states to establish systems for
managing the funds, maintaining the status quo of divergent management
systems with the potential to create inefficiencies and increase costs.
The greatest efficiency can be gained through the creation of a
national system managed by a third party organization and that does not
impose management requirements on individual states.
Question 4. Do you see any significant differences in your state's
strategy with the other states represented on the panel that better
encourages and builds incentives for both the consumer and the industry
toward a recycling approach to their e-waste?
A. Yes. Maine's system requires manufacturers to be responsible for
ensuring the recycling of their products once collected and
consolidated by consumers and local governments. This builds incentives
for manufacturers to design their products to recapture the most value
at the end of life, and for recyclers to develop efficiencies in
recycling systems to maximize net revenues.
Maine law also prohibits the disposal of cathode ray tubes
beginning in July 2006, and of mercury-added products (including flat
panel displays) as of January 2005. Along with no or minimal end-of-
life fees, these disposal bans encourage consumers to ensure their
electronics are delivered in to the recycling system.
Question 5. Could you talk about any specifics problems that Maine,
as a state with more rural municipalities, faces in implementing an e-
waste program that might be different than larger and more populated
states like California? How did you approach those problems with your
legislation?
A. As a shared responsibility system, the most perplexing problem
in implementing Maine's law is how to fairly apportion costs of
transportation from rural collection points to centralized
consolidation points between manufacturers and rural municipalities.
The Maine law holds manufacturers responsible for transportation costs
commensurate with a minimum amount of waste materials consolidated, yet
it also requires manufacturers to provide geographically convenient
consolidation in all areas of the state. Maine law holds municipalities
responsible for ensuring that their residents' waste televisions and
computer monitors are delivered to consolidation points based on the
understanding that the costs of collection and transportation to
consolidation would be very limited. We are currently in process of
making a final determination on this issue through our rule-making
process.
The Honorable Hilda L. Solis
Question 1. Has your program set accountable goals for how many
products should be collected? If there are no goals, how does your
program encourage more electronics to be recycled?
A. Maine law prohibits the disposal of mercury-added products
(including flat panel displays) as of January 2005 and of cathode ray
tubes as of July 2006, effectively banning the disposal of all
televisions and computer monitors. In effect, this disposal ban sets a
goal of recycling 100% of televisions and computer monitors at the end
of life. The state encourages recycling of electronics by making grants
available to local communities to develop collection infrastructure and
through targeted educational efforts to consumers through their
municipal recycling and solid waste facilities.
Question 2. Does your program have a system to track the amount of
E-waste that will be collected and recycled? Do you have any statistics
that show that more products are being recycled as a result of your
program?
A. Maine's e-waste law requires annual reporting of actual units
recycled. We will perform our first evaluation of how well the system
is working once Maine's e-waste law and disposal bans come into full
effect and the first round of annual reports is received early in 2007.
We have current data from municipalities that have already done some
voluntary collection and recycling of televisions and computer monitors
that will be used as a baseline for evaluating any increases in
recycling that can be attributed to full implementation of Maine's e-
waste law in 2006.
Question 3. What has been your experience to date of the
electronics law operating in your state? Does your state have enough
experience in implementing this law to suggest what you might change
about it?
A. To date, the law has required manufacturers of televisions and
computer monitors to submit plans for compliance with the manufacturer
responsibility provisions of the law. The vast majority of
manufacturers are in compliance with the requirement to submit a plan,
and the Department is working with manufacturers to have them address
any provisions of their plans that are not in conformance with Maine's
requirements. The manufacturer responsibility for recycling provisions
do not come into effect until January 2006, so we do not yet have
experience from a fully operational system. There is some minor
streamlining of manufacturer plan and reporting requirements that we
would suggest to anyone interested in using Maine's law as a model.
Question 4. What is your advice for how to craft national
legislation that would take into consideration the different state
legislation already enacted? What aspects of your state legislation
would make it most difficult to incorporate into national legislation?
A. National legislation should allow for state electronics waste
legislation that is at least as effective and less costly to consumers
and taxpayers. That said, if an effective national system is instituted
that implements the principles of product stewardship (see attached
ECOS resolution), there will be great incentive for states to sunset
their programs in favor of a uniform national system.
We recommend that a federal law impose a disposal ban uniformly
across the country to prevent states without disposal bans from
becoming dumping grounds for e-waste and to maximize the recapturing of
the commodity resources in e-waste. Like the Maine law, any national
legislation should include provisions that clearly assign some direct
responsibility to manufacturers for their products at the end of life.
There are fewer barriers to creating an efficient national system
that is truly protective of public health and the environment than
there are to creating a state system that accomplishes the same levels
of protection. A federal system can include a uniform set of
environmentally sound management standards and a single auditing system
to which all recyclers would be subject equally; a federal system will
not create inequities in manufacturer and/or consumer costs across
state borders; and the federal government has authority to control the
flow of goods into the country from foreign manufacturers that do not
comply with a federal e-waste law.
______
Maryland Department of the Environment
Baltimore MD 21230
September 7, 2005
The Honorable Paul E. Gillmor
U.S. House of Representatives
Committee on Energy and Commerce
Environment and Hazardous Materials Subcommittee
2323 Rayburn House Office Building
Washington, DC 20515
Dear Congressman Gillmor: Thank you for the opportunity to address
the Environment and Hazardous Materials Subcommittee on July 20, 2005
regarding current activities, environmental stewardship, and the proper
federal role related to electronics waste. The Maryland Department of
the Environment (MDE) appreciates your interest in the views of the
states that are currently implementing legislation on electronics
recycling systems and federal agencies that are assisting with
determining a solution to the issues of electronics waste and
recycling. Our responses to additional questions by Subcommittee
members in your letter of August 23, 2005 are enclosed.
I mentioned during my testimony that the US Environmental
Protection Agency (EPA) Region 3 eCycling Pilot Project (Project) gave
Maryland the shared resources needed to begin electronics recycling in
the State and I would like to share additional details regarding the
Project and how it has influenced our current eCycling efforts. The
Project kickoff was held in Harford County, Maryland in October 2001.
The Project's goal was to develop an economically and environmentally
sustainable collection, reuse, and recycling system for electronics
based on the principle of shared responsibility among business
(electronics manufacturers and retailers), government, and consumers.
Project partners included:
EPA Region 3;
EPA Region 3 state (Delaware, Virginia, West Virginia, District of
Columbia, and Maryland) environmental protection agencies; and
Sony, Panasonic, Sharp, Envirocycle, Inc., Waste Management Asset
Recovery Group, Elemental, Inc., Electronic Industries Alliance
(EIA), and Polymer Alliance Zone of West Virginia.
EIA, a national trade organization and one of the partners,
contributed $50,000 to the Project to help fund transportation and
recycling of electronic wastes. Contributing members of EIA included
Canon, Hewlett-Packard, JVC, Kodak, Nokia, Panasonic, Philips Consumer
Electronics North America, Sharp, Sony, and Thomson Multimedia.
In response to concerns raised by participating electronics
manufacturers and recyclers regarding consistent enforcement of
hazardous waste regulations in the Region during the life of the
Project, EPA and the Region 3 states determined that a new regional
regulation should be developed to exclude from hazardous waste
requirements those electronics from the Project that were destined for
recycling and reuse. A Memorandum Of Understanding between EPA Region 3
and Region 3 environmental protection agencies was signed in 2001 to
manage end-of-life electronics as a solid waste through the Mid-
Atlantic States. On December 26, 2002, EPA issued a final rule
exempting CRT's and CRT glass destined for recycling and reuse from
regulation as a hazardous waste. This enabled those involved in the
generation, transportation, collection, accumulation, storage, and
dismantling of end-of-life electronics to feel more secure in
participating in the Project.
During the Project, over 2,700 tons of electronics were diverted
from the waste stream through a total of 58 collection events and nine
(9) permanent collection programs in the Region 3 states. Maryland held
21 one-day and two (2) two-day collection events and established one
permanent collection facility (Wicomico County) as part of the project,
collecting over 250 tons of electronics. This was a remarkable response
for a small state and resulted in a significant increase in public
awareness of electronics recycling and demand for these activities.
Overall Project costs were approximately $1.1 million or an average of
20 cents per pound.
The Project was successful because it created a partnering
environment and a common vision amongst government and industry. The
idea brainstorming, combined funding, consistent advertising message,
and shared lessons learned were invaluable to the Region 3 states as
they struggled to move toward developing long-term electronics waste
recycling systems. Although EPA Region 3 continues to support its
states through monthly conference calls, there is no longer the
coordinated effort regionally to manage electronics wastes. However,
Maryland has continued to establish electronics recycling mechanisms
and has collected over 3,905 tons of electronics since eCycling began
in 2001.
I hope this additional information has been helpful to you. We will
continue to monitor your Subcommittee's activities and national
activities related to electronic wastes and remain ready to assist you
as necessary. If you have additional questions, please feel free to
contact me or Mr. Horacio Tablada, Director, Waste Management
Administration, at 410-537-3304, toll-free at 800-633-6101 or via email
at [email protected] if we may be of additional assistance.
Very truly yours,
Kendl P. Philbrick
Secretary
Enclosures
cc: The Honorable Hilda L. Solis, Ranking Member
Subcommittee on Environment and Hazardous Materials
Mr. Donald Welsh, Region 3 Administrator, U.S. Environmental
Protection Agency
The Honorable Paul E. Gillmor
Question 1. The issue of electronic waste and recycling can be
looked at from several different perspectives. Could you please tell me
how you define ``electronic waste'' and do you consider recycling these
products more important in order to avoid an environmental hazard or
because you are worried about preserving landfill capacity?
Response. The Maryland Department of the Environment's working
definition of ``electronic waste'' is ``unwanted consumer electronics,
such as computers, monitors, keyboards, televisions, audio equipment,
printers, cellular phones, and other home electronic devices.''
Although electronic waste contains toxic materials, such as lead,
mercury, and cadmium that can be hazardous to public health and the
environment if not properly managed, electronic equipment also contains
valuable resources, such as precious metals, engineered plastics, glass
and other materials, all of which require energy to extract, refine,
manufacture, and transport. Therefore, it is important not only to
protect the environment and preserve landfill capacity, but also to
encourage energy efficiency through the recovery of valuable materials.
Question 2. Since individual persons have to make the choice to
give up their unused electronic equipment, what responsibilities do you
think they should bear? What role does public education have in this
effort and have you seen any successes with public education efforts in
your states on these or other recycling programs?
Response. Many consumers are aware of both the hazards associated
with the improper management of used electronics and the valuable
resources contained in these products. However, we have seen that many
consumers are not aware of the ways that used electronics can be
refurbished, reused, and recycled. Through our efforts during the EPA
Region 3 eCycling Pilot Project and our work with the counties in
Maryland, we have seen that public education plays a crucial role in
the success of our eCycling programs. Counties that invest time and
money in advertising their events through flyers in schools, mailings,
radio spots, posters, and other outlets, witness higher participation
rates and volumes of material collected than counties that do not
advertise their collection events and facilities well. Although we know
that advertising is important, many Maryland counties simply cannot
afford to spend a lot of money on advertising electronics collection
activities. Maryland would welcome federal assistance in this area.
In Maryland, as is being witnessed around the country, recycling
rates seem to have reached a plateau. Recycling is no longer a hot
topic and has become routine for many of our citizens. EPA has
recognized this problem and is working toward developing a plan for
increasing the national recycling rate. Undoubtedly, public education
regarding the benefits of recycling will play a significant role in
these efforts. A national education and outreach campaign, with a
consistent message, could be beneficial.
Question 3. In 1980, Congress enacted the Low-level Radioactive
Waste Policy Act. Under this law, a state is given the responsibility
to select disposal sites for low-level radioactive waste--a type of
waste that generally consists of low concentrations of relatively
short-lived hazardous waste. What intrigues me most though is that
several states have banded together to address this serious waste
concern. In fact, most states have set up and joined congressionally
approved interstate compacts to handle low-level waste disposal, while
others are developing single-state disposal sites. Recognizing the
interstate nature of electronics sales and product take-back and
refurbishment programs, is this model something that makes sense to you
or your state?
Response. Low-level radioactive waste is classified as a hazardous
waste throughout the country, requiring careful monitoring, handling,
tracking, transportation, and disposal. Many states, including
Maryland, have chosen to join with other states to identify disposal
sites for these hazardous wastes for economic reasons, as facilities to
manage low-level radioactive waste are quite expensive. Although used
electronics may contain some toxic materials such as lead, mercury and
cadmium, they are not, in their whole state, classified as hazardous
waste in all states. It may be useful to work with other states in the
same geographic regions on projects involving electronics waste.
However, there would be difficulties in managing these materials
regionally as definitions of electronic waste differ and not all states
regulate electronics waste the same way, if at all.
Question 4. The law that Maryland recently passed allows
manufacturers a choice in how to meet the state requirements--either
establishing a take back program or paying the state a fee. This seems
like an interesting approach that may help to provide different options
to residents in Maryland--Was that one of the goals of the legislation?
Response. Maryland's Statewide Computer Recycling Pilot Program law
requires a manufacturer of an average of more than 1,000 computers over
the preceding three-year period to pay an initial $5,000 registration
fee, regardless of whether the manufacturer has implemented a computer
take-back program, if the manufacturer wishes to sell its computers in
Maryland on or after January 1, 2006. In subsequent years, if a
manufacturer has implemented a take back program acceptable to the
Department, the registration fee will be reduced to $500. Those
manufacturers that have not implemented take back programs after 2006,
are required to pay $5,000 each year if they wish to continue to sell
their computers in Maryland. We do not expect that the manufacturer's
choice to establish a take back program or continue to pay Maryland the
$5,000 annual fee would have any significant impact on the consumer.
Question 5. Currently the Maryland law only focuses on computer
products. This subcommittee has heard testimony that the U.S. EPA has
concerns with all types of cathode ray tubes (CRTs), including computer
monitors and televisions. Does your Department plan on expanding the
scope of products to include televisions?
Response. The Maryland Department of the Environment has no plans
at this time to propose legislation regarding electronics recycling
during the 2006 legislative session that begins in January. Electronics
recycling in Maryland currently includes many types of electronics,
including computers, monitors, keyboards, mice, printers, televisions,
cellular phones, etc.
Question 6. Of the three states that have enacted an electronic
waste law, Maryland chose, arguably, the most minimal approach to
address electronic waste streams and recycling. Was this decision made
consciously because of concerns about regional or Federal actions or
was it simply the political reality that all the State legislative
branch could support was your five-year registration and take-back
program?
Response. The Maryland Department of the Environment had input on
fashioning some provisions of the Statewide Computer Recycling Pilot
Program law that became effective July 1, 2005, but it was a bill that
was introduced and sponsored by several delegates. As stated in the
response to the previous question, the Department has no plans at this
time to seek changes to the current law.
Question 7. Your testimony refers to the importance of the private
recycling market. Could you please expound on your testimony's
reference to Maryland electronics recyclers who ``have often responded
to demand for electronics waste reuse, refurbishment, and recycling by
negotiating mutually beneficial contracts with local governments for
collection and recycling activities,'' thus allowing many local
governments to increase their electronic waste collection activities?
Response. Several major recyclers in Maryland have been very active
in seeking contracts with local governments to manage electronics waste
collected through permanent county facilities and one-day events. In an
effort to make these collection activities economically feasible for
both parties, these recyclers have kept the costs to the local
governments low in order to receive a consistent quantity and quality
of electronics to support their recycling business. For example, one
recycler is currently charging a metropolitan county two cents per
pound for electronics collected at the county's permanent collection
facility. This relatively affluent county has been shown to collect
rather high-end electronics products that have reuse and refurbishment
potential and can be resold at a profit to the recycler. This not only
benefits the recycler but benefits the county by managing its
electronics waste and preventing disposal, which helps increase
disposal capacity.
Materials generated through the recycling of electronics in
Maryland have several destinations. Some electronics recyclers are very
efficient at recycling nearly 100% of the materials they collect and
dismantle. They have been able to find markets for all the materials
generated from shredding or dismantling, including the plastics and
varied ferrous and non-ferrous metals. Other electronics recyclers are
more involved in refurbishing electronics for reuse and have found
local and overseas markets for these items. As Maryland does not
specifically regulate electronics recyclers nor require reporting on
their activities, we rely on self-disclosure by these companies
regarding their markets and the destinations for these materials.
Question 8. In the section of your testimony that talks to
Maryland's decision about its financing mechanism, you mention that
your state was uncomfortable pursuing plans that had been adopted in
either California or Maine. In fact, you state: ``Because many
Workgroup members voiced differing opinions on key components of an
eCycling system (a definition for electronic waste, a funding
mechanism, or whether to ban disposal of electronic waste in landfills
and incinerators), they felt that decisions regarding funding and a
system for electronics collection and recycling in Maryland should be
delayed to allow for the development of a national electronics waste
management system.'' Does this mean you want a Federal electronic waste
program to make this financing decision for you?
Response. During the Workgroup discussions, it was decided that it
would be best for Maryland to take a ``wait and see'' approach, in part
because there were efforts nationally to develop a system for managing
electronic wastes. However, with the enactment of Maryland's
legislation, we will now focus our efforts on implementing and
evaluating the provisions of this new law without regard to potential
federal action.
Question 9. You mention in your testimony that you are unsure how
many companies your state law covers, which makes it impossible to know
how much money your registration fee will raise. When do you expect to
have a full understanding of how many companies are involved in your
state and how much money you should generate? What will the State do if
it does not generate enough money under the registration fees to pay
the costs of its program?
Response. The Department has mailed approximately 250 letters to
companies identified as potentially subject to the requirements of the
new computer recycling law. The Department is also following up with
companies that have questions about the law. It is expected that by
early fall, there will be reliable information about the number of
computer manufacturers that will be required to register with and pay
the registration fee to the Department by January 1, 2006. By mid to
late January, the Department should discern the amount of funding that
will be available to support the Pilot Program the first year. Since
the registration fee will be reduced in future years of the pilot if a
manufacturer implements a take-back program, it will take at least
until January 2007 to determine the amount of money that will be
available to support the Program through 2010.
Since 1) electronics recycling is voluntary, 2) there are no
accurate figures regarding how much electronic waste is being stored or
generated, 3) the program will have only been in place for four years
this fall, and 4) eCycling is still growing in Maryland, there is no
reliable data at this time regarding the exact costs for providing
recycling services for all computers in the state. In addition, the
Program is a pilot that will expire December 31, 2010 if no further
action is taken by the legislature on computer recycling.
Question 10. Your state law allows a reduced registration fee if a
computer manufacturer has a ``take-back'' program. Since the
registration fee drives the local recycling programs, what do you see
as the trade off and what do you estimate to be the decrease in
revenue? If a company has a ``take-back'' program, but it does not
apply to other maker's products or there is a fee involved, how does
your law handle this? Do you think this creates more or less of an
incentive under your state law to adopt a state sanctioned ``take-
back'' program?
Response. Several counties in Maryland are currently maintaining
their own electronics recycling activities without State financial
support. The registration fees that will be received from computer
manufacturers are not expected to do any more than supplement or
reimburse for some of these activities. More fees will obviously allow
more activity, but if annual fee collection decreases, then assistance
to local jurisdictions will correspondingly decrease. With no past data
to guide our projections, we have no way to reliably estimate revenues
for this program. If a company implements a take back program, it will
continue to pay a $500 annual fee to the State. Maryland's law already
provides that a take back program must be ``acceptable'' to the
Department, so we, in effect, ``sanction'' each program while allowing
manufacturers the flexibility to design and implement whatever makes
the best business sense for them. .
The Honorable Charles F. Bass
Question 1. This Committee in the past has often discussed
interstate solid municipal waste. I would like to hear each of your
thoughts on what implications would result if all fifty states created
their own programs and standards in how to handle e-waste? What
complications would you see as a result of this on the flow of
interstate waste?
Response. Maryland addressed the issues of siting landfills and
transporting solid waste between jurisdictions through the efforts of
the Solid Waste Management Task Force in 1998. The recommendations of
the Task Force included encouraging regionalization and public-private
partnerships, increasing recycling, collecting better information about
waste generation, transportation, and disposal within and outside the
region, and increasing funding for recycling, source reduction, and
education. The full text of the report can be found on the Department's
website at: http://www.mde.state.md.us/assets/document/waste/SW--
TaskForce98.pdf.
Question 2a. In talking with the New Hampshire Department of
Environmental Services, one of their concerns has been with the
mobility of items: where an item is sold is not necessarily the place
where it is disposed. Could you address the problems with charging a
fee at the point of sale for products bought over the internet if a
national program is not implemented?
Response. The Electronics Recycling Workgroup studied the funding
and implementation of a system for collection and recycling of waste
electronics in the fall of 2004. The members of the Workgroup expressed
concerns regarding the use of an advanced recovery fee for the reasons
you mentioned. The recommendations of the Workgroup can be found on the
Department's website at: http://www.mde.
state.md.us/assets/document/Electronics%20Workgroup%20Report.pdf.
Question 2b. Additionally, could you discuss the problem with
individuals buying an electronic product from one state and disposing
of it in another? How would that affect the success of your program and
how have you addressed this problem in your own strategies?
Response. At this time, it is not anticipated that the problem you
mention will impact the success of the Statewide Computer Recycling
Pilot Program in Maryland. The new law requires manufacturers of
computers sold in Maryland to register and pay a fee to the Department.
These registration fees will be used to provide grants to local
governments and municipalities to support their computer recycling
programs and for the Department's Office of Recycling. The law does not
address disposal of computers in Maryland.
Question 3. Would you agree that if a national fee was imposed with
pro rata payments made to the states that this would be the most
efficient way to pay for such electronic waste programs?
Response. The Department has no data that attempt to rank the
efficiency of different models of program design and/or funding.
The Honorable Hilda L. Solis
Question 1. Has your program set accountable goals for how many
products should be collected? If there are no goals, how does your
program encourage more electronics to be recycled?
Response. The Department has not set specific goals related to
electronics recycling; however, the Department does have an objective
related to increasing the Statewide recycling rate as part of
Maryland's State agency Managing Maryland For Results tracking. The
objective is to ``Increase the statewide voluntary waste diversion rate
to 40% by the end of calendar year 2005.'' Electronics are a recyclable
material that counts toward each county's annual waste diversion rate
(determined by adding the county's recycling rate and the county's
source reduction credit, if applicable). Therefore, electronics
recycling is a factor in the statewide waste diversion rate, even
though it is not counted separately.
Question 2. Does your program have a system to track the amount of
E-waste that will be collected and recycled? Do you have any statistics
that show that more products are being recycled as a result of your
program?
Response. Maryland's Statewide Computer Recycling Pilot Program
just became effective July 1, 2005 and the Department is in the process
of implementing the law. Although we do not have any statistics at this
time regarding the program, we have been tracking electronics
collection activities since October 2001, when eCycling activities
began in Maryland. Our most current collection data is enclosed for
your information.
Question 3. What has been your experience to date of the
electronics law operating in your state? Does your state have enough
experience in implementing this law to suggest what you might change
about it?
Response. The Statewide Computer Recycling Pilot Program law became
effective July 1, 2005. Computer manufacturers are required to register
and pay a registration fee to the Department by January 1, 2006 or they
will no longer be able to sell their computers in Maryland. The
Department does not have any experience to report at this time.
Question 4. What is your advice for how to craft national
legislation that would take into consideration the different state
legislation already enacted? What aspects of your state legislation
would make it most difficult to incorporate into national legislation?
Response. Again, as we are just beginning the implementation of our
new law, the Department does not have any advice at this time.
ELECTRONIC WASTE: AN EXAMINATION OF CURRENT ACTIVITY, IMPLICATIONS FOR
ENVIRONMENTAL STEWARDSHIP AND THE PROPER FEDERAL ROLE
----------
THURSDAY, SEPTEMBER 8, 2005
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Environment and
Hazardous Materials,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2322, Rayburn House Office Building, Hon Paul E. Gillmor
(chairman) presiding.
Members present: Representatives Gillmor, Bono, Otter,
Solis, and Inslee.
Staff present: Mark Menezes, chief counsel for energy and
environment; Jerry Couri, policy coordinator; Tom
Hassenboehler, majority counsel; Peter Kielty, legislative
clerk; and Dick Frandsen, minority senior counsel.
Mr. Gillmor. We will call the subcommittee to order. And we
did have two panels consisting of nine members, but we thought
it might be a better idea if we consolidated those two panels
into one panel of nine members. So we will ask all of the
panelists, both on panel one and panel two, if they could come
forward and take a seat at the witness table.
And we had name tags for everybody, Jerry. So we can get
the name tags and get the seating?
We will start. Once again, I apologize to this panel. Two
of the members of the panel are distinguished former colleagues
of ours, so they are used to all of this confusion, Steve and
Dave. But let us proceed, and we are waiving opening statements
for this hearing so that we can facilitate the witnesses. And I
would propose that we go in the order that our panelists were
originally listed.
The first would be Joel Denbo of the Institute of Scrap
Recycling Industries. We normally have 5 minutes, and we would
ask if you would stay within that. And, of course, your
complete statements will become part of the record.
STATEMENTS OF JOEL DENBO, CHAIR, INSTITUTE OF SCRAP RECYCLING
INDUSTRIES, INC.; MICHAEL VITELLI, SENIOR VICE PRESIDENT, BEST
BUY, ON BEHALF OF CONSUMER ELECTRONIC RETAILERS COALITION;
STEVE LARGENT, PRESIDENT AND CEO, CTIA-THE WIRELESS
ASSOCIATION; DAVE MCCURDY, PRESIDENT AND CEO, ELECTRONIC
INDUSTRIES ALLIANCE; PARKER E. BRUGGE, SENIOR DIRECTOR AND
ENVIRONMENTAL COUNSEL, CONSUMER ELECTRONICS ASSOCIATION; DAVID
A. THOMPSON, DIRECTOR, CORPORATE ENVIRONMENTAL DEPARTMENT,
PANASONIC CORPORATION OF NORTH AMERICA; GERALD L. DAVIS,
PRESIDENT & CEO, GOODWILL INDUSTRIES OF CENTRAL TEXAS, INC.;
MARK MURRAY, EXECUTIVE DIRECTOR, CALIFORNIANS AGAINST WASTE;
AND RENEE ST. DENIS, DIRECTOR, AMERICAS PRODUCT TAKE BACK,
HEWLETT-PACKARD COMPANY
Mr. Denbo. Mr. Chairman and members of the subcommittee I
am Joel Denbo of the Institute of Scrap Recycling Industries.
ISRI is the trade association that represents 1,260 private
for-profit companies that process, broker and industrially
consume scrap commodities including metals, paper, plastics,
glass, textiles, rubber, and electronics at nearly 3,000
facilities worldwide. Electronics scrap is nothing more than a
complex combination of these items.
I am also the third generation of my family to own and
operate Tennessee Valley Recycling, a company that began small,
struggled for years, and will celebrate a century of recycling
in 2007, with plants in Alabama and Tennessee.
The recycling industry is made up of entrepreneurs whose
businesses, large and small, collectively process over 130
million tons of recyclables each year, worth upwards of $30
billion. ISRI member companies have been recycling electronics
for decades. In 2002, recognizing the ever-growing number of
obsolete personal computers and peripherals and other
electronics materials entering into the recycling stream, ISRI
formed an Electronics Council to address the issues unique to
this segment of the scrap recycling industry's activities.
The recycling of electronics--as entrepreneurs, I can
assure you that we would not be here today if we did not
recognize the value of this market. The explosive growth of
electronics has presented challenges that need to be addressed.
Scrap is not waste. Recycling is not disposing. These are two
simple concepts that are often misunderstood. Scrap is a
valuable raw material used in manufacturing. In contrast, waste
has no value and generally ends up in landfill.
Defining obsolete electronics as waste undermines and
overlooks the value that these electronics retain if properly
recycled. When properly handled, the recycling of electronics
poses little to no environmental risk, though ISRI is
implementing a comprehensive integrated quality environmental
health and safety management system. We call this Recycling
Industry Operating Standards, or RIOS. Few industries have
attempted such a huge step, but we believe that it is valuable
to promote worker safety and manufacture of high quality raw
material feed stocks.
The third issue involves the scope of the challenge. In the
short form, our country needs to deal with the amount of
electronics that are stored in closets, basements, and
warehouses. Some of these materials may have a value once
calculated, sorted, transported, and recycled. There seems to
be general agreement that our country needs some sort of short
term, and I reiterate short term, funding mechanism to cover
these costs, but there is less agreement on how it should be
funded.
ISRI's Electronics Council is taking a look at this issue
and comparing the two propositions most often discussed: cost
internalization by the responsible manufacturers, and an
advanced recycling fee administered by the government. We
believe if funding is needed, cost internalization is the
better of these alternatives. It is cheaper for consumers and
taxpayers and provides a strong incentive for manufacturers to
design their products to make them easier to recycle. Design
for Recycling is a concept that ISRI developed 20 years ago. It
calls on manufacturers to design products that can be easily
recycled, minimizing the risk. Unfortunately, few manufacturers
have voluntarily adopted the Design For Recycling philosophy.
Electronics manufacturers are better than most, and we
appreciate that. But there is still a significant room for
improvement.
There is one more challenge that we must undertake in the
long-term market. We must work together to develop markets. As
the market grows, demand grows, the value of the commodity
grows, and the need to subsidize electronic recycling falls.
Hence, we suggest including funding for research.
In the end, our country should be encouraged to recycle. We
must ensure that scrap electronics that come out of the
basements, closets, and warehouses are handled properly,
recycled, and not disposed of in a landfill. We should address
this issue in a way that is not overburdened with regulation,
that encourages a marketplace economy, and protects America's
environment.
Thank you, Mr. Chairman and members of the subcommittee,
for addressing this timely issue. I welcome any questions you
may have.
[The prepared statement of Joel Denbo follows:]
Prepared Statement of Joel Denbo, Chair, Institute of Scrap Recycling
Industries
Mr. Chairman and Members of the Sub-committee, my name is Joel
Denbo. I am here as Chair of the Institute of Scrap Recycling
Industries (ISRI). ISRI is the trade association that represents 1,260
private, for-profit companies that process, broker and industrially
consume scrap commodities including metals, paper, plastics, glass,
textiles, rubber and electronics at nearly 3,000 facilities worldwide--
over 80% of those facilities are located in the United States.
Approximately 300 of our 1,260 members handle electronics, either
exclusively, or as an aspect of their other recycling activities. I am
also the third generation leader of Tennessee Valley Recycling, a
company my family began in 1907 that currently has plants located in
Alabama and Tennessee.
In the minds of many, recycling in the United States is a
phenomenon that began in the 1970's following the original Earth Day
celebration. For others, awareness dates to the late 1980's following
the infamous voyage of the ``garbage barge'' and the ensuing fears that
landfill capacity had reached a crisis stage. It may interest the
Committee to know that--the scrap recycling industry actually dates
back to the beginnings of our nation, when a statue of King George III
was toppled in NYC and its metal was used to make bullets for the
Continental Army. Our members are in the business of recycling, and
have formed the basis of the established recycling infrastructure that
exists in this country today.
Today, the processing of scrap commodities is an integral part of
the U.S. economy and its domestic manufacturing industries. Scrap
commodities are collected for beneficial reuse, conserving impressive
amounts of energy and natural resources in the recycling process. For
example, according to the Environmental Protection Agency recycled
aluminum saves the nation 95 percent of the energy that would have been
needed to make new aluminum from virgin ores. Recycled iron and steel
result in energy savings of 74 percent; recycled copper, 85 percent;
recycled paper, 64 percent; and recycled plastic, more than 80 percent.
Collectively, ISRI members process over 130 million tons of recyclables
each year, worth upwards of $30 billion and contribute more than $2
billion annually to the US balance of trade.
ISRI's member companies are family owned businesses that have stood
by, and with, the same towns and cities throughout America for the past
century, creating the backbone of the recycling infrastructure you see
in this country today. In fact, in two years my company will celebrate
the one hundredth anniversary of its founding by my immigrant
grandfather and his brother. ISRI members have provided stable, good-
paying jobs in this country during the boom years, the lean years, and
in war time. Understandably, we are known as America's ``Original
Recyclers'' and proudly wear the badge of the Voice of the Recycling
Industry.
ISRI members have been recycling electronics for decades as an
integral part of their recycling operations. Indeed, early computers--
mainframes as they were known, were highly sought after commodities in
our industry. In 2002, recognizing the ever-growing number of obsolete
personal computers and peripherals, and other electronics materials
entering the recycling stream, ISRI formed an Electronics Council to
address the issues unique to this segment of the scrap recycling
industry's activities. Sensing an opportunity, as good businessmen and
entrepreneurs generally do, many of our member companies are investing
significant capital to expand their businesses to recycle more
electronics. Yet, while they have acted on their ``recycling know-how''
and sense of opportunity, they also know that before electronics
recycling can stand on its own, a number of challenges familiar to the
traditional scrap recycling industry need to be addressed.
The challenges include, among other things, the need: to
distinguish between scrap and waste, to develop end-use markets for the
materials recovered from scrap electronics, to promote manufacturer
design improvements to make electronics easier to recycle and to avoid
the use of hazardous materials in the manufacture of electronics
products, and to promote the benefits of environmental management
systems, such as ISRI's Recycling Industry Operating Standard (RIOS) as
the proper means to address environmental concerns. Consequently,
ISRI's Board of Directors last month adopted a policy resolution
outlining how best to address these challenges.
As businessmen who know how to recycle, our views are derived from
years of practical experience. In order to assist this Committee's
efforts to understand how best to ensure that electronics are recycled
properly, and not disposed of in landfills or elsewhere, I would like
to highlight some of the key issues within our policy.
We need to avoid creating unnecessary impediments to recycling.
Thus, it is very important to distinguish the difference between scrap
and waste. Electronics scrap, like scrap paper, glass, plastic, metal,
textiles, and rubber, is not waste. Scrap is the opposite of waste.
Processed scrap materials are commodities that have a value on domestic
and international markets, whereas waste materials have no value and
are typically buried in a landfill. Electronics recyclers make their
living by providing de-manufacturing services, such as scrubbing and
reselling hard drives, by reselling cell phones, monitors and CPUs that
are in good working order, and by using machinery and equipment to
shred or otherwise process electronics to extract the various
commodities that are in electronics like steel, aluminum, gold, silver,
titanium, copper, nickel, plastic and glass.
Defining obsolete electronics as waste undermines and overlooks the
value that these electronics retain if properly recycled. Saddling them
with the moniker of waste imposes a whole host of unwarranted
regulatory burdens that will undermine the ability to make the system
work. For these reasons, it is eminently important that we avoid
confusing these valuable commodities with wastes.
Another key aspect underlying our policy is the concept of free and
fair trade. We have been in the recycling business a long time and
understand that scrap commodities are some of the best examples of
basic supply and demand economics. These materials are traded in the
global marketplace, supplying America's basic manufacturing industries
with valuable raw material feed stocks that are used in place of virgin
materials, and contributing significantly to the United States' balance
of trade with other nations. Hence, our industry has generally opposed
efforts to interfere with commodity markets and create artificial
distortions. However, being the pragmatic businessmen that we are, we
recognized that the electronics market has grown explosively in such a
short period of time that, for the short term, it might take some sort
of financial mechanism to ensure that the costs of recycling
electronics--which sometimes have a ``negative intrinsic value''--do
not deter recycling from taking place.
Allow me to explain. Right now, under current market conditions, if
a citizen, a governmental entity, a commercial or retail establishment
wants to do the right thing and recycle their electronics, recyclers
must charge that citizen or other entity a fee in order to justify the
costs of recycling certain obsolete electronics components, such as
older computer monitors and TV's with cathode ray tubes (CRTs). That's
because the costs of recycling these items are more than the value of
the component materials that can be extracted from them. This is due in
large part to the lack of markets for the recycled glass and plastics
in these units. Creating a long term, sustainable recycling
infrastructure for the recycling of electronics will require that the
electronics are both economically and technologically feasible to
recycle. As a result, ISRI decided to support a financial mechanism to
cover the negative value of the material.
In looking at the issue, our Electronics Council determined that
the best financial mechanism would be for manufacturer's to take some
responsibility for the cost of recycling their products, by
internalizing the cost of collecting, sorting, transporting and
recycling of a defined set of electronics for two primary reasons.
First, we recognized that producer responsibility provides a greater
incentive to encourage manufacturers to adopt Design For
Recycling, a concept that ISRI has been
advocating since the early 1980s. Second, we believe that
internalization will be cheaper for the consumer/taxpayer. We did not
come to this conclusion lightly. In fact, it was a gut wrenching
decision as our industry has long argued that the markets should be
allowed to operate freely.
Essentially, Design for Recycling calls upon manufacturers to
design their products to be easily recycled at the end of their useful
lives, without using hazardous or toxic constituents that can hinder
the recycling of those products, and to be manufactured using recycled
materials. Design for Recycling contemplates cooperative efforts
between manufacturers, recyclers and the government, in research and
development efforts, in defining and understanding the challenges faced
at every stage of a product's life cycle, and in mutual efforts to
develop better ideas. To date, voluntary calls by the recycling
industry to motivate manufacturers to adopt a Design for Recycling
philosophy have met with only a tepid response. We do recognize that
electronics manufacturers have taken some steps towards designing for
recycling; however, there is room for improvement. It is important to
understand that greater Design for Recycling can increase recycling
productivity that will only ensure a stronger more sustainable
infrastructure.
We believe, as successful businessmen, that if given the
flexibility and opportunity to internalize the costs, that manufactures
can create a model that will be less bureaucratic and burdensome and
cheaper for the tax payer. However, certain manufacturers insist that a
consumer tax in the form of an Advance Recycling Fee (ARF),
implemented, governed and administered by state governments, will be
cheaper than manufacturers internalizing the costs. We disagree with
this logic. We are aware that there is a fierce and sometimes spirited
debate occurring among and between manufacturers and retailers about
this issue. This is as it should be. Ultimately, being neither an
electronics manufacturer nor a retailer, ISRI's Electronics Council
felt it necessary to take an objective look at this issue, as the
outcome of the debate will ultimately affect the electronics recyclers.
We acknowledge that some manufacturers have had an unkind, if not
visceral, reaction to our position on this issue. They have even
questioned our right to have an opinion on the matter of cost
internalization versus ARFs. However, while we would not fall on our
sword whichever way the Congress or state legislatures decides the cost
internalization versus ARF matter, we have specific reasons for holding
our preference.
While ISRI will ultimately defer to the wisdom of the Congress or
the states to decide which financial mechanism is most apt to spur
electronic markets, we strongly encourage the Congress and the states
to end any financial mechanism as soon as markets for recyclable
electronics become economically viable. We are not an industry that
looks lightly on government subsidy, and we believe markets must
ultimately stand on their own based on solid business principles. That
said, whatever financial mechanism the Congress and the states might
decide to put forward in order to sustain this market, ISRI suggests
that a portion should be applied to the research and development of end
use markets for the materials recovered from electronics products.
Two of the greatest challenges of electronics recycling are the
difficulties of sorting the different resins of plastic and recycling
chemically coated glass. Targeting funds to further technology in these
two fields would have a tremendous impact on making end-use consumer
markets more economically viable, which would, over time, ensure these
markets could stand on their own without subsidy. In fact, we believe
it would be wholly appropriate for the Congress to support research
efforts aimed toward the development of technologies for utilizing
these materials in the manufacturing process.
Mr. Chairman, I briefly alluded to RIOS early in my remarks. RIOS
is an integrated environmental, health and safety, and quality
management system standard that ISRI has developed over the past 18
months. Few industries worldwide have endeavored to undertake such a
huge step, but the recycling industry in the United States has always
been, and intends to remain, the global leader in recycling technology,
environmental protection, worker safety and the production of high
quality materials. RIOS is a tool for us to accomplish those goals and
will help assure that ISRI members who recycle scrap electronics will
do so in a manner that is best for our country, and the world in which
we live.
In closing, I want to remind the Committee what this is all about,
and that is recycling. At the end of the day when you have done your
jobs and the money issue is sorted out, and folks start pulling
electronics from closets and basements, it will be the electronics
recyclers that end up with electronics on their doorsteps, and that is
exactly what we want. What we do not want is an over-regulated system
that makes it impossible to do our job. Our job is to make sure
electronics are properly recycled in order to protect America's
environment and support our global economy. I want to thank you Mr.
Chairman and Members of the Committee for addressing this timely issue
and welcome any questions you may have.
Mr. Gillmor. Thank you very much, Mr. Denbo, and we will go
to Michael Vitelli, Senior Vice President of BestBuy, who is
testifying on behalf of the Consumer Electronic Retailers
Coalition.
Mr. Vitelli.
STATEMENT OF MICHAEL VITELLI
Mr. Vitelli. Thank you Chairman Gillmor, Ranking Member
Solis, and members of the subcommittee. I am Michael Vitelli,
Senior Vice President of Consumer Electronics of BestBuy, and I
am here today to testify on behalf of the consumer electronics
retailers coalition, or CERC.
CERC is a national coalition representing consumer
electronics retail businesses and associations that operate in
all 50 States and worldwide. Joining BestBuy in CERC are
Circuit City, Radio Shack, Wal-Mart, Target, North American
Retail Dealers Association, and the Retail Industry Leaders
Association.
BestBuy is the country's leading consumer electronics
retailer with close to 700 stores in 49 of the 50 States and
nearly 100,000 employees. The company started in 1966 with a
single store in Saint Paul, Minnesota, and we continue to
operate our headquarters in the Twin Cities.
BestBuy is actively concerned with the issue of electronic
waste. In 2001, we launched a series of recycling events.
Through these events, BestBuy has helped consumers nationwide
recycle over 2.5 million pounds of electronics in an
environmentally responsible way since the program began. We
also offer the ability to recycle cell phones, ink cartridges
and rechargeable batteries year round in all our U.S. stores.
CERC members and other consumer electronics retailers and
manufacturers have participated in such EPA programs as the
Plug-in to e-Cycling outreach campaign. Partners in this EPA
program have included manufacturers like Panasonic, Sharp, Sony
JVC, Lexmark, Dell, and Intel, retailers like BestBuy, Staples,
and Office Depot, and approximately 2 dozen State and local
governments. More than 26.4 million pounds of electronics were
collected in the first 10 months of this national program
alone.
Given our industry's history on recycling programs and
events, CERC has some observations regarding public policy
solution to this issue.
There are three central points I want to make regarding the
electronics recycling:
One, a Federal solution is far preferable to 50 differing
State solutions. This issue needs Federal leadership. Of
course, I believe this because it simplifies our participation.
I also think a Federal solution is required because it will
simplify the process for consumers and will ensure that no
State is either disadvantaged by a system, or left with a large
amount of the waste. The Federal Government needs to actively
study this issue, thereby providing assurance to States that a
Federal solution may be found and potentially reducing the
number of individual State actions. Many States are acting only
because they do not see a Federal action.
Two, this issue is complicated. There is the waste that is
currently waiting to be recycled. There are the products that
are still in use, but will need recycling in the near future.
Neither of these two categories of products--historic waste--
were produced with the understanding that they would have to be
recycled. And then there are the products that will be produced
in the future--future waste. It may be helpful in finding a
solution to think about these two categories of waste
separately.
Three, in any scenario, the public will pay for the
recycling of electronic waste. If the government provides the
solution, consumers pay in the form of additional taxes. If the
government mandates a fee, the consumer pays. If the
manufacturer must include recycling in their product costs, the
consumer pays. But it is only in this last solution, where the
costs of recycling are part of the cost of the products, that
there is an inherent incentive to reduce both the need to
recycle and the long-term costs of recycling. Given the reality
that the consumer will pay under any scenario, it seems best to
find the solution that will drive efficiencies and reduce costs
over time.
It is the combination of point two, that there may need to
be a couple of solutions, and point three, that the best
solution in the future is one that drives to least cost and
efficiency, that drives CERC to support the concepts of the
Talent-Wyden approach. This tax incentive program could go a
long way to provide an immediate incentive to deal with the
historic waste over the next few years. If coupled with a
program of manufacturers' responsibility for future products,
the end result could be a total solution that drives to least
cost and maximum efficiency over time and provides the right,
limited incentive to jump start and capitalize recycling
programs in the near term.
We very much appreciate the holding of this hearing and
encourage Congress and the committee to continue to work toward
a national solution to electronics waste management. We pledge
to work with you in arriving at a fair, viable, and effective
approach. Thank you.
[The prepared statement of Michael Vitelli follows:]
Prepared Statement of Michael Vitelli, Senior Vice President, Best Buy
on Behalf of the Consumer Electronics Retailers Coalition (CERC)
Chairman Gillmor, Ranking Member Solis and members of the
Committee, I am Michael Vitelli, Senior Vice President of Consumer
Electronics of Best Buy and am here today on behalf of the Consumer
Electronics Retailers Coalition (CERC) to provide the views of CERC's
membership on the need for a national electronics management system.
CERC very much appreciates the opportunity to provide the views of
the consumer electronic and general retail industry concerning the need
for a national approach to handling electronic devices at their end of
life. We are also very appreciative, Mr. Chairman, of the leadership
you have shown in holding this hearing today and providing a forum for
interested stakeholders to express their views. We look forward to
working with you and the members of this Committee to identify the best
means of developing a national solution for electronic device
recycling.
BACKGROUND ON BEST BUY
Let me begin by thanking the members of this Subcommittee as well
as the full Committee for your leadership on energy issues related to
the aftermath of Hurricane Katrina. Best Buy had 15 stores affected by
the storm and 6 are still not functional. We have found all but 20 of
our associates but are saddened to know that somewhere between 750 and
1000 are now homeless. We are working with those employees to secure
needed support including temporary housing. As is our practice,
employees affected by natural disasters remain on the payroll. We do
our best to redeploy employees in other locations or provide them as
local volunteers as needed. Our employees across the nation are active
in their local communities, assisting where possible so trained
disaster relief personnel can be deployed. The Company has donated $1
Million in relief funds to the American Red Cross and we have opened
our point of sale systems in our stores to collect contributions from
customers and the general public for the American Red Cross.
As you may know, Best Buy is the country's leading consumer
electronics retailer with close to 700 stores in 49 of the 50 states
and nearly 100,000 employees. The company started in 1966 with a single
store in St. Paul, Minnesota and we continue to operate our
headquarters in the Twin Cities. In addition to our product and service
offerings, Best Buy is also known for our ongoing commitment to our
communities, providing volunteer support, financial resources and
leadership on many issues, but especially on the use of innovative
technology to improve the learning opportunities for kids. We provide
over 1300 scholarships to students entering higher education--3
scholarships in every Congressional district in the country. Our new
te@ch program rewards schools and educators who are using technology to
energize their lesson plans and engage students. The National Parks
Foundation's Junior Ranger program is available to kids across the
country through the Web Ranger program sponsored by Best Buy. With
Junior Achievement's ``Titan'' business simulation game, we've helped
harness the excitement of a video game to stimulate real learning.
Best Buy has also been actively concerned with the issue of
electronic waste. In 2001, we launched a series of recycling events to
provide a simple, fun and convenient program for recycling electronics
that protects the environment while raising awareness of recycling
options. Best Buy has helped consumers nation-wide recycle over 2.6
million pounds of electronics in an environmentally responsible way
since the program began. In addition to recycling events, we also offer
the ability to recycle cell phones, ink cartridges, and rechargeable
batteries year round in all our U.S. stores.
BACKGROUND ON CERC
CERC is a national coalition representing small, medium and large
consumer electronics retail businesses and associations that operate in
all 50 states and worldwide. Our members, in addition to Best Buy,
include Circuit City, RadioShack, Wal-Mart, Target, the North American
Retail Dealers Association and the Retail Industry Leaders Association.
Our goal is to educate, advocate and instill continued consumer and
market confidence in consumer electronics policy issues.
Following months of internal discussion, conducting an industry-
wide survey, holding meetings with state legislative leaders and
experiencing the impact and initial results of the California advance
recycling fee law, CERC drafted a consensus legislative position paper
on electronic waste management earlier this year, which is attached to
my written statement.-- While other stakeholders have yet to reach a
broad consensus, consumer electronic and general retailers, including
their national and state federations, have come together around a
position that we believe lays out the issues, opportunities and
obstacles--involved in setting up a nationwide eWaste model. Since
issuing this Position Paper, CERC has been working with and recruiting
broad cross-industry support among other interested stakeholders,
including environmental groups, recyclers, state legislators and
manufacturers.--
CURRENT PROGRAMS/ACTIVITIES
Even without state or federal laws governing management of
electronic waste, the private sector--manufacturers and retailers
working with qualified recyclers--has been fully supportive of the
shared responsibility product stewardship approach through numerous
voluntary initiatives that collect and recycle devices. These programs
have included the development of a strong and meaningful educational
campaign for consumers and policy makers. Best Buy and other members of
CERC, as well as consumer electronic retailers that are not members of
our organization, together with a number of manufacturers, have been
actively involved in activities that highlight the need for
conservation and how best to handle electronic devices at their end of
life.
There are several initiatives in place today to reduce and manage
electronic waste both at the federal and industry levels. CERC members
and other consumer electronic retailers and manufacturers have
participated in such EPA programs as the Plug-In To eCycling outreach
campaign, which works to increase the number of electronic devices
collected and safely recycled in the United States and has identified
new and creative flexible, yet more protective ways to conserve our
valuable resources.
Plug-In To eCycling focuses on:
Providing the public with information about electronics recycling and
increasing opportunities to safely recycle old electronics;
Facilitating partnerships with communities, electronics retailers and
manufacturers to promote shared responsibility for safe
electronics recycling; and
Establishing pilot projects to test innovative approaches to safe
electronics recycling.
Program partners have included manufacturers like Panasonic, Sharp,
Sony, JVC, Lexmark, Dell, Intel; retailers like our company, Best Buy,
as well as Staples and Office Depot; and approximately two dozen state
and local governments. More than 26.4 million pounds of electronics
were collected in the first ten months of this national program alone.
In addition to the Plug-In To eCycling campaign a number of
retailers and manufacturers have taken part in voluntary programs to
encourage greater recycling. As noted in my introduction, Best Buy
actively provides recycling options for our customers with our
recycling events. We have had an overwhelming response to our events.
In fact, the event we hosted a month ago at our corporate headquarters
in Minnesota drew record crowds with over 2,900 cars and a collection
of over 250,000 pounds (125 tons) in just two days. This is in a county
that already has a program in place for the recycling of electronics.
In addition to Best Buy activities, a number of CE retailers and
manufacturers have and are taking part in voluntary pilot projects.
Staples, for example, sponsored a New England-based pilot program in
cooperation with EPA's Plug-In To eCycling campaign and the Product
Stewardship Institute (PSI) in the summer of 2004. Also last summer,
Office Depot and HP sponsored a similar in-store electronics recycling
pilot nationwide. Both programs accepted hardware from any
manufacturer, including PCs, mice, keyboards, PDAs, monitors, flat-
panel displays, laser and ink jet printers, scanners, all-in-one
printers, digital cameras, fax machines, cell phones, TVs, and TV/VCR
combos. This summer, Good Guys is partnering with the EPA and a number
of electronics manufacturers to collect and recycle televisions.
THE NEED FOR A FEDERAL SOLUTION
But we all realize that voluntary programs cannot fully handle or
solve the end of life issues surrounding electronics products. CERC
strongly believes a comprehensive nationwide approach to the management
of electronics is the ultimate solution and far more preferable,
desirable and efficient than a patchwork of different eWaste laws
instituted by individual states. In the first half of 2005 alone, 30
state and local legislatures saw more than 50 separate bills introduced
on this issue including an eWaste measure introduced and still active
in New York City. 50 different state approaches will be
administratively unreasonable and infeasible for manufacturers and
retailers alike and will not lead to a comprehensive and efficient
electronics waste management system for our nation. Many states are
acting because they do not see action from the Federal Government.
Active consideration of this issue by Congress, like that shown by this
Committee, may help in providing a positive, national solution and in
reducing the need for disjointed state and local action.
THE ISSUE IS COMPLICATED
Through all of the voluntary efforts outlined above, we have first-
hand knowledge of the fact that this issue is complicated. It may be
helpful to the Committee to highlight one significant complication.
There is the waste that is currently waiting to be recycled. There are
the products that are still in use but will need recycling in the near
future. Neither of these two categories of products--historic waste--
was produced with the understanding that they would have to be
recycled. And then there are the products that will be produced the
future--future waste. Finding a solution may require us to think about
these two categories of waste separately.
EFFICIENCY AND A LEAST COST SOLUTION
Both CE and general retailers unanimously support a shared
responsibility approach to the handling of electronic devices at the
end of their life cycle. In any scenario, the public will pay for the
recycling of electronic waste. If the government provides the solution,
consumers pay in the form of additional taxes. If the government
mandates a fee, the consumer pays. If the manufacturer must include
recycling in their product costs, the consumer pays. But it is only in
this last solution--where the costs of recycling are part of the cost
of the products--that there is an inherent incentive to reduce both the
need to recycle and the long term costs of recycling. Given the reality
that the consumer will pay under any scenario, it seems best to find
the solution that will drive efficiencies and reduce costs over time.
It is the combination of these last two points--that there may need
to be a couple of solutions and that the best solution in the future is
one that drives to least cost and efficiency--that drives CERC to
support the concepts of the Talent Wyden approach. This tax incentive
program could go a long way to provide an immediate incentive to deal
with the historic waste over the next few years. If coupled with a
program of manufacturers' responsibility for future products, the end
result could be a total solution that drives to least cost and maximum
efficiency over time and provides the right, limited incentives to jump
start and capitalize recycling programs in the near term.
SPECIFIC SUGGESTIONS
Our Position Paper outlines the factors and components that a
successful manufacturer responsibility program should include:
Initially, any program should have a limited number of types included
to insure an easy transition, and clear definitions of which
devices are covered.
Making sure that any ``take-back'' programs--if mentioned at all--
remain voluntary.
A ``safe harbor'' for a consumer electronics retailer that sells a
product not covered under an approved management plan absent
actual knowledge.
Programs that help educate and are easily understood by consumers.
A flexible system that allows manufacturers the ability to provide
services to consumers and encourages the market to drive
efficiencies and choices.
Encouragement to voluntary collection initiatives by manufacturers to
partner with retailers, charities and/or local government.
Establishment of manufacturers' financial responsibility based on the
products that consumers return to the system--not fees at the
point of sale or other financial models that do not reflect the
true costs and realities of the return system.
The ability of manufacturers to work independently or collaborate
with others to meet the established responsibility goals.
CERC EXPERIENCE WITH STATE-LEVEL ADVANCE RECOVERY FEES
Our members oppose a point of sale advance recovery fee (POSARF)
system because we know from firsthand experience that such an ARF will
not accomplish its goals, is administratively burdensome for all
parties, and will only guarantee a new revenue source for government
without guaranteeing that an effective recycling system will be put
into place. In addition, such a program provides no incentive for the
design of more environmentally-friendly products, and fails to take
advantage of market forces to reduce the cost of recycling over time.
The recent institution of such a fee/tax program in California has
already been shown to be:
Too complicated for all parties--government, businesses and
consumers--to understand and administer.
Incredibly costly for both governmental agencies and retailers to
implement.
Impracticable to bring sufficient dollars down to the local level to
implement enough local collection and disposal facilities.
Impossible to impose on out-of-state online/mail order retailers.
Impractical, by asking the government to set up a new administrative
structure to collect the fees, to manage the program and
disperse the revenue for effective recycling.
Impossible to know how high the taxes/fees charged to consumers needs
to be in order to adequately fund a successful electronics
device recycling program.
In short, a POSARF--particularly given significant budget cutting
at all levels of government--will not adequately fund an effective
recycling program, and will only serve to confuse and burden the
consumer with the imposition of new fees and perceived new taxes
without any direct benefits.
CONCLUSION
The members of the Consumer Electronics Retailers Coalition,
together with CE and general retailers and their trade associations
throughout the United States, want to be constructive and contributing
partners with law makers, manufacturers, public interest groups,
recyclers and our customers in dealing with the end of life issues
surrounding electronics products. We cannot, however, afford to let
individual states and certainly individual cities and counties,
establish their own programs that impose inconsistent mandates on
retailers or manufacturers.
We very much appreciate the holding of this hearing and encourage
Congress in general and this Senate Committee in particular to continue
to work towards a national solution to electronics waste management. We
pledge to work with you in arriving at a fair, viable and effective
approach.
Thank you.
Mr. Gillmor. Thank you very much, Mr. Vitelli. And I want
to congratulate you. You almost hit the 5 minutes right on the
button. Next, we will go to Steve Largent, who is the President
of CTIA, the wireless association.
Steve.
Oh, Steve, could I ask you to suspend for a moment? We do
have a court reporter here, and we will give him time to set
up.
We are good to go.
Mr. Largent.
STATEMENT OF STEVE LARGENT
Mr. Largent. I would like to ask that my entire written
testimony be made a part of the record.
Mr. Gillmor. Without objection, it will be done.
Mr. Largent. As a Member of Congress, I had the privilege
of serving on this subcommittee for 6 years. The experience and
insight I gained formulating national environmental policy has
proven invaluable as I work with CTIA's member companies to
minimize the environmental impact of discarded mobile phones
and related accessories.
CTIA members recognize that one of our responsibilities as
good corporate citizens is a commitment to environmental
stewardship. This commitment is reflected in the industry's
voluntary disposal recycling program, ``Wireless . . . the New
Recyclable.'' This is a multifaceted program the wireless
industry launched in 2003 to facilitate environmentally
sensible management of wireless products at end of life. The
program has been embraced by most CTIA members, including all
national carriers and mobile phone manufacturers. The program
guidelines incorporate all aspects of the recycling process:
collection, transportation, reuse, refurbishment, and materials
reclamation.
The guidelines assist companies in ensuring that the
wireless devices that are collected are managed, transported,
recycled or refurbished in a responsible way, and in accordance
with Federal and State environmental laws. The wireless
industry has been able to establish effective voluntary
collection programs because of the small size and portability
of mobile phones and devices. Wireless handset manufacturers
have responded to consumers' preference of the less is more
approach. I have with me today an old mobile phone as well as a
phone that is on the market today. This is our old mobile
phone; some of you may remember using that. This is one of our
newer phones here. It is a small, slim phone. That is the way
of our world. Less is more.
The new generation of wireless devices weigh approximately
42 percent less than earlier models and are constructed in a
more environmentally friendly way with a reduction of hazardous
materials. Carriers, recyclers, and refurbishers are in the
process of evaluating the best way to expand and assess their
respective recycling and/or refurbishing programs. With that
being said, I can share the following heartening statistics:
ReCellular, a refurbisher, collected 4 million phones in 2004,
up from 1.5 million in 2002. Sprint Nextel has collected 4.4
million phones since 2002. They also have refurbished 2.3
million phones since 2002. The Wireless Foundation's take-back
programs have collected nearly 3 million phones since 1999.
Verizon Wireless has collected approximately 2 million phones
through their HopeLine charitable donation program. eBay
reportedly sells 130,000 used phones a month on its Web site
and approximately 4 million phones over the past 5 years.
Other examples are provided in my written testimony. CTIA
and the member companies I represent believe that mobile phones
and mobile devices are a consumer product in the national
commerce and best addressed at the national level. We believe
that State-by-State regulation is counterproductive. Rather,
this challenge demands a comprehensive voluntary national
solution tailored to address the issues raised by mobile phone
and mobile device end of life. The wireless industry fears that
a State-by-State system would lead to confusion, uncertainty,
high compliance cost, and inefficient use of resources, all of
which will lead to increased costs for consumers.
The EPA has established a record of comprehensive voluntary
reuse and recycling programs. EPA's programs, such as Waste
Wise and Resource Conservation Challenge are good examples of
government-industry partnerships designed to produce
environmental sound results without the need for new
regulation.
The industry I represent believes that mobile phones and
mobile devices demand a comprehensive voluntary national
program for reuse and recycling that takes into account the
unique characteristics of our devices. We are committed to
working with EPA and the Department of Commerce to continue the
industry's initiative, ``Wireless . . . the New Recyclable,'' a
program with a proven track record of success in protecting our
Nation's environment.
I thank you, Mr. Chairman, for the opportunity to testify
and for the opportunity to share the wireless industry's views.
Thank you, Mr. Chairman.
[The prepared statement of Steve Largent follows:]
Prepared Statement of Steve Largent, President and CEO, CTIA--The
Wireless Association TM
Chairman Gillmor, Ranking Member Solis, and members of the
Subcommittee, thank you for the opportunity to appear before you today
to testify on the issue of electronic waste and the appropriate role of
government, be it local, state, or Federal, to address this matter. As
a Member of Congress, I had the privilege of serving on this
Subcommittee for six years. The experience and insight I gained
formulating national environmental policy has proven invaluable as I
work with CTIA's member companies to minimize the environmental impact
of discarded mobile phones and related accessories. CTIA--The Wireless
Association TM and its members have been committed to the
goal of sustainable development in the wireless industry and the
environmentally sound management of discarded, recycled, or refurbished
wireless mobile phone products.
CTIA'S COMPREHENSIVE, VOLUNTARY REUSE AND RECYCLING PROGRAM
CTIA members are at the forefront of providing consumers with
wireless products and services that facilitate communications wherever
and whenever. Concurrent with the industry's business goal of providing
ubiquitous wireless coverage, CTIA members recognize that one of our
responsibilities as good corporate citizens is a commitment to
environmental stewardship. This commitment is reflected in the
industry's voluntary disposal recycling program--Wireless . . . The New
Recyclable.
WIRELESS . . . THE NEW RECYCLABLE
What is ``Wireless . . . The New Recyclable?'' It is a multi-
faceted program the wireless industry launched in October of 2003 to
facilitate environmentally sensible management of wireless products at
end-of-life. The initiative provides a voluntary and uniform set of
guidelines allowing manufacturers and carriers to upgrade the
management of their environmental practices in the disposition of used
wireless devices. It has been embraced and adopted by numerous CTIA
members, including all of the national carriers and mobile phone
manufacturers.
The program guidelines incorporate all aspects of the recycling
process: collection, transportation, re-use, refurbishment and
materials reclamation.
PUBLIC OUTREACH AND AWARENESS
``Wireless . . . The New Recyclable'' is designed to inform,
educate, and encourage consumers to recycle their ``end-of-life''
wireless products through a wide range of company initiatives and
incentives. In particular, the program focuses the public's attention
on the importance and ease of recycling wireless devices by 1)
supplying the wireless industry with public awareness materials, such
as posters and bill stuffers, to reinforce the message to recycle
wireless devices and; 2) directing consumers to
www.recyclewirelessphones.com, a central website that provides
consumers with important information on the recycling of wireless
products and links to CTIA member company sites which provide
information on where consumers can recycle phones.
CTIA ENVIRONMENTAL PRINCIPLES
``Wireless . . . The New Recyclable'' incorporates CTIA's ten
environmental principles that set forth the wireless industry's
commitment to sustainable development and the proper management of
wireless devices at their end-of-life. The principles are listed on the
second page of a handout that I've included with my testimony.
VOLUNTARY GUIDELINES
The guidelines assist companies in ensuring that the wireless
devices that are collected are managed, transported and reused,
refurbished or recycled in a responsible way and in accordance with
federal and state environmental laws. Promoting the re-use,
refurbishment or recycling of wireless devices minimizes waste destined
for landfills or incineration. Just as importantly, the recycling
guidelines facilitate the recovery of raw materials that are then used
in the manufacture of new products.
CELL PHONES ARE DIFFERENT FROM OTHER ELECTRONICS
A key aspect of any re-use or recycling program is the collection
of the product. The industry has been able to establish effective
voluntary collection programs that are a function of the small size and
portability of mobile phones and mobile devices. These voluntary
programs include collection at municipal centers, return of products to
service providers or other retailers, or mail-in returns to
manufacturers. The size and relative lack of portability of most other
electronics products, such as TVs and computers may not practically or
economically allow for this range of collection options.
For example, Verizon Wireless has a program that collects cellular
telephones in retail outlets and accepts the return of its products via
mail through the charitable program, HopeLineSM; this program offers
these collected products to help the victims of domestic violence. T-
Mobile's Give More, Get More accepts used phones through the mail and
donates 100% of the recycling proceeds to charitable organizations.
Cingular, SprintNextel, and other companies also collect previously
used wireless phones and donate either the refurbished phones or the
proceeds from the programs to charitable organizations. Finally, The
Wireless Foundation, a charitable organization created by CTIA, has
sponsored collection events and charitable programs, such as Donate-a-
Phone '.
SIZE, PORTABILITY, AND REDUCED ENVIRONMENTAL IMPACTS
Wireless handset manufactures have responded to consumers'
preference of the ``less is more'' approach when it comes to the
development of new mobile phones. One only has to look at the size of
mobile phones ten years ago juxtaposed to the size of phones being
manufactured today to see the tremendous strides the industry has made
not only in technological capabilities, but also environmental
compatibility. The new generation of wireless devices weigh
approximately 42% less than earlier models and are being constructed in
a more environmentally friendly manner. As mobile phone and device
manufacturers comply with the European Union's Restriction of Hazardous
Subtance (RoHS) Directive, we also see the reduction of hazardous
materials such as lead and cadmium in wireless phones marketed in the
United States.
We anticipate that the design changes required for sale in, or
import to, the European Union will also be applied to products marketed
and sold in the United States. Such design changes will facilitate
recycling and reuse and further reduce any potential environmental
impacts from the recycling or disposal of mobile phones or mobile
devices.
MARKETS EXIST FOR USED MOBILE PHONES AND MOBILE DEVICES
The market for used mobile phones and mobile devices is different
from most of the electronics industry. Mobile phones have a relatively
high re-use value creating an ongoing market for these devices;
therefore, the market forces providing incentives to collect and re-use
these devices would be more efficient than for other electronics
products. This is evidenced by the current efforts of ReCellular and
HOBI International, Inc., two for-profit companies established to
collect and refurbish used telephones for return to the market. The
operation of for-profit companies is unusual in the electronics
recycling and reuse market and is a clear indication of the strength of
the market for wireless device reuse.
CLOSE CONTACT BETWEEN CONSUMERS AND SERVICE PROVIDERS
Unlike most electronics manufacturers and retailers, wireless
service providers and consumers are typically in close contact during
mobile phone or mobile device replacement and billing. This contact
presents the opportunity for efficient and cost-effective collection.
Many wireless customers return to a service provider or independent
agent to replace their devices. Moreover, through monthly billing,
service providers are in communication with their customers on
recycling and re-use options. This readily available occasion for re-
use or recycling opportunities is not common to most other electronics
industries.
SUCCESS OF ``WIRELESS . . . THE NEW RECYCLABLE '''
Carriers, recyclers, and refurbishers are all in the process of
evaluating the best way to expand and assess the success of their
respective recycling and/or refurbishing programs. With that being
said, I can share with the Subcommittee the following statistics:
ReCellular, a refurbisher, has collected approximately four million
phones in 2004, up from 1.5 million in 2002.
Nextel has collected 4.4 million phones since 2002. Nextel also has
refurbished 2.3 million phones since 2002.
The Wireless Foundation's take-back programs have collected nearly
three million phones since 1999.
Verizon Wireless has collected approximately two million phones
through their HopeLineSM charitable donation program.
GRC Wireless Recycling has collected approximately one million phones
since 2001.
Old Cell Phone Co. reportedly buys back 30,000 used cell phones a
month, and has been doing so since 2002.
RMS Communications Group collected one million phones in 2004, and
has been collecting phones for the past ten years.
eBay reportedly sells 130,000 used phones a month on its website, and
has sold approximately four million phones over the past five
years.
STATE-BY-STATE REGULATION IS UNWORKABLE
Mobile phones and mobile devices are a consumer product in national
commerce best addressed at the national level. The re-use and recycling
of these wireless devices present issues unlike those presented by
traditional state solid waste management and disposal. The size,
marketing and re-use and recycling options available for wireless
devices are also distinct from other types of electronics. In our view,
a voluntary, industry-supported national program will facilitate the
re-use and responsible recycling of wireless devices regardless of
where the devices are purchased or where the devices wind up.
The re-use and recycling of mobile phones and mobile devices is a
national environmental challenge. We believe that state-by-state
regulation is counter-productive and a one-size fits all national
approach is not workable for the entire electronics industry. Rather,
this challenge demands a comprehensive, voluntary national solution
tailored to address the issues raised by mobile phone and mobile device
end-of-life. Consumers and industry are already confronting
inconsistent state requirements, as evidenced by the inconsistent take-
back, financing and manufacturing requirements already enacted in
California and pending in several other states. Absent a definitive
federal endorsement of a voluntary national recycling program, it seems
that a piecemeal and inconsistent network of state regulatory programs
will be the default solution. The wireless industry fears that a state-
by-state system would lead to regulatory uncertainty and confusion,
high compliance costs, and the inefficient use of resources, all of
which combined will lead to increased costs for consumers and a much
less efficient and effective take-back program, particularly for
wireless providers and manufacturers that serve multiple markets. The
environmental benefits of such an approach are also questionable.
Wireless consumers will pay, either directly or indirectly, for
inefficient and inconsistent state regulatory programs. Increased
regulatory costs will invariably be passed through to the consumer as a
result of an increase in product costs.
It's unfortunate, but true, that regulatory systems simply cost
more and those states that choose to adopt such programs will incur
potentially significant costs, at both the state and local level, to
implement a mandatory regime, including costs of collection,
administration, oversight and enforcement. Again, consumers will
ultimately pay for these increased costs through local taxes.
Working with industry to promote product reuse and recycling on a
national level will help the United States in its efforts to work with
other nations in finding environmentally sound, effective, workable
solutions to address the increasing volume of used wireless devices
elsewhere. A piecemeal state-by-state approach will leave the United
States without a strong basis for a leadership role in the
international discussion on recycling issues.
epa and department of commerce can play an important role in assisting
INDUSTRY TO TAKE THE LEAD ON PROMOTING PRODUCT STEWARDSHIP
The EPA has an established record of comprehensive, voluntary re-
use and recycling programs. EPA's programs, such as ``Waste Wise'' and
``Resource Conservation Challenge,'' are good examples of government/
industry partnerships designed to produce environmental results without
the need for new regulation. In May of 2004, EPA issued national
guidelines for the management of ``end-of-life'' electronics.
Additionally, EPA has worked with states and industry for several
decades in developing national markets for traditional recycled
materials, such as aluminum, glass and paper. The Department of
Commerce has expertise in technology and markets. We believe mobile
phones and mobile devices demand a comprehensive, voluntary national
program for re-use and recycling that takes into account the unique
characteristics of mobile phones and mobile devices and we are
committed to working with the EPA and the Department of Commerce to
continue to promote the industry's initiative, ``Wireless . . . The New
Recyclable''--a program with a proven track record of success in
protecting our nation's environment.
Thank you for the opportunity to share the wireless industry's
views on this important issue, I welcome any questions you may have.
Mr. Gillmor. Thank you, Steve.
Ms. Solis
Ms. Solis. Thank you, Mr. Chairman. I would like to request
unanimous consent to submit a letter by Representative Alan
Mollohan to our subcommittee on this particular issue.
[The information referred to follows:]
Prepared Statement of Hon. Alan B. Mollohan, a Representative in
Congress from the State of West Virginia
Thank you Chairman Gillmor and Ranking Member Solis for the
opportunity to provide comments on the issue of electronic waste, or e-
waste. I applaud the subcommittee on your efforts to advance the
dialogue in Congress on this important issue, and to find both an
environmentally sound and economically beneficial solution to the
electronics recycling problem.
As a member of the Appropriations Committee, I have worked for the
past several years to further develop regional and national solutions
to e-waste technology and to its associated collection infrastructure.
Specifically since 1998, I have supported grant funding for the Mid-
Atlantic Recycling Center for End-of-Life Electronics (MARCEE) project,
a public-private initiative designed to improve the economics of
recycling used electronics.
Launching in 1999, the MARCEE project has provided grant funding to
tackle some of the biggest challenges facing the electronics recycling
industry. MARCEE has focused on developing new technologies to make
plastics recycling economically feasible, supporting both laboratory
research and a plastics recycling demonstration project. With support
from MARCEE, West Virginia University recently created a Polymer
Research Center as a public-private partnership to develop new
recycling technologies and commercial applications in the plastic
industry.
Through MARCEE's online platform, GreenOnline, MARCEE has also
helped to pioneer the application of new information technologies to
exchange electronics recycling data. The MARCEE project has also led to
the development of a new cluster of electronics recycling activity and
related services at the MARCEE-inspired Polymer Technology Park in Wood
County, West Virginia, and continues to provide assistance in
developing new electronics recycling infrastructure on behalf of West
Virginia and around the nation. MARCEE has also provided the seed
funding for the National Center for Electronics Recycling (NCER). The
NCER is a new non-profit organization organized under the guidance of a
13 member Industry Advisory Committee of leading electronics
manufacturers. Working closely with industry, U.S. EPA, state and local
government officials, the NCER is a leading institution in the
development of electronics recycling systems across state lines.
Through the NCER and other activities initiated with MARCEE's
assistance, I have seen how Congress can make a difference by
developing and improving systems to recover the valuable resources
contained in used electronics that would otherwise go to non-recyclable
waste. I look forward to working with this subcommittee on finding
additional environmentally sound, economically beneficial solutions to
the electronics recycling problem by optimizing the advances already
put in place through the MARCEE initiative.
Mr. Gillmor. Without objection, so ordered.
Before I go to the next witness, Steve, I used to have one
of those big clunky things. I had one that was even clunkier.
My 13-year-old, his mother got him a cell phone about 2 weeks
ago. It is amazing, 13-year-olds are getting those now. He
gives me the weather report. He tells me what Ohio State and
Texas' standings are, because we have a big game this weekend.
I do not even know what button to push. Amazing stuff.
Dave McCurdy, President and CEO of the Electronic
Industries Alliance.
STATEMENT OF DAVE MCCURDY
Mr. McCurdy. Thank you, Mr. Chairman and Ranking Member
Solis. It is a pleasure to be here. I, like my colleague, Steve
Largent, having been on that side of the dais, know the
challenges of trying to put this hearing together, and we
commend you and appreciate your flexibility.
I am here representing the Electronic Industries Alliance,
which is one of the largest trade associations representing the
full breadth and depth of the over $400 billion U.S. high-tech
and electronics industries. Our 1,300 member companies
represent the entire range of products from electronic
components to state-of-the-art defense and space industry high-
tech systems, including the full range of telecommunications
information-technology consumer electronics products.
Dozens of our major manufacturers actually participate in
our Environmental Issues Council which has led industry
involvement on environmental priorities for well over a decade.
And again, we commend you for your interest in this hearing.
Basically, for the members, I am going to make five points,
and then these are the ones that stand out. First of all, our
industry is and has been committed to efficient environmentally
sound management. I think the record will speak for that, and I
will give you some examples.
Second, this is an important issue, and in order to discuss
it, we need to put it in proper environmental context. I will
give some rationale for that.
Third, our industry may be the most competitive in the
world. And this particular issue may have an impact and effect
the competitive balance so it is important to us.
Fourth, we strongly support the principle of shared
responsibility.
And last, I and my colleagues believe there is a Federal
role, and we have some suggestions that we would like to make.
So, first, our member companies have been at the vanguard
in taking action to support the safe and appropriate recycling
of used electronic products to help meet the important
environmental goal of resource conservation and recovery. This
ongoing commitment of our member companies to product
stewardship, environmental design, and recycling can best be
demonstrated by noting concrete examples.
Through a combination of direct corporate efforts and
innovative partnerships including EPA's Plug-in to eCycling
campaign, EIA member companies have been involved in the proper
recovery and management of well over 2 billion pounds of used
electronic products.
It is important to note that EIA member companies are on
target to be in compliance with the European Union directive on
the restriction of hazardous substances, the RoHS Directive
when it takes effect next year.
More importantly many of our companies have long-standing
design for environment or product stewardship programs that
predate the adoption of the RoHS Directive by years. Since our
companies manufacture electronic products for global sale,
production, and distribution, consumers in the United States
and in overseas markets alike enjoy broad access to products
with the latest environmental innovations.
And as a result of our members' long-standing dedication to
product stewardship and technological innovation, our industry
continues to achieve significant and sustained environmental
progress throughout the entire product life cycle from design,
through beneficial use, to end of life.
On the whole, every year, our products become more energy
efficient, use fewer materials of potential environmental
concern, and become easier to upgrade, disassemble, and
recycle. And where Mr. Largent showed you the cell phone, we
can demonstrate that in technology after technology and
product. They get better, cheaper, and smaller every single
year.
And on this last point, it is imperative to note that the
competitive marketplace, not broad mandates or increased
regulation, continues to be the primary driver behind these
product innovations. This project of continuous evolution
driven by market demand and competition leads to critical
production efficiencies that directly translate into important
benefits for reuse and recycling.
Moving to the environmental discussion, I think we have to
get beyond the rhetoric and hyperbole that we often hear
because we believe it is essential to consider the science
related to electronic products as part of any public policy
discussion regarding recycling. Compounds such as lead and
mercury are present in some electronic products because they
provide clear safety, performance and energy-efficiency
benefits. As our industry and others have developed viable
substitutes, manufacturers have successfully incorporated them
into our products. You can go to conference after conference
that we lead on lead-free products and lead-free development.
These compounds can and should be appropriately managed at
the end of life. EPA shares this view and has consistently
stated that the used electronics products when properly managed
do not represent a human health or environmental concern. The
agency considers electronics recycling as fundamentally a solid
waste management and resource conservation issue.
The third point I was going to reiterate was market
competition. Any discussion of recycling must recognize the
intense competitive pressures within this industry and the
potential impacts of any given recycling system could have on
the competitive balance. As, again, the Department of Commerce
witness noted in the first day of this hearing, government
decisions on electronics recycling can impact the market
competitiveness of the U.S. companies, and our organization
strongly agrees with this assessment.
Consequently, any prospective recycling approach should
strive to consider global competition and preserve market
balance by applying equally to all producers while recognizing
the important roles that many other stakeholders have in
achieving this solution. And that comes to the principle of
shared responsibility.
Given the complex nature of this challenge, EIA supports
efforts to support a viable recycling infrastructure in which
all major stakeholders, manufacturers, retailers, government,
nongovernment organizations, and recyclers, participate based
on their unique expertise and capabilities. The combined goal
of these institutional stakeholders should be to develop a
recycling infrastructure that is convenient for the residential
consumer.
Implementing a system based on principles of shared
responsibility will increase the efficient collection of
electronics and ensure economies of scale by taking advantage
of existing infrastructure. This existing infrastructure
includes municipal waste collection systems and reverse
distribution systems that rely on established product
distribution and retail channels.
Last, Mr. Chairman, what is the Federal role? We have had
these discussions, and I think they are important to note.
There is clearly a role for the Federal Government in
bringing national consistency to this emerging field. Federal
action should strive to keep cost to consumers as low as
possible, create a level playing field for market participants,
and ensure that products are being recycled in an
environmentally sound manner.
Federal action can promote safe and appropriate recycling
by creating a streamlined uniform regulatory framework that
removes artificial barriers and instead encourages the free
flow of used products with proper management. Specific steps
include: one, establishing consistent regulatory definitions
key terms and strictly defining the scope of covered products
through the application of fixed criteria. Two, consider the
establishment of a flexible third party organization that can
help with roles such as data reporting, compliance, and
financing. Third, ensure broad consistency with labeling,
product information, and regulatory reporting requirements.
Last, assess whether additional recycling regulations or
standards are necessary to ensure the environmentally sound
management of used electronics.
EIA and our member companies stand ready to work with the
subcommittee on these and other initiatives. Thank you again
for bringing this important topic to the Congress and for
taking appropriate action. We look forward to working with you
and are prepared to answer any questions.
[The prepared statement of Dave McCurdy follows:]
Prepared Statement of Dave McCurdy, President and CEO, Electronic
Industries Alliance
INTRODUCTION
Thank you Chairman Gillmor, Ranking member Solis and members of the
Subcommittee. I am appearing today as the President and CEO of the
Electronic Industries Alliance (EIA), an alliance of several major
trade associations. EIA is the only organization that represents the
full breadth and depth of the $400 billion U.S. high-tech and
electronics industries. Our 1,300 member companies provide products and
services ranging from microscopic electronic components to state-of-
the-art defense, space and industry high-tech systems, as well as the
full range of telecommunications, information technology and consumer
electronics products. Dozens of our major manufacturers actively
participate in EIA's Environmental Issues Council, which has led
industry involvement on environmental priorities for well over a
decade.
As the leading advocate of the high-tech and electronics
industries, EIA appreciates the opportunity to provide the views of our
membership concerning the end-of-life management of our products. In
February of this year, EIA hosted a meeting with Chairman Gillmor and
representatives of several of our key manufacturers to discuss the
challenges and opportunities surrounding electronics recycling. We are
pleased to see the active interest that the Chairman has taken in this
matter, and we commend the Subcommittee for holding this hearing and
advancing the dialogue on this important issue.
INDUSTRY COMMITMENT
EIA and our member companies have been at the vanguard in taking
action to support the safe and appropriate recycling of used
electronics products to help meet the important environmental goal of
resource conservation and recovery. As manufacturers, we recognize our
key role in the process, and we will continue to work with Congress,
federal agencies, the states and involved stakeholders to address this
challenge.
The ongoing commitment of our member companies to product
stewardship, environmental design and recycling can best be
demonstrated by noting some of our industry's concrete achievements:
Through a combination of direct corporate efforts and innovative
partnerships--including the U.S. Environmental Protection
Agency's Plug-in to eCycling campaign--EIA member companies
have been involved in the proper recovery and management of
well over two billion pounds of used electronics products. In
addition, EIA member companies use significant quantities of
recycled materials, including glass, metals and plastics, in
new generations of their products, thus creating demand that
helps sustain markets for these materials.
EIA member companies are on target to be in compliance with the
European Union Directive on the Restriction of Hazardous
Substances (the RoHS Directive) when it takes effect next year.
In fact, many of our companies have long-standing design-for-
environment or product stewardship programs that pre-date the
adoption of the RoHS Directive by years. Since EIA companies
manufacture electronics products for global sale and
distribution, consumers in the U.S. and in overseas markets
alike enjoy broad access to products with the latest
environmental innovations.
In conjunction with our members, EIA has developed a consumer
outreach program, known as the Consumer Education Initiative,
to inform the public of the options available for electronics
recycling. A website (www.eiae.org) directs consumers to
updated recycling and reuse options available in local
communities throughout the United States. The Consumer
Education Initiative website now contains information on over
2,000 recycling opportunities nationwide.
MARKET COMPETITION
Any discussion of electronics recycling must recognize the intense
competitive pressures within our industry, and the potential impacts
that any given recycling system could have on the competitive balance.
As the U.S. Department of Commerce witness noted in the first part of
this hearing, government decisions on electronics recycling can impact
the market competitiveness of U.S. companies. EIA strongly agrees with
this assessment. Our member companies are already facing unprecedented
global competition, as the primary products contemplated under most
electronics recycling approaches are increasingly treated by the market
as commodities. Since margins are thin and producers depend on volume
sales, any shift in the competitive playing field can have a direct and
immediate impact on market share and the bottom line.
The EIA member companies, which include all the global brand-name
manufacturers of these products, hold divergent views based in large
part on their particular business models and corporate strategies.
Specific factors include but are not limited to:
Company size
Number and types of product lines, and the comparative life-spans of
their products
Sales and distribution methods (i.e., traditional distribution and
retail channels versus direct-to-consumer sales)
Experiences and capabilities related to recycling
Relative market share (i.e., current market share as compared to
historical market share; business sales as compared to
household sales)
Given this diversity of business models and capabilities, any
particular funding approach may result in a competitive imbalance in
this extremely competitive industry.
The competitive issues are intense enough between the EIA member
companies. However, concerns over fair competition are significantly
compounded due to the presence in the market of numerous small
producers and generic-brand manufacturers that cannot necessarily be
compelled to participate in a recycling program. These manufacturers
fall predominantly into one of two groups: (1) small foreign producers
that sell mostly low-end units into U.S. markets; and (2) the so-called
``white box'' manufacturers that produce and sell generic computers at
retail or remotely via catalogs or the internet. While individual
manufacturers in these categories are usually small, they nonetheless
collectively represent a noteworthy segment of the overall market.
EIA member companies comply with existing state requirements, and
will certainly step up and participate in any broader national system.
The same cannot necessarily be said of ``fly-by-night'' companies that
often frequently change brand names or sell products remotely into
regulated markets. EIA members have significant doubts over whether
individual states can take effective enforcement actions against these
manufacturers to ensure they pay their fair share of recycling costs.
This threatens to result in a competitive imbalance that will
disadvantage legitimate producers. Consequently, any prospective
recycling approach should strive to consider global competition and
preserve market balance by applying equally to all producers, while
also recognizing the important roles that many other stakeholders have
to play in achieving a solution.
SHARED RESPONSIBILITY
Given the complex nature of the challenge, EIA supports efforts to
establish a viable recycling infrastructure in which all the major
stakeholders--manufacturers, retailers, government, non-governmental
organizations (NGOs) and recyclers--participate based on their unique
expertise and capabilities. The combined goal of these institutional
stakeholders should be to develop a recycling infrastructure that is
convenient for the residential consumer. Implementing a system based on
principles of shared responsibility will increase the efficient
collection of electronics and ensure economies of scale by taking
advantage of existing infrastructure. This existing infrastructure
includes municipal waste collection systems and reverse distribution
systems that rely on established product distribution and retail
channels. Given that there is no true national or even regional
collection and transportation infrastructure for electronics, making
use of these systems is critical.
The vast majority of electronics products are sold through
traditional distribution and retail channels. In general, manufacturers
sell products in bulk to distributors, who sell them to retailers.
Retailers in turn sell them to consumers through a network of thousands
of retail locations. These products then have years of useful life, and
are often re-sold, passed along to friends or family members, or
donated to schools or charities. In most cases, manufacturers do not
have a direct relationship with the end user at the time of initial
sale, let alone years later when the product is ready to be placed into
the recycling stream.
Given the way our products are manufactured, distributed and sold,
it is clear that each stakeholder can and should bring its own
strengths and capabilities to the table under a shared responsibility
model. Manufacturers, for example, can best fulfill our role by
continuing with our broad and successful efforts to design products
that are lighter, more efficient, more environmentally-friendly, and
easier to upgrade and recycle. We will also continue to participate as
a key partner in efforts to develop a broader national approach to
electronics recycling.
Retailers can likewise make unique contributions. Unlike any other
stakeholder in the process, retailers have millions of face-to-face
interactions with consumers every year. When consumers come into a
retail store to purchase a new computer or television, it is often to
replace an older unit that is ready to be collected and recycled. Many
retailers have already participated in successful recycling events--
often in partnership with manufacturers, NGOs and government--that
include collecting used devices at retail locations. Because of their
direct and special relationship with the public, their numerous stores
and their existing transportation and distribution networks, retailers
have a vital role to play.
For their part, recyclers need to provide their services in a safe,
cost-effective and environmentally-sound manner. EIA is working with
the U.S. EPA, recyclers and other stakeholders to help develop
appropriate standards and a certification process for electronics
recyclers.
ENVIRONMENTAL DISCUSSION
EIA believes it is essential to consider the science related to
electronics products as part of any public policy discussion regarding
recycling. Compounds such as lead and mercury are present in some
electronics products because they provide clear safety, performance and
energy efficiency benefits. As our industry and others have developed
viable substitutes, manufacturers have successfully incorporated them
into our products. However, these compounds cannot yet be replaced in
all applications. For example, the RoHS Directive provides narrow
exemptions for specified uses of these materials to provide for product
safety or energy efficiency, or when no technically or environmentally
suitable alternatives exist.
Nonetheless, these compounds can and should be appropriately
managed at the end of life. U.S. EPA shares this view, and has
consistently stated that used electronics products, when properly
managed, do not represent a human health or environmental concern. The
agency considers electronics recycling as fundamentally a solid waste
management and resource conservation issue. Likewise, our member
companies recognize that reusing and recycling electronics at the end
of life is the most environmentally preferable option, and we support
reasonable efforts to develop the recycling infrastructure.
MARKET-DRIVEN ACHIEVEMENTS
As part of our commitment, producers acknowledge that we have a
critical role to play in the process by continuously improving product
design for environment and recycling. Our companies have consistently
risen to that challenge. As a result of our members' abiding dedication
to product stewardship and technological innovation, the high-tech and
electronics industries continue to achieve significant and sustained
environmental progress throughout the entire product lifecycle: from
design, through beneficial use, to end-of-life.
It is also critical to emphasize that the competitive marketplace--
not broad mandates and increased regulation--continues to be the
primary driver behind these improvements. On the whole, every year our
products become more energy efficient, use fewer materials of potential
environmental concern, and become easier to upgrade, disassemble and
recycle. This process of continuous evolution, driven by market demand
and competition, can be readily observed by comparing today's products
to similar products that were manufactured just a few years ago. These
market-driven innovations on the production side directly translate
into benefits for reuse and recycling. Given the intense market
competition, manufacturers have a clear incentive to streamline and
simplify product assembly to improve production efficiency. Not only
does this make products easier to service during their useful lives, it
also makes products easier to upgrade, disassemble and recycle at the
end of life. Market competition and consumer demand will continue to
drive our companies to make important innovations in product design,
efficiency, performance and recycling.
SUGGESTED FEDERAL ROLE
Absent a consistent national approach to electronics recycling,
manufacturers, retailers and recyclers will be confronted by an
expensive, inefficient and unworkable confusion of state laws and
regulations. If this state-by-state pattern continues, it will impose
an enormous administrative and logistical burden on the system that
will ultimately result in increased prices to consumers for new
products.
There is clearly a role for the federal government to play in
bringing national consistency to this emerging field. Federal action
should strive to keep costs to consumers as low as possible, create a
level playing field for market participants, and ensure that products
are being recycled in an environmentally sound manner. Federal action
can also help promote safe and appropriate recycling by creating a
streamlined and uniform regulatory framework that removes artificial
barriers and instead encourages the free flow of used products for
proper management. Specific steps include:
Establishing consistent regulatory definitions of key terms, and
strictly defining the scope of covered products through the
application of fixed criteria;
Considering the establishment of a flexible third party organization
that can help with roles such as data reporting, compliance,
and financing;
Ensuring broad consistency in labeling, product information, and
regulatory reporting requirements; and,
Assessing whether additional recycling regulations or standards are
necessary to ensure the safe and environmentally sound
management of used electronics.
EIA and our member companies stand ready to work with the
Subcommittee on these and other initiatives. Thank you again for the
opportunity to share industry's position on this important issue. I
would be pleased to respond to any questions.
Mr. Gillmor. Thank you very much. Our next witness is Mr.
Parker Brugge.
Did I pronounce that right.
Mr. Brugge. It is Mr. Brugge.
Mr. Gillmor. Mr. Brugge, who is the Senior Director and
Environmental Counsel of the Consumer Electronic Association.
STATEMENT OF PARKER E. BRUGGE
Mr. Brugge. Good afternoon, Chairman Gillmor, Ranking
Member Solis, and members of the subcommittee. I am Parker
Brugge, and I am senior director and environmental counsel for
the Consumer Electronics Association and I would like to ask
that my written statement be made a part of the record.
Mr. Gillmor. Without objection. Actually, all statements
submitted will become a part of the record.
Mr. Brugge. CEA is the trade association of the U.S.
consumer electronics and information technology industries. Our
2,000 members are involved in all aspects of the consumer
electronics industry and are responsible for over $125 billion
in annual sales. Their products include televisions, computers,
audio and video equipment, and other consumer electronics. CEA
also produces America's largest annual trade event, the
international consumer electronics show.
Our member companies are fully supportive of the safe and
appropriate recycling and reuse of consumer electronics
products. Many of our companies, both manufacturers and
retailers, have already established programs to collect and
recycle computer monitors and other consumer electronics. In
addition, our members have pioneered the concept of design for
the environment as products are now engineered from the
earliest design stages to ensure maximum recyclability and
minimal use of potentially hazardous materials.
In the title of this hearing, you asked whether the Federal
Government has a role to play in the management of electronic
waste. Let me emphasize that the answer is yes. It is essential
that Congress establish a national framework to address the
management of electronics recycling. The current ad hoc
approach of State-by-State programs is not a viable or
successful system. Conflicting State programs impose
unnecessary burdens on global technology companies and
consumers alike.
Electronics recycling is a national issue that warrants a
national solution. Moreover, with the upcoming transition to
digital broadcasting and the inevitable enactment of a hard
deadline on analog broadcasts, there has never been a more
opportune time to address the issue with respect to television
sets.
A national end-of-use framework must apportion
responsibility among all the stakeholders and ensure a level
playing field. Above all, we must develop a solution that
convenient for the consumer and broadly consistent in product
scope. The consumer electronics industry has reached consensus
on many elements of an electronics recycling approach. First,
there needs to be national consistency and uniform framework.
Second, whatever approach that is put in place should begin
with a limited and clearly defined scope of products. Third,
all major stakeholders should bear some responsibility for the
recycling of electronics product. And fourth, standards or best
business practices should be established for recyclers to
ensure the safe and appropriate recycling of electronics.
With respect to the financing system, a large majority of
CEA's members favor a visible advanced recovery fee for a
member of reasons. These companies believe that an advanced
recovery fee is convenient and transparent for consumers and is
the most effective way to handle the large volume of historic
product in the market place. The consumer electronics sector is
a dynamic sector with businesses and brands constantly entering
and leaving the marketplace. Supporters of a fee-based approach
believe that producer responsibility, or take-back, approach
can be abused by those companies that enter but do not stay in
business for a significant length of time. Essentially, a take-
back approach is a promise to pay or a promise to act at a
later date when the product reaches its end of life. If those
companies are no longer in business, the burden for recycling
their products will fall on other companies and perhaps the
government.
The best way for such a financing mechanism to be
implemented is through a national framework that ensures
harmonization. We believe that additional elements of the
national approach should include the following: tax credits
should be available to all stakeholders involved in the end-of-
life infrastructure. CEA supports reasonable Federal
procurement policies such as EPA's electronic product
environmental assessment tool or EPEA. CEA is actively working
with the national center for electronics recycling to create a
third party organization that will provide a clearinghouse for
product scope and ensure stable harmonization of State level
systems. And finally, the role of the Federal Government we
believe lies primarily in ensuring a level playing field
nationally for recycling stakeholders complying with State
level recycling systems.
Finding a solution to the electronics recycling challenge
is a top priority for CEA. As we continue to make strides in
eco-friendly design initiatives, lead the consumer electronics
industry on environmental issues, and be a part of the effort
to educate consumers, CEA stands ready to work with Congress
and all interested parties to reach a common sense national
solution that makes recycling as convenient as possible for all
Americans.
I am grateful for the opportunity to share CEA's position
on this important public policy issue, and I look forward to
addressing any questions you may have.
[The prepared statement of Parker E. Brugge follows:]
Prepared Statement of Parker E. Brugge, Senior Director and
Environmental Counsel, The Consumer Electronics Association
INTRODUCTION
Mr. Gillmor, Ms. Solis and Members of the Committee: My name is
Parker Brugge and I am the Senior Director and Environmental Counsel
for the Consumer Electronics Association (CEA). CEA is the principal
U.S. trade association of the consumer electronics and information
technology industries. CEA's 2,000 members are involved in the design,
development, manufacturing, distribution and integration of audio,
video, in-vehicle electronics, wireless and landline communication,
information technology, home networking, multimedia and accessory
products, as well as related services that are sold through consumer
channels. Moreover, CEA's members include manufacturers of consumer
electronics products, as well as many of the largest retailers. CEA
also produces the nation's largest annual trade event, the
International Consumer Electronics Show. CEA commends the Subcommittee
for holding this hearing on the important issue of electronics
recycling and we appreciate the opportunity to provide the views of our
membership.
By extending information and entertainment to everyone--regardless
of income or geographic location--our members' products have improved
lives and changed the world. Meanwhile, America stands as the global
leader in innovation, ingenuity and creativity. In addition, the
competition and falling prices characteristic of our industry continue
to confer benefits to consumers. As our products become increasingly
affordable, it is often more economical for consumers to replace a
product with a new one then to repair older equipment.
While these displaced products may have reached the end of their
lives or be out-of-date, they certainly are too valuable to be
completely discarded. Most consumer electronics products contain
valuable materials, such as precious metals, plastics and other raw
materials that can be resold in the commodities market by recyclers.
Moreover, used, working computers can find use in thousands of schools,
charities and public agencies committed to training people with
disabilities, students at risk and economically disadvantaged
Americans.
Although certain substances of concern, such as lead, mercury and
cadmium, are present in these products, they are there for a good
reason. For example, lead shields users of monitors from
electromagnetic fields and mercury is used in backlights to conserve
energy. According to U.S. EPA, these compounds, if properly managed and
disposed of, present little or no risk to human health or the
environment. The Agency views the issue of electronics recycling as one
of resource conservation and solid waste management, and so do CEA and
its members.
CEA'S MEMBERS ARE COMMITTED TO ELECTRONICS RECYCLING
CEA and its member companies have been and will continue to be
fully supportive of the safe and appropriate recycling and reuse of
consumer electronics products. A number of our member companies, both
manufacturers and retailers, have partnered in voluntary pilot projects
to collect and recycle computers, monitors and other consumer
electronics. Many of our member companies have participated in EPA
programs, such as Plug-In To eCycling, a consumer electronics campaign
working to increase the number of electronic devices collected and
safely recycled in the United States.
CEA recently joined eBay's Rethink initiative, which brings
together leading technology companies, government agencies,
environmental groups and millions of eBay users to confront the issue
of electronic waste through consumer education via comprehensive
information on options available to reuse or responsibly recycle, as
well as disposition tools such as assisted selling, convenient local
drop-off, trade-in programs and charity donations. We believe that the
Rethink initiative can serve as a component of an important element in
electronics recycling--consumer education.
A primary responsibility shared by manufacturers of consumer
electronics lies in product design. Advances in technology have been
accompanied by large reductions in the consumption of energy, fewer
materials of potential concern, and other positive environmental
attributes. Further, manufacturers use significant amounts of recycled
content, such as glass, plastics and metals, in the production of new
devices.
CEA SUPPORTS A NATIONAL APPROACH TO ELECTRONICS RECYCLING
CEA and its member companies all realize that voluntary programs
alone cannot resolve the very important issue of electronics recycling.
CEA strongly believes that a successful national framework should be
established to address the management of electronics recycling. The
current de-facto framework is an evolving patchwork of state-by-state
approaches. As this Subcommittee is aware, three states, California,
Maine and Maryland, have passed legislation to manage used electronics.
These inconsistent state requirements likely will soon be joined by
even more conflicting state requirements, as there were over twenty-
five states that introduced legislation on the subject in 2005. This
conflicting, ad-hoc approach imposes unnecessary burdens on global
technology companies and consumers alike. Electronics recycling is a
national issue that warrants a national solution.
A national end-of-use framework should apportion responsibility
among all of the stakeholders and ensure a level playing field, while
promoting a widespread and adequately financed electronics recycling
solution. Above all, we must develop a solution that is convenient for
the consumer and one that is broadly consistent in product scope.
CEA believes that a national framework should include the following
elements:
1. Tax Credits
The federal government should support states choosing to rely on
effective market-based solutions. Federal tax credits can enable
manufacturers, recyclers, and retailers to offer recycling services in
those states. Tax credits also may enable stakeholders in other
electronic sectors to offer recycling services or to develop markets
for recycled products. Tax credits should be available to all
stakeholders involved in the end-of-life infrastructure, including
retailers, to help defray costs in those states adopting visible fee-
based systems.
2. Fostering Design for Environment
CEA supports the creation of reasonable federal procurement
policies based on environmental criteria. The market power of the
government can play a significant role in providing a direct sales-
based incentive to manufacturers. States can augment this by adopting
federal environmentally sensitive procurement guidelines, increasing
the market and the incentive for manufacturers. In addition, federal
and state governments will capture cost-savings through reduced energy
usage and other advantages offered by these products.
3. A National Recycling Third-Party Organization
States considering Advanced Recovery Fee or ARF-based systems, as
well as producer responsibility or takeback approaches, may opt to
select a third-party organization (``TPO'') to collect and administer
recycling funds. CEA is actively working with the National Center for
Electronics Recycling to support the creation of a national third-party
organization, to assist states considering a TPO system, to provide a
national clearinghouse for product scope, and to ensure stable
harmonization of state-level systems. A national TPO should include
manufacturers, retailers, and recyclers in its governance structure. A
national TPO that is available to states can serve as a further
incentive to create state-level systems complementing a national
solution. If additional federal authority to enable harmonization is
required, CEA will work with Congress as appropriate to put that
authority in place.
4. Ensuring a Level Playing Field through Federal Policy
The role of the federal government lies primarily in ensuring a
level playing field nationally for recycling stakeholders complying
with state-level recycling systems. The federal government should put
measures in place that enable states to ensure a level competitive
playing field for in-state retailers with Internet and out-of-state
retailers. CEA will advocate for any required additional federal
authority to ensure interstate compliance with state-level market-based
or visible fee-based systems, including seeking retailer stakeholder
support.
CONCLUSION
Finding a solution to this public policy challenge is a priority
for CEA. As we continue to make strides in eco-friendly design
initiatives, lead the consumer electronics industry on environmental
issues and be a part of the effort to educate consumers about
electronics recycling, CEA stands ready to work with Congress and all
interested parties to reach a common-sense, national solution that
makes recycling as convenient as possible for all Americans.
Thank you again for the opportunity to share CEA's position on this
important public policy issue. I look forward to addressing any
questions you may have.
Mr. Gillmor. Thank you very much. And we will go to David
Thompson of Panasonic Corporation of North America.
STATEMENT OF DAVID A. THOMPSON
Mr. Thompson. Chairman Gillmor, Ranking Member Solis, I am
David Thompson, Director of the Corporate Environmental
Department of the Panasonic Corporation of North America. I am
here today on behalf of the electronics manufacturers coalition
for responsible recycling. We commend you on your leadership
and are pleased to have the opportunity to present our views on
an emerging issue of concern, the collection and recycling of
electronic products.
Our coalition consists of 16 manufacturers which I have
listed in my testimony. And I would like to emphasize five
points, if I may: one is that our coalition and industry has
been actively engaged in electronic product recycling and
design for the environment; our support for an advanced
recycling fee approach; our concerns with the take-back system
that is now being developed in Maine; our concern that take-
back is not a strong design incentive, in fact we think it is a
very weak design incentive; and last suggestions for going
forward.
Our companies have come together to introduce recycling
systems around the world, in the U.S., Japan and Europe. And
collectively, we have recycled more than 1 million tons of
electronic products to date. We are world leaders in the area
of environmental design, including in the energy efficiency of
products, in minimization or elimination of hazardous materials
from our products and design for recycling.
My company alone spent almost $125 million last year on
environmental product design improvements. And from 1999 to
2003, we have spent approximately $725 million changing the
designs of our products to make them more environmentally
conscious. Collectively, as a coalition, we have spent billions
of dollars on environmental design. IBM is a member of our
coalition. They are the world leader in computer product
recycling. They have recycled over 1 billion pounds of computer
products to date. Panasonic and Sanyo played a leading role in
establishing the successful rechargeable battery recycling
corporation. This is a program to recycle rechargeable
batteries, and it was enabled, I believe, in 1996 by an act of
Congress that enabled us to implement nationwide this cost
internalization program. I took a leave of absence from my
company to work for 1 year to startup this program, so I have
some experience in this area with cost internalization
programs.
JVC, Panasonic, Sharp, and Sony have developed a voluntary
shared responsibility program under which we have sponsored
1,000 collection events over the past 5 years in the United
States, many of them with BestBuy. And these events have
collected over 10,000 tons of electronic products and recycled
them.
And, finally, LG, Philips, Panasonic, RCA, Samsung, and
Sony have taken the lead in the reuse of post-consumer CRT
glass and now have in many of our picture tubes 20 to 50
percent post-consumer CRT glass recycled content. Based on our
experience, we came together in 2003 to support the California
electronic waste recycling act, which essentially established a
statewide system in California based on an advanced recycling
fee. We thought this approach had a number of advantages and
supported it for that reason.
Our approach is that, one, we think first and foremost
manufacturers should be responsible for the design of
electronic products to make them more environmentally
conscious. That is something that we can do based on our core
expertise. We thought that consumers should pay an advance
recycling fee to cover the cost of collection and recycling,
that retailers should collect this fee, and manufacturers who
sell products directly to consumers in California are also
responsible for collecting the fee. The State government
manages the financing of the system as well as ensuring a level
playing field, and we also thought that a third party
organization could be established that would manage the same
process, the collection and recycling of electronic products.
That seemed to be more realistic to solve this problem.
Local governments organize and provide collection services,
and their costs are covered under this program. Manufacturers,
retailers, and both State and local governments cooperate to
provide education. And the manufacturers report on our design
for recycling plans in progress, our chemical usage, and our
consumption of recycled materials to the State on an annual
basis. That is what was enacted, essentially, from our
perspective as a manufacturer in California.
The advantages were numerous. We thought it was visible to
the consumer and delivered a strong educational message to the
consumer that they had a role to play and that systems are
available. We also thought a visible fee would exert pressure
on system operators to keep costs as low as possible.
We thought that the visible fee, an advanced fee was not
subject to markup as the product moved through the chain of
retail distribution. It would not be taxed thereby increasing
the cost of recycling to the consumers. It eliminates the
competitive disadvantage of associated systems based on waste
stream share. It creates one unified system, as opposed to
several competing manufacture based systems. It eliminates
costly brand sorting. It eliminates the problem of orphaned
products that are no longer associated with a manufacturer. And
we thought it was easier to enforce than manufacturer take-back
models, hence we came together to support this approach in
California.
Since California, Maine has also enacted electronic product
recycling legislation that essentially requires manufacturers
to take back and recycle electronic products. One of our
concerns with this particular approach is that electronic
products are very long-lived. Televisions, based on our
research, last about 17 years on average before people throw
them away, and computer monitors approximately 10 to 11 years.
So you have a situation where, since the Maine system is based
on a manufacturer's waste stream share, a manufacturer is
responsible for collecting products that are actually being
thrown away today. You have a system where historical
manufacturers who have a legacy waste stream share have an
immediate financial burden whereas newcomers to the market have
no burden to pay and help support a collection recycling
system. And we felt that represented a competitive disadvantage
to the historical manufacturers, many of whom are North
American manufacturers.
According to an article in the May 2005 edition of Smart
Money called ``Behind the Glass, there has been a wave of new
entrants into the television manufacturing business with 127
brands now available, 70 percent more than a decade ago. So I
think you can get an idea of the potential competitive
disadvantage this system would place on historical
manufacturers.
The Maine approach requires that products be separated by
brand in order to be managed. A recent study in Hennepin
County, Minnesota, over the last 6 months of 2004, looked at
17,134 TV brands and 11,920 computer monitor brands.
Mr. Gillmor. Could we ask you to wrap up here so we could
keep on schedule? Thank you.
Mr. Thompson. So brand sorting is going to be a problem. We
think multiple programs will be confusing. We think take-back
does not present a strong design incentive.
And finally, we would like to recommend that, one, we do a
study to get a sense of this problem. The last study was done
in 1999. Many people have concerns about many different issues.
That study could address those issues.
Finally, we look forward to working with this committee and
our colleagues to develop an approach to electronic recycling
that makes sense for all of us.
[The prepared statement of David Thompson follows:]
Prepared Statement of David A. Thompson, Director, Corporate
Environmental Department, Panasonic Corporation of North America on
Behalf of Manufacturers Coalition for Responsible Recycling
Electronics Manufacturers Coalition for Responsible Recycling
consists of major manufacturers of televisions, computers, and laptops.
Canon USA; LG Electronics; Sanyo Fisher; Epson; Mitsubishi Digital
Electronics America; Sharp Electronics; Hitachi America; Panasonic
Corporation of North America; Sony Electronics; IBM Corporation;
Philips Consumer Electronics North America; Thomson Inc.; JVC America;
Pioneer Electronics (USA) Inc.; Toshiba; and Samsung Electronics
America.
Chairman Gillmor, Ranking Member Solis, and members of the
subcommittee, my name is David Thompson, Director, Corporate
Environmental Department, Panasonic Corporation of North America.
I am here today on behalf of the Electronic Manufacturer's
Coalition for Responsible Recycling (``Coalition''). The Coalition
commends you on your leadership and is pleased to have the opportunity
to present our views on an emerging issue of concern--the collection
and recycling of electronic products.
The Coalition consists of 16 major manufacturers and marketers of
consumer, commercial and industrial electronic products.
Our Coalition members have actively supported the recycling of used
electronic products and have been deeply involved in developing product
recycling systems in the US, Japan, Europe, and other countries around
the world. Collectively we have recycled more than 1 million tons of
electronic products to date. Our Coalition members have also led the
electronics world in eco-design, ranging from energy efficiency,
hazardous material minimization, and design for recycling. My company
alone spent almost $125 million on environmental product design
improvements just last year, and almost $725 million from 1999-2003.
Here are a few of our members' noteworthy accomplishments:
IBM is the world leader in computer equipment recycling, having
recycled over 1 billion pounds to date.
Panasonic and Sanyo played a leading role in establishing the
successful Rechargeable Battery Recycling Corporation (RBRC)
Program. Sony is also an RBRC member company and Board member.
JVC, Panasonic, Sharp, and Sony have developed a voluntary Shared
Responsibility Program, under which we have sponsored over
1,000 collection events over the past 5 years in the United
States. These events have collected over 10,000 tons.
LG, Philips, Panasonic, RCA, Samsung and Sony have lead the way in
incorporating post-consumer recycled CRT glass into new picture
tubes, in some cases achieving 20% post-consumer CRT glass
recycled content.
Canon operates a world-leading printer cartridge recycling program.
Sharp is the world leader in the manufacturer of solar panel
displays.
Sony used 160,000 tons of recycled materials in 2004.
Panasonic and Sanyo are the world leaders in manufacturing Ni-MH
batteries used to power hybrid cars, trucks and buses. Look in
the trunk of a Prius hybrid automobile and you will find a
Panasonic battery.
Mitsubishi Electric established the first home appliance recycling
plant in 1988.
Based on our collective experience around the world in establishing
recycling systems, our Coalition came together in California to support
The Electronic Waste Recycling Act of 2003, a new law that established
a state-wide recycling system financed by a point of sale advanced
recycling fee.
The Coalition members have been for some time strongly committed to
helping design and implement a national system for electronics
recycling. Many of us were active participants in the three-year NEPSI
process.1 We believe that the NEPSI negotiations resulted in
the detailed design of an excellent national system, one which was
supported by the great majority of the NEPSI stakeholders. We
understand that a small number of companies and stakeholders prefer a
different approach, and we have worked hard with them to craft a
compromise. Unfortunately these efforts have been unsuccessful to date
and we are left with competing proposals. We believe that a compromise
is within reach and we are still committed to achieving that
compromise.
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\1\ A National Electronics Product Stewardship Initiative was
convened by the U.S. EPA in order to provide all key stakeholders an
opportunity to discuss and debate comprehensive responses to the
electronic product recycling challenge, particularly the finance aspect
associated with collection and recycling.
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SUMMARY OF COMPETING APPROACHES
In this testimony, I will lay out the details of the two competing
approaches and their pros and cons from the Coalition's perspective. We
understand that it is time to make progress toward a compromise. I will
therefore conclude our testimony with a set of principles that we
believe are important to recognize in developing a compromise.
The consumer fee approach: In simple terms the NEPSI majority
solution is based on a consumer fee that is paid on every covered
product--an advanced recycling fee. The fee provides the money needed
to finance the entire recycling system--collection through processing
plus public education. A private third-party organization, consisting
of manufacturers and other stakeholders, would contract for services,
assure that environmental standards are followed, provide public
education, and report on results.
The manufacturers' responsibility or take-back approach: In
contrast the alternative approach assigns a responsibility to each
manufacturer to recycle a share of products that are returned. Their
share, in most cases, is determined by the portion of their brand that
is returned, plus in some models, an allocation of old products for
which the brand no longer exists, called orphan products. Manufacturers
individually or collectively figure out how they will meet their
responsibility and contract for services. Often local governments are
asked to pay for collection from the public.
In both approaches the consumers pay for recycling services at the
time of new product purchase. In the first the fee is visible, while in
the second it is internalized in the product price and not visible.
COALITION APPROACH: SUPPORT ADVANCE RECYCLING FEE COLLECTED AT POINT OF
SALE
The California legislation embodies our concept of a shared
responsibility system based on a consumer fee, where all stakeholders
have defined roles of responsibility.
Manufacturers must design environmentally conscious products
Consumers pay an advanced recycling fee to cover the costs of
collection and recycling
Retailers collect the required fee. Manufacturers who sell products
at retail also collect the recycling fee.
State government manages the financing of the collection and
recycling system, as well as ensuring a level playing field.
Local governments organize and provide collection services and their
costs are paid out of the fee revenues. Retailers and
manufacturers, to the extent that it makes business sense, may
also provide collection services and receive compensation.
Manufacturers, retailers, and both state and local government
cooperate to provide education.
Manufacturers report on design-for-recycling plans and progress,
chemical usage, and consumption of recycled materials.
An advanced recycling fee has a number of advantages:
Visible to the consumer, it delivers a strong educational message
that the consumer has a role to play in recycling used products
and that recycling programs are available. A visible fee will
also direct consumer pressure toward keeping recycling costs as
low as possible.
In contrast to the internalized costs envisioned by take-back models,
a retail fee will not be marked up as the product moves through
the distribution chain (typically 30% or more) and will not be
taxed, thereby minimizing the cost of recycling to consumers.
Eliminates the competitive disadvantages associated with systems
based on waste stream share. (The European Union Waste
Electrical and Electronic Equipment Directive (WEEE)
established financial responsibility on current and future
sales, and not retroactively.)
Creates one unified system as opposed to several competing, confusing
systems that may minimize potential economies of scale.
Eliminates costly brand sorting
Eliminates orphan problem
Easier to enforce than take-back models
Our Coalition acknowledges that the California Advanced Recycling
Fee system is not perfect. Particularly, no one likes to pay a fee, but
we should also acknowledge that in some states consumers have become
accustomed to paying a user fee to ensure the proper recycling or
disposal of used motor oil, tires, and car batteries.
In addition we recognize that in California the State bears the
burden of managing the infrastructure--the Waste Board audits and pays
the companies that provide collection and processing. These functions
could be better performed by a private entity. The Coalition is working
with other stakeholders in a project sponsored by EPA in the Pacific
Northwest to design a private third-party organization that would
deliver these services more cheaply and efficiently than government
can.
Of course there are some other issues that need to be addressed
including:
Legitimate enforcement issues against remote sales. Data collected to
date, however, indicates that California is meeting its
projected revenue targets, suggesting a high level of
compliance.
Retailer start-up and administration costs. (Retailers are allowed to
keep 3% of the fees they collect to cover administration
costs.)
The fee was set too high. The California statute has an adjustment
mechanism.
We believe there is room for improvement, and have proposed a
number of suggestions.
MAINE STATUTE DISADVANTAGES NORTH AMERICAN MANUFACTURERS
In contrast to the California Advanced Recycling Fee system, Maine
has passed the first manufacturer take-back law in the United States.
Our principle concern centers on a fundamental inequity the Maine
approach places on established manufacturers (and by extension on North
American manufacturers) vis-a-vis newer market entrants. First, our
research indicates that televisions are on average 17 years old when
discarded and that computer monitors are about 11 years old. Second, we
are experiencing a wave of new manufacturers, primarily form China,
entering the North American market. According to an article in the May
2005 edition of Smart Money, ``Behind the Glass,'' there has been a
wave of new entrants into the television manufacturing business with
127 brands now available, 70% more than a decade ago. Since the Maine
law requires manufacturers to finance the management of their own
products based on actual collection volumes, established manufacturers
will have take-back costs while the 70% of the new market entrants will
have no costs since their products are simply too new to be winding up
in the recycling system. Only basing responsibility on current sales
can eliminate this disadvantage to established manufacturers and their
North American workers. 2
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\2\ Additionally, new brand compliance in Maine appears to be less
than 25%, based on the most recent information published by Maine
Department of Environmental Protection (DEP). (Waste stream share
compliance is much higher, approaching 80% based on April 21, 2005
summary prepared by Maine DEP.
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Maine's approach to orphan products could further exacerbate this
competitive disadvantage. Maine, the only state that has passed take-
back legislation, is attempting to allocate responsibility for orphan
products based on a manufacturer's waste stream share. Obviously, such
an approach places the established, legacy manufacturers at a double
competitive disadvantage to the newer market entrants, even though
neither subset of the market (those with waste shares and those too new
to the market place to have a waste stream share) is in any way
responsible for the orphan problem. The only fair way to deal with
orphan products is to base responsibility on current sales.
Unfortunately this would result in a complex and burdensome dual
financing system that would be difficult to administer and enforce.
REQUIRES TIME-CONSUMING AND EXPENSIVE SEPARATION BY BRAND
In order to allocate manufacturer responsibility under the Maine
system, collectors and recyclers would have to sort products by brand,
an extremely burdensome and costly endeavor. A recent brand sort
completed by Hennepin County, Minnesota, during the last six months of
2004 looked at 17,134 TVs and 11,920 computer monitors by brand.
Hennepin County reported 281 TV brands and 458 computer monitor brands
respectively. While some brands have significant waste stream shares,
the vast majority of the brands have waste streams shares that are
below 1%: 258 TV brands and 438 computer monitor brands. It should be
clear that attempting to manage collection by waste stream brand is
going to be extremely burdensome and expensive.
It will be argued that brand sorting can be minimized through
periodic sorting and reporting in order to establish manufacturer
shares and proportionate responsibility. While possible in theory,
sorting will still have to be done frequently in order to catch the
brands of the new market entrants as soon as they begin entering the
waste stream.
MULTIPLE PROGRAMS WILL BE CONFUSING AND INEFFECTIVE
The disparity in waste stream shares described above will result in
those companies with larger shares establishing their own programs and
smaller companies attempting to band together. The result will likely
be a mish-mash of competing programs that will be both extremely
difficult for Maine to administer and confusing for consumers, local
governments and retailers to utilize. These divergent programs will
place enormous burdens on compliant companies to achieve the public
awareness goals outlined in the bill.
TAKE-BACK DOES NOT PROVIDE A MEANINGFUL DESIGN INCENTIVE
Let me refer to an example from my own company's activities, which
I believe is indicative of what all leading electronic manufacturers
are doing. Panasonic recently completed a redesign of our complete line
of CRT-technology TVs in order to make them easier to recycle. Compared
to a Panasonic TV manufactured in 1980, we have reduced the number of
plastic resins we use from 13 to 2. We have reduced the number of
plastic parts from 39 to 8, not only making the sets easier to
disassemble, but improving the ability of the recyclers to sort and
manage the plastic parts more effectively. In all, the disassembly time
has dropped from approximately 140 seconds to 78 seconds. I am
confident that other TV manufacturers are in the process of making
similar design improvements.
While we, like all members in our Coalition, endeavor to design
products where the value of the materials contained within will cover
the cost of collection and recycling, these design changes will not
benefit the recycling process until the newly improved sets have
exhausted their useful life 15--17 years from now. This time lag calls
into question the common supposition that mandated product take-back
requirements will lead to design improvements. No chief financial
officer would approve even an incremental investment in recycling
design in the hope that the investment would be recouped or would
advantage the company 15 years in the future. Companies that suggest
otherwise are being disingenuous.
Under the type of take-back system mandated by the Maine
legislation it should be clear that Panasonic would not receive any
immediate financial benefit from the design improvements already made.
It is quite possible that the added costs of complying with the Maine
statute will actually reduce the amount of resources available to
implement environmental design enhancements, given the ongoing
competitive pressures now prevalent in the electronic marketplace. I
therefore urge you to consider a system where market forces are
harnessed to encourage and reward design innovations. The US
Environmental Protection Agency's ENERGY STAR Program and newly
launched Electronic Product Environmental Assessment Tool (EPEAT)
represent excellent examples of a positive role the federal government
can play in assuring product designers work diligently toward
environmentally conscious designs.
In addition to the types of specific design for recycling efforts
already discussed, it should be re-emphasized that all of our Coalition
companies have accelerated plans to reduce or eliminate the use of
potentially hazardous chemicals in the manufacture of and contained
within our products.
GOING FORWARD: THE FEDERAL GOVERNMENT
First, we need an accurate understanding of the problem and the
challenge. The most recent governmental study was concluded by the
National Safety Council back in May 1999. We need to better understand:
How many products of concern are being generated
The capability of the domestic recycling industry in terms of
capacity and technology
The adequacy and viability of secondary markets for materials
contained in electronic products, both in the US and around the
world
The volumes of electronic products that are being exported, and the
adequacy of overseas recyclers.
The economic consequences of different financing mechanisms: An
advanced fee versus cost internalization models versus pay-to-
throw systems.
The adequacy of modern landfills to handle the disposal of electronic
products.
A national study conducted by US EPA would answer these questions.
As recently written by the EPA-appointed NEPSI facilitator, ``Prior to
starting a full-fledged dialogue, an adequate level of base research
must be in place . . . [In] the NEPSI dialogue, this baseline did not
exist at the outset, which created recurring disagreements through the
dialogue on basic facts.'' 3
---------------------------------------------------------------------------
\3\ ``Lessons Learned from Multi-stakeholder Dialogues'', Catherine
Wilt, Resource Recycling, August 2005.
---------------------------------------------------------------------------
We need a system of consistent laws and regulations that do not
burden commerce in new products and recyclable materials unnecessarily.
The so-called CRT rule would help achieve this goal.
We need a system that actually rewards investments in environmental
design. We have suggested some approaches that are preferable to
mandating take-back in order to accomplish such a goal.
Again our Coalition companies are generally supportive of up-front,
fee-based financing models, particularly fees assessed at the point of
retail sale and run by independent 3rd party organizations.
Our Coalition has prepared a white paper on electronic product
recycling that provides an in-depth discussion of the above issues and
challenges, as well as model ARF legislation and a suggested design
incentive system. Copies are submitted for your review.
RECOMMENDED PRINCIPLES OF A NATIONAL SOLUTION
In closing, the Electronic Manufacturers Coalition for Responsible
Recycling stands by to work with the Committee to address this emerging
issue. It's time to find a solution--the public is rightly expecting a
way to reasonably and responsibly recycle their old electronics which
are accumulating every day.
We understand that compromises will need to be made in order to
bridge the gaps that separate companies favored approach to this
challenge. Above we offered you our preferred solution--the advanced
recycling fee. Here we offer three simple principles that should guide
a compromise solution.
The solution should actively engage and involve all stakeholders,
each in proportion to their ability to contribute. Each
stakeholder group is best able to provide some elements of the
needed system. By all sharing in the burden it will not fall
too heavily on any one group.
The solution should not disadvantage any manufacturer or retailer
over others. In particular, an unfair burden should not be
placed on small companies because they lack the resources of a
nationwide presence, nor should unfair advantage be given to
recent market entrants because their products will not enter
the recycling stream for years. All companies should be treated
equally.
The national solution should be as straightforward and efficient to
implement as possible. It should avoid complex or contentious
regulations and enforcement.
Thank you again for the opportunity to present our views and ask
for your leadership on this issue.
Mr. Gillmor. Thank you very much, Mr. Thompson. And we will
now go to Gerald Davis who is President and CEO of Goodwill
Industries, central Texas, and is also distinguished by being
an Ohio State alum and further distinguished by being a former
resident of Port Clinton, Ohio, in the Fifth District of Ohio.
STATEMENT OF GERALD L. DAVIS
Mr. Davis. And it is a particularly hard time to live in
Austin, Texas, these days. Not after Saturday.
Chairman Gillmor, Ranking Member Solis, members of the
subcommittee, first I want to say that our prayers and
sympathies go out to those affected by Hurricane Katrina, our
agencies in New Orleans and Gulfport and their 700 employees
who have suffered devastating losses. Goodwill agencies from
Texas to Arizona to North Carolina are gearing up for increased
demand in job placement and career services as tens of
thousands of Americans arrive in new cities looking for
shelter, food, and work, including Austin.
Many Goodwills have already helped out with donation
gathering and distribution. We have 207 community-based
autonomous Goodwill agencies in the U.S. and abroad. We fund
our mission through revenues earned from donated goods,
government contracts, and workforce development funding.
Goodwill industries is one of the world's largest nonprofit
providers of education training and career services for people
who have physical, mental, and emotional disabilities as well
as those with disadvantages such as welfare dependency,
criminal history, lack of work experience, and dislocation.
Donors play a pivotal role in our ability to fulfill our
mission. Last year, we had nearly 54 million donors. In the
past decade, we have seen a growing number of computers and
other electronic devices donated. Many of these items are
dropped off at our stores or drop-off locations. But because of
the environmental concerns specific to computers and other
electronic devices, we have to grapple with a number of issues,
from effective disposal of these items to successful recycling
of them. Unlike clothing and household goods, we cannot always
simply sort them and place them back in our retail stores for
sale. However, a number of Goodwill agencies have come together
to seek innovative solutions to this problem. On the policy
side, we have been involved with initiatives both local and
national. And on the business side, we have been seeking
various partners to help us develop reasonable solutions to the
e-waste problem, while at the same time sustaining our funding
to help the disadvantaged and those with disabilities.
For many of our agencies, e-waste represents anywhere from
10 to 30 percent of all electronic donations. We consider this
to be one of our top concerns. As a charitable organization
with retail stores across the country, Goodwill has a unique
perspective on the problem of e-waste. Nearly all Goodwill
agencies receive computers through donation streams, although
some do not willingly accept them. In 2004, Goodwill Industries
received over 23 million pounds of used electronics. A large
number of these donations are unusable, and the cost of safely
and responsibly disposing of these products can directly impact
the job training and career services offered by Goodwill
Industries.
More and more, landfills refuse to accept electronic
products and charge a hefty disposal fee. In 2003, a quarter of
all Goodwill agencies reported having to pay a landfill fee,
again taking money from mission. All of the fees vary according
to agency, the State, and the locale.
As part of our policy efforts, Goodwill participated in the
NEPSI initiative, National Electronics Products Stewardship
Initiative, a multi-stakeholder initiative focused on the
recycling of used electronic products. Unfortunately, the group
was not able to reach consensus. Recently, we joined the
Congressional E-waste Working Group, a bipartisan group
consisting of Members of the U.S. House of Representatives and
other stakeholders working together to discuss end-of-life
management solutions that are mutually beneficial to all
stakeholders.
Increasingly, local Goodwill agencies are developing
innovative business solutions to address the growing surplus of
computer donations. Some Goodwill agencies are refurbishing and
demanufacturing equipment, reselling systems and components,
expanding client training and career services and avoiding high
disposal costs. Through pilot programs with computer companies
like Dell, county and city governments, as well as other
organizations, Goodwill is exploring socially responsible ways
of managing consumer electronics in a cost-effective manner.
We are using four models. The first is a retail model which
focuses on collecting, demanufacturing, refurbishing and
reselling computer systems. You will find these models in L.A.,
Santa Cruz and Austin. The client model, a model integrating
client technology training and workforce development, can be
found in Charleston, South Carolina. A third model, a corporate
model, focuses on erasing hard drives and preventing identity
theft is one that is being used at Pittsburgh Goodwill. And
last, the collaborative model, one you will find in San
Francisco, is a mixture of many things from stores to
relationships with cities and counties as well as the Goodwill
agency.
In Austin, where I am the President, we began in 1997, as a
training program, a retail outlet for donated computers. We
sell all forms of systems and products in a dedicated computer
store called Computer Works. There is one in Orange County and
Fort Worth. We are well positioned in Austin and these other
Goodwills in both refurbishing and recycling used computers. We
have developed a well-proven, state-of-the-art dismantling and
sorting process similar to what you would find at any third
party recycling vendor and what they can offer on the
marketplace. This year, we look at processing 2 million pounds.
We are sharing the results of our business model with other
Goodwill agencies in Charlotte, Dallas/Ft. Worth, Portland, and
San Antonio. So we are spreading best practices.
The Federal Government plays a leadership role in e-waste
disposal. We also believe in the shared responsibility approach
and support the concept of advanced recovery fees.
We recognize there are significant costs with any recycling
program, and the cost will be borne by consumers and
manufacturers primarily. We believe that the government has a
role in balancing the impact of the costs in developing safe
disposal methods and standards. We believe the Federal
Government can play a vital role in assisting the development
and sustainability of a recycling reuse infrastructure. The
Federal Government, using incentives perhaps could, aid and
perhaps encourage necessary private sector investment in the
used electronic recycling and reuse markets.
We believe that one possibility is a tax credit. Not just
for the manufacturers, but also the consumers. Recycling grants
and other initiatives could also spur innovative solutions.
We also hope that the Federal Government would support
pilot projects for sustainable initiatives. And other projects
that would result in the development of recycling and reuse
infrastructure.
We believe that the government can play a key role in
educating consumers, especially those in the residential
marketplace where many of the used computers are.
Goodwill Industries looks forward to working with the
subcommittee in finding electronic waste management solutions.
Thank you very much for your time.
[The prepared statement of Gerald L. Davis follows:]
Prepared Statement of Gerald L. Davis, President & CEO, Goodwill
Industries of Central Texas, Inc. (Austin), Chairman, Goodwill
Industries International, Inc.
Mr. Chairman and members of the Subcommittee, I am pleased to
testify today on the role of various stakeholders, including government
and businesses, in the safe disposal of the growing problem of
electronic waste in our country.
My name is Jerry Davis, and I am the President and CEO of Goodwill
Industries of Central Texas located in Austin, Texas and the Chair of
the Board of Directors for Goodwill Industries International, Inc.
Goodwill Industries of Central Texas is the 15th largest of the
Goodwill agencies, and this year we mark our 47th anniversary.
I want to say that our prayers and sympathies go out to the victims
of Hurricane Katrina. Our prayers are with the hundreds of thousands of
people who have lost their homes and loved ones. Goodwill Industries
has agencies in the affected Gulf Coast areas: Alabama, Louisiana, and
Mississippi. Our agencies are mobilizing efforts to assist with relief
to the victims of the hurricane.
BACKGROUND
We have 207 local, autonomous Goodwill agencies in the U.S. and
abroad, and we fund our mission through revenues collected from donated
goods, government contracts, and workforce development funding.
Goodwill Industries is one of the world's largest nonprofit providers
of education, training, and career services for people with physical,
mental, and emotional disabilities, as well as those with disadvantages
such as welfare dependency, criminal history, and lack of work
experience. Donors play a pivotal role in our ability to fulfill our
mission.
Founded in Boston in 1902 by Rev. Edgar J. Helms, a Methodist
minister, Goodwill Industries first put people to work by hiring them
to repair and sell donated goods. Today, Goodwill Industries trains
people for careers in fields such as financial services, computer
programming and health care. To pay for its programs, Goodwill
Industries sells donated clothes and other household items in more than
2,000 retail stores, and online at www.shopgoodwill.com. The
organization also builds revenues, and creates jobs, by contracting
with businesses and government to provide a wide range of contract
services, including janitorial work, packaging and assembly, food
service preparation, and document shredding. Eighty-four percent of
revenues are channeled back into programs and services. More than
723,000 people benefited from Goodwill's career services in 2004.
Last year, collectively we had nearly 54 million donors. However,
during the past decade, we have seen a growing number of computers and
other electronic devices donated to Goodwill agencies. Many of these
items are dropped off at our stores or drop off locations. Because of
the environmental concerns specific to computers and other electronic
devices, we have to grapple with a number of issues, from effective
disposal of these items to successful recycling of them. Unlike
clothing and household goods, we cannot always simply sort through
computers and electronics and place them back in our retail stores for
sale.
However, a number of Goodwill agencies have come together to seek
innovative solutions to this problem. On the policy side, we have been
involved with initiatives both local and national, and on the business
side, we have been seeking various partners to help us develop
reasonable solutions to the e-waste problem, while at the same time
sustaining our funding to help the disadvantaged and those with
disabilities. For many of our agencies, e-waste represents anywhere
from 10-30 percent of donations. For example, in Orange County
California, our agency there receives approximately 8,000 televisions
and 280,000 pounds of monitors annually; in Richmond, Virginia, they
receive 353,000 pounds of computers and 390,000 pounds of televisions.
My testimony today will focus on our business-to-business solutions
and possible policy venues to address this problem that should be
considered by local, state, and federal governments. Many state and
local governments are developing and passing legislation to address the
issue of e-waste.
As a charitable organization with retail stores across the country,
Goodwill Industries has a unique perspective on the problem of e-waste.
Nearly all Goodwill agencies receive computers through their donation
streams, although many do not willingly accept them. In 2004, Goodwill
Industries received over 23 million pounds of used electronics. A large
number of these donations are unusable and the cost of safely and
responsibly recycling or disposing of these products can directly
impact the job training and career services offered by Goodwill. As our
generous donor base (which averages 40 pounds per drop-off) continues
to grow, the challenge of disposing of non-recyclable and unusable
donations in landfills also increases. Some of our agencies have been
able to negotiate reduced landfill fees with their localities or to
seek a waiver of these fees.
But, more and more, landfills refuse to accept electronic products,
or charge a hefty disposal fee. In 2003, 24% of Goodwill agencies
responding to an internal survey reported paying a landfill fee. The
landfill fees vary by agency. State governments are imposing stricter
guidelines on the proper disposal of e-waste and a patchwork of
differing laws appears to be emerging.
As part of our policy efforts, Goodwill Industries participated in
the National Electronics Product Stewardship Initiative (NEPSI), a
multi-stakeholder initiative formed a few years ago and focused on the
recycling and reuse of used electronics; unfortunately, the group was
not able to reach consensus.
Recently, Goodwill Industries joined the Congressional E-Waste
Working Group, a bipartisan group consisting of m embers of the U.S.
House of Representatives and other stakeholders working together to
discuss end-of-life management solutions that are mutually beneficial
to all of the stakeholders.
Currently three states (California, Maine and Maryland) have
enacted laws governing electronics end-of-life management. California's
law is based on an advance recovery fee paid by the consumer. We have
13 Goodwill agencies in the state of California and already a number of
them have applied to the state to become recyclers to benefit from the
new law. It is too early to tell whether this particular model is a
success, but early indications appear that the fund has raised revenue
available for recycling efforts.
In Maine, the law requires producer-financed collection, recovery,
and recycling of electronic waste. In Maryland, a new law requires
manufacturers to offer a take back program and pay a fee. Still, other
states have banned landfills from accepting Cathode Ray Tube (CRT)
monitors, or have commissioned study committees on the issue. In May,
the New York City Council passed a bill--the first ever to be
introduced by a municipality--which requires manufactures to develop
and divulge specific plans to reuse, recycle, and properly dispose of
waste.
In 2004, 26 states introduced e-waste legislation. This year 30
states introduced e-waste legislation and in state legislatures across
the country 109 bills were introduced with 12 of those bills enacted;
84 will carryover to next year. While we applaud the efforts of
localities in addressing this issue, we do believe that the various
models and financing mechanisms can become confusing to consumers,
businesses, and manufacturers that have business across state lines. A
leadership role does exist for the federal government to bring agencies
together and to develop a national, comprehensive solution to this
growing problem.
GOODWILL AGENCY E-WASTE PROGRAMS
Nonprofit organizations that accept donated goods, such as Goodwill
Industries, are often left with a surplus of unusable computers and
televisions that they have to pay to dispose of safely. Unfortunately,
the payment to recycle and to dispose of these items diverts funds from
critical human services we provide in communities. Where permitted by
law, some Goodwill agencies dispose of unwanted electronics in
landfills.
Increasingly, however, local Goodwill agencies are developing
innovative business solutions to address the growing surplus of
computer donations. Some Goodwill agencies are refurbishing and de-
manufacturing equipment; reselling systems and components; expanding
client training and career services; and avoiding high disposal costs.
Through pilot programs with computer companies like Dell, Inc.,
county and city governments, as well as other organizations, Goodwill
Industries is exploring socially responsible ways of managing used
electronics in a cost-effective manner. An internal Goodwill Industries
taskforce has researched the issue and has identified four innovative
e-recycling models that have so far been successful in meeting Goodwill
Industries' revenue goals, concern for the environment, and most
importantly, our charitable mission.
Specifically, the various models are as follows:
(1) Retail--a model focusing on collecting, de-manufacturing,
refurbishing and reselling computer systems and components in a
dedicated retail store.
(2) Client--a model integrating client technology training and
workforce development programs into computer collection, recycling and
reuse.
(3) Corporate--a model integrating corporate services into computer
collection, recycling and reuse.
(4) Collaborative--a model utilizing partnerships and collaboration
to address computer collection and recycling.
In Austin, Texas, where I am the President and CEO, we employ a
retail model. Beginning in 1997 as a training program and retail outlet
for donated computers, we sell all forms of systems, products, and
accessories in a dedicated computer store called Computer Works. Some
of the benefits that are a direct yield from our computer recycling
business include the creation of new jobs for people with disadvantages
and disabilities while increasing revenue from parts and component
sales. Our computer business operations also result in little or no
waste going to landfills, which is also important to us as we strive to
be better stewards of our environment.
In Austin, Texas, we are well-positioned in both refurbishing and
recycling used computers; we have developed a well-proven state of the
art dismantling/sorting process, similar to what any third party
recycling vendor can offer in the marketplace. This year, we are
looking at processing two million pounds; 50 percent of what's
collected gets refurbished or dismantled; of that, 20 percent will get
refurbished and be sold as complete systems in our store; 75 percent
will be broken down and sold as parts in the store; and 5 percent will
be broken down and sold to a third-party recycler. We are sharing the
results of our business model with other Goodwill agencies.
The reduction in landfill deposits coming from programs like the
one we use in Austin, we believe, is encouraging. As this subcommittee
is well aware, the overburdening of landfills with otherwise recyclable
electronics is problematic. In addition to aggravating the cost and
availability of landfills, electronics products contain materials that
increasingly cannot be treated as common waste.
Recent studies show that the component materials of electronic
items threaten human health and the environment, especially water and
air quality. Computers contain heavy metals such as lead, chromium,
nickel, and zinc. CRT glass picture tubes found in television and
computer monitors contain five to eight pounds of lead. CRT monitors
are the biggest e-waste cost factor for noncommercial computer
refurbishers.
LEGISLATIVE AND POLICY SOLUTIONS
The federal government can play a leadership role in e-waste
disposal. A ``shared responsibility approach'' must be applied to
future policy and we cannot compromise on environmentally sound
disposal practices. The financial burdens should be shifted from
nonprofits (for example, the average landfill fee per unit is $25.00).
We do support collection of ``point of sale'' fee/deposit shared by
consumer and manufacturer. but realize that other solutions in the
immediate period are feasible, such as working directly with
manufacturers in various partnerships.
In Europe, the European Commission in 2003 published the WEEE
(Waste Electrical and Electronic Equipment) and RoHS (Restriction of
Hazardous Substances) Directives to regulate component materials. Under
the WEEE and RoHS Directives, all but a few exempted electronics
applications will have to comply with the elimination of lead in their
manufacture by July 2006. The substances to be banned are: Lead,
Mercury, Cadmium, Hexavalent Chromium, Polybrominated Biphenyls (PBB)
and Polybrominated Diphenyl Ethers (PBDE). While we do not have a
formal position on WEEE, it seems that policymakers in the U.S. could
look to the European Commission's work with respect to the regulation
of component materials. The Environmental Protection Agency (EPA)
during the course of the last year, has held meetings of the various
stakeholders and has played a role by hosting ongoing conference calls
on the issue. We hope these efforts continue.
Goodwill Industries supports the development of a national solution
that embraces and balances environmentally sound disposal practices
with market-based solutions that are inclusive of nonprofits recyclers/
collectors and will aid in the development of a reuse infrastructure.
Goodwill Industries supports product recovery requirements for
electronic manufacturers and incentives for businesses (including
nonprofits) and individuals that recycle.
At present, several legislative approaches have been introduced in
Congress. The Electronic Waste Recycling Promotion and Consumer
Protection Act (S.510) introduced by Sens. Wyden (D-ORE) and Talent (R-
MO) recommends among other things, the use of tax-credits as an
incentive to ``jump-start'' the building of a recycling infrastructure.
Similarly, the Tax Incentives to Encourage Recycling Act (H.R. 320) by
Rep. Duke Cunningham (R-CA) would also provide tax incentives.
Another legislative approach provides an advanced recovery fee
(ARF) model similar to legislation enacted in California. Utilizing
grants as an incentive, H.R. 425 the National Computer Recycling Act,
introduced by Rep. Mike Thompson (D-CA) creates a fund generated by the
collection of ARFs to be managed by the Environmental Protection Agency
(EPA). This is one approach supported by Goodwill Industries, because
we do believe there is a role for the model using ARFs.
We recognize that there are significant costs with any recycling
program and the costs will be borne by consumers and manufacturers
primarily. We believe that the government has a role in balancing the
impact of the costs and in developing safe disposal methods and
standards for computer manufacturers. To that end, Goodwill Industries
supports market-based incentives for nonprofit collectors/recyclers and
a national solution to the issue that brings together manufacturers,
recyclers and other stakeholders.
We believe the federal government can play a vital role in
assisting the development and sustainability of a recycling/reuse
infrastructure. The federal government, by utilizing incentives, could
aid and encourage necessary private sector investment in the used
electronic recycling/reuse markets. This can be done through tax
credits for manufacturers and consumer, recycling grants, and other
initiatives that could spur innovative solutions and help stakeholders
handle this problem.
Additionally, increased federal support for pilot projects and
other sustainable initiatives would be helpful in promoting the
development of a recycling/reuse infrastructure. The federal government
also can play a key role in educating consumers. Through increased
consumer awareness, a greater impact can be made upon the established
and developing markets, particularly the residential market. A
developing infrastructure could benefit greatly from increased federal
support of consumer education campaigns.
For example, one such consumer awareness project that Goodwill
Industries has recently become involved with is eBay's ``Rethink''
initiative. The Rethink Initiative is a web portal linking the public
to e-cycling programs and information. Goodwill has partnered with eBay
in their mission of educating and enabling eBay's computer users to
take action to reduce e-waste. By helping buyers and sellers connect it
makes it easier for people with idle computers and electronics to find
others who can put them to good use. Putting old products to new use
extends their useful life and delays their entry into the waste stream.
Lastly, the federal government should play a role in the handling
of orphan waste (electronic waste produced by a company that is no
longer in business or cannot be identified). A significant stumbling
block to the development of a recycling/reuse infrastructure is the
problem of who is responsible for orphan waste.
Existing companies that have been justly rewarded by surviving in a
competitive marketplace through innovation and efficiency are naturally
hesitant to bear responsibility for the remaining products of companies
no longer in business. Goodwill believes that product recovery
requirements that also require current manufacturers to be share
responsibility for orphan waste is necessary and appropriate for the
development of a recycling/reuse infrastructure.
conclusion
Goodwill Industries looks forward to working with the Subcommittee
in finding electronic waste management solutions. Goodwill Industries
remains committed to environmentally sound disposal practices; the
exploration and development of nationally based solutions leading to
the development of a recycling and reuse infrastructure; and supports
product recovery requirements for electronic manufacturers and tax
incentives for businesses and individuals that recycle and grant-based
incentives for nonprofits--all of which supports our mission of helping
the disadvantaged and individuals with disabilities find employment and
become productive members of society.
Mr. Gillmor. Thank you Mr. Davis.
Mark Murray of Californians Against Waste.
STATEMENT OF MARK MURRAY
Mr. Murray. Good afternoon, Mr. Chairman. My name is Mark
Murray, the executive director of the nonprofit environmental
group, Californians Against Waste. It is a 28-year old
environmental group that has been involved in a wide spectrum
of solid waste and recycling policies from direct producer
responsibility programs, advanced disposal fee programs,
command and control types of recycling programs. So we have had
a great deal of experience, and we were the legislative sponsor
of State Senator Byron Sher's S.B. 20, the 2003 legislation
which enacted California's first in the Nation e-waste
recycling law. Along with Senator Sher, we developed the
initial proposal for the legislation which was a hybrid of
direct producer responsibility and advanced disposal fee
producer responsibility. We consider both of those concepts
producer responsibility. It is a matter of whether you are
charging the fee directly or it gets internalized. We organized
the support for that, and we negotiated the final language with
the various industry players.
Today, I would like to briefly describe a number of things:
No. 1, the features of the California law; No. 2, summarize the
progress to date; No. 3, describe the unique political
coalition that came together to create and implement and move
this legislation; and finally, identify a few areas where I
think the Federal Government might focus.
No. 1, you have already heard from a representative of the
State of California at a previous hearing describing the
details of the California law. My written testimony provides
those details as well. Let me just summarize that the
California law that went into place on January 1 is a producer
responsibility system that utilizes a front-end advanced
disposal fee. Under the system, public, private, and nonprofit
collectors of covered electronic waste--in California, covered
electronic waste is devices with a screen, flat screen, CRT
screen. Those are the devices we are concentrating on right now
and providing a financial incentive that is designed to cover
the average net cost of recycling those devices. And the
concept is to provide a network of free and convenient
recycling opportunities for consumers, both individual,
residential as well as business consumers and industry,
institutional consumers.
The system is financed by a front-end fee that ranges from
$6 to $10 per device, depending on the size. It is great that
we are actually able to talk about the program after just
talking about talking about the program for several years; now
to be talking about a program that is up and running. In the 10
months since implementation, 286 e-waste collectors and 39
recycling have stepped forward and are providing recycling
opportunities at more than 500 locations in California. These
locations include nonprofit thrifts, such as Goodwill and the
Salvation Army, to local government operated household
hazardous waste collection depots. There are also local
governments and private sector recyclers who have partnered
with electronics retailers to provide point of purchase
recycling opportunities. Additionally, many e-waste collectors
and most e-waste recyclers in the State are providing direct
pick up and recovery services for business and institutional
generators of electronic waste. In some locations, the added
cost of those collections is paid for by the generators, but at
this point in time, the environment is so competitive for
recycling that these services including these Cadillac
recycling services are being provided at no additional cost to
the generators.
With 6 months of program data, it is premature to speculate
on the success of California at this point. The exponential
growth both in the opportunities for recycling and the volumes
of collected recyclable e-waste is worth noting. There are 500
locations in the State of California where folks can drop off
material for recycling; 311 of these are certified physical
locations in the State, permanent locations, where people can
know that they can on a regular basis drop off their devices.
There are an additional 250 locations that provide some level
of drop-off. Sometimes it is a store that is running a
promotion that allows folks to bring back their devices. And in
some cases, it is something that is a mobile recycling
location.
Free and convenient e-waste recycling opportunities are
available across the State for most Californians. To date, more
than 20 million pounds of covered electronic waste has been
collected in the first 6 months that has been reported being
collected. There are additionally more than a million pounds of
materials in the system. We are projecting that for the first
year of the program, we will see 50 million pounds of covered
electronic waste recycled in the State of California.
The State board of equalization, which collects the fee
from manufacturers, has reported collecting $30.8 million
dollars in e-waste fees. The sales of consumer electronic
devices that the board of equalization has tracked represents
80 to 85 percent of the devices that the industry is projecting
should have been sold in the State of California. Concerns
about materials slipping through the cracks has not manifested
itself.
For the first year of the program, we are projecting $60 to
$70 million in revenue which will be more than sufficient to
cover the costs of recycling.
I just want to mention briefly that the California law was
supported by a broadbased coalition of local governments,
environmental groups, retailers, and a large sector of the
manufacturing industry. Those entities continue to support the
program. Private sector recyclers and private sector waste
haulers also supported the program and continue to support it.
In terms of a Federal role, I want to identify a couple of
areas. No. 1, there are some devices and fees that are slipping
through the cracks, and that is, devices that are sold by or
sold to Federal agencies in the State of California. It would
be helpful if the Federal Government in their purchases of
devices used in California would pay the fee. Right now, they
are not doing that.
Second, States could use assistance in terms of providing a
framework for dealing with the export problem. States have
limited ability to deal with the export problem, and we are
continuing to see devices slip through the cracks and go to the
developing world. It seems like an appropriate role for the
Federal Government.
Additionally, we believe that the State of California and
other States have the legal authority to impose an
environmental protection responsibility on entities, be it in
the form of a fee or a manufacturer responsibility on entities
outside of the State when they are impacting the State.
However, we are relying on court decisions. It would be helpful
if the Federal Government would provide clarity to the State on
the their authority to do that.
In wrapping up, I want to say that, at this point, we feel
like we have a successful program under way in California. And
we look forward to reporting to your committee, continuing to
report on our progress.
[The prepared statement of Mark Murray follows:]
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Mr. Gillmor. Thank you very much, Mr. Murray.
Renee St. Denis of the Hewlett-Packard company.
STATEMENT OF RENEE ST. DENIS
Ms. St. Denis. Hello Mr. Chairman. I want to thank you for
giving me this opportunity to speak to you today. I am Renee
St. Denis. I am the director of America's Product Take Back for
the Hewlett Packard Company, and we submitted written comments,
but I wanted to highlight a few key points today. I will try to
keep it brief to get to the questions.
First of all, I want to share with you a little bit about
HP's experience and insights in the area of electronics
recycling. You probably all know HP, but one thing that you may
not know is that HP is the largest electronics recycler in the
country. The 2 billion pounds of electronics that Mr. McCurdy
spoke about being recycled, 25 percent of that, half a billion
pounds, was recycled in the U.S. facilities of HP. That is a
huge achievement for HP and a great contribution to the
environment.
HP runs these recycling facilities, and we invest in
technology. We have partners in the recycling business, many of
them members of ISRI whom we work with, but HP does have
intellectual property in this area as well. HP offers recycling
services to our customers in a variety of forms: easy-to-use,
over-the-web services where we pick up at a customer's house.
We offer services to small and large businesses. We have
partnerships with retailers such as BestBuy. We did a promotion
last year, over 7 weeks in the summer with Office Depot, where
we collected 10.7 million pounds in 7 weeks. Another very
significant achievement and something that I have yet to see us
be able to duplicate, although we are working on another one
soon.
HP is a global entity, and we look at product take-back as
a global issue. We draw on worldwide experience. We are
familiar with recycling around the world in all major markets,
and we view this as an important market issue. One thing we
want to stress is that these products are mostly metals and
plastics. The plastics are an embedded source of energy, and we
are looking at ways to reuse that embedded energy, to take the
plastics and put them back in new products and not use raw
plastics or oil out of the ground.
This is something I think we can all really think about as
we move forward with this, what kind of incentives are going to
get us to keep these valuable resources in the stream of
commerce and not have them go to waste.
I want to talk to you a little bit about HP's position and
how we arrived at it. HP favors a market-based solution that is
flexible and promotes innovation. And I have heard many other
witnesses talk today about a take-back system, it is what we
call manufacturer responsibility, and those are solutions that
are structured to provide incentives for improved performance,
for environmental design, and for reducing costs in the system.
I have to agree with Mr. Vitelli. No matter what system we
come up with, the costs are going to be borne by our customers,
our shared customers, your constituents. And no matter how we
structure the deal, it is true that today's consumers are going
to have to pay for yesterday's waste.
I think the one thing we all share is a desire to keep
those costs as low as possible while still meeting
environmental goals. And our solution is really built out of
the needs of our customers who have said to us they want to
solve this problem, but they don't want to pay for government
bureaucracy and lots of overhead; they would really like to
have solutions put in place that work and work well for them.
We know that a one-size-fits-all approach is not going to
be the most effective approach. Customers, like I said, have
different needs; they interact with us in different ways in
business today. We expect that as this is yet another part of
our business, they will want to interact with us in different
ways when it comes to disposing of their old electronics.
HP looks at electronics recycling as a continuation of our
supply chain. We design our products, we manufacture them, we
distribute them, we take care of them in the customer's home,
and we want to be a part of taking care of those products at
the end of their lives.
We have a responsibility to provide solutions to our
customers, but we need to have flexibility to implement these
in a cost-effective way that meets the needs of our customers
and our business. We want to limit government enforcement.
Governments should be there to provide a framework, but we need
to allow the private sector to utilize our expertise, our
inventiveness, our technology to address this challenge
without, again, investment in overhead or bureaucracy.
And it is clear that we need to reduce the burden on local
governments, but at the same time provide them opportunities
and provide opportunities for nonprofits like Goodwill to
participate in a solution where they can do so in a cost-
effective way. They should not be granted an open checkbook to
provide Cadillac services when those aren't necessarily the
most effective ways of providing services to customers.
The one thing that is clear is that new taxes on technology
products are good at one thing, and that is raising a lot of
money. In California, they have raised over $30 million in the
last 6 months. By our estimates, 10 to 15 percent of that money
came from sales of HP products, so we are talking about $3 to
$4.5 million. I run a recycling center for my day job, and I
can tell you that for $3 to $4.5 million, we could have
provided services to every customer in California that HP has.
There is really not an incentive for improvements or cost
savings or superior performance in a system that just assigns
one--or in the case of California, one of three flat fees or
taxes to the sale of new products. We want something that is
sufficient, but doesn't just give the bare minimum, and we are
clear that as industry continues to innovate, we are going to
have ways to drive cost out of this system and efficiencies up.
We have seen that in our experiences in our facilities in
California and Toronto.
So finally, we are here to ask for some help. One thing
that would be very helpful to all of us here at this table is a
harmonized national solution. It is clear that the patchwork
increases everybody's costs, increasing the complexity of doing
business, and increases the complexity of complying with the
law. To the extent that we have a national solution, I think
our lives become easier. And again, that money that is spent on
those administrative burdens will go to actually relieving the
burden of these items ending up in local landfills.
In addition, there are improvements that can be made to
regulations applicable to these products at the time they are
recycled. As Mr. McCurry said, we believe that these products
don't pose any more harm at the point where we determine that
they are destined for recycling than they do in use. It is at
the point when you start working with them that we need to make
sure the regulations are in place.
That is it for me. I am happy to answer questions.
[The prepared statement of Renee St. Denis follows:]
Prepared Statement of Renee St. Denis, Director, Americas Product Take
Back, Hewlett-Packard Company
On behalf of Hewlett-Packard Company (HP), I am pleased to provide
this testimony on the recycling of used electronics. My name is Renee
St. Denis, and I am Director, Americas Product Take Back, based in
Roseville, California. HP is a technology solutions provider to
consumers, businesses and institutions globally. The company's
offerings span IT infrastructure, global services, business and home
computing, and imaging and printing. More information about HP is
available at www.hp.com.
HP applauds Chairman Gillmor for convening this second part of the
hearing to discuss electronic waste and for providing HP with an
opportunity to testify. Today's hearing is a valuable first step in
advising Members of the House and the public on the emerging challenge
of managing and recycling used electronics in the United States. HP
supports increased recycling to conserve natural resources and protect
our environment through a harmonized national approach. HP calls on
Congress to support a national solution to the challenge of recycling
used electronics, the adoption of recycling incentives and the removal
of regulatory barriers to cost-effective recycling, and market-based
solutions to finance government recycling programs. HP believes that
the Congress should reject attempts to impose a new tax on American
consumers and to create bureaucratic recycling programs. Imposing more
taxes on consumers will needlessly increase costs to the public and
fail to achieve our nation's recycling goals in an efficient manner.
Several decades of experience in implementing environmental laws and
regulations in this country have proven that environmental goals can
best be achieved by providing the private sector with flexibility and
incentives to innovate.
As a major manufacturer of a broad range of technology products, as
well as a leading recycler of these products, HP has a strong interest
in the development of policies relating to electronics recycling. HP
has nearly twenty years of first-hand experience in product take-back
and recycling. Since 1987, HP has successfully collected and recycled
more than 600 million pounds of used or unwanted computer-related
equipment globally. With our vast knowledge and experience, HP's goal
is to recycle 1 billion pounds of equipment by the end of 2007. HP has
established a recycling service throughout the US (as well as other
countries around the world) that provides consumer and commercial
customers with a convenient opportunity to recycle their old products
in an environmentally sound manner. For more information see: http://
www.hp.com/hpinfo/community/environment/productinfo/design.htm.
HP currently operates two large, state-of-the-art recycling
facilities in the U.S., in California and Tennessee, and recently
signed a contract with a partner company for a third facility in
Canada. All materials are managed in the U.S. and Canada in an
environmentally sound manner; under HP's program, no waste materials
are shipped overseas and no electronic material is sent to a landfill.
In the past year, HP has recycled almost 3.5 million pounds of
electronic waste each month and reused or donated an additional 400,000
pounds annually.
HP encourages Congress to allow companies such as HP to maintain
this flexibility in implementing recycling--which provides American
companies opportunities and incentives to continue to focus on
innovation--and efficiently achieve superior recycling results that
best protect our nation's natural resources for future generations.
We wish to emphasize the following points in our testimony today:
A harmonized national approach to the recycling of used electronic
products is necessary to avoid a patchwork of varying state and
local requirements.
As first steps in the development of a national approach, Congress
should adopt incentives for recycling, such as those set forth
in the ``Electronic Waste Recycling Promotion and Consumer
Protection Act'' (S.510); expand federal support for recycling
projects; and remove regulatory impediments to recycling.
A comprehensive national approach should promote innovation and allow
for flexible implementation to achieve recycling goals in the
most efficient manner.
Congress should reject calls for new taxes on technology products and
new government recycling programs.
I. A NATIONAL APPROACH IS NECESSARY AND APPROPRIATE
A national solution for the recycling of used electronic products
can help promote efficiency and avoid a patchwork of inconsistent state
approaches. Electronics recycling is an emerging national challenge
resulting from the growing use and enjoyment of technology products and
consumer electronics throughout our society. As an emerging
environmental challenge, the country as a whole would benefit from a
national approach that enables the U.S. to address this issue at a
relatively early stage in its development. Environmental challenges are
too often addressed by the Congress after a problem already exists.
This issue presents an opportunity for the Congress to act proactively
in developing a solution to an emerging challenge.
A patchwork has already begun to develop. Three states--California,
Maine, and Maryland--have adopted comprehensive recycling laws for
certain electronic products, but each of these laws is significantly
different from the other. The most important differences are the
varying methods of financing the recycling system. California has
imposed a new tax on consumers to fund a bureaucratic government
recycling program. In contrast, Maine has developed an innovative
shared responsibility model in which the burdens of recycling are
shared by various stakeholders. Manufacturers are required to pay for
consolidation and recycling or to conduct recycling of their products
on their own. Maryland has imposed a fee on manufacturers to finance
computer recycling programs around the state, with the fee varying
depending on whether a manufacturer offers a computer take-back
program. Moreover, numerous states, and even some localities, have been
and are considering proposals to address the management of used
electronics, and we anticipate that this trend will continue.
This emerging patchwork of differing state laws is adding
significant new costs and impeding the development of an efficient
nationwide infrastructure, while creating the potential for consumer
confusion. A consistent national approach is necessary and appropriate.
We recognize, however, that solid waste issues are traditionally
managed by the states and localities. Nonetheless, a federal solution
is needed in this instance because of the potential for disparate state
programs to result unnecessarily in added costs to consumers and
companies, while failing to achieve our environmental goals in an
effective manner. In addition, a national solution is desirable because
of the connection between the recycling of used electronics and the
adoption of state-specific design standards. Several states have
adopted, or are considering, mandated design requirements on new
technology products as part of their recycling laws or other
environmental initiatives, driven largely by concerns with
environmental issues associated with disposal of used electronic
products. Differing state design requirements are problematic for HP
and other technology companies because our products are designed and
manufactured for global distribution. Conflicting state design
requirements can impair our ability to sell products globally, may
needlessly raise costs, and ultimately restrict innovation in the
development of new products. An effective national solution can address
the concerns of the states with the disposal of used electronics,
thereby avoiding the need for design standards at the state level that
may balkanize the global technology marketplace.
II. RECYCLING INCENTIVES, FEDERAL SUPPORT, AND REMOVAL OF REGULATORY
IMPEDIMENTS ARE APPROPRIATE FIRST STEPS IN THE DEVELOPMENT OF AN
EFFICIENT RECYCLING INFRASTRUCTURE
To further the development of an effective recycling infrastructure
for used electronics, HP believes that incentives to promote recycling
are a useful first step. One such incentive is a tax credit for
consumers to return their products for recycling and for manufacturers
to offer recycling services to their consumers. In this regard, HP
supports the ``Electronic Waste Recycling Promotion and Consumer
Protection Act'' (S.510), a bipartisan bill introduced by Senator
Talent and Senator Wyden. This bill would provide tax credits to help
manufacturers, retailers, the recycling industry, and others to
establish an efficient national infrastructure for the environmentally
sound recycling of computers and other products and to encourage
consumers to return their products for responsible recycling. These
incentives can serve as a catalyst for voluntary, market-based
solutions that avoid the need for potentially burdensome, costly
mandates at the federal or state level.
Similarly, expanded government support for pilot projects and other
initiatives can help promote the development of an efficient recycling
infrastructure for electronics. Programs such as the ``Plug-In to
eCycling'' initiative of the U.S. Environmental Protection Agency have
played a useful role in successfully recycling large volumes of
products and collecting data on the nature of the issue and the range
of approaches that can be successful. For example, during the summer of
2004 HP partnered with Office Depot stores nationwide on an in-store
takeback program that collected and recycled approximately 10 million
pounds of products in less than seven (7) weeks. The recycling of this
amount of products was accomplished in a manner that was convenient for
consumers and efficient for the two companies. Another retail return
program, in which HP participated, involving Staples stores in New
England also proved to be successful. Continued and expanded funding
for these ``Plug-In to eCycling'' programs can facilitate more
recycling of used electronics and the development of new approaches.
Finally, the federal government can play an important role in
promoting recycling by removing regulatory impediments to cost-
effective recycling. Under current federal and state regulations, used
electronics are sometimes classified as ``hazardous waste,'' even
though they are routinely used in our homes and offices and, when
recycled, pose no risk to human health or the environment. When these
used products are classified as hazardous waste, they become subject to
burdensome and costly regulatory requirements associated with their
collection, storage, transportation, and processing. Congress and the
EPA should reform these regulatory requirements to facilitate recycling
of used electronics, while continuing to protect human health and the
environment.
III. A NATIONAL APPROACH SHOULD PROMOTE INNOVATION AND ALLOW FOR
FLEXIBLE AND EFFICIENT IMPLEMENTATION
HP supports a comprehensive, national approach to the recycling of
used electronics that allows for flexible implementation and innovative
approaches that can achieve our recycling goals in the most efficient
manner. In discussions with several states, we have advocated a Product
Stewardship Solution that is based on implementing a market driven
system for recycling CRT-containing computer monitors and TVs (``CRT
devices''). The approach requires manufacturers to take responsibility
for the recycling of a specified amount of CRT devices, either by
implementing a recycling program to cover this specified amount or by
assuming financial responsibility for this amount. It places limited
responsibilities on retailers and state government and avoids creation
of new taxes and government bureaucracies. It provides funds to local
governments for CRT device collection, consolidation, and recycling. As
a result, the approach promotes flexible and efficient implementation
of CRT recycling.
Under the Product Stewardship Solution, manufacturers must take
responsibility for their ``equivalent share'' of CRT devices--including
orphan CRT devices--returned by households (individual consumers and
home businesses) for recycling. They can do this either (1) by
establishing a recycling program or (2) by paying the state reasonable
collection, consolidation, and recycling costs for their equivalent
share.1 Manufacturers implementing a recycling program have
the flexibility to design their program as they see fit, so long as
they recycle their equivalent share in compliance with applicable laws
and regulations.
---------------------------------------------------------------------------
\1\ This is a hybrid approach that combines elements of a producer
responsibility system and the widely supported Maryland Statewide
Computer Recycling Pilot Program (HB 575). A producer responsibility
system enables manufacturers to assume responsibility for their
products by establishing a recycling program. The Maryland law requires
manufacturers to pay to the state an annual registration fee--the
amount of which varies depending on whether the manufacturer offers a
computer takeback program.
---------------------------------------------------------------------------
Manufacturer equivalent shares are determined annually by the
state. A manufacturer's equivalent share is that manufacturer's portion
of the annual CRT device waste stream. The equivalent share concept
allows manufacturers that choose to run a recycling program to satisfy
their obligations with CRT devices of any brand or their own brand.
This approach avoids the need for brand sorting, but preserves the
ability of manufacturers to implement recycling programs that collect
only their own brand products. It provides an efficient recycling
system with multiple options for consumers.
Manufacturers will be held accountable to the state to meet their
equivalent share obligations. This is a self-implementing performance
standard keyed to a specific amount of CRT devices to be recycled.
Thus, a manufacturer that chooses to provide a recycling program but
fails to recycle its equivalent share has a predetermined payment
obligation for the shortfall to the state. This system is designed to
achieve recycling results by manufacturers, not merely to generate
revenue or establish government recycling programs.
The Product Stewardship Solution has numerous benefits and
advantages compared to alternative approaches such as advance recycling
taxes or fees (``ARFs''):
A. Provides efficiencies through market-based solutions and the
opportunity for improvements over time, thereby offering a
lower cost solution to consumers.
Relies on and leverages the expertise of manufacturers to produce
competitive, market-based solutions. Key recycling responsibilities are
placed on manufacturers competing among themselves in the private
sector, rather than on the government, which faces no competitive
pressure.
Provides flexibility to allow manufacturers to develop over time
least-cost recycling arrangements. Manufacturers have broad flexibility
to act individually or in partnership with others to develop recycling
programs or to pay for their recycling responsibility. This provides
manufacturers with maximum flexibility to be innovative and to work
with recyclers to develop least-cost alternatives.
Allows collection costs and responsibilities to be determined by
the market. Manufacturers that choose to run recycling programs are
required to recycle their equivalent share of discarded CRT devices.
But no particular entity has a mandated responsibility to collect
discarded CRT devices. This fosters development of cost-effective,
market-driven collection methods by manufacturers, non-profits,
independent collectors, municipal governments, and others.
Provides consumers a broad range of collection/recycling options.
Consumers may return their unwanted CRT devices to recycling programs
offered by manufacturers or to any other recycling program--whichever
collection/recycling option best suits their needs.
B. Avoids new taxes on consumers.
The Product Stewardship Solution imposes no point-of-sale taxes on
consumers. ARF proposals are simply a new tax on consumers to finance
new government recycling programs.
C. Places key responsibilities on manufacturers, not government, to
achieve recycling goals, including recycling of orphan CRT
devices.
Manufacturers are responsible for their contribution to the
household-CRT device waste stream--the fundamental performance goal of
a recycling program. Manufacturers are responsible for their equivalent
share of CRT devices that are discarded each year by households, i.e.,
the contribution that their products make to the annual CRT device
waste stream.
Manufacturers are responsible for the orphan waste stream. This
includes both unlabeled CRT devices and CRT devices for which the
manufacturer is no longer in business and has no successor in interest.
D. Places minimal responsibilities on retailers.
Retailers are not required to impose and collect new taxes and are
not obligated to collect products. The only obligations of retailers
are not to sell unlabeled and unregistered CRT devices. Retailers will
also certify annually that they checked the state CRT device
registration website to determine if the branded CRT devices they sell
are registered.
E. Limits government involvement to enforcement and other necessary
functions, avoiding the creation of new taxes and new agencies.
Requires government to perform limited administrative and
enforcement functions. These limited functions will be sufficient to
establish the level playing field that makes it possible for
manufacturers to provide market based recycling solutions. Among the
functions performed by government are determining annual manufacturer
equivalent share obligations, enforcing the requirements of the law,
and collecting and compiling recycling data.
Avoids establishing new taxes and new agencies. By placing
fundamental recycling responsibilities on manufacturers, there is no
need for consumers to pay new taxes on their purchases of CRT devices
or for new agencies to be created to collect or administer a tax. The
limited government responsibilities required by the approach are
designed, like the other parts of the approach, to achieve overall
recycling goals efficiently.
F. Reduces burdens on local governments by providing manufacturers with
incentives to keep CRT devices out of the municipal waste
stream and by providing a funding source for CRT device
collection, consolidation, and recycling.
Provides manufacturers with incentives to keep their CRT devices
out of the municipal waste stream. Manufacturers' equivalent share
obligations are based on the percentage of CRT devices for each
manufacturer that are collected in local government recycling programs.
Thus, manufacturers have incentive to keep their CRT devices out of the
municipal waste stream.
Provides local governments with a funding source for CRT device
collection, consolidation, and recycling. Manufacturers that elect to
pay the government for their recycling obligation, or that are required
to pay for failing to meet their equivalent share obligation, provide
local governments with a funding source for collecting, consolidating,
and recycling CRT devices.
G. Provides the opportunity for design improvements.
Allows manufacturers to benefit from improved environmental design
and innovation. Those manufacturers that collect their own brand
products can benefit from design improvements they have made. Moreover,
the system provides an incentive to improve product design by removing
materials of concern, enhancing recyclability, and incorporating
recycled content into their new products.
IV. CONGRESS SHOULD REJECT NEW TAXES AS A MEANS OF FINANCING RECYCLING
PROGRAMS
California has adopted a new tax, or ``advance recycling fee''
(``ARF''), to finance a government recycling program, and other states
are considering this approach.2 Congress should reject this
approach. HP believes that a new tax on technology products to raise
revenue for government to use for recycling is a poor way of achieving
recycling goals.
---------------------------------------------------------------------------
\2\ Supporters of this approach refer to it as a ``fee'' and not a
tax. The law generally distinguishes between ``taxes'' and ``fees''
based on whether the payment provides a public benefit (a tax) or a
specific service (a fee). National Cable Television Assn. v. United
States, 415 U.S. 336 (1973). Because the revenue raised provides a
general public benefit and not a specific service for the consumer
paying the tax, an ARF is properly characterized as a tax.
---------------------------------------------------------------------------
This new tax on consumers will raise the price of technology
products and, assuming it is used for its intended purpose, establish a
new government program that will likely result in efficient recycling
solutions. There is no incentive for improvements over time--all
products are subject to the same fee regardless of the cost of
recycling that product. Manufacturers and others have little incentive
to reduce these costs. This new tax is a one-size-fits-all approach
that removes incentives for innovation and market-based solutions,
thereby likely resulting in higher overall costs. Moreover, there is
the risk that the funds collected by the government would be used for
purposes other than recycling, thereby failing to address the issue.
A tax-based approach suffers from other deficiencies, including the
following:
A Tax Finances A Large New Government Program. A tax-based system
requires receipt and administration of new sales taxes on consumers
transmitted by likely thousands of retailers and distribution of the
tax proceeds to hundreds of collectors and recyclers. The result is a
large new government program with substantial administrative expenses.
The Tax Revenues Can Be Diverted For Other Governmental Purposes.
The tax revenues may be diverted to finance other governmental
programs. Given tight government budgets and numerous competing
priorities, governments often shift spending from one area to another.
Indeed, there is no way to prevent a future legislature from taking
such action. Numerous recycling and other environmental programs based
on special taxes or fees that are presumably dedicated to a specific
purpose have witnessed the funds being shifted to other uses.
A Tax System Does Not Guarantee That Any Amount of Electronic
Devices Will Be Recycled. Although proponents of tax-based recycling
systems typically call for achieving numeric collection goals, the
proposed systems provide no mechanism for enforcing these goals or
ensuring that any amount of electronic devices are actually recycled.
The California ARF statute does not require that any amount of
discarded electronic devices must be recycled. The only guaranteed
outcome of these tax-based systems is the generation of new tax revenue
for government, not the recycling of products.
A Tax on Products Is Burdensome To Retailers. The Consumer
Electronics Retailers Association (``CERC''), supported by retailers
such as Best Buy Co., Circuit City Stores, Inc., Radio Shack Corp.,
Sears Holdings, Target, and Wal-Mart, opposes an ARF because an ARF is
``administratively burdensome for all parties;'' and ``too complicated
for all parties.'' 3
---------------------------------------------------------------------------
\3\ See http://www.ceretailers.org/cerc/CERC--Position--on--
eWaste.pdf.
---------------------------------------------------------------------------
Collection And Administration Of Taxes By A TPO Raises Concerns of
Efficiency, Expertise, Legality, and Accountability. Some proponents of
new taxes advocate the formation of a ``Third Party Organization''
(TPO) to receive and administer the government-imposed taxes collected
by retailers. This proposal raises concerns of efficiency, expertise,
legality, and accountability:
The TPO duplicates functions currently performed by government
agencies.
The TPO lacks the expertise of existing tax collecting agencies and
is unlikely ever to acquire equivalent expertise.
The lack of accountability of the TPO to the government for TPO
expenditures of public revenues raises significant legal
issues. A TPO would control public tax revenues without
congressional oversight over appropriations.
TPO proposals provide no accountability if the TPO fails to achieve
recycling goals or fails to meet other obligations. There is no
ability by the government to enforce against a TPO.
An ARF Constrains Competition And Limits The Efficiencies To Be
Gained From Competition. A new tax to fund a monopolistic recycling
program fails to establish a competitive environment that will provide
incentives for improved performance. Under the California ARF system,
all collectors and recyclers receive a uniform rate of compensation set
by the state. In ARF systems that depend on a TPO, the only possibility
of competitive bidding is with a monopoly organization that sets the
bid requirements. This is not the same as a fully functioning private
market with multiple manufacturers seeking recycling services.
V. CONCLUSION
HP supports a Product Stewardship Solution that requires
manufacturers to take responsibility for their equivalent share of CRT
devices returned for recycling by households, that places minimal
responsibilities on retailers and state government, and that provides
local governments with funds for CRT collection, consolidation, and
recycling. Overall, this approach offers a more efficient and flexible
way to achieve our recycling goals.
HP looks forward to working with the Subcommittee and other Members
of Congress on the development of a national recycling system that
leverages the capabilities and expertise of manufacturers, retailers,
recyclers, and others to achieve efficient and low cost opportunities
for all consumers.
For more information, please contact Renee St. Denis at 916-785-
8034 or [email protected].
Mr. Gillmor. Okay. Thank you very much.
Let me start with the questions, and direct this to the
whole panel, those of who you want to respond; I would imagine
that would be those of you in the retailing or manufacturing.
Many of the organizations have been members of several
stakeholder processes, including the National Electronic
Product Stewardship Initiative, that have been trying to seek a
consensus of recommendations of what a Federal response should
be, but each time the talks have not produced a resolution. So
I guess I would ask why is that, what lessons have you learned
from those meetings, and is there a possibility of a consensus
developing, or are we going to be in the position of having no
consensus and then just trying to pick what would appear to be
the best solution? Dave.
Mr. McCurdy. Mr. Chairman, it is a very appropriate
question. And EIA was very involved in the NEPSI dialog, as
were many other stakeholders here. And I think you hit the key
point first, and just let me quickly reiterate. I think what
happened during NEPSI and through this process is that there
was a number of areas of consensus. We started with a lot of
disharmony on a lot of these issues and a lot of
miscommunication and people talking past each other, and I
think throughout this process--and EPA did facilitate and work
and tried to even hold the hammer over us at some point trying
to build the most consensus.
In the areas that we mentioned before, national consistency
and electronic recycling, we really want to see a streamline in
uniform regulatory framework. I don't think there is
disagreement on this panel; if there is, it is rare. A viable
infrastructure that requires coordinated efforts--and we say
shared responsibility, it really comes down to a funding issue
which I think is really the crux of the question. And I think
there was consensus as well. And in California there was a
debate, and I think there was agreement, this is a solid waste
management and resource conservation issue. There is a
consensus on that. There are those on the fringe who will argue
it is hazardous waste. That is not the case. This is a resource
conversation issue.
We want to see a limited and defined scope of products, and
again, Mr. Murray from California said the screen was the
nexus. The size of the screen actually we had a lot of debate
on, and industry was involved in that. We also saw that there
was a need to harmonize labeling product information and
regulatory reporting requirements. That is important.
And then last, regulations or standards for recyclers,
there is a discussion there, and there have been questions and
kind of subquestions that are just waiting to be asked of this
on issues such as export. And I think it is important our
manufacturers and others believe that the recyclers have a role
to play, and there is a need for safe, environmentally sound
management there, and that there have to be standards and
certification of those recyclers that are responsible for the
product they take back in order to make sure that it doesn't
end up in the wrong place or that it is misused or not
controlled. Those areas we have reached consensus, I think; I
think it is safe to say. So as the subcommittee looks at this,
don't write those off. Those are really critical.
The other question, though, is on the issue of financing.
Recycling unfortunately today, the cost of the transportation,
the labor of dismantling, the collection far exceed the value
of the end product, the recycled product, so there is a
differential, and that really is the crux of the problem is how
do you manage those costs.
California, we didn't oppose the California bill as an
alliance. Some of our companies support it; some opposed it. We
as an association didn't oppose the final compromise, but I
will say that I think the jury is still out on what happens in
California. There is a bureaucracy at work there. We will see
how that is managed. And what I think we are asking the
subcommittee to do at the end is help us find a way to reach a
concensus so that we don't have a main solution and a
California solution multiplied across the country.
Mr. Gillmor. Thank you, Dave.
My time for questioning is expiring, but I want to give
anybody else that wants to take a crack at that the
opportunity, then go to Ms. Solis and Mrs. Bono. And I have
been informed that probably in about 10 minutes they are going
to start a series of votes on the floor, so we will need to
conclude.
Anybody else want to take a crack at that question, or did
Mr. McCurdy so profoundly sum it up that we are all set?
All right. Ms. Solis.
Ms. Solis. Thank you.
My question is for Mr. Thompson from Panasonic. You raised
a good issue. What should the EPA do in terms of recommending a
national study? The last one you mentioned wasn't out until
1999. Give me some idea of what you would see in something like
that.
Mr. Thompson. I have a quotation in my testimony that was
written by the NEPSI coordinator, and she said, ``Prior to
starting a full-fledged dialog, an adequate level of base
research must be in place. In the NEPSI dialog this baseline
did not exist at the outset, which created recurring
disagreements through the dialogs on basic facts.''
What I see as a manufacturer who participated in NEPSI and
supported the NEPSI consensus, if you will, was that we didn't
have an understanding of how many products are being generated
and how many products are actually of concern. We didn't have
an understanding of the capability of the domestic recycling
industry in terms of its capacity, its technology, the markets
for materials. We didn't have an understanding of the adequacy
of secondary markets for materials containing electronic
products, both in the United States and around the world. We
didn't have an understanding of the volumes of products being
exported and the adequacy of overseas recyclers. And we didn't
have an understanding, probably most importantly to me, of the
different economic consequences and ramifications of different
systems.
So, for example, we have talked about California, and
California has a centralized bureaucratic approach that is very
easy to focus on and associate a cost on that. If you look at
an approach that is being suggested in Maine, for example, the
take-back approach, you will have a number of consolidation
facilities, probably 10 to 20, I am not sure what that number
will be yet, to which local governments will collect and
deliver electronic products. Those products will have to be
sorted by brand, and then once that is done, manufacturers will
be assessed a cost for paying for their brands at those
consolidation facilities, including transportation, dismantling
and recycling. That, when you combine all those together, you
are going to have a large number of what I will call
minibureaucracies that is also going to be a very substantial
cost.
Ms. Solis. Because my time is short, what are you
recommending then? Obviously we need to do an inventory of what
is going on, and that has to be done.
Mr. Thompson. Plus focus on the different economic
consequences for American society of different approaches.
Ms. Solis . Is there anyone on the panel that differs from
that and wants to speak to that? No?
Mark.
Mr. Murray. I think there has been so much focus on
assessing the different approaches, and I think, and I may
disagree with some with regard to the need for a national
solution, that it is appropriate to allow these two experiments
in California and Maine to move forward and allow the real
world to determine which approach works and what are the
strengths and weaknesses of those systems. I think that is
going to be more valuable than a U.S. EPA study of those kinds
of systems.
It seems to me that there are specific areas that the
Federal Government can play a role. The export issue is one of
those areas; again, State authority to impose responsibility on
any of these that are outside of their State, whether it is an
advanced disposal fee responsibility or a direct manufacturer
responsibility. Those are two areas where States could use some
assistance from the Federal Government. But my recommendation
would be, rather than studying what system works from a
theoretical perspective, allow these two experiments to move
forward and see how the real world emerges there.
Ms. Solis. My next question is for Mr. McCurdy. Since you
represent the high-tech industry there, is your organization
planning on addressing the issue of phasing out toxic materials
that are used in the manufacturing processes?
Mr. McCurdy. Yes, ma'am. As I stated in my testimony, the
design cycle is very important. We don't just talk about
manufacturing and sale, it is a life cycle. And our
manufacturers and representative here, as well as Mr. Thompson,
indicated in the consumer electronic sector, in the IT sector
our companies invest in literally hundreds of millions, perhaps
billions, of dollars in the design of products that not only
make them more efficient, reduce these materials--again, if
they are suitable alternative materials--and again, they have
to apply science to do that. Our company is, I think, ahead of
implementation or ability to implement directives.
Again, I mentioned lead free. A lot of our companies today
are talking about green manufacturing. They are looking at this
as potential market enhancement for them or competitive
advantage.
So, yes, there are many, many examples, incredible steps,
and we see it every single day. Mr. Largent showed you the
examples of the different systems. Look at televisions today.
The television today, most models--and hopefully the price
points of these are coming to the point that they are going to
be readily available--instead of having these big tubes, are
going to be thin-screened, just like your computer screens
today. Those are computers and televisions at the same time.
That is where the future is going.
Mr. Brugge. Can I just add to that? You asked about
contaminants like lead and cadmium. There is already agreement
among wireless carriers to completely phase those out by mid-
2006, next year.
Mr. Gillmor. The gentlelady from California.
Mrs. Bono. Thank you, Mr. Chairman. I actually am going to
pass on any questions, which is very strange, I know. But I
want to point out to the panel that I look forward to working
with each of you on a solution as we move forward here. And I
did have a question for Steve Largent, but I will talk to you
about it in person as we move forward.
So, again, thank you all for your time. And you know that I
am personally interested in this, and I look forward to working
with each and every one of you.
Thank you, Mr. Chairman, also, for holding this hearing.
Mr. Gillmor. I also commend the gentlelady for her
leadership and the interest that she has evidenced in this
issue over a period of time.
I would like to ask the panel, I think, because everything
was going on, our membership at this hearing was not what we
would like, but there may be some members wanting to submit
questions to the panelists in writing, and we would ask if you
would be willing to respond to that.
With that, I want to thank you all very much for being
here. It was very informative. And we will conclude.
[Whereupon, at 3:20 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows.]
Prepared Statement of Carolyn Brandon, Vice President, Policy, CTIA--
The Wireless Association TM
Chairman Gillmor, Ranking Member Solis, and members of the
Subcommittee, thank you for the opportunity to appear before you today
to testify on the issue of electronic waste and the appropriate role of
government, be it local, state, or Federal, to address this matter. My
name is Carolyn Brandon and I am CTIA's Vice President for Policy.
CTIA--The Wireless Association TM and its members have been
committed to the goal of sustainable development in the wireless
industry and the environmentally sound management of discarded,
recycled, or refurbished wireless mobile phone products.
CTIA'S COMPREHENSIVE, VOLUNTARY REUSE AND RECYCLING PROGRAM
CTIA members are at the forefront of providing consumers with
wireless products and services that facilitate communications wherever
and whenever. Concurrent with the industry's business goal of providing
ubiquitous wireless coverage, CTIA members recognize that one of our
responsibilities as good corporate citizens is a commitment to
environmental stewardship. This commitment is reflected in the
industry's voluntary disposal recycling program--Wireless . . . The New
Recyclable.
WIRELESS . . . THE NEW RECYCLABLE
What is ``Wireless . . . The New Recyclable?'' It is a multi-
faceted program the wireless industry launched in October of 2003 to
facilitate environmentally sensible management of wireless products at
end-of-life. The initiative provides a voluntary and uniform set of
guidelines allowing manufacturers and carriers to upgrade the
management of their environmental practices in the disposition of used
wireless devices. It has been embraced and adopted by numerous CTIA
members, including all of the national carriers and mobile phone
manufacturers.
The program guidelines incorporate all aspects of the recycling
process: collection, transportation, re-use, refurbishment and
materials reclamation.
PUBLIC OUTREACH AND AWARENESS
``Wireless . . . The New Recyclable'' is designed to inform,
educate, and encourage consumers to recycle their ``end-of-life''
wireless products through a wide range of company initiatives and
incentives. In particular, the program focuses the public's attention
on the importance and ease of recycling wireless devices by 1)
supplying the wireless industry with public awareness materials, such
as posters and bill stuffers, to reinforce the message to recycle
wireless devices and; 2) directing consumers to
www.recyclewirelessphones.com, a central website that provides
consumers with important information on the recycling of wireless
products and links to CTIA member company sites which provide
information on where consumers can recycle phones.
CTIA ENVIRONMENTAL PRINCIPLES
``Wireless . . . The New Recyclable'' incorporates CTIA's ten
environmental principles that set forth the wireless industry's
commitment to sustainable development and the proper management of
wireless devices at their end-of-life. The principles are listed on the
second page of a handout that I've included with my testimony.
VOLUNTARY GUIDELINES
The guidelines assist companies in ensuring that the wireless
devices that are collected are managed, transported and reused,
refurbished or recycled in a responsible way and in accordance with
federal and state environmental laws. Promoting the re-use,
refurbishment or recycling of wireless devices minimizes waste destined
for landfills or incineration. Just as importantly, the recycling
guidelines facilitate the recovery of raw materials that are then used
in the manufacture of new products.
CELL PHONES ARE DIFFERENT FROM OTHER ELECTRONICS
A key aspect of any re-use or recycling program is the collection
of the product. The industry has been able to establish effective
voluntary collection programs that are a function of the small size and
portability of mobile phones and mobile devices. These voluntary
programs include collection at municipal centers, return of products to
service providers or other retailers, or mail-in returns to
manufacturers. The size and relative lack of portability of most other
electronics products, such as TVs and computers may not practically or
economically allow for this range of collection options.
For example, Verizon Wireless has a program that collects cellular
telephones in retail outlets and accepts the return of its products via
mail through the charitable program, HopeLineSM; this program offers
these collected products to help the victims of domestic violence. T-
Mobile's Give More, Get More accepts used phones through the mail and
donates 100% of the recycling proceeds to charitable organizations.
Cingular, SprintNextel, and other companies also collect previously
used wireless phones and donate either the refurbished phones or the
proceeds from the programs to charitable organizations. Finally, The
Wireless Foundation, a charitable organization created by CTIA, has
sponsored collection events and charitable programs, such as Donate-a-
Phone '.
SIZE, PORTABILITY, AND REDUCED ENVIRONMENTAL IMPACTS
Wireless handset manufacturers have responded to consumer'
preference of the ``less is more'' approach when it comes to the
development of new mobile phones. One only has to look at the size of
mobile phones ten years ago juxtaposed to the size of phones being
manufactured today to see the tremendous strides the industry has made
not only in technological capabilities, but also environmental
compatibility. The new generation of wireless devices weigh
approximately 42% less than earlier models and are being constructed in
a more environmentally friendly manner. As mobile phone and device
manufacturers comply with the European Union's Restriction of Hazardous
Subtance (RoHS) Directive, we also see the reduction of hazardous
materials such as lead and cadmium in wireless phones marketed in the
United States.
We anticipate that the design changes required for sale in, or
import to, the European Union will also be applied to products marketed
and sold in the United States. Such design changes will facilitate
recycling and re-use and further reduce any potential environmental
impacts from the recycling or disposal of mobile phones or mobile
devices.
MARKETS EXIST FOR USED MOBILE PHONES AND MOBILE DEVICES
The market for used mobile phones and mobile devices is different
from most of the electronics industry. Mobile phones have a relatively
high re-use value creating an ongoing market for these devices;
therefore, the market forces providing incentives to collect and re-use
these devices would be more efficient than for other electronics
products. This is evidenced by the current efforts of ReCellular and
HOBI International, Inc., two for-profit companies established to
collect and refurbish used telephones for return to the market. The
operation of for-profit companies is unusual in the electronics
recycling and re-use market and is a clear indication of the strength
of the market for wireless device re-use.
CLOSE CONTACT BETWEEN CONSUMERS AND SERVICE PROVIDERS
Unlike most electronics manufacturers and retailers, wireless
service providers and consumers are typically in close contact during
mobile phone or mobile device replacement and billing. This contact
presents the opportunity for efficient and cost-effective collection.
Many wireless customers return to a service provider or independent
agent to replace their devices. Moreover, through monthly billing,
service providers are in communication with their customers on
recycling and re-use options. This readily available occasion for re-
use or recycling opportunities is not common to most other electronics
industries.Success of ``Wireless . . . The New Recyclable
'''
Carriers, recyclers, and refurbishers are all in the process of
evaluating the best way to expand and assess the success of their
respective recycling and/or refurbishing programs. With that being
said, I can share with the Subcommittee the following statistics:
ReCellular, a refurbisher, has collected approximately four million
phones in 2004, up from 1.5 million in 2002.
Nextel has collected 4.4 million phones since 2002. Nextel also has
refurbished 2.3 million phones since 2002.
The Wireless Foundation's take-back programs have collected nearly
three million phones since 1999.
Verizon Wireless has collected approximately two million phones
through their HopeLineSM charitable donation program.
GRC Wireless Recycling has collected approximately one million phones
since 2001.
Old Cell Phone Co. reportedly buys back 30,000 used cell phones a
month, and has been doing so since 2002.
RMS Communications Group collected one million phones in 2004, and
has been collecting phones for the past ten years.
eBay reportedly sells 130,000 used phones a month on its website, and
has sold approximately four million phones over the past five
years.
STATE-BY-STATE REGULATION IS UNWORKABLE
Mobile phones and mobile devices are a consumer product in national
commerce best addressed at the national level. The re-use and recycling
of these wireless devices present issues unlike those presented by
traditional state solid waste management and disposal. The size,
marketing and re-use and recycling options available for wireless
devices are also distinct from other types of electronics. In our view,
a voluntary, industry-supported national program will facilitate the
re-use and responsible recycling of wireless devices regardless of
where the devices are purchased or where the devices wind up.
The re-use and recycling of mobile phones and mobile devices is a
national environmental challenge. We believe that state-by-state
regulation is counter-productive and a one-size fits all national
approach is not workable for the entire electronics industry. Rather,
this challenge demands a comprehensive, voluntary national solution
tailored to address the issues raised by mobile phone and mobile device
end-of-life. Consumers and industry are already confronting
inconsistent state requirements, as evidenced by the inconsistent take-
back, financing and manufacturing requirements already enacted in
California and pending in several other states. Absent a definitive
federal endorsement of a voluntary national recycling program, it seems
that a piecemeal and inconsistent network of state regulatory programs
will be the default solution. The wireless industry fears that a state-
by-state system would lead to regulatory uncertainty and confusion,
high compliance costs, and the inefficient use of resources, all of
which combined will lead to increased costs for consumers and a much
less efficient and effective take-back program, particularly for
wireless providers and manufacturers that serve multiple markets. The
environmental benefits of such an approach are also questionable.
Wireless consumers will pay, either directly or indirectly, for
inefficient and inconsistent state regulatory programs. Increased
regulatory costs will invariably be passed through to the consumer as a
result of an increase in product costs.
It's unfortunate, but true, that regulatory systems simply cost
more and those states that choose to adopt such programs will incur
potentially significant costs, at both the state and local level, to
implement a mandatory regime, including costs of collection,
administration, oversight and enforcement. Again, consumers will
ultimately pay for these increased costs through local taxes.
Working with industry to promote product re-use and recycling on a
national level will help the United States in its efforts to work with
other nations in finding environmentally sound, effective, workable
solutions to address the increasing volume of used wireless devices
elsewhere. A piecemeal state-by-state approach will leave the United
States without a strong basis for a leadership role in the
international discussion on recycling issues.
EPA AND DEPARTMENT OF COMMERCE CAN PLAY AN IMPORTANT ROLE IN ASSISTING
INDUSTRY TO TAKE THE LEAD ON PROMOTING PRODUCT STEWARDSHIP
The EPA has an established record of comprehensive, voluntary re-
use and recycling programs. EPA's programs, such as ``Waste Wise'' and
``Resource Conservation Challenge,'' are good examples of government/
industry partnerships designed to produce environmental results without
the need for new regulation. In May of 2004, EPA issued national
guidelines for the management of ``end-of-life'' electronics.
Additionally, EPA has worked with states and industry for several
decades in developing national markets for traditional recycled
materials, such as aluminum, glass and paper. The Department of
Commerce has expertise in technology and markets. We believe mobile
phones and mobile devices demand a comprehensive, voluntary national
program for re-use and recycling that takes into account the unique
characteristics of mobile phones and mobile devices and we are
committed to working with the EPA and the Department of Commerce to
continue to promote the industry's initiative, ``Wireless . . . The New
Recyclable''--a program with a proven track record of success in
protecting our nation's environment.
Thank you for the opportunity to share the wireless industry's
views on this important issue, I welcome any questions you may have.
______
Hewlett-Packard Company
Roseville, CA 95747
October 6, 2005
Paul E. Gillmor, Chairman
Subcommittee on Environment and Hazardous Materials
2323 Rayburn House Office Building
Washington, DC 20001
Dear Chairman Gillmor: On behalf of HP, it is my pleasure to
respond to the questions we received from the Subcommittee on
Environment and Hazardous Materials regarding electronics recycling. I
also would like to take this opportunity to thank you for allowing me
to address your committee on September 8, 2005, about this important
issue and HP's views.
HP applauds Chairman Gillmor for holding hearings on this emerging
issue and we hope that you view, as we do, that the hearings were a
success. In our view, the hearing succeeded in raising the awareness
and advising the Members of the House and the public on the challenges
of managing and recycling used electronics in the United States.
Thank you again for this opportunity. Please do not hesitate to
contact me should you have any additional questions.
Sincerely,
Renee St. Denis
Director, Americas Product Take Back
Attachment
cc: The Honorable Hilda L. Solis, Ranking Member,
Subcommittee on Environment and Hazardous Materials
Hewlett-Packard Answers to Questions from Hon. Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: As between whether electronic waste is a resource
conservation issue or a hazardous waste issue, HP sees electronic waste
as primarily a resource conservation issue.
As a company committed to environmental stewardship, HP believes
that society has an interest in minimizing waste and that the recycling
of electronic products can help to conserve natural resources. HP
believes that the determination of whether electronic devices generally
warrant hazardous waste management remains debatable. While we
recognize that some stakeholders view mismanagement of electronic waste
as posing potential environmental issues, studies also have been
conducted that indicate minimal risks. For example, in a recent letter
to Senator Thune, the Solid Waste Association of North America (SWANA)
and the National Solid Wastes Management Association (NSWMA) stated
that electronic products can be safely managed in municipal solid waste
landfills and that the natural processes occurring within a municipal
solid waste landfill, such as precipitation and absorption, effectively
inhibit heavy metals from dissolving into the leachate or being
released from the landfill in the form of landfill gas.1 In
addition, landfill liner systems substantially prevent leaking of
leachate from the landfill to the land upon which the landfill is
constructed.2 And, as industry moves to put EU RoHS
compliant products on the world-wide market, waste concerns should
become even more limited. HP can provide other examples if needed.
While considering the above information from the solid waste management
experts, HP believes and is involved with this issue because it is an
important resource conservation issue.
---------------------------------------------------------------------------
\1\ Letter from John Skinner & Bruce J. Parker to the Honorable
John Thune (Aug. 16, 2005), at 1-2.
\2\ Id.
---------------------------------------------------------------------------
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: HP finds that legacy and orphan waste are a significant--
but not the biggest--electronic waste issue. The major issue is
developing and implementing a national, uniform approach to electronic
waste recycling that will achieve our recycling goals in a fair,
flexible, and efficient manner, including providing incentives for
improved performance over time. Regarding legacy and orphan wastes, we
think it important to understand that these waste streams derive from
different sources.
``Legacy wastes'' result from electronic products that are
currently in use or otherwise owned by households and that were sold
without being subject to any requirements regarding recycling or end of
life management. When companies sold these products, there was no
expectation that manufacturers would be responsible for managing them
at end of life. End-of-life management of these wastes will be taken
care of by many recycling approaches, including HP's Product
Stewardship Solution.
``Orphan waste'' results from discarding products that: (1) are not
labeled with a manufacturer's brand; or (2) for which the manufacturer
of the product is no longer in business and has no successor in
interest. A key fact about orphan waste is that it is much smaller in
amount than what is regularly attributed to it. Preliminary data
circulated by the Maine Department of Environmental Protection suggest
that orphan waste currently constitutes approximately 10 percent of
returns to local waste collection systems. Thus, while orphan waste is
an issue, it is not as big an issue as many assumed that it might be.
The orphan waste percentage can be minimized going forward by
enforcement of labeling requirements and a thorough assessment of which
manufacturers are in business or have a successor in interest. End-of-
life management of orphan waste will be taken care of by many recycling
approaches, including HP's Product Stewardship Solution.
In the absence of federal or state laws, a grant program for state
or local governments would assist in jump-starting the solutions
necessary to address this emerging environmental challenge. This has
been demonstrated in the EPA's Plug Into E-cycling programs such as the
Staples/Product Stewardship Institute (``PSI'') take back offerings. HP
is an active participant, both financially and through establishing
taking back programs, in many of these programs and continues to
support the government role in supplying grants.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: The various ways that state and local governments address
the electronic waste issue demonstrate that a federal solution is
appropriate and, in fact, the best solution.
First, state and local governments are not treating electronic
waste in the same way that they generally treat household waste. State
and local governments are not managing and financing the collection,
handling, and recycling of electronic products on a local basis in the
traditional way, either through drop-off fees or through taxes that
residents pay. Instead, state and local governments are requiring
global manufacturers to manage and finance unique electronic waste
collection and recycling systems.
Second, the three states--California, Maine, and Maryland--that
have enacted electronics recycling laws have imposed fundamentally
different requirements on manufacturers. (See Answer to Question No. 4
below for more information.) The effect of this patchwork is to
increase the costs to manufacturers of managing electronic waste at its
end-of-life. Manufacturers have to incur higher costs to meet these
differing state schemes than the costs that manufacturers would incur
to meet a uniform, federal scheme.
Third, state electronics recycling proposals often include design
mandates. Thus, rather than managing the local collection and disposal/
recycling of electronic waste, these new state electronic waste
proposals reach back to manage the design of electronic products. In
addition, design mandates affect movement of products in both
interstate and global commerce. Traditional state and local government
waste management programs do not affect interstate or global commerce.
In sum, these design mandates underscore that electronic waste should
not be treated as a local problem.
Fourth, unlike household waste, which is disposed of in solid waste
disposal facilities, state electronic waste proposals require
electronic waste to be recycled. Localities have access to local solid
waste disposal facilities for disposal. Electronic recycling facilities
typically are not located within each local government jurisdiction and
may not be located within a state. Thus, electronic recycling often
involves interstate commerce issues as well as other transport and
management issues associated with the need to use recycling rather than
landfill disposal facilities.
Due to these unique features of electronic waste recycling programs
(both enacted and proposed), HP supports a uniform federal approach to
electronics recycling.
Question 4. H-P sells in not only brick-and-mortar stores, but also
over the Internet. Your testimony states: ``the emerging patchwork of
differing state laws is adding significant new costs and impeding the
development of an efficient nationwide infrastructure, while creating
the potential for consumer confusion.'' Could you please tell me,
specifically, how this is a problem?
Response: The three current systems--in California, Maine, and
Maryland--have imposed significant costs on HP and other manufacturers
that could be avoided under a uniform, national electronics recycling
program. The three distinct sets of rules in these states that HP has
to examine, comply with, and communicate throughout our company and to
our retail partners, most of whom are doing business on an interstate
basis, add significant complexity to establishing a nation-wide
infrastructure.
Compliance with the California electronics product tax requires HP
to undertake a broad range of activities, from developing internal IT
systems, to identifying those individual products covered by this new
law, to collecting new taxes on our internal and direct sales in
California and remitting to the state the required amount on those
products. All of these requirements combined impose significant costs
on HP. For example, HP incurred a cost of more than $3.5 million to
meet only one of these requirements--collecting taxes on HP's direct
sales within California.
In contrast, to comply with Maine's producer responsibility
program, HP will not be forced to make any changes to our IT systems
nor impose new taxes on our consumers. HP's requirement is to develop
and finance a statewide electronic waste management plan.
Maryland has established yet a different electronic waste
management system. The Maryland law requires manufacturers to pay the
state a registration fee. HP can reduce the amount of that fee by
establishing an electronic waste recycling program. The requirements of
an electronic waste recycling program in Maryland will likely differ
from those required in Maine.
Increasing the compliance complexity for HP is that each state has
imposed its electronic waste recycling requirements on a different
scope of products. California's and Maine's programs both address
computer monitors and televisions containing a screen greater than four
inches measured diagonally. California's program, however, covers only
computer monitors and televisions that have been identified as
hazardous wastes by regulation. Maryland's program addresses only
computers and computer monitors and does not address televisions. In
addition, electronic products tax requirements are more difficult to
administer than an ordinary sales tax because the taxes differ by
product type (e.g., California's tax ranges from $6 to $10 depending on
screen size). These inconsistencies restrict the development of nation-
wide solutions. Keeping track of these three systems is a challenge.
Imagine if there were 47 others.
The emerging patchwork of differing state laws also has the
potential for consumer confusion. Consumers may be using common
carriers or the U.S. mail to ship devices for recycling. Having
different management standards for electronic waste in different states
complicates compliance by both senders and transporters. In addition,
in our mobile society, consumers moving from state-to-state may be
confused by a wide variety of systems.
The US EPA's proposed rule for managing cathode ray tubes (CRTs) is
one example of how a national approach could simplify and increase the
efficiency of managing end-of-life CRTs. The proposed rule would
exclude from the definition of solid waste CRT devices sent for
recycling. To the extent that states adopt the rule it would enable
companies to ship CRT devices to recycling centers without worrying
about multiple differing state labeling, shipping paper, and other
requirements.
As shown by the discussion above, the emerging patchwork of
different state electronic waste management laws will impose on
manufacturers' significant new costs, impede the development of a
national electronic waste recycling infrastructure, and cause consumer
confusion.
Question 5. Your testimony mentions that several states have
adopted or are considering mandated design requirements or new
technology products as part of their recycling laws or other
environmental initiatives. What are your feelings about the use of
environmental statutes to govern individual manufacturing processes? Do
you support this type of action or think it is a wise precedent to have
set?
Response: We find that state mandated design requirements are not a
wise precedent.
At the outset, it is important to distinguish between environmental
regulation of ``manufacturing processes'' and establishing product
design mandates. Environmental regulation of manufacturing processes is
the traditional approach of most environmental statutes, such as
establishing controls on end-of-pipe wastewater discharges through
NPDES permits. These state (and sometimes local) environmental
requirements are imposed on and met by individual HP facilities.
Product design mandates, on the other hand, apply to products before
they are even created and force manufacturers to apply such mandates to
all products or to sell differently designed products on a state-by-
state basis. HP questions the wisdom of state-by-state design standards
as a matter of law, policy, and cost.
Several recent state electronics recycling proposals have included
RoHS or RoHS-type requirements. As you are aware, the European
Directive called ``Restriction of Hazardous Substances'' (``RoHS'')
limits the amounts of the certain chemical substances that can be
present in electronic products sold within the European Union. HP
considers having individual states impose provisions of the RoHS
directive at a state level to be inappropriate for a number of reasons.
Manufacturers generally are complying with RoHS on a worldwide basis.
Incorporating RoHS requirements into state legislation will not provide
any additional incentives to increase the recyclability of products.
Moreover, inclusion of such material restrictions in U.S. state
legislation will create confusion and interfere with the flow of these
products in interstate commerce because the state requirements may be
different from RoHS or may be interpreted by state agencies differently
than the worldwide standard.
Question 6. Your testimony recommends expanding government support
for pilot projects and other initiatives to promote the development of
an efficient electronics-recycling infrastructure. In particular, you
single out the U.S. EPA's ``Plug-In to e-Cycling'' program--the same
one praised by Maryland Secretary of Environment in the first part of
our hearing. What do you see as being needed and do you see a lack of
support for these or other Resource Conservation Challenge Programs?
Response: The results of implemented pilot projects demonstrate
their value. By showing what works, pilot programs can also serve as a
guide for development of electronics recycling programs. For instance,
during the summer of 2004, Staples, Inc., in partnership with the
Product Stewardship Institute (``PSI'') and the U.S. EPA--with
participation from state agencies, a recycler, and ten electronics
manufacturers, including HP--launched a program to measure the success
of retail-based electronics recycling. Staples collected used computers
and related equipment from customers at retail stores and businesses in
five northeastern states, then transported the materials to a recycler.
The program report concluded that customers were overwhelmingly
positive about the program and wanted it to continue. From an
operational perspective, the program was easy to implement. The cost of
collection was competitive with other electronics collections. (See
Answer to No. 3 of Mr. Dingell for detailed cost information for the
Staples, Inc./PSI pilot project.) Overall, the program was a
success.3
---------------------------------------------------------------------------
\3\ For more information, see http://productstewardship.us/
pilot_takeback_staples.html.
---------------------------------------------------------------------------
In several meetings, including a recent meeting held in Minnesota,
EPA has stated that the Plug-in program has raised awareness of the
electronics recycling issue. To continue this progress, it is apparent
that additional funding and support are needed now to support
additional pilot programs. Pilot programs started with government seed
money can grow into self-supporting programs and lead to the
development of permanent recycling infrastructure.
Question 7. Your testimony mentions H-P's strong advocacy of a
``Product Stewardship Solution.'' Could you please explain this program
and why you consider it so much better than the California, Maine, or
Maryland approaches? Does this guarantee that all CRTs are eventually
addressed? What is H-P's burden vis-a-vis the rest of the consumer
products industry, particularly if you use as the basis the number of
annual cathode ray tube devices sold? What do you estimate to be the
economic or other practicality burden on your competitors or other
sectors of the e-waste recycling chain?
Response: We summarize the key elements of HP's Product Stewardship
Solution below and show that the approach is not biased in favor of any
particular manufacturer, including HP. The Product Stewardship approach
provides a fair and equitable allocation of end-of-life management
responsibilities for manufacturers' electronic products based on the
amount of each manufacturer's contribution to the electronics waste
stream.
Under Hewlett-Packard's Product Stewardship Solution, manufacturers
must take responsibility for their ``equivalent share'' of CRT-
containing computer monitors and TVs (``CRT devices'')--including
orphan CRT devices--returned by households (individual consumers and
home businesses) for recycling. They can do this either (1) by
establishing a recycling program or (2) by paying the state reasonable
collection, consolidation, and recycling costs for their equivalent
share. Manufacturers implementing a recycling system have the
flexibility to design their program as they see fit, so long as they
recycle their equivalent share in compliance with applicable laws and
regulations.
Manufacturer equivalent shares are determined annually by the
government. A manufacturer's equivalent share is that manufacturer's
portion of the annual CRT device waste stream. The equivalent share
concept allows manufacturers that choose to run a recycling program to
satisfy their obligations with CRT devices of any brand or their own
brand if they desire. This approach avoids the need for brand sorting,
but preserves the ability of manufacturers to implement recycling
programs that collect only their own brand products. It provides an
efficient recycling system with multiple options for consumers and
manufacturers.
Manufacturers will be held accountable to the government to meet
their equivalent share obligations. This is a self-implementing
performance standard keyed to a specific amount of CRT devices to be
recycled. Thus, a manufacturer that chooses to provide a recycling
program but fails to recycle its equivalent share has a predetermined
payment obligation for the shortfall to the state. This system is
designed to achieve recycling results by manufacturers, not merely to
generate revenue or establish government recycling programs.
This approach has many benefits:
Provides efficiencies through market-based solutions and the
opportunity for improvements over time, thereby offering a
lower cost solution to consumers.
Avoids new taxes on consumers.
Places key responsibilities on manufacturers, not government, to
achieve recycling goals, including recycling of orphan CRT
devices.
Places minimal responsibilities on retailers.
Limits state government involvement to enforcement and other
necessary functions, avoiding the creation of new taxes and new
agencies.
Reduces burdens on local governments by providing manufacturers with
incentives to keep CRT devices out of the municipal waste
stream and by providing a funding source for CRT device
collection, consolidation, and recycling.
Provides the opportunity for design improvements.
Provides a simple approach that can transition to a national system.
HP supports a comprehensive national solution to the challenge of
recycling discarded electronics. While federal legislation based on the
principles of product stewardship outlined above would be the most
efficient approach, we recognize that several states will likely act
prior to the adoption of a federal program and are working with state
governments to enact our Product Stewardship Solution.
HP's Product Stewardship Solution includes elements of the widely
supported Maryland Statewide Computer Recycling Pilot Program. The
Maryland law requires manufacturers to pay to the state an annual
registration fee--the amount of which varies depending on whether the
manufacturer offers a computer take back program. Thus, both HP's model
bill and Maryland's approach offer manufacturers the opportunity to
``pay'' or ``play.'' Maine's Electronics Waste Law requires
manufacturers to submit to the state a statewide electronic waste
management plan for the collection and recycling of computer monitors
and televisions produced by the manufacturer and generated as waste by
Maine households. We do not consider our approach superior to the
Maryland or Maine approaches, but we have improved our model based on
experiences in Maryland and Maine.
HP believes that its approach is superior to the California
approach and other advance recovery fee (``ARF'') approaches. An ARF
system fails to provide the benefits of the Product Stewardship
Solution. In particular:
The ARF ``fee'' is a new tax on consumers.
The ARF is burdensome to retailers.
The ARF creates a large new government program.
The ARF does not guarantee that any amount of electronic devices will
be recycled.
An ARF constrains competition and limits the efficiencies to be
gained from competition.
An ARF favors remote sellers at the expense of in-state retailers
because states cannot require ARF collection by remote sellers
that lack nexus to the state.
No system can guarantee that all CRTs are eventually addressed
because end-of-life product management depends on consumer behavior.
Under HP's approach, manufacturers provide information about how CRT
devices may be returned via a website and/or toll-free telephone
number. Local governments, charities, retailers, and other
organizations will offer other recycling opportunities including
programs implemented in cooperation with manufacturers. This variety of
programs lets consumers choose the programs that best suit their needs.
This broad flexibility of choices for consumers increases, rather than
decreases, the likelihood that they will recycle their CRT devices.
Under HP's approach, the economic burden on HP's competitors would
be no greater or less than the burden on HP. All manufacturers must
take responsibility for their equivalent share, i.e., the contribution
of their CRT devices to the annual CRT device waste stream. Our
approach would be advantageous for all manufacturers in that it offers
flexibility. Manufacturers can choose whether to provide a recycling
program or to pay the state reasonable collection, consolidation, and
recycling costs for their equivalent share. Manufacturers choose
whether to act individually or in partnership with other manufacturers.
Finally, manufacturers that choose to provide a recycling program can
select among many approaches to obtaining their equivalent share. HP's
approach fairly apportions the economic burden of electronics end-of-
life management to each manufacturer based on each manufacturer's
contribution to the electronics waste stream.
Question 8. As I understand it, H-P opposed California's advanced
recovery fee because it believes that manufacturers should be
responsible for the recycling of their products. Is that correct? Why
do you believe manufacturers should be ``tagged'' with responsibility
for product recycling as well as ``legacy'' and ``orphan'' waste? What
has been H-P's experience in California since enactment of the
California law, are you losing money because of it?
Response: You are correct that HP opposed California's advanced
recovery fee law. We did so for a number of reasons, including its high
cost, which we discuss below. As discussed more fully in the Answer to
Question No. 7 above, HP supports a product stewardship approach
through which manufacturers take responsibility for their ``equivalent
share'' of CRT devices returned by households (individual consumers and
home businesses) for recycling, either by implementing a recycling
program or by assuming financial responsibility for their equivalent
share. HP's opposition to California's approach stems from our belief--
now borne out by experience--that a one-size-fits-all tax on consumers
at the point of sale is not the most efficient approach to electronics
recycling.
Under any electronics recycling program--including HP's Product
Stewardship Solution and California's electronic products tax--
consumers are ultimately ``tagged'' with the cost of product recycling.
Accordingly, our goal should be to develop a system that imposes the
lowest overall costs on consumers and includes mechanisms for consumers
to gain from efficiency improvements over time. Creating a new
bureaucracy to fund a new tax program as California has done is not,
and was not at the time of adoption, the best solution for consumers.
Consider the following California ARF system costs. Start-up
administrative costs are budgeted at approximately $8 million for the
first year and then expected to stabilize at $5-6 million
annually.4 In the first six months, revenues were about
$30.8 million.5 As of early August, claims amounted to only
about $8.1 million and about $3.5 million in payments had been
approved.6 The California program pays $0.48/lb for
collection and recycling, 7 which is more than 40% higher
than the cost of collection and recycling under the Staples, Inc./
Product Stewardship Pilot (``PSI'') ($0.34/lb).8 (For a
description of the Staples, Inc./PSI pilot study, see the Answer to
Question No. 6 above.) The overall cost of this system, in relation to
the overall costs to recycle is high. The gross revenues under
California's proposal is expected to be $60-70 million, and the
estimates are that they will recycle approximately 50 million pounds of
products in 2005.9 As a result, the overall system costs of
this approach are approximately $1.20 to $1.40 per pound, and these
costs will ultimately be borne by consumers in the state. In contrast
to California's tax program, HP's approach is intended to provide
efficiencies through market-based solutions and opportunities for
improvements over time. HP's market-based, flexible approach offers a
lower overall system cost, which will result in lower costs for
consumers.
---------------------------------------------------------------------------
\4\ Testimony of Mark Murray, Executive Director, Californians
Against Waste, to U.S. House Subcommittee on Environment and Hazardous
Materials (Sept. 8, 2005) at 7.
\5\ Id.
\6\ California Integrated Waste Management Board, California E-
Waste Updates: Implementing SB 20/SB 50 (Aug. 3, 2005).
\7\ 14 Cal. Code Reg. 18660.34(a).
\8\ Product Stewardship Institute, The Collection and Recycling of
Used Computers Using a Reverse Distribution System, A Pilot Project
with Staples, Inc., Final Report to the U.S. Environmental Protection
Agency (June 2005) at 47, available at http://productstewardship.us/
pilot_takeback_staples.html.
\9\ Murray Testimony, at 7.
---------------------------------------------------------------------------
In addition, HP's approach is more equitable for manufacturers
because individual manufacturers must take responsibility for their own
``legacy'' waste, and all manufacturers share the responsibility for
``orphan'' waste. In contrast, under California's electronic products
tax, a tax on current sales funds recycling of ``legacy'' and
``orphan'' waste. This means that new market entrants and manufacturers
with a growing market share disproportionately shoulder the
responsibility for product recycling. In addition, based on data for
the first six months of 2005, sales of covered electronic devices for
which the California State Board of Equalization has collected taxes
equal 80% to 85% of California's share of national sales for the same
period.10 This suggests that 15% to 20% of sellers, most
likely internet and other remote sellers, are not collecting and
remitting the tax. Overall, California's electronic products tax
creates an unlevel playing field among manufacturers.
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\10\ Murray Testimony at 7.
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In response to your question about HP's experience in California
since enactment of California's electronic products tax, HP has been
forced to spend over $3.5 million on a single aspect of the program--
tax collection on direct sales in California. This expenditure was
incurred by HP as our role as a retailer under this program. The $3.5
million does not include HP's costs to update our systems with new SKUs
(stock keeping units) for new products, or other costs incurred by HP
in our role as a manufacturer. In addition, this cost does not include
HP's expenditures as a consumer and the new taxes that we have had to
pay the state for covered products used by our California employees.
Hewlett-Packard Answers to Questions from Hon. John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: HP's Product Stewardship Solution provides the
opportunity for manufacturers to benefit from improved environmental
design and innovation, whereas an advance recycling fee/tax approach
provides no such opportunity.
Under HP's approach, manufacturers take responsibility for their
``equivalent share'' of CRT devices returned by households (individual
consumers and home businesses) for recycling, either by implementing a
recycling program or by paying the state reasonable collection,
consolidation, and recycling costs for their equivalent share. Those
manufacturers that collect and recycle their equivalent share can
benefit from design improvements they have made. Moreover, the system
provides an incentive to improve product design by allowing market
forces to decrease recycling costs for those improved products. To the
extent that recycling costs can be decreased, manufacturers--both those
that run their own recycling programs and those that pay the state for
collection, consolidation, and recycling costs--will benefit.
An advance recovery fee/tax approach itself provides no
identifiable incentives to design for the environment.11
Under this approach, commercial recyclers conduct recycling. Consumers
pay the tax. And manufacturers are divorced from the recycling process.
Therefore, recyclers have no incentive to reduce recycling costs where
market forces are divorced from the system and they are paid a fixed
price per pound. The uniform fee/tax imposed on products has no linkage
to recyclability of the products. Consequently, manufacturers gain no
benefit from product improvements they make.
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\11\ Some ARF systems (e.g., California's program) incorporate an
independent regulatory mandate to comply with the European Union's
restriction of the use of certain hazardous substances in electrical
and electronic equipment (``RoHS'') requirements.
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Question 2. At the Subcommittee hearing on July 20, 2005, Mr. Breen
of the Environmental Protection Agency testified that a good rule of
thumb for the cost of recycling a desktop computer is $15, while the
value of the materials recovered is anywhere between $1 and $2.50.
Do you agree with the economics of recycling desktop computers as
described by Mr. Breen? If not, please provide your views.
Response: Although the estimates might not be the same in all
regions, we agree with Mr. Breen's fundamental point that the current
costs of recycling electronics in an environmentally sound manner are
greater than the value of the materials recovered. At least part of
this disparity is due to the fact that electronics recycling is in its
infancy and markets are lacking for the recovered material. These
economics are not fixed and may vary well change over time. Government
policy should be drafted in a way to provide incentives for changing
these economics, and manufacturers and customers should benefit from
any improvement in such economics. A fixed uniform fee fails to provide
such incentives and does not allow companies or customers to benefit
from any efficiencies that are gained over time.
Question 3. How much does it cost to recycle a laptop computer and
what is the value of the recovered materials?
Response: The recent Staples, Inc./Product Stewardship Institute
(``PSI'') pilot study provides the information you requested. The
Staples/PSI study estimated the cost of handling computer equipment in
a retail store, shipping it to a distribution center and then on to
recycler, and recycling it to be $0.337/lb.12 HP's Notebook
computers weigh on average about 7 pounds. Thus, the recycling cost of
a Notebook computer would be $2.36. In contrast, under California's
electronics product tax, the California Integrated Waste Management
Board pays recyclers $0.48/lb,13 resulting in $3.36 for a 7-
pound Notebook computer. Thus, under California's program, the cost of
recycling a Notebook computer is more than 40% higher than under the
Staples, Inc./PSI pilot study. The cost figures in the Staples and
California programs are net of any recovered value and do not include
administrative overhead and other costs. Recovered value of the
commodities varies depending on available markets. For the recovered
value to increase, markets need to develop.
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\12\ Product Stewardship Institute, The Collection and Recycling of
Used Computers using a Reverse Distribution System, A Pilot Project
with Staples, Inc., Final Report to the U.S. Environmental Protection
Agency (June 2005) at 46, available at http://productstewardship.us/
pilot_takeback_staples.html.
\13\ 14 Cal. Code Reg. 18660.34(a).
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Question 4. Will your company be able to comply with the waste
electrical and electronic equipment (WEEE) directive of the European
Union, which requires the elimination of mercury, cadmium, lead,
chromium, and other substances by July 1, 2006?
Response: We assume that the question is referring to the European
Union's restriction of the use of certain hazardous substances in
electrical and electronic equipment--the RoHS Directive--rather than
the WEEE directive, which establishes a manufacturer electronics waste
recycling system.
HP is committed to compliance with all applicable laws and
regulations, including the RoHS Directive, which will restrict the use
of lead, mercury, cadmium, hexavalent chromium and two bromine-
containing flame retardants: PBB (polybrominated biphenyls) and PBDE
(polybrominated diphenyl ethers) in electrical and electronic products.
HP's goal is to exceed compliance obligations by meeting the
requirements of the RoHS Directive on a worldwide basis. By July 1,
2006, RoHS substances will be virtually eliminated (to levels below
legal limits) for all HP electronic products subject to the RoHS
Directive, except where it is widely recognized that there is no
technically feasible alternative (as indicated by an exemption under
the RoHS Directive).
In addition to HP's commitment to adherence with the RoHS
Directive, HP is participating in the development of global standards
for the restriction of hazardous substances and is working with
industry partners through several consortia to accelerate industry's
transition to alternative materials. As similar regulations are adopted
by other countries, we believe harmonized global standards will also
accelerate the industry transition.
HP's initiative to address the RoHS Directive is part of the
company's Design for Environment program which includes using materials
more efficiently, finding alternatives for hazardous materials,
designing for energy efficiency, and designing products that can be
easily recycled.
Question 5. After July 1, 2006, will your company discontinue
selling electronic products, such as computers or televisions, in the
United States that contain mercury, cadmium, lead, or chromium and
other substances covered by the WEEE directive?
Response: As in the Answer to Question No. 4 above, we assume that
the question is referring to the European Union's restriction of the
use of certain hazardous substances in electrical and electronic
equipment--the RoHS Directive. HP is committed to compliance with all
applicable laws and regulations, including the RoHS Directive, which
will restrict the use of lead, mercury, cadmium, hexavalent chromium
and two bromine-containing flame retardants: PBB (polybrominated
biphenyls) and PBDE (polybrominated diphenyl ethers) in electrical and
electronic products.
HP's goal is to exceed compliance obligations by meeting the
requirements of the RoHS Directive on a worldwide basis. By July 1,
2006, RoHS substances will be virtually eliminated (to levels below
legal limits) for all HP electronic products subject to the RoHS
Directive, except where it is widely recognized that there is no
technically feasible alternative (as indicated by an exemption under
the RoHS Directive).
Question 6. Is it correct that the proposal described in your
testimony would allow companies to opt out of their take back
responsibilities and pay a fee? If so, on what basis would that fee be
calculated and who would get the revenues?
Response: You are correct that HP's proposal would allow companies
to opt out of their take back responsibilities and pay a fee. Under
HP's Product Stewardship Solution, manufacturers must take
responsibility for their ``equivalent share'' of CRT-containing
computer monitors and TVs (``CRT devices'')--including orphan CRT
devices--returned by households (individual consumers and home
businesses) for recycling. They can do this either (1) by establishing
a recycling program or (2) by paying the state reasonable collection,
consolidation, and recycling costs for their equivalent share. An
individual manufacturer's payment amount is logically related to the
actual costs that the local government would incur to collect,
consolidate, and recycle the amount of that manufacturer's CRT devices
that constitute the manufacturer's equitable share. The state
determines the payment amount annually by a simple calculation.
To determine the payment amount for an individual manufacturer who
opts to pay, the state multiplies two values: the reasonable cost per
pound for collection, consolidation, and recycling services and the
total weight in pounds for which the manufacturer is responsible (i.e.,
the equivalent share).
Reasonable collection, consolidation, and recycling costs for CRT
devices are determined annually by the state based on the cost per
pound incurred for such services by local governments in the state that
provide such services. An annual determination of these costs allows
the state to adjust the values based on the actual experience of local
governments in the state. The state notifies manufacturers of its
annual determination of reasonable collection, consolidation, and
recycling costs.
Equivalent shares are calculated annually by the state by a simple
calculation: each manufacturer's return share percentage of CRT devices
collected in local government recycling programs is multiplied by the
total weight of CRT devices collected in manufacturer and local
government recycling programs. Return share percentages are simply the
number of CRT devices identified for an individual manufacturer divided
by the total number of CRT devices identified for all manufacturers,
based on periodic samplings by local governments. Equivalent share
calculations are made separately for CRT computer monitors and TVs.
Under HP's proposal, manufacturers who opt to pay--as well as
manufacturers who run recycling programs but fall short of their
equivalent share obligations--make payments to the state agency that
implements the program. Funds collected by the state agency are used
for collection, consolidation, and recycling of CRT devices by local
governments.
For more details on HP's Product Stewardship Solution, please see
HP's White Paper attached hereto.
______
Response for the Record by Parker E. Brugge, Senior Director and
Environmental Counsel, Consumer Electronics Association
Questions from The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: CEA concurs with the U.S. EPA that electronic waste, if
properly managed and disposed of, presents little or no risk to human
health or the environment. The Agency views the issue of electronics
recycling as one of resource conservation and solid waste management,
and so do CEA and its members.
Although resource conservation issues have received relatively less
attention in the U.S. relative to solid waste toxicity issues, CEA
recognizes the long-term importance of good stewardship of our natural
resources. Development and implementation of wide-scale electronics
recycling programs will relieve the need for energy-intensive resource
extraction activities that can significantly affect on the environment.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: CEA agrees that an immediate e-waste challenge is what to
do with the historic and orphan waste now residing in peoples' homes.
While these unwanted ``legacy'' products sitting in basements and
attics are the immediate challenge, the volume of unwanted/waste
products over the next decade is expected to increase as currently
utilized products become obsolete. However, from the industry's
perspective, the overarching issue is the development of a national,
uniform system for electronics recycling. This is a complex issue with
many challenges but the biggest challenge is probably the creation of
adequate national infrastructure.
CEA supports federal tax incentives or other measures fostering
development of recycling systems and infrastructure and defraying costs
of recycling program implementation. CEA would support grant funding
for state and local communities to help finance and build the
infrastructure to address this waste stream.
While CEA recognizes that grant programs can be helpful to build
infrastructure, the projected rise in volume of unwanted product calls
for a sustainable funding source. Furthermore, such a grant program
might not address CEA's overriding concern about the growing patchwork
of conflicting state programs.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: CEA believes that a national solution is the most
appropriate means to addressing this public policy challenge, primarily
as a means to avoid an undesirable patchwork of state legislative
mandates.
Existing and proposed state legislative mandates on electronics
have a significant effect on interstate commerce and extend well beyond
the scope of traditional solid waste management systems that are
financed by local fees or taxes on local waste generators (including
households) for local waste management services. These new existing and
proposed state mandates attempt through various means to redirect the
cost of waste management into the commerce of producing and selling new
electronic products--and thus calls out for a Federal solution.
Ideally, a Federal program would establish a consistent set of
financing and compliance rules but allow for implementation and
flexibility at the local level. Such a system should be established
using a common set of metrics to facilitate evaluations of program
effectiveness from one geographic implementation area to another, and
to provide a means to evaluate national performance.
Question 4. Your testimony presents a classic ``good news-bad
news'' situation where the ingenuity and creativity of the electronics
industry has created a situation where competition has driven down
prices of consumer electronics, thus the economic incentives for
consumers is to replace a product rather than repair it. What do you
suggest be done to decelerate the ``throw-away'' mindset that this
creates? What specifically are your companies doing to responsibly
address the potentially negative environmental legacy of their growing
success?
Response: CEA would argue that the competition and falling prices
characteristic of our industry confers benefits to consumers that far
outweigh the environmental challenges caused by technology innovation.
By extending information and entertainment to everyone--regardless of
income or geographic location--our members' products have improved
lives and changed the world. Meanwhile, America stands as the global
leader in innovation, ingenuity and creativity. The electronics and
software industry is also responsible for much--some claim most--of the
extraordinary gains in American productivity during the past decade.
These are no small benefits to the United States and CEA is proud of
our industry's contribution to society.
CEA also acknowledges, however, that as our products become
increasingly affordable it is often more economical for consumers to
replace a product with a new one than to repair older equipment. This
is especially true for televisions, where the end of analog signals
will provide consumers an additional incentive to replace their
outdated television with the superior picture and audio performance of
a new digital television. This is an economic reality that has an
impact on the environment. CEA suggests that in lieu of attempting to
change the economic reality of new technology application and
adaptation, the Federal Government establish a national framework for
responsible recycling of these products once they are no longer wanted.
While these displaced products may have reached the end of their lives
or be out-of-date, they certainly are too valuable to be completely
discarded.
To address the long term effects of our products on the
environment, CEA and its member companies have been and will continue
to be fully supportive of the safe and appropriate recycling and reuse
of consumer electronics products. A number of our member companies,
both manufacturers and retailers, have partnered in voluntary pilot
projects to collect and recycle computers, monitors and other consumer
electronics. Many of our member companies have participated in EPA
programs such as Plug-In To eCycling, a consumer electronics campaign
working to increase the number of electronic devices collected and
safely recycled in the United States.
CEA recently joined eBay's Rethink initiative, which brings
together leading technology companies, government agencies,
environmental groups and millions of eBay users to confront the issue
of electronic waste through consumer education via comprehensive
information on options available to reuse or responsibly recycle, as
well as disposition tools such as assisted selling, convenient local
drop-off, trade-in programs and charity donations. We believe that the
Rethink initiative can serve as a component of an important element in
electronics recycling--consumer education.
A primary responsibility shared by manufacturers of consumer
electronics lies in product design. Advances in technology have been
accompanied by large reductions in the consumption of energy, fewer
materials of potential concern, and other positive environmental
attributes. Further, manufacturers use significant amounts of recycled
content, such as glass, plastics and metals, in the production of new
devices.
Question 5. I am very intrigued about how you explain the issue of
electronic waste components in landfills and why regulating the
materials and manufacturing of your companies' products could have
negative effect on public health. As you know, EPA testified at the
first part of our hearing on July 20 that they believed properly lined
and operated landfills could handle e-waste. Could you please explain
to me the health benefits of using some of the constituent materials
that others would ordinarily characterize as hazardous waste and seek
to discourage their use in your products?
Response: Although certain substances of concern, such as lead,
mercury and cadmium, are present in electronic products, they are there
for a good reason. For example, lead shields users of cathode ray tube
(CRT) monitors and televisions from harmful x-rays. While CRTs are
still made and sold, flat panel screens have displaced CRTs as the
primary display product of choice, thereby removing the need for this
leaded shielding in most product displays on the market today.
Another example is mercury. One of the largest overall impacts to
the environment is emissions from power plants. Since electronic
products require electricity, the more energy efficient the product,
the fewer emissions will be created. Mercury is an extremely energy
efficient material used for backlighting in LCD displays that reduces
electricity use, thereby decreasing power plant emissions. Recognizing
this important environmental benefit, the European Union exempted
mercury used in compact fluorescent lamps from the material bans
included in the RoHS directive.
According to U.S. EPA, these compounds, if properly managed and
disposed of, present little or no risk to human health or the
environment. Additionally, forcing the elimination of these materials
in new products could have negative environmental consequences if the
alternatives are less environmentally friendly.
Question 6. Your testimony focused on the size of the Federal
government and its substantial purchasing power with electronics
products. Could you please elaborate on the involvement of your member
companies in Design for Recycling efforts at EPA, including Energy
Star, the Federal Electronics Challenge, and E-PEAT? What has been your
member companies experience with Federal and state government
electronics purchasing and recycling efforts? What more do you think
can and should be done?
Response: CEA supports the creation of reasonable federal
procurement policies based on environmental criteria. The market power
of the government can play a significant role in providing a direct
sales-based incentive to manufacturers. States can augment this by
adopting federal environmentally sensitive procurement guidelines,
increasing the market and the incentive for manufacturers. In addition,
federal and state governments will capture cost-savings through reduced
energy usage and other advantages offered by these products.
In order to demonstrate industry leadership and shared
responsibility in electronics recycling in its product design efforts,
CEA supports market-driven environmental design initiatives, such as
workable federal and state government programs on purchasing of
environmentally preferable display devices.
One of the biggest challenges in implementing and devising
government procurement is consistency and recognition. Many government
agencies at the federal and state levels have their own, specific and
sometimes conflicting criteria for what makes a product
``environmentally preferable.'' Compounding this problem is the fact
that government procurement officials are not always informed about
environmental purchasing programs and their benefits. EPA attempted to
address this problem in the negotiated stakeholder process to create
the Electronic Product Environmental Assessment Tool (EPEAT).
Manufacturers, government officials, environmental groups, and others
reviewed and established a set of environmental criteria and a scoring
system for evaluating electronic products. In order for this program to
be successful, it must be used in a consistent manner at all levels of
government and it must be promoted by all stakeholders to raise
awareness.
CEA members have supported and been very involved in Energy Star,
FEC, and other affirmative procurement efforts (i.e. Executive Order on
standby power). CEA also supports reasonable federal procurement
policies currently under development, such as EPA's EPEAT. The Federal
government should use EPEAT as a government wide standard for EPEAT
electronics, and encourage or require use of EPEAT by state and local
governments as well.
Question 7. Why do you think the creation of a private, Third Party
Organization is a good idea to collect and disburse government
sanctioned revenue. Would a ``check-off'' program funded by
manufacturers and retailers seem like a better, more responsible way
for the industry to fund education and recycling efforts that will
ultimately benefit their sales?
Response: In the context of electronics recycling systems, an
industry-led Third Party Organization (TPO) could efficiently fulfill
one or more roles that otherwise would be borne by government or
individual companies. For example, once authorized by Congress, a
primary TPO function could be to provide a mechanism of delivering e-
waste management services that engages electronics manufacturers to
help achieve national program objectives. Such a TPO could, but not
necessarily, collect and disburse government sanctioned revenue.
Congress could decide that a TPO be created or designated to operate a
national recycling system under U.S. EPA oversight using appropriated
federal funds. Alternatively, Congress could authorize a TPO, or
authorize U.S. EPA to authorize a TPO, to fulfill a universal
manufacturer requirement for participation in a national electronics
recycling program. There are a number of wholly private and quasi-
public organizations authorized by Congress to perform very specific
duties identified as a national or multi-state concern. As the outlines
of a workable national electronics recycling system becomes clear, CEA
offers its services to Congress in identifying efficient system
implementation strategies.
Towards this end, CEA is actively working with the National Center
for Electronics Recycling to support the creation of a national third-
party organization to assist states considering a TPO system, to
provide a national clearinghouse for consistent product scope, and to
ensure stable harmonization of state-level systems. CEA believes that a
national TPO should include manufacturers, retailers, and recyclers in
its governance structure. A national TPO that is available to states
can serve as a further incentive to ensure any state-level systems
complement an ultimate national solution. If additional federal
authority to enable harmonization is required, CEA will work with
Congress as appropriate to put that authority in place.
In contrast with check-off programs designed to promote various
agricultural products, a TPO as envisioned above would not directly
contribute to the sales of electronics. CEA also notes that there are
many problems with such check-off programs, including recent federal
court decisions that question the constitutionality of many of these
check-off programs to require payment for speech found objectionable by
the payee. As stated above, CEA recognizes the immediate e-waste
challenge of what to do with the historic and orphan waste now residing
in peoples' homes--it is not fundamentally a problem of consumer
education. Therefore CEA would not support a check-off program if
established similar to the programs administered by the U.S. Department
of Agriculture.
Question 8. Your testimony specifically says that your members
primarily support seeing the Federal government ensure a level playing
field nationally for all electronic products recycling stakeholders in
complying with state-level recycling programs. Since you are worried
about the creation of a patchwork of state regulations, does this mean
you support either or both of: (1) minimum Federal guidelines for
states or (2) pre-emption of state programs?
Response: CEA suggests that the role of the federal government lies
primarily in ensuring a level playing field nationally for recycling
stakeholders complying with state-level recycling systems.
CEA strongly believes that a successful national framework should
be established to address the management of electronics recycling. The
current de-facto framework is an evolving patchwork of state-by-state
approaches. As this Subcommittee is aware, three states (California,
Maine and Maryland) have passed legislation to manage used electronics.
These inconsistent state requirements likely will soon be joined by
even more conflicting state requirements, as there were over twenty-
five states that introduced legislation on the subject in 2005. This
conflicting, ad-hoc approach imposes unnecessary burdens on global
technology companies and consumers alike. Electronics recycling is a
national issue that warrants a national solution.
CEA believes that a national solution is the most appropriate means
to addressing this public policy challenge, primarily as a means to
avoid an undesirable patchwork of state legislative mandates.
Therefore, CEA supports a national framework providing localized,
flexible implementation options that preempts the evolving patchwork of
state programs. A national framework that preempts conflicting state
programs would substantially relieve the ever-increasing burden on
interstate commerce created by new state electronics recycling
mandates. CEA recommends that any such federal solution should begin
with a measured approach and, once demonstrated as successful, should
be reviewed and possibly expanded.
CEA recognizes the reluctance of Congress to assume such authority,
and industry recognizes that there will be a transition period for
existing state programs required for any national program. But the
sooner such a national framework is created, the less difficult such a
preemptive approach will be. For example, the new California
electronics recycling statute explicitly allows for deferral to a
national program, and the new Maryland law is structured as a pilot
program that expires in 2010.
Short of a federally legislated program that preempts conflicting
and duplicative state programs, the federal government should at a
minimum put measures in place that enable states to ensure a level
competitive playing field for in-state retailers with Internet and out-
of-state retailers. CEA supports federal authority to ensure interstate
compliance with state-level market-based or visible fee-based systems.
Questions from The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: CEA recognizes that a primary responsibility shared by
manufacturers of consumer electronics lies in product design. Advances
in technology have been accompanied by large reductions in the
consumption of energy, fewer materials of potential concern, and other
positive environmental attributes. Further, manufacturers use
significant amounts of recycled content, such as glass, plastics and
metals, in the production of new devices.
That said, CEA notes that recycling programs usually have little
effect on the design process. Some stakeholders claim that mandatory
take-back programs provide this benefit, but this is only true if two
conditions are met: 1) the program is not retroactive to any product
sold before the effective date; and 2) manufacturers can retrieve only
their branded products in the recycling system. These conditions cannot
be currently met because 1) to be effective, any program must address
the historic and orphan waste that is currently stored in homes and
businesses, and 2) it is not cost-effective or feasible to sort
collected products by brand in order to return to the original
manufacturer.
Furthermore, the longer the product life span, the more irrelevant
any design benefit due product take-back requirements. For example, a
recent study by State of Florida found that the average age of returned
televisions is 14 years. Similar analysis by the ongoing residential
collection program in Hennepin County, Minnesota identified the average
age of a returned television at 17 years. It is highly unlikely that a
company will spend extra dollars today to recoup potential savings more
than a decade away in recycling costs. Long product life cycles
accentuate uncertainties about any return on investment in new
recycling designs--uncertainties about the future state of recycling
technologies that may be fundamentally different by the time the
product enters the waste stream, the level of commodities markets, the
reuse market for product components, etc.
Question 2. At the Subcommittee hearing on July 20, 2005, Mr. Breen
of the Environmental Protection Agency testified that a good rule of
thumb for the cost of recycling a desktop computer is $15, while the
value of the materials recovered is anywhere between $1 and $2.50.
Do you agree with the economics of recycling desktop computers as
described by Mr. Breen? If not, please provide your views.
Response: Many electronics recycling programs use 50 cents per
pound as a starting estimate for the overall costs of collecting,
shipping and recycling waste electronics. This estimate is close to the
48 cents per pound reimbursement rate established in California for
costs incurred by approved electronics recyclers. If one assumes that
the average weight of a desktop computer is 30 pounds and assumes a 50
cents per pound cost estimate is reasonable, the total average cost of
recycling a desktop computer would be $15.
Although CEA has not performed any specific studies on these
estimates, $15 per desktop computer appears to be on the high end of a
reasonable range for estimating overall per unit costs. Per unit
processing costs would likely decline if a national system were put
into place and economies of scale realized.
CEA does not have data on the average value of recovered materials.
Question 3. How much does it cost to recycle an average size
television and what is the value of the recovered materials?
Response: Using California's existing reimbursement rates for
televisions (48 cents per pound) and assuming the weight of an average
returned television is 50 pounds, the cost to recycle an average size
television would be approximately $25.
Although CEA has not performed any specific studies on these
estimates, $25 per television appears to be on the high end of a
reasonable range for estimating overall per unit costs. Per unit
processing costs would likely decline if a national system were put
into place and economies of scale realized.
CEA does not have data on the average value of recovered materials.
Question 4. How much does it cost to recycle a laptop computer and
what is the value of the recovered materials?
Response: Using California's existing reimbursement rates for
laptop computers (48 cents per pound) and assuming the weight of an
average returned laptop is 8 pounds, the cost to recycle an average
size laptop computer would be $4 per unit.
Although CEA has not performed any specific studies on these
estimates, $4 per laptop appears to be on the high end of a reasonable
range for estimating overall per unit costs. Per unit processing costs
would likely decline if a national system were put into place and
economies of scale realized.
CEA does not have data on the average value of recovered materials.
Question 5. Will your Member companies be able to comply with the
waste electrical and electronic equipment (WEEE) directive of the
European Union, which requires the elimination of mercury, cadmium,
lead, chromium, and other substances by July 1, 2006?
Response: A primary responsibility shared by manufacturers of
consumer electronics lies in product design. Advances in technology
have been accompanied by large reductions in the consumption of energy,
fewer materials of potential concern, and other positive environmental
attributes.
CEA members have pioneered the concept of ``design for the
environment'' as products are now engineered from the earliest design
stages to ensure maximum recyclability and minimal use of potentially
hazardous materials.
The restrictions cited in the question are the result of the
Restriction on Hazardous Substances (RoHS) Directive, not WEEE. While
these new requirements will increase manufacturing costs and may well
inhibit product improvements and even functionality, the primary
challenge for compliance will be on small and medium size businesses.
Nearly all larger manufacturing companies have invested significant
resources and are on track to comply. CEA expects all of its members
selling into the European market to comply with the RoHS Directive,
although some smaller companies may comply by no longer selling those
products into that market.
Question 6. After July 1, 2006, will your Member companies
discontinue selling electronic products, such as computers or
televisions, in the United States that contain mercury, cadmium, lead,
or chromium and other substances covered by the WEEE directive?
Response: For large companies with overseas operations, the answer
is yes. There is less certainty for smaller niche market players who
may not sell in the EU or China. There is also a possibility that
components made for larger companies that are compliant will be
available for smaller companies, but these components may be more
expensive and therefore drive out some of the smaller and niche
players.
______
Response for the Record by Gerald L. Davis, President & CEO, Goodwill
Industries of Central Texas, Inc.
The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: On the topic of leachabilty, Goodwill understands that at
present there is a difference of opinion as to whether landfills can
safely contain electronic waste for extended periods of time without
leaching into the ground. Goodwill is aware of various studies that
comment on the suitability of landfills to properly accommodate
electronic waste deposits.
Most recent, the United States Government Accountability Office
(GAO) on July 26, 2005, testified before the Senate Subcommittee on
Superfund and Waste Management under the Environment and Public Works
Committee. Testifying on behalf of the GAO, John B. Stephenson,
Director, Natural Resources and Environment offered the following:
. . . standard regulatory tests show that some toxic substances
with known adverse health effects, such as lead, have the
potential to leach into landfills. Although one study suggests
that leaching is not a concern in modern U.S. landfills, it
appears that many of these products end up in countries without
modern landfills or the environmental regulations comparable to
the U.S. Regarding the issue of toxicity, the research we have
reviewed to date is unclear on the extent to which toxic
substances may leach from used electronics in landfills. On one
hand, according to a standard regulatory test RCRA requires to
determine whether a solid waste is hazardous and subject to
federal regulation, lead (a substance with known adverse health
affects) leaches from some used electronics under laboratory
conditions. Tests conducted at the University of Florida
indicate that lead leachate from computer monitors and
televisions with cathode ray tubes exceeds the regulatory limit
and, as a result, could be considered hazardous waste under
RCRA. On the other hand, the study's author told us that these
findings are not necessarily predictive of what could occur in
a modern landfill. Furthermore, a report by the Solid Waste
Association of North America suggests that while the amount of
lead from used electronics appears to be increasing in
municipal solid waste landfills, these landfills provide safe
management of used electronics without exceeding toxicity
limits that have been established to protect human health and
the environment.
Without having the technical expertise required to comment on
landfill leachability, Goodwill cannot state definitively whether
landfill deposits of electronic waste are based upon ``real concerns''
or not. However, as an organization we are very interested in landfill
leachabilty and what effect this debate ultimately has upon landfill
use in particular and electronic waste recycling generally. Goodwill
believes this issue should be further examined, and that forthcoming
public policy decisions should be based on disinterested, unbiased
scientific assessment.
Goodwill believes also that the creation of a recycling
infrastructure would help to significantly reduce the amount of
electronic waste ending up in landfills, thereby lessening or
eliminating the potential affects of leachability.
On the topic of resource conservation, Goodwill has been in the
reuse, recycle and conservation business for over 100 years. By selling
used clothing and household goods ``including used, refurbished
computers at some Goodwills--we fund our mission of helping people with
barriers to employment find and keep jobs. We are very proud of the
significant role we have played in keeping millions of tons of waste
out of landfills across America. Through the de-manufacturing programs
used at some of our Goodwills, we have been able to keep large amounts
of used electronics out of landfills. And through the refurbishing and
re-selling of these operating units and used components, Goodwill
provides meaningful work for many disabled and vocationally
disadvantaged job seekers, who in turn, become tax-paying members of
the U.S. workforce.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: ``Orphan'' and legacy waste is a very significant
problem. However, we believe a related concern--the nonexistence of a
recycling/reuse infrastructure in the United States--is a greater
problem. The development of a properly functioning recycling/reuse
infrastructure would address the larger problem of used electronic
management, particularly on the residential level.
However, to say that the nonexistent infrastructure is a greater
problem is not to dismiss concerns surrounding orphan/legacy waste. A
significant stumbling block to the development of a recycling/reuse
infrastructure is the problem of who is responsible for orphan waste.
To the extent that major manufacturers are reluctant to agree to an
end-of-life management solution for the United States because of the
issue of orphan/legacy waste, the problem is only further compounded.
``Beginning of life'' solutions, (i.e., the development of newer
computers), continue to develop at a rapid pace as newer and better
computers and other electronic devices flood the U.S. marketplace with
great speed and efficiency in natural response to market demands of the
tech-savvy society we now occupy. Conversely, the ``end of life''
solutions that are necessary to properly manage the disposal and/or
recycling of older computers simply cannot keep pace without market
incentives.
We recognize that there are significant costs associated with the
development of a recycling/reuse infrastructure and that the costs will
be primarily borne by consumers and manufacturers. Goodwill believes
that the government has a role in balancing the impact of the costs and
in developing safe end-of-life standards. To that end, Goodwill
Industries supports market-based incentives for nonprofit collectors/
recyclers, and a national solution that considers the interests of
manufacturers, recyclers and other stakeholders. We believe the federal
government can play a vital role in assisting the development and
sustainability of such an infrastructure. The federal government, by
utilizing incentives, could aid and encourage necessary private sector
investment in the used electronic recycling/reuse markets. This can be
done through tax credits for manufacturers and consumers, recycling
grants, and other initiatives that could spur innovative solutions and
help stakeholders handle this problem. Additionally, increased federal
support for pilot projects and other sustainable initiatives would be
helpful in promoting the development of a recycling/reuse
infrastructure. Collection and dismantling grants, in particular, could
prove to be an effective method of processing orphan/legacy waste
without financially burdening the public. The resale ``value'' of these
reused, recycled computers could help offset the amount the federal
government would pay to collectors and recyclers. The federal
government also can play a key role in educating consumers. Through
increased consumer awareness, a greater impact can be made upon the
established and developing markets, particularly the residential
market. A developing infrastructure could benefit greatly from
increased federal support of consumer education campaigns.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: Goodwill believes that electronic waste management is a
national environmental challenge. While household waste is exempt from
the federal regulations governing hazardous waste, states and
municipalities increasingly have stricter regulations that ban
household hazardous waste and specifically electronics. Even if the
state or municipality allows landfill deposits of household hazardous
waste including electronics, many charge landfill fees that negatively
impact our ability to provide critical services to our clients.
Consumers, manufacturers and other stakeholders are already confronting
inconsistent state requirements. In California, for example, where
electronic waste is regulated at state level, the state requires
collectors and recyclers to document the origin of every used computer
in order to verify that the state is only incurring processing costs
for used computers from California. Requirement such as this can be
particularly problematic for nonprofits that accept computer donations
because donors frequently ``drop-off'' their donations without
providing any information. Under a national solution the need to
document the origin of the computer would be nonexistent. For these
reasons, Goodwill believes that state-by-state regulation is
counterproductive. The continuation of state-level solutions, we
believe, could create regulatory uncertainty and confusion, high
compliance costs, and the inefficient use of resources, all of which
combined will lead to increased end-of-life management costs.
Goodwill seeks to find environmentally responsible methods of
managing our used electronic donation stream that at a minimum are not
financially burdensome to the fulfillment of our charitable mission.
The costs associated with inefficient and inconsistent state regulatory
programs are a significant reason why various state-based laws will not
sustain a nation-wide recycling/reuse effort. We believe a national
solution--be it federal or otherwise' offers the best potential for
creating a nation-wide recycling/reuse infrastructure.
A national solution will also help the United States in its efforts
to work with other nations in finding environmentally workable
solutions to address the increasing volume of U.S. manufactured
electronics in foreign nations. A piecemeal, state-by-state approach
will leave the United States without a strong basis for taking a
leadership role in the international discussion of recycling issues.
Question 4. I am interested in the way that Goodwill is involved in
the acceptance and recycling of electronics products. Some relief
organizations, including some Goodwill outlets, will not take these
kinds of items. When and why did Goodwill decide to accept donations of
these items? What liabilities or other disincentives exist that prevent
other relief groups from taking these types of donations? Do you sort
out these items for resale or do you simply send them for recycling?
Response: Goodwill Industries is a network of 205 community-based,
autonomous member organizations. The common thread that unites each
independently-operated Goodwill is the goal of helping people with
workplace disadvantages and disabilities become and remain gainfully
employed. Community-based employment and training programs are central
to the Goodwill mission. Most Goodwill member organizations provide
services that fall into four general categories: vocational evaluation,
vocational adjustment, job-seeking skills/job placement services and
transitional employment. To fund our mission, Goodwills collect donated
clothing and household goods to sell in more than 2,000 retail stores
and online at www.shop.goodwill.com.
Goodwills decide on an individual basis whether to accept any kind
of donation, including used electronics. The decision to accept used
electronics depends primarily on the local Goodwill's ability to
generate income that will fund its job training and employment
assistance programs.
Among the Goodwills that willingly accept used computer donations,
a variety of methods are used to handle the items ``including sorting,
demanufacturing and third party recycling.
Donors play a pivotal role in our ability to fulfill our mission.
Yet Goodwills that do not accept used electronic donations, frequently
must handle unwanted donations. Local Goodwills that refuse used
computer donations at the donation site, often find used computers that
have been dumped at Goodwill locations after hours. The reality for
many organizations that accept and rely on non-cash donations is that
used computer donations ``wanted or not'' are a part of the donation
stream.
For some Goodwills, properly managing and disposing of used
computer donations in an environmentally responsible manner is a
financial strain. Where permitted by law, some Goodwill agencies
dispose of unwanted electronics in landfills. More and more, landfills
refuse to accept electronic products, or charge a hefty disposal fee.
The average landfill fee per unit is $25. In 2003, 24 percent of
Goodwill agencies responding to an internal survey reported paying a
landfill fee. The landfill fees vary by agency. While some of our
agencies have been able to negotiate with their localities for reduced
landfill fees or a waiver of these fees, this is not so for many of our
organizations.
Software removal or software licensing for refurbished systems can
also be a disincentive to organizations that do not wish to enter into
used electronics as a business line. Additionally, some Goodwills
express concern over potential liability issues for personal data left
on a computer.
Question 5. Several of the manufacturer and national retailer
groups testifying here today are calling for a national solution to e-
waste because they are concerned about a patchwork of state
regulations. Your testimony, too, expresses concern about the
development of the same ``patchwork of differing laws.'' Could you
please explain to me why this is a concern to Goodwill Industries and
what the practical effects of this fragmented legal scenario will be on
Goodwill's operations?
Response: There are 171 North American Goodwills, crossing many
state and county boundaries. It is not uncommon for a local Goodwill to
operate in a geographic territory that crosses three state lines. As a
result, it can be a tremendous challenge for local Goodwills to comply
with different sets of laws. The costs attributed to these additional
compliance requirements can quickly drain the limited financial
resources of local Goodwills that could be better used in furtherance
of our charitable mission.
As Goodwill attempts to promote a national computer-recycling
program in partnership with manufacturers, or recommend best practices
to our local member organizations, conflicting state-level legislation
and local regulations could greatly restrict the ability of
organizations, like Goodwill, to implement recycling/reuse plans on a
national scale.
Further, even where state laws are not in conflict, state-level
laws ``by the limited geographical scope of their authority'' simply
cannot abate certain issues, such as the requirement to document the
origin of used electronics as discussed in our response to Question 3.
Question 6. Your testimony identifies four (4) e-recycling models
that Goodwill uses. Could you please tell us the percentages of use of
each model by Goodwill and whether there are specific models that have
had particular success with a certain part of your mission or in
certain parts of the country? Is there a governmental authority that
oversees these models and are there any legal impediments to your
deployment of these models?
Response: The used electronic management systems being used by
Goodwills that accept used computer donations fall under one of the
following models. Some Goodwills employ a ``retail model'' that focuses
on collecting, de-manufacturing, refurbishing and reselling computer
systems and components in dedicated retail stores. Other Goodwills use
a ``client model'' that integrates technology training and workforce
development programs with computer collection, recycling and reuse
efforts. Still other Goodwills use a ``corporate model'' that
integrates corporate services into computer collection, recycling and
reuse. Lastly, some Goodwills implement a ``collaborative model'' that
utilizes partnerships and collaboration to address computer collection
and recycling.
In Austin, Texas, Goodwill employs a retail model and enjoys a high
level of success. Beginning in 1997 as a training program and retail
outlet for donated computers, it sells all forms of systems, products,
and accessories in a dedicated computer store, Computer Works. Some of
the benefits that are a direct yield from its computer recycling
business include the creation of new jobs for people with disadvantages
and disabilities, and increased revenue from parts and component sales.
The model also results in little or no waste going to area landfills.
Not all Goodwills participate in used electronics recycling. Of
those Goodwills that do participate, 6 percent operate a retail model;
20 percent operate a client model; 3 percent operate a corporate
services model; and 31 percent operate a partnership/collaborations
model.
Question 7. Your testimony suggests that Goodwill does not oppose
the imposition of an advanced recovery fee, but prefers a manufacturer
responsibility/take-back approach? Why do you think requiring
manufacturers to take-back their products is a preferable policy
choice? You mention tax incentives as a way to develop an
infrastructure and market for e-recycling. Could you please talk about
your work with E-Bay and Dell and what you have learned from it?
Response: The primary policy objective of Goodwill regarding
electronic waste is to advocate for a national solution(s) that: (1)
replaces the financial burden of used electronic disposal borne by
charitable organizations with end-of-life management incentives; (2)
promotes the development of a national recycling/reuse infrastructure;
and (3) includes nonprofit recyclers in the eventual design and
implementation of a national recycling/reuse infrastructure.
Goodwill has in the past and continues to support Advanced Recovery
Fees (ARFs). We believe the National Computer Recycling Act introduced
by Rep. Mike Thompson (D-CA) which would create a fund generated by the
collection of ARFs to be managed by the Environmental Protection Agency
(EPA), has merit. Some of the benefits that Goodwill believes an ARF
could provide include establishing a visible, national fee at all
points of purchase; making the system as administratively simple as
possible; and a means to equitably allocate costs of historic product.
Through our education and awareness campaigns, and by participating
in task forces and forums with regulatory organizations like the EPA,
we have learned that some manufacturers disapprove of an ARF-based
system. Opponents of an ARF-based system argue advanced recovery fees
raise consumer prices and hurt retail sails.
As Goodwill looks to address our immediate concerns over landfill
disposal fees for unwanted waste, we also look to expand our charitable
services by commercially utilizing the electronics that are a part of
our natural donation stream. To that end, Goodwill Industries' internal
public policy committee amended its public policy position to include
support for market-based incentives for nonprofit collectors/recyclers
and support for a national solution that brings together manufacturers,
recyclers and other stakeholders. The rationale behind Goodwill's
support for this alternative is largely based upon the inability of
stakeholder groups to craft a consensus solution under the EPA-
sponsored NEPSI project.
At the same time, we maintain our support of the ARF-based
legislation (National Computer Recycling Act) as a possible solution.
Goodwill is also encouraged by the current ARF-based system operating
in California that ``notwithstanding our previously mentioned concerns
over state-level limitations'' appears to be working.
From our involvement with Dell, Goodwill has learned that there is
a market for recycled computers, and especially computer parts. Dell
can use its influence to drive donations and has been useful in
providing some specific technical knowledge.
Through our involvement with eBay, Goodwill has learned the
importance of consumer education.
The Rethink Initiative is an Internet-based consumer awareness
project. Through a web portal linking the public to e-cycling programs
and information, consumers are provided information on computer reuse.
Goodwill has partnered with eBay in its mission of educating and
enabling eBay's computer users to take action to reduce e-waste. By
providing a venue for buyers and sellers to connect, eBay makes it
easier for people with idle computers and electronics to find others
who can put them to good use.
The Honorable Paul E. Gillmor (continued)
Question 8. Your testimony supports ``market-based incentives for
recyclers and collectors of electronic waste, but also advocates the
precedent-setting, European-style, command and control of electronics
manufacturing through the European Union's Waste Electrical and
Electronic Equipment Directive (WEEE). How do you justify heavy
government regulation on the front end for manufacturers and minimal
governmental oversight once the products get to you or other recyclers?
Response: Goodwill Industries supports the development of a
national solution that embraces and balances environmentally sound
disposal practices with market-based solutions that are inclusive of
nonprofits recyclers/collectors and will aid in the development of a
reuse infrastructure. We believe the development of a recycling/reuse
infrastructure is critical to effectively manage the current and
growing stockpile of used electronics. We believe that the government
has a role in balancing the impact of the costs and in developing safe
disposal methods and standards for computer manufacturers.
With respect to the European Union's Waste Electrical and
Electronic Equipment Directive (WEEE), Goodwill has not adopted a
formal position. In our written testimony, Goodwill noted that
``policymakers in the U.S. could look to the European Union's work with
respect to the regulation of component materials.'' Goodwill also
believes that the WEEE model has potential value for American lawmakers
and policy experts in that it offers another perspective on a
tremendously difficult and complex problem.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: Goodwill believes that the development of a recycling/
reuse infrastructure is of critical importance to dealing with the
problem of electronic waste in the United States. We believe that
establishing such an infrastructure can best be accomplished by
providing incentives for all stakeholders, and particularly
manufacturers, given their unique position as generators in the
computer industry.
The question as to which approach presents manufacturers with the
strongest incentive to design their products for recycling is difficult
and complex. As you know, Goodwill participated in the EPA-sponsored
NEPSI process and worked with other stakeholder groups in an attempt to
tackle this very question. While the NEPSI group was unable to reach
consensus, the discussions were not without great value. Out of those
discussions, Goodwill learned the concerns of different stakeholders as
well as the public, and some of the potential effects proposed
solutions could possibly have upon them.
To that end, Goodwill believes that federal regulation would
provide manufacturers with the strongest incentive to reevaluate
computer design. We believe federal regulations that, over time, phase
in percentage reductions by specified dates (similar to the
requirements under SB20/50) would be the strongest incentive for
manufactures to place greater emphasis on computer design. Without
clear goals driving this system, we do not foresee any significant
improvements in the areas of computer design. Manufacturers should be
given the freedom to innovate with design, but they must be held to
certain performance goals, or they will not be motivated to improve
design. Noncompliance with such goals would result in graduated fines
and possibly the inability to sell noncompliant products.
Also, we would note our belief that manufacturers, inasmuch as they
generate the source of the waste stream, are not alone responsible for
electronic waste generation. To the extent that our country relies upon
computers for all of the obvious benefits enjoyed by their existence,
we all have some measure of responsibility. Accordingly, Goodwill
recommends that any solution include incentives for other relevant
stakeholders, like nonprofits, in addition to incentives for
manufacturers.
______
Response for the Record by Joel Denbo, Chair, Institute of Scrap
Recycling Industries, Inc.
The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leaching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: ISRI regards the laws that govern the recycling of
electronics scrap as resource conservation measures. According to the
testimony provided by the EPA during the Subcommittee's first hearing
on electronics recycling, there is still insufficient evidence to
support the argument that there is a leaching problem for household
electronic goods disposed of in Subtitle D disposal facility.
Nevertheless, we recognize that potentially toxic components are
present in many obsolete electronics; if properly recycled, however,
these components pose no greater threat to the environment than during
their original use. Nevertheless, ISRI is concerned about the materials
present in obsolete electronics products because they can affect the
ability to recycle the product, as well as the quality of the recycled
materials. ISRI has encouraged manufacturers in all industries to
design their products, from the outset, with recycling in mind. We
refer to this as Design for Recycling and
promote it as a way to reduce the use of hazardous materials. By
reducing or eliminating hazardous materials in the manufacturing of
electronics, the materials we recover and process have more market
value and are, therefore, more cost effective to recycle, and are more
environmentally friendly.
In addition, as stated in our written testimony, we respectfully
request that electronics destined for recycling be referred to as--
recycable materials,' or ``commodities,'' and not ``waste.'' Saddling
obsolete electronics with the stigma of ``waste'' imposes a whole host
of unwarranted regulatory burdens that will likely undermine the
ability to make the system work. Therefore, it is eminently important
that we avoid confusing these valuable commodities with ``wastes,''
especially with hazardous wastes.
Question 2. It seems to me, though, in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: The most significant problem is how to get the general
public to pay a fee for the costs of recycling certain obsolete
electronic materials with negative value, such as monitors with CRTs,
rather than disposing of their systems at curbside or at their local
Subtitle D disposal facility, or elsewhere in the environment.
ISRI has put forward two proposals to change the economics of
electronics with negative values. First, we support a producer
responsibility model that requires manufacturers to pay for the costs
of collecting, sorting, transporting and recycling obsolete electronic
materials that have a negative intrinsic value until end-use consumer
markets are economically sustainable and viable. Second, ISRI supports
dedicating a portion of funds generated from the manufacturers'
management plan to be used for the development of end-use consumer
markets for recycled materials, e.g. technology to recycle computer
glass and plastic. Once research and development dollars are spent and
end-use electronics markets are economically viable and can support a
sustainable electronics recycling infrastructure, ISRI strongly
supports ending producer financial responsibility.
ISRI is not opposed to a grant program if it, too, addresses end-
use consumer markets, promotes Design for
Recycling and provides funds to compensate
recyclers for handling obsolete electronics with negative values.
Should the Congress wish to proceed with a grant program, it may wish
to consider a dual system where the grant program pays for orphaned
systems and a producer responsibility system pays for legacy equipment.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstance, the
state government. Why do you support a federal solution to an otherwise
local program?
Response: ISRI favors a national solution that provides for product
stewardship and promotes Design for Recycling.
Creating a level playing across all 50 states will more quickly and
efficiently produce stability in the recycling business. A multiplicity
of laws and regulations will understandably inhibit economies of scale
and efficiencies. Although ISRI is concerned that 50 different
approaches will hinder the development of a sustainable recycling
infrastructure and thereby slow the development of end-use consumer
markets for these materials, we are not opposed to a state-by-state
approach in the absence of federal law.
Question 4. Your testimony states that your group represents 1,260
private, for-profit companies that conduct recycling activities at
3,000 locations world wide, however, only 300 of your members ``a
little less than 25 percent--actually handle electronics waste. What
percent of all electronic waste that is recycled in this country do
your members handle? Is the trend showing that increasing amounts of e-
waste are becoming available? Do landfill bans of electronic waste
components have a material affect, in the jurisdiction of the ban, on
the amount of electronic waste being recycled?
Response: ISRI does represent over 1265 companies the process,
broker, and consume paper, glass, plastics, metals, textiles, rubber
and electronics materials for recycling. ISRI represents over 300
companies that make up the electronics recycling infrastructure.
Unfortunately, ISRI does not collect recycling data in a manner that
answers your market-share question.
Question 5. In testimony before the Senate Committee on Environment
and Public Works, the GAO stated that in their interviews with eight
electronics recyclers these recyclers ``were unanimous in emphasizing
that they could not cover the costs without charging fees.'' In
addition, testimony that we received in the first half of this hearing
on July 20, 2005 suggested that the economics of private recycling
businesses that voluntarily take on the electronics in waste streams
were poor. Yet, I think your testimony suggests that you think there is
money to be made in recycling consumer electronics products. Could you
please set the record straight? Is this a business your members want to
pursue and can make money in a free-market, non-governmentally
subsidizes atmosphere or do you need government to artificially create
this market for you?
Response: ISRI and its electronics recycler members believe that
there is money to be made in recycling consumer electronics in a free-
market, non-governmentally subsidized atmosphere. As stated above,
under current market conditions, there remain some obsolete electronic
products that have a negative value. To recycle these products,
recyclers must charge a fee to cover the cost of recycling. However,
economies of scale may mitigate some of the negative value of obsolete
electronic products. Bulk recyclers may ultimately charge less to
recycle these negative valued materials than smaller recyclers.
Some products already have a positive recycling value, such as
CPUs, laptops, cell phones, and larger copy machines or ``tanks.'' In
lieu of charging a fee, recyclers could, and in some cases do, pay
consumers for these materials.
ISRI believes that to resolve the discrepancy between negative and
positive valued materials, end-use electronics markets must be
developed. Increasing the value of recycled obsolete electronic glass
and plastic could have a significant effect on reducing the negative
valued costs, thus creating a sustainable infrastructure.
Therefore, to cover the short-term costs of recycling negative
valued obsolete electronics, ISRI believes a financial mechanism needs
to be put in place. ISRI strongly supports ending any subsidy as soon
as end-use markets are economically viable, that is, once negative
valued recycled materials no longer enter the market place or have a
negative value.
Question 6. Your testimony mentions ISRI's Recycling Industry
Operating Standard is the proper means to address environmental
concerns with electronics recycling. Could you please tell me,
specifically, what RIOS is and how this applies and will be helpful to
promoting and sustaining electronics recycling?
Response: ISRI developed RIOS, an integrated management system
standard designed specifically for the scrap recycling industry, as a
means of providing recyclers of all scrap commodities--including
electronics--with an affordable tool to monitor their quality,
environmental, health and safety goals. RIOS seeks to provide consumers
with the same assurances of compliance that they have come to expect
from programs like ISO 9001, ISO 14001, and the proposed OSH 18000
standard. RIOS combines the applicable parts of these types of systems
into an integrated system designed specifically for the recycling
industry. Our goal is to assure consumers that, if they buy from a
recycling company that is registered to RIOS, they are obtaining scrap
materials that are manufactured consistently, according to a quality
management plan in a facility that has a recognized environmental
management system and safety program. Attached you will find a recent
article that explores RIOS in greater detail (``ISRI at Your Service:
Rolling Out RIOS,'' Kent Kiser, September/October 2005).
Question 7. Your group supports a regime whereby manufacturers of
consumer electronics products should be held responsible for recovering
used products and then recycling them. Since your members would stand
to benefit from a consistent stream of materials under this scenario or
would benefit from the California-style advanced recovery fee, why was
it so important for your group to take this policy position that it
did? It seems that the promotion of a producer responsibility plan
really shifts the costs from you to the manufacturer, particularly
since it could result in electronics product designs that make
recycling less expensive. Do you think the government should be used in
this way to either mandate design or manufacturing activities or to
determine economic winners and losers?
Response: To respond to the latter part or your question first,
virtually every time the Congress legislates in the environmental or
economic arenas, it chooses winners and losers. This goes to the heart
of legislating for the public good. While it is true that recyclers of
obsolete electronic products are benefiting from California's advanced
recycling fee, or consumer tax, the real issue is how to avoid
overwhelming our landfills with the enormous tonnages of obsolete
electronic equipment at reasonable or no cost to the taxpayer. Asking
manufacturers to internalize life cycle costs will, more quickly that
any other device, allow the industry to reach a point where electronics
recycling can stand on its own.
If manufacturers internalize all life cycle costs, i.e., cradle to
grave costs, they will, using good manufacturing and business sense,
use every tool at their disposal to minimize the marginal costs of
producer responsibility. They likely will do this by finding solutions
to the glass and plastics issues, which currently minimize the value of
obsolete electronics. By building electronic products in a manner by
which it could be easily disassembled, thereby preserving the integrity
of the recyclable parts, they will also increase the value of their
obsolete electronic products. Achieving these objectives will likely
assure a positive, rather than a negative, value of electronic
recyclables. Only manufacturers can achieve this.
Question 8. Your testimony encourages Congress and the states to
``end any financial mechanism as soon as markets for recyclable
electronics become viable.'' Under what conditions would you consider
markets for recyclable electronics viable? Do you consider any of the
current state sponsored financial mechanisms for electronic product
recycling to be unconstitutional retrains on trade between states under
the dormant portion of the Commerce Clause in the United States
Constitution?
Markets will be viable when the value of electronics recyclables is
positive rather than negative. At that point, the market place will
respond without artificial subsidies. With regard to the Commerce
Clause, ISRI would refer the Chairman to a recent case on point in
Maine. See attached case. Alliance of Automobile Manufacturers v.
Gwadosky, 304 F. Supp. 2d 104, D.Me., 2004.
Question 9. What, specifically, are ways in which manufacturers can
be encouraged to adopt Design For Recycling techniques? What are the
potential costs to the consumer? Do you have any advise for ``common
sense'' techniques the manufacturers can take to advance Design for
Recycling?
Response: Manufacturers should be asked to address, in the product
design stage, ways to improve environmental and recycling impacts of
their products. It is not the role of government to dictate design
engineering or manufacturing behavior. Government can ask manufacturers
to report annually on what, if any, design changes they have made in
their products that are intended to minimize adverse environmental
impacts and to increase product recyclability at the end of a products
useful life. As an example, we have attached a recent mercury bill
(Mercury Switch Removal Act of 2005) that was enacted in Arkansas that
contains specific Design for Recycling language beginning on page 8.
There will likely be little or no increase in consumer cost if
manufacturers incorporate environmental recyclability decisions in the
design phase of their products. Recent examples should provide context
for your question. Concern for mercury in the environment and state
legislation addressing mercury products have resulted in significant
design changes. Children's sneakers that contained lights that blinked
when children walked were produced with mercury. Manufacturers no
longer use mercury to cause the sneaker lights to blink. Another
mercury design issue involves HID headlamps currently used in many
vehicles. They are produced with mercury. After many complaints and
concerns, Honda asked the lighting manufacturer, OSRAM, to produce an
HID lamp without mercury. OSRAM has now done so, and Honda will utilize
the non-mercury in its next vehicle design change. In addition, years
ago, the house appliance manufacturing industry ended their use of
``Harvest Gold,'' and Avocado paints. Those colors were achieved with
the use of cadmium, which is a hazardous substance. This market
approach will depend on public scrutiny and consumer choices.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: Producer Responsibility/Cost Internalization provides the
strongest incentive for manufacturers to implement Design for
Recycling policy. It is important to understand
that ISRI has been advocating that manufacturers design their products
to increase their end-of-life recyclability since the early 1980's. Our
long standing policy is based on the premise that implementing greater
Design for Recycling will increase recycling productivity that will in
return ensure a stronger, more sustainable economic and recycling
infrastructure.
ISRI believes that once manufacturers internalize the costs to
collect, sort, transport and recycle certain obsolete electronics they
will improve product design in order to maximize the value of the
obsolete product, thereby helping to create a sustainable electronic
recycling infrastructure. In addition, manufacturers can create a model
that will be less bureaucratic and cheaper to recycle.
Cost internalization utilizes the flexibility that manufactures
naturally have in their production process. It is the manufactures that
understand the details of their production lines, their financial
bottom lines, their supply chains and the desires of their consumers.
Unfortunately, although some progress has been made by electronics
manufactures to implement Design For Recycling--policy, voluntary
measures have largely failed to spur industry wide change in design
policy. As a result, requiring manufactures to internalize the costs is
the next appropriate step to encourage greater design policy.
Question 2. How much does it cost to recycle a cell phone and what
is the value of the materials that can be recovered?
Response: Cell phones have a positive re-sale and intrinsic value.
Before cell phones are scrapped, recyclers analyze factors for re-sale
such as, age, model and the condition of the phone. The re-sale market
for current, vintage cell phones is somewhere between $10 and $20
dollars. If a cell phone can not be resold, recyclers then scrap or
recycle the phones.
Cell phones are at the highest end of the value chain because they
contain recoverable amounts of precious metals. Generally, cell phones
contain up to 10 ounces per ton gold (without batteries) and some
palladium value as well. Thus, depending on the gold and palladium
markets, recycling cell phones yields a positive value of approximately
$2.90 per pound without a battery and a positive value of $1.80 per
pound with a battery. The recycling cost is roughly $1.00 per pound.
Question 3. At the Subcommittee hearing on July 20, 2005, Mr. Breen
of the Environmental Protection Agency testified that a good rule of
thumb for the cost of recycling a desktop computer is $15, while the
value of the materials recovered is anywhere between $1 and $2.50.
Do you agree with economics of recycling desktop computers as
described by Mr. Breen? If not, please provide your views.
Response: If a desktop computer means a central processing unit
(CPU), then no, ISRI does not agree with Mr. Breen's economic analysis.
The recycling industry's definition of a desktop computer does not
include the monitor, the printer, the keyboard, or the mouse. As with
most electronics recycling, the economics vary on whether the unit can
be resold or needs to be scrapped. The resale value is largely
contingent on the processing speed and whether the unit has a CD and/or
DVD player and the capacity of the hard drive. Desk top sales equate to
approximately 10 cents a mega hertz, (based on an average 1 gig
desktop), which yields a resale value between $50-$70 dollars. Note:
these prices are typically marked up 20-25% by used computer sellers on
the public market.
Domestic recyclers can offset the costs of scrapping CPUs since the
units have a positive intrinsic value. In today's market, recycling a
CPU yields a positive value of $5 dollars a unit, or 10 cents a pound.
Although circuit boards contain 5-10 ounces per ton of gold, they only
account for 5-10% of the weight of the unit. Therefore, the entire unit
contains only 1 ounce per ton of gold. Residual copper value can be
found in power supplies. And, depending on the age of the unit, there
may be recoverable amounts of steel and aluminum in the chasis.
Question 4. How much does it cost to recycle an average size
television and what is the value of the recovered material?
Response: Unlike cell phones, CPU's and laptops, average size and
larger televisions have a negative value. Recyclers must charge their
customers to off-set the costs of recycling televisions. Recyclers
charge between 20-30 cents a pound (based on truckload bulk equations
and an average TV weight: 90-100 pounds). The value of the recovered
material is less than 20 cents a pound.
Question 5. How much does it cost to recycle a laptop computer and
what is the value of the recovered material?
Response: Due to the re-sale value, 99% of laptops are resold in
there entirety, repackaged with value added and then sold or de-
manufactured for its parts. Thus, in today's domestic market, the vast
majority of laptops are not being scrapped. The resale market yields
between $300 and $550 a unit.
The Honorable C.L. ``Butch'' Otter:
Question 1. I understand that recyclers in California are having a
great deal of difficulty in being compensated for their recycling
activities. Can you tell us about the practical problems being
encountered by your members?
Response: The most significant issues for recyclers in California
are the amount of paperwork to process claims and the time delay for
compensation.
Burdensome paperwork requirements unnecessarily increase the costs
of recycling electronics. Employees are required to complete forms that
track the type and origin of products, which adds to the costs of
recycling operations. When considering the small margins for these
commodities and limited end-use consumer markets, these costs become
even more significant as markets tighten. The delay for compensation is
approximately six months.
______
Response for the Record by Steve Largent, President and CEO, CTIA-The
Wireless Association
The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: The wireless industry is committed to the goal of
sustainable development and the environmentally-sound management of
their wireless products at the end-of-life. CTIA members continue to
reduce the use of various materials through design for environment
(DfE) initiatives and compliance with new legal mandates, such as the
E.U. RoHS Directive. For those reasons, CTIA views resource
conservation as the primary drive of industry-led recycling initiatives
and legal measures targeting e-waste.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: CTIA has found that many consumers do hold on to used
wireless phones in anticipation of future use by the original user or
future use by a family member or friend. CTIA believes that the unique
attributes of wireless products (small size and availability of
wireless retail establishments) allow used phones to be collected for
re-use and recycling through voluntary initiatives. CTIA would support
a grant program for initiatives aimed at raising awareness among
consumers on the benefits and options for the re-use and recycling of
mobile phones.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: The wireless industry supports a national solution, in
order to avoid a piecemeal and inconsistent network of state regulatory
programs for managing end-of-life electronic equipment. Such a state-
by-state approach would lead to regulatory uncertainty, high compliance
costs, the inefficient use of resources and less effective take-back
programs. CTIA supports federal legislation that would discourage the
disposal of wireless products in municipal landfills and incinerators
as part of a broader effort to promote re-use and recycling. CTIA does
not support legal mandates for the collection of used mobile phones, as
programs are currently being implemented by carriers on a voluntary
basis that will promote the recycling and re-use of wireless phones.
These costs will ultimately be passed on to the consumer. Finally,
having a national program will make it easier for the United States to
assume a leadership role in working with other nations in finding
environmentally-sound, effective, workable solutions to the management
of end of life wireless devices.
Question 4. How are you ensuring that the wireless devices are
being collected, managed, transported and reused in a responsible way
and in accordance with federal and state environmental laws? What types
of organizations do you contract with to implement these voluntary
guidelines?
Response: The CTIA voluntary Guidelines assist companies in
ensuring that the wireless devices are being managed in an
environmentally-sound way. Companies can encourage materials recovery
facilities to conduct their operations in a manner that is protective
of both workers and the environment by pledging to send materials only
to facilities that satisfy the CTIA Guidelines. For instance, a company
may choose to require an audit of a recycling facility's environmental
management system, by an independent third party, before the company
agrees to send materials to the facility.
Question 5. Do you have an estimate of what percentage of total
U.S. cell phones in use currently gets reused or recycled? What, in
your estimate, is the best way to increase these numbers?
Response: There is no single source for data on handsets collected,
nor is there a single methodology for collecting it. Carriers,
recyclers, and refurbishers are all in the process of evaluating the
best way to assess the success of their respective recycling and / or
refurbishing programs. The wireless recycling market is highly
competitive with many participating organizations, and a multitude of
collection points. CTIA is working with the EPA and organizations such
as the National Center for Electronics Recycling to develop a national
repository for data on the collection, recycling, reuse, and disposal
of electronic waste. With this said, CTIA has been able to determine
the following:
a. ReCellular, a refurbisher, has collected some four million phones in
2004, up from 1.5 million in 2002.
b. Nextel has collected 4.4 million phones since 2002. Nextel also has
refurbished 2.3 million phones since 2002.
c. The Wireless Foundation's take-back programs have collected nearly
three million phones since 1999.
d. Verizon Wireless has collected approximately two million phones
through their HopeLineSM charitable donation program.
e. GRC Wireless Recycling has collected approximately one million
phones since 2001.
f. Old Cell Phone Co. of Port St. Lucie, FL, reportedly buys back
30,000 used cell phones a month, and has been doing so since
2002.
g. RMS Communications Group collected one million phones in 2004, and
has been collecting phones for the past ten years.
h. eBay reportedly sells 130,000 used phones a month on its website,
and has sold approximately four million phones over the past
five years.
The key to a successful recycling program is consumer education.
CTIA's ``WirelessThe New Recyclable--'' program is designed to do just
that. The program focuses on educating the public on the importance and
ease of recycling wireless devices and providing useful and simple
information on the recycling of wireless products and where consumers
can recycle phones.
Question 6. What types of cost to the consumer do you charge, if
any, for your voluntary return programs, whether it be at municipal
centers, other retailers, or mail in returns to manufacturers?
Response: CTIA members take-back used mobile phones at no charge to
consumers. In order to encourage consumers to recycle their used mobile
phones, all barriers to recycling must be avoided. Recyling can be
encouraged by providing tax incentives for recycling wireless devices.
Question 7. You stated in your testimony that the size of mobile
phones has greatly decreased over the past 10 years. While the size can
certainly have environmental benefits, just because they are now
smaller, does that mean necessarily that less toxic materials such as
lead, mercury, and cadmium are used? Do new technologies; such as I-
pods and LCD screens consist of any other types of toxic metals or
materials?
Response: Mobile phones are being constructed in a more
environmentally-friendly manner than they were 10 years ago. In
addition to reducing the size and weight of wireless devices (and,
therefore, reducing the materials/resources used) manufacturers are
maximizing the use of recycled materials and are increasingly designing
for recyclability. For instance, manufacturers of wireless devices are
phasing out the use of cables containing lead and cadmium and PVC from
decorative parts of their products. More importantly, as mobile phone
and device manufacturers comply with the European Union's Restriction
on Hazardous Substances Directive, we are also seeing a reduction of
hazardous materials in wireless phones marketed in the United States.
All mobile phones sold in the European Union are expected to be RoHS
compliant by June 2006. All CTIA members are expecting to deliver RoHS
compliant products to the U.S. on or before the June 2006 deadline.
Question 8. How successful have the for-profit companies,
established to collect and refurbish used cellular phones, been? Can
you as an industry trade association do anything more to encourage your
members to participate in your voluntary programs and add more
incentives to these markets?
Response: For-profit companies established to collect and refurbish
used phones have been quite successful, due to the unique attributes of
mobile phones (size and the availability of secondary markets). Mobile
phones have a relatively high re-use value creating an ongoing market
for these devices; therefore, the market forces provide incentives for
the collection and re-use of these devices. The availability of
convenient retail collection points, combined with the portability of
mobile phones and the availability of secondary markets, distinguish
mobile phones from other types of electronic waste.
There are several successful for-profit companies that are in the
business of collecting and recycling mobile phones:
ReCellular, a refurbisher, has collected some four million phones in
2004, up from 1.5 million in 2002.
GRC Wireless Recycling has collected approximately one million phones
since 2001.
Old Cell Phone Co. of Port St. Lucie, FL, reportedly buys back 30,000
used cell phones a month, and has been doing so since 2002.
RMS Communications Group collected one million phones in 2004, and
has been collecting phones for the past ten years.
eBay reportedly sells 130,000 used phones a month on its website, and
has sold approximately four million phones over the past five
years.
Question 9. As technology becomes more advanced and consumers
demand newer and more efficient cell phones or other electronics, do
you envision a time where a mandatory federal regulatory policy could
be needed, or do you think products will get better, last longer, and
demand will decrease, therefore lessening need for end of life cycles?
Response: Although technology will improve the functionality and
performance of products over time, there will always be a need to
ensure that end of life mobile phones are properly managed. In the case
of mobile phones, we do not feel that a mandatory national system will
be necessary. Federal agencies can play an important role in working
with industry to promote a national system for voluntarily recycling
mobile phones. However, due to the unique character of mobile phones
and mobile devices, it will be more efficient and effective, to promote
existing voluntary programs such as CTIA's ``Wireless . . . The New
Recyclable TM'' program. The House Subcommittee on
Environment and Hazardous Materials can play a key role in increasing
public awareness of ``Wireless . . . The New Recyclable TM''
by encouraging the EPA to designate the initiative as part of the
[name?] program. This designation would reap tremendous benefits to the
wireless industry's recycling efforts and the environment.
Question 10. Does your industry have bigger plans for industry wide
universal recycling? How can you maximize these results?
Response: Carriers, recyclers, and refurbishers participating in
the ``Wireless . . . The New Recyclable TM'' program are
constantly evaluating the best way to expand and assess the success of
their respective recycling and/or refurbishing programs. We expect the
program to grow substantially as we are able to educate more consumers,
and businesses, about the importance of proper cell phone recycling,
through our public outreach efforts. CTIA believes that consumer
education companies will be the key to increasing the collection, re-
use and recycling of used mobile phones in the U.S.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: Programs that encourage carriers and Original Equipment
Manufatucturers to collect used mobile phone for re-use and recycling
provide market-based incentives for design improvements over time. In
fact, a combination of social and economic incentives already exist for
more efficient design of handsets and accessories, and for the
recycling of retired devices. These include the RoHS directive, carrier
and manufacturer interest in the more efficient production of wireless
devices, as well as consumer demand for environmentally friendly
devices.
Question 2. How much does it cost to recycle a cell phone and what
is the value of the materials that can be recovered?
Response: CTIA understands that recycled phones that are run
through a smelter for precious metal recovery net approximately $0.20
per handset. Most LCD screens are sent through a re-use channel, and
increase the value to between $0.25 to $0.30 per phone or $1.25 to
$1.50 per pound. Currently, companies collecting phones for resale pay
consumers donating the phones anywhere from $3 a handset to $100 a
handset depending on the model.
Question 3. How many cell phones are discarded each year in the
United States and of that total number how many are collected and
recycled?
Response: Most of the available data on reuse or recycling is
localized, and there is, to our knowledge, no single-source that
provides reliable national statistics reflecting the number of phones
discarded or recycled each year. While approximately 47 million
consumers change providers on an annual basis, their phones are not
necessarily ``discarded.'' In some cases, the phones are provided to
family members or friends, or are retained by the owner. In 2004,
approximately 47 million consumers ``disconnected'' service with a
provider. Some 10 million of these disconnections actually reflect the
consumption or expiration of prepaid service packages, which may have
been subsequently renewed by the subscribers, without a change of
handset. The remaining 37 million disconnections may reflect either
changing service providers, or simply discontinuing wireless service
for at least some time. ReCellular and RMS Communications Group, alone,
collected five million phones in 2004 (ReCellular collected four
million phones, while RMS collected one million phones.) ReCellular's
collections increased 166 percent between 2002 and 2004. As previously
noted, there are many companies and organizations involved in carrying
out recycling and phone collection programs which have collected more
than 17 million phones in the last five years, refurbished more than
2.3 million, and resold more than four million phones during the same
time period. These include phones collected and recycled by:
a. ReCellular, which collected some four million phones in 2004, up
from 1.5 million in 2002.
b. Nextel, which collected 4.4 million phones since 2002. Nextel also
has refurbished 2.3 million phones since 2002.
c. The Wireless Foundation's take-back programs, which collected nearly
three million phones since 1999.
d. Verizon Wireless, which has collected approximately two million
phones through their HopeLineSM charitable donation program.
e. GRC Wireless Recycling, which has collected approximately one
million phones since 2001.
f. Old Cell Phone Co. of Port St. Lucie, FL, which reportedly buys back
30,000 used cell phones a month, and has been doing so since
2002.
g. RMS Communications Group, which collected one million phones in
2004, and has been collecting phones for the past ten years.
h. And eBay, which reportedly sells 130,000 used phones a month on its
website, and has sold approximately four million phones over
the past five years.
The Honorable Tammy Baldwin
While we all enjoy cell phones, personal laptops, and other gadgets
that help us be able to communicate and be more efficient, it is clear
from these e-waste hearings that we must be vigilant in making sure the
toxic substances in these electronic devices are properly disposed of
and safely recycled.
Overall, I believe the manufacturers of these products should have
the primary responsibility for the cost of collecting, transporting and
recycling of electronic products, not consumers or taxpayers. If
manufacturers do not have a financial stake in their products at the
end of their useful life, then they will never have an incentive to
design them to have longer life spans, to be easier to recycle, and to
contain less toxic materials in the first place.
Let me give you an example of why I believe this. I have authored
legislation in this Congress that would help encourage the safe
disposal of recycling of the toxic element mercury, which is found in
dozens of household and industrial products, including many electronic
devices. As you probably know, exposure to mercury can have serious
health effects to a person's liver, kidneys, nervous system, and brain
functions. Small children and pregnant mothers are most at risk to the
harmful effects.
One provision in this bill is a nationwide ban on the sale of
thermometers that contain mercury. As communities have become more
aware of the harmful impact of mercury on the public health and the
environment, more and more state and local governments have passed
their own legislation banning the sale of mercury thermometers.
Manufacturers have since responded to these laws and now make and
sell more digital thermometers, which are just as effective but much
safer. State and local laws may have pushed them to make a less
dangerous product, but they also found it made good business sense that
improved their bottom lines.
As the amount of e-waste grows, I believe we are not doing enough
to give manufacturers the primary responsibility for managing the toxic
substances in their products. This is thwarting the development of a
strong private market for the safe recycling of these products and the
development of products that contain nontoxic alternatives and that are
easier to recycle.
Question 1. Mr. McCurdy, Mr. Largent, and Mr. Vitelli--As
representatives of these industries, do you agree with this, and if
not, how can you justify making consumers and/or taxpayers shoulder
most of the burden?
Response: CTIA member companies have voluntarily taken
responsibility for reducing the presence of various materials in their
products, and will continue to do so, through design for environment
(DfE) initiatives and compliance with new legal mandates, such as the
E.U. RoHS Directive. The wireless industry shoulders its fair share of
the cost of such programs. In fact, the take-back and recycling
programs managed by most major service providers, manufacturers, and
third-party recyclers of which we are aware, do not charge consumers
for the collection or recycling used handsets. Indeed, a number of
programs pay consumers for the return of some wireless devices.
Wireless devices may be returned at many retail locations, or via mail-
in pouches, and have been collected through both industry-wide and
company-specific initiatives, such as the industry's Wireless . . . The
New Recyclable TM initiative, as well as the efforts of
third-party organizations such as local school groups or charitable
organizations. Such voluntary initiatives are not obligatory, and
supplement the collection activities of wireless providers of all
sizes, as well as the initiatives of manufacturers and for-profit
recyclers.
The wireless industry is highly-competitive, and consumer demand
for its products and services is price-sensitive. (Over the past year,
several studies have noted the extent to which wireless is already
subject to taxation, and the extent to which increases in prices reduce
demand. It has been estimated that for every one percent increase in
price, consumer demand is reduced by as much as 1.29 percent.) In a
highly-competitive environment, wireless carriers cannot simply absorb
the cost of additional mandates. The wireless industry in 2004 paid
$14.6 billion in federal, state and local sales and transactions taxes
and surcharges, $900 million in sales taxes on handsets, and
contributed $2.6 billion in universal service funding.
Moreover, as of 2004, the wireless industry had already paid more
than $24 billion to the Treasury for spectrum, and invested more than
$174 billion in building-out networks to deliver service to consumers.
This year the industry made another $13 billion in additional
infrastructure investment.
______
Response for the Record by Dave McCurdy, President and CEO, Electronic
Industries Alliance
The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: EIA believes it is essential to consider the science
related to electronics products as part of any public policy discussion
regarding recycling. Compounds such as lead and mercury are present in
some electronics products because they provide clear safety,
performance and energy efficiency benefits. As our industry and others
have developed viable substitutes, manufacturers have successfully
incorporated them into our products. However, these compounds cannot
yet be replaced in all applications. For example, the European Union
(EU) Directive on the Restriction of Hazardous Substances (the RoHS
Directive) provides narrow exemptions for specified uses of these
materials to provide for product safety or energy efficiency, or when
no technically or environmentally suitable alternatives exist.
Nonetheless, these compounds can and should be appropriately
managed at the end of life. The U.S. Environmental Protection Agency
(U.S. EPA) shares this view, and has consistently stated that used
electronics products, when properly managed, do not represent a human
health or environmental concern. The agency considers electronics
recycling as fundamentally a solid waste management and resource
conservation issue. Likewise, our member companies recognize that
reusing and recycling electronics at the end of life is the most
environmentally preferable option, and we support reasonable efforts to
develop the recycling infrastructure.
In regards to whether or not compounds in electronics pose a
leaching concern in landfills, I will refer to the testimony delivered
to the Subcommittee in the first part of this hearing by Barry Breen,
Deputy Assistant Administration for U.S. EPA's Office of Solid Waste
and Emergency Response. Mr. Breen clearly indicated that the agency
believes that electronics can be safely managed in properly permitted
and operated municipal solid waste (MSW) landfills. In 1991, EPA
updated the MSW landfill criteria to ensure that these landfills are
protective of human health and the environment, even if they accept
household hazardous waste or conditionally exempt hazardous waste.
Furthermore, recent studies indicate that landfill leachate is very
unlikely to impact drinking water due to low levels of metals present
in the leachate of MSW landfills, and due to leachate collection and
treatment systems. In fact, the National Solid Wastes Management
Association (NSWMA) and the Solid Waste Management Association of North
America (SWANA)--two leading professional organizations in the waste
management field--maintain that electronics can be safely managed in
municipal landfills.
Additionally, in September 2004, the U.S. EPA, Office of the
Inspector General released a comprehensive evaluation of the agency's
various electronics recycling programs. The report is entitled Multiple
Actions Taken to Address Electronic Waste, but EPA Needs to Provide
Clear National Direction. The report includes several noteworthy
statements from U.S. EPA's Office of Solid Waste regarding electronic
waste.
``Regardless of how much E-waste that may exhibit a hazardous
characteristic finds its way into municipal landfills, EPA does
not believe that this will pose an environmental risk'' (page
30).
``Our primary interest in focusing on increasing recycling of E-waste
is based on resource conservation and minimization of the
environmental insults that result from materials extraction
rather than on environmental risks from landfilling the waste
in properly managed landfills'' (page 30).
``We do not agree that there is any need to define contingency plans
regarding volumes of e-waste discarded in landfills because we
strongly believe MSW landfill management practices consistent
with our requirements are protective of human health and the
environment'' (page 31).
In short, while compounds such as lead and mercury are present in
some of our products, their mere presence does not translate into risk
to human health or the environment. While our products can and should
be properly managed at the end of life, an impact could only occur if
there were to be a completed exposure pathway to a substance of concern
at a high enough dose and for a long enough duration for a negative
outcome to result. This is clearly not an issue when our products are
properly used and safely managed.
As an aside, it is also important to recognize that even recycling
generates by-products that must themselves be properly managed. Many
resource recovery techniques, including plastic and metal recovery, may
result in the generation of secondary materials such as ash and slag
that is often disposed of in landfills.
To reiterate, the high-tech and electronics industries recognize
that reusing and recycling electronics at the end of life is the most
environmentally preferable option, and we support reasonable efforts to
develop the recycling infrastructure. By developing a viable and self-
sufficient recycling infrastructure, many of the perceived risks posed
by the use of compounds of potential concern in electronics can be
mitigated. However, we also believe that it is critical for
policymakers to consider these products in their proper scientific
context.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: EIA and our members believe that the primary issue with
electronics recycling is the potential confusion arising from competing
state and local laws and regulations. The lack of national consistency,
combined with numerous initiatives under consideration at the state and
local levels, threatens to create a costly, inefficient and perhaps
conflicting set of requirements that will only raise costs to consumers
for electronics products.
That said, the handling of orphan and legacy wastes is also an
important challenge under any electronic recycling program. Orphan
devices--those used products for which there is no longer a viable
brand owner--should be fairly addressed in any comprehensive system. As
noted in our testimony, EIA and our member companies support the
principle of shared responsibility. When applied to orphan products,
shared responsibility means that all the major stakeholders--not just
the manufacturers--should combine to address this portion of the
recycling stream.
Legacy wastes are indeed a major part of the challenge. Since older
products are generally larger and heavier than contemporary devices, it
costs more to collect and transport them for recycling. The goal of any
national recycling approach should be to address these legacy wastes--
which, by definition, are ready to be collected and recycled now--but
to also establish a viable and comprehensive infrastructure to collect
used products over the long term. EIA would support grants to states
and municipalities as part of a coordinated approach to developing such
a permanent infrastructure. Grant money could be used for collection
and recycling activities, public education and to aid in the purchase
of new capital equipment for recycling. Grant funding could also be
used to advance the technology of recycling by supporting research into
methods to make the processes more efficient, for example, or to
maximize the nature and types of materials that can be recycled.
Our members have also expressed interest in exploring the approach
embodied in the Wyden-Talent legislation (S. 510). This proposal would
provide tax incentives to consumers and recyclers to stimulate the
development of recycling capacity. While grants and tax incentives can
be pieces of the solution, national consistency and shared
responsibility are required to ensure reliable funding for appropriate
electronics recycling activities.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: The problem is that various states and municipal
governments are choosing to handle this issue differently, mandating
different fees, programs and results, thus creating a competitive
imbalance. This patchwork is already beginning to develop. Three
states--California, Maryland and Maine--have enacted recycling laws for
certain electronic wastes, but each of these laws establishes a
significantly different financing and compliance system. This confusion
of state laws, with several more states poised to enact new laws or
regulations, is adding significant new costs and is confusing
consumers. A federal solution will harmonize a system for the financing
of an electronic recycling infrastructure and operation of the program.
In addition, the financing approaches that have either been enacted
or are being considered by various states primarily focus on assessing
a fee on each sale of a covered product made in the state, or on
determining each manufacturer's market/return share in the state.
Focusing on the sale of products elevates the debate from a solid waste
issue to one regarding interstate commerce and market competitiveness,
thus warranting federal involvement. Furthermore, used electronics must
often be transported across state borders to qualified recycling
facilities. If separate states regulate the transport of used products
differently, this will cause artificial regulatory burdens that will
lead to inefficiencies and increased costs. Finally, national
involvement is necessary to make sure that products imported by foreign
manufacturers that otherwise have no U.S. presence are included in the
system. EIA supports a national approach that would provide balance and
consistency and pre-empt the various inconsistent state approaches.
Question 4. In your testimony you stated EIA member companies use
significant quantities of recycled materials, including glass, metals,
and plastics, in new generations of their products, thus creating
demand that helps sustain markets for these materials. This statement
addresses a fundamental problem with domestic recycling infrastructure
in this country and the ability of a recycler to make a profit when
other viable options, such as exporting to China exist. How do you
think the electronics industry can build on this market demand and
create a competitive domestic recycling market?
Response: There are three major elements of an electronics
recycling system: collection, transportation and the actual disassembly
and recycling. The physical collection of used electronics represents
arguably the biggest single economic barrier to recycling. With
millions of televisions and computers spread out across urban, suburban
and rural areas, collection becomes an enormous and costly logistical
challenge.
With this in mind, it is likely that recycling will remain an
overall cost. As detailed above, collection and transportation costs
each represent a significant part of the overall expense. Even with
greater markets for products and the establishment of a viable
recycling infrastructure, these costs will still remain fixed within a
range. The value of the resulting commodities still won't pay for the
overall costs of collecting and recycling products, at least not at the
present time.
Question 5. Are there any ways the numerous small producers and
generic brand manufacturers that cannot necessarily be compelled to
participate in a recycling program can be overseen in our current free
market? Have there been any ideas generated within your industry
regarding this anti-competitive imbalance in your ideas for a requested
federal solution? What are these?
Response: EIA and our member companies continue to have serious
concerns over whether states can effectively compel small market
participants to play by the rules. For instance, two separate
California agencies have issued conflicting opinions regarding whether
the state can impose a fee collection obligation on out-of-state
retailers that have no physical presence in the state. While the state
of Maine does not implement its recycling program until 2006, EIA
members already have significant doubts over whether state officials
can take effective enforcement actions against small foreign producers
or generic manufacturers to pay their fair share of recycling costs.
While individual manufacturers in these categories are usually small,
they nonetheless collectively represent a noteworthy segment of the
market. In fact, Maine is proposing to release companies with a smaller
share of the current recycling stream from certain financial
obligations that will apply to larger, brand-name producers. This will
clearly benefit small foreign and generic producers in the intense
competition over market share.
The financing mechanism aside, a national approach to electronics
recycling would resolve many of these issues. First, it would prevent
small domestic manufacturers from selling into regulated markets while
escaping responsibility or enforcement. Second, a national system could
address products manufactured by foreign companies with no physical
presence in the U.S. Some foreign producers frequently change brand
names; their products then end up designated as orphans even though the
company is still in business and selling products under yet another
temporary brand. Manufacturers with no U.S. presence could be required
to provide some financial security in order to sell into the U.S.
market. Alternately, the importer of these products could be considered
the responsible party.
The federal government should consider requiring all manufacturers
of certain electronics devices to include their brand label on their
products. This would serve to reduce the volume of ``orphan'' products
which other parties must finance. While this is already a requirement
in certain states, it has limited effect. The major manufacturers
already place their brand names on their products. The small and
foreign producers who are the real target of these provisions are
largely outside state jurisdiction. In addition, the federal government
could consider a registration requirement for all manufacturers of
certain electronics devices. All manufacturers (or importers of
products) would provide basic contact and business information to make
sure they stepped up and participated in any national system.
Question 6. Given the fact that shared responsibility is one of
your goals and developing a recycling infrastructure that is convenient
for the residential consumer, how do you envision manufacturers being
involved in the process other than environmental design and product
stewardship? What, in your view is a fair contribution from each
industry, and how do you pass along the costs to the consumer?
Response:
Manufacturers
The EIA manufacturers are leading innovators in environmental
design and product stewardship; since we design and manufacture the
products, our single largest contribution is in this arena. On the
whole, every year our products become more energy efficient, use fewer
materials of potential environmental concern, and become easier to
upgrade, disassemble and recycle.
In addition, our member companies see their roles as also including
the following:
Participating in a shared responsibility approach with the other key
stakeholders to resolve the challenge;
Continuing the broad industry effort to drive environmental
innovations throughout the global supply chain;
Working to educate the public regarding the benefits of recycling and
to provide them with recycling resources, such as EIA's
Consumer Education Initiative (www.eiae.org);
Using recycled materials, including glass, metals and plastics, in
new generations of products;
Continuing to handle our own used electronics responsibly, for reuse,
recycling, or refurbishment;
Offering refurbishment programs where we buy-back used products, or
where one product can be traded-in for another, and marketing
refurbished products to our consumers;
Designing newer more environmentally-preferred technologies/
materials/parts into older products which are still being
marketed;
Continuing to participate in recycling partnerships with retailers,
recyclers, government (including U.S. EPA's Plug-in to eCycling
campaign) and non-governmental organizations to develop a
recycling infrastructure and expertise;
Funding brand sort and data collection projects to help better
understand the context of the recycling challenge; and,
Participating in U.S. EPA's effort to establish standards for
electronics recyclers to make sure that used equipment is
properly and safely managed.
While manufacturers are a key partner in the process, it is also
important to recognize that our role is ultimately limited.
Retailers
Retailers also have a critical role to play within a properly
structured and funded recycling system. The vast majority of
electronics products are sold through traditional distribution and
retail channels. In this system, retailers serve as the intermediary
between manufacturers and consumers, and transfer the product to the
end-user in exchange for financial consideration. In general,
manufacturers sell products in bulk to distributors, who sell them to
retailers (although many large retailers buy directly from
manufacturers). Retailers in turn sell them to consumers through a
network of thousands of retail locations. These products then have
years of useful life, and are often re-sold, passed along to friends or
family members, or donated to schools or charities. In most cases,
manufacturers do not have a direct relationship with the end user at
the time of initial sale, let alone years later when the product is
ready to be placed into the recycling stream. (According to the non-
profit National Center for Electronics Recycling (NCER), the average
life of a television is about 17 years, and the average life of a
computer is about 11 years.)
Unlike any other stakeholder in the process, retailers have
millions of face-to-face interactions with consumers every year. When
consumers come into a retail store to purchase a new computer or
television, it is often to replace an older unit that is ready to be
collected and recycled. Many large retailers have already participated
in successful recycling events--often in partnership with
manufacturers, NGOs and government--that include collecting used
devices at major, usually company-owned retail locations. Because
retailers have a direct and special relationship with the public, and
maintain numerous stores as well as transportation and distribution
networks, they can play a vital role in educating consumers and
partnering with others to provide recycling solutions.
Manufacturers also act as retailers in some cases. In those
instances, they must also share the responsibility of retailers.
Recyclers
Recyclers need to provide their services in a safe, cost-effective
and environmentally-sound manner. EIA is working with the U.S. EPA,
recyclers and other stakeholders to help develop appropriate standards
and a certification process for electronics recyclers.
Consumers
As noted in our testimony, the combined goal of the institutional
stakeholders should be to develop a recycling infrastructure that is
convenient for the residential consumer. Ultimately, recycling can only
succeed if citizens themselves participate by turning used products in
to the system. According to the non-profit National Center for
Electronics Recycling (NCER), the average life of a television is about
17 years, and the average life of a computer is about 11 years. These
products are purchased by consumers and provide benefits to the
consumer for years. It is also important to remember that these
products, once sold to distributors, retailers or consumers, no longer
belong to the manufacturer. They become personal property, just like
all other goods, and no one can compel consumers to properly manage
their personal property at the end of its useful life.
Costs
As noted above, recycling will remain an absolute cost on the
system for the foreseeable future. Consequently, whether recycling
costs are paid for by a point-of-sale fee, are internalized in the cost
of new products or are addressed in some other manner, the consumer
will ultimately end up paying the difference.
Question 7. Do you think, because demand for market driven
environmental design is growing, that the free market could best handle
this issue of e waste? Or do you feel because states are acting, and so
many others have legislation under consideration, there is no choice
but to pursue federal legislation?
Response: Since the total costs of recycling exceed the value of
the commodities recovered, it is already difficult enough to try and
develop a free market solution to this challenge. If states continue to
enact distinct and possibly conflicting statutes and regulations, the
obstacles will be even more insurmountable. As noted in our testimony,
there is clearly a federal role. The federal government should focus on
removing artificial regulatory barriers to encourage the free movement
of these products for safe and appropriate recycling. If the federal
government can ensure a level playing field, and if all stakeholders
can resolve the funding challenge, it is possible that a free market
solution will emerge.
Question 8. What, in the industries that you represent, should be
the definition of e-waste? Should it remain fluid? Or should it be
defined by products or by toxic components that make up the product?
How much debate is there going on within your industry about this term
and are certain states defining the term differently?
Response: Any definition of e-waste or e-scrap should initially
focus on a limited number of products. It is our belief that the
solution should start with an identifiable and manageable subset of
devices, rather than attempting to address the universe of all
electronic equipment at once. We are currently discussing this very
issue within our membership, and would be happy to provide an update to
the Subcommittee in the future.
Also, the EIA member companies would prefer that any recycling
approach apply only to household products. However, we recognize the
challenges in differentiating between consumer products and certain
non-household products, both at the point of sale and at end-of-life.
Electronic devices from non-households (i.e., businesses, institutions
and government) are typically required to be appropriately managed at
the end of life by the entity disposing of the equipment. However, in
certain cases, non-household electronic devices are re-sold and
ultimately end up in the household waste stream. Any approach needs to
consider options to ensure that businesses handling their end-of-life
devices responsibly as required by law are not penalized by paying for
recycling services they are not able to use, while ensuring that
devices that eventually become household waste finance the collection
mechanism that they will use. EIA and our members are willing to work
with the Subcommittee on mechanisms to differentiate household from
non-household products.
On the second part of the question, states are indeed using
different definitions of electronics scrap or covered electronics
devices. Maine's approach covers all televisions and computers,
including laptop computers, regardless of the technology involved.
California started with cathode ray tube (CRT) televisions and computer
monitors, and LCD monitors and laptop computers. The state has since
expanded the list of covered devices to include plasma and LCD-screen
televisions. Maryland's new statute applies only to computers.
The Honorable Tammy Baldwin
Mr. McCurdy:
Question 1. Do you or any of the companies you represent currently
export e-waste to other countries?
Response: In response to this first question, please refer to EIA's
statement on electronics recycling, which is attached as the last two
pages of this document. This statement includes our position on the
export of end-of-life electronics.
Question 2. If so, how much do they export?
Response: We are not aware of any EIA member company that sends
end-of-life electronics anywhere but to appropriate facilities in North
America or other developed countries. EIA does not have statistics
regarding the volume of end-of-life electronics that our members may
send to appropriate facilities in developed countries. Please note that
electronics devices exported for reuse or refurbishment are not
considered electronic waste because they still have value as products.
Question 3. Where do they export this waste?
Response: Please see the response to Question 2.
Question 4. Do they demand any safety standards or safety gear for
their employees when processing this waste?
Response: Per our statement on electronics recycling (included
below), our member companies require that any facility that manages
their end-of-life electronics meets stringent requirements that include
appropriate worker health and safety criteria.
Question 5. Do they plan to continue exporting this waste to other
countries?
Response: Please see the response to Question 2.
Question 6. How would federal legislation banning the export of e-
waste impact the companies that are currently doing so?
Response: First, it is important to note that the 30 member
governments of the Organization for Economic Co-operation and
Development (OECD) have concluded an agreement that governs cross-
boundary shipments of wastes destined for recycling within the OECD.
See OECD Council Decision C (2001)107/Final. In addition, the U.S has
concluded bilateral accords governing waste exports to Canada and
Mexico. These international accords have been in place for some time,
and exports of end-of-life electronics to these OECD or ``developed
countries'' raises few, if any, issues. A prohibition on exports to
these developed countries would significantly disrupt current trade and
recycling practices.
Second, it is our understanding that exports of end-of-life
electronics to non-OECD countries are primarily being made by numerous
small recyclers. Federal legislation banning the export of electronic
scrap would likely minimize this practice, assuming aggressive
enforcement. However, such an approach could also discourage future
investment in needed recycling infrastructure in non-OECD countries.
Rather than an outright ban on exports, EIA recommends that Congress
and EPA consider actions to ensure that exports of end-of-life
equipment for recycling are only allowed where the receiving facility
can ensure safe and environmentally sound management. Appropriate
recycling facilities that can safely and properly manage electronic
scrap should not be excluded from the market simply because they are
located in non-OECD countries.
Question 7. As the amount of e-waste grows, I believe we are not
doing enough to give manufacturers the primary responsibility for
managing the toxic substances in their products. This is thwarting the
development of a strong private market for the safe recycling of these
products and the development of products that contain nontoxic
alternatives and that are easier to recycle.
Mr. McCurdy, Mr. Largent, and Mr. Vitelli--As representatives of
these industries, do you agree with this, and if not, how can you
justify making consumers and/or taxpayers shoulder most of the burden?
Response: EIA does not agree that the materials content of our
products is ``thwarting the development of a strong private market for
the safe recycling of these products.'' As noted above, compounds such
as lead and mercury are present in some electronics products because
they provide clear safety, performance and energy efficiency benefits.
As manufacturers and others develop appropriate and innovative
alternatives to these compounds, we readily incorporate them into our
products. Used products that contain these compounds can and are being
safely recycled. As discussed in our response to question #4 from
Chairman Gillmor above, collection and transportation costs each
represent a significant part of the overall expense. These costs have
virtually nothing to do with the materials content of the products
themselves. The real obstacle to the development of a viable,
comprehensive recycling infrastructure is that the value of the
resulting commodities does not currently cover the overall costs of
collecting, transporting and recycling products. In other words, even
if all applications of compounds of concern could somehow be replaced
tomorrow, there would still be a major economic barrier to the
development of a free market recycling infrastructure.
We also do not agree that more needs to be done to ``give
manufacturers the primary responsibility for managing the toxic
substances in their products.'' As manufacturers, we already recognize
that we have primary responsibility for product design. On the whole,
every year our products become more energy efficient, use fewer
materials of potential environmental concern, and become easier to
upgrade, disassemble and recycle.
Finally, we do not agree that any perceived lack of manufacturer
responsibility is thwarting ``the development of products that contain
nontoxic alternatives and that are easier to recycle.'' Some
stakeholders promote onerous design mandates by claiming that
manufacturers ``choose'' to include compounds such as mercury and lead
in our products. This is a fundamental misstatement of fact. As
materials technology has improved and viable substitutes have become
available, manufacturers have made enormous progress in reducing the
presence of compounds of potential concern in our products. We are
continuing to make advances towards minimizing or eliminating the use
of these compounds. However, that is not yet possible in all instances.
To give just one example, mercury lamps, which typically contain
only a few milligrams of mercury, are used for illumination in a
variety of electronic products due to their high energy efficiency.
While technically there are substitutes, such as CRTs, that do not
contain mercury, these alternative lighting sources vastly increase the
energy demand of the product. Increased energy demand results in
increased power plant emissions, which are the single largest source of
mercury in the environment. Out of recognition of the greatly enhanced
energy efficiency provided by mercury lamps, the European Union has
exempted the use of mercury lamps in backlighting for LCD monitors from
the RoHS Directive. The European Union has granted similar exemptions,
for example for high-temperature lead solder, out of recognition that
no technically or environmentally-preferable alternatives currently
exist. In short, the uses of these compounds for certain specified
purposes are dictated by necessity, not by choice.
Also, please see our response to question #1 from Congressman
Dingell below that details the broad market forces that drive our
manufacturers to constantly improve product design. These improvements
translate directly into products that are smaller, lighter, and more
efficient, and are easier to upgrade and recycle.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: The competitive marketplace continues to be the primary
driver behind improvements in product design, efficiency and
performance. The electronics industry continues to achieve significant
and sustained environmental progress throughout the entire product
lifecycle: from design, through beneficial use, to end-of-life. In
fact, many of our companies have long-standing design-for-environment
or product stewardship programs that pre-date the adoption of the
European Union Directive on the Restriction of Hazardous Substances
(the RoHS Directive) by several years. On the whole, every year our
products become more energy efficient, use fewer materials of potential
environmental concern, and become easier to upgrade, disassemble and
recycle. This process of continuous evolution--driven by market demand
and competition--can be readily observed by comparing today's products
to similar products that were manufactured just a few years ago.
There is intense competition in the consumer electronics
marketplace, and therefore any manufacturing efficiencies that a
company achieves can result in increased output while simultaneously
decreasing per-unit production costs. In addition, technological
advancements that extend product life increase the marketability of the
products while creating opportunities to sell more product extensions
and upgrades after the initial purchase. These market-driven
innovations on the production side directly translate into benefits for
reuse and recycling. Please consider the following examples:
1. Manufacturers have a clear incentive to streamline and simplify
product assembly by, for instance, using fewer screws and
connectors. Not only does this improve production efficiency,
but it makes these products easier to service during their
useful lives. It also makes these products easier to upgrade,
disassemble and recycle at the end of life.
2. To achieve valuable economies of scale, manufacturers are
increasingly purchasing larger volumes of a single plastic,
instead of smaller amounts of different plastics. The use of a
uniform type of plastic makes these products easier and less
expensive to recycle at the end of life.
3. Larger and heavier products cost more to transport. Accordingly, our
companies strive to use lighter-weight materials as they become
available in order to control transportation costs for
distribution and sale. To achieve production efficiencies and
meet market demand, our members are also constantly innovating
to create smaller products without sacrificing functionality or
performance. Since transportation costs represent one of the
single largest expenses associated with recycling, these
ongoing innovations directly result in products that are less
expensive to recycle.
4. Metals and certain other compounds are present in electronics
products because of their important safety, performance or
energy efficiency characteristics. However using these
materials can add costs to the manufacturing process, as
companies may need to implement additional measures to ensure
proper management. As technically and economically viable
substitutes become available, EIA member companies have worked
to reduce or eliminate the uses of these compounds. These
efforts also facilitate the recycling of electronics products.
EIA member companies have also gained invaluable knowledge by
recovering products themselves and by working with independent
recyclers. Understanding the requirements for recycling also helps
manufacturers factor in end of life management considerations into the
design of new products.
Question 2. At the Subcommittee hearing on July 20, 2005, Mr. Breen
of the Environmental Protection Agency testified that a good rule of
thumb for the cost of recycling a desktop computer is $15, while the
value of the materials recovered is anywhere between $1 and $2.50.
Do you agree with the economics of recycling desktop computers as
described by Mr. Breen? If not, please provide your views.
Response: First, it is important to note that the EIA member
companies are manufacturers, not recyclers. Our member companies
contract with independent recyclers to manage their own used equipment.
In addition, many EIA manufacturers have been involved in recycling
partnerships with retailers, government and NGOs where used equipment
is collected and sent to qualified private recyclers. Consequently, the
vast majority of our members have little or no direct experience
conducting recycling activities themselves. Some EIA member companies
that are directly involved in recycling activities cited
confidentiality concerns regarding recycling costs.
However, the non-profit National Center for Electronics Recycling
(NCER) has developed the following estimates for the costs related to
electronics recycling:
Processing costs: 24 cents/lb.
Collection costs: 7 cents/lb.
Shipping costs: 5 cents/lb.
Recycling system administration: 3 cents/lb.
Under California's electronics recycling statute, qualified
collectors and recyclers are eligible for total payments of 48 cents
per pound. A general rule of thumb in the recycling industry seems to
be approximately 50 cents per pound. Regarding materials value, EIA
does not maintain information on prices in the commodities market
Please note that recycling can also include extending the useful
life of various components and subcomponents of a computer system. For
example, the hard drive, optical drive and various other parts have
potential resale value in the secondary electronics market. The parts
recovered in this recycling process have a much higher value than the
commodities grade materials.
Question 3. How much does it cost to recycle an average size
television and what is the value of the recovered materials?
Response: EIA does not maintain information on recycling costs, or
on prices in the commodities market. We are in the process of checking
with appropriate sources in those markets, and we will share with the
Subcommittee whatever information they are able to provide. Costs will
likely differ from recycler to recycler and state-to-state due to
different processing requirements.
Question 4. How much does it cost to recycle a laptop computer and
what is the value of the recovered materials?
Response: Please see the response to Question 3.
Question 5. Will your Member companies be able to comply with the
waste electrical and electronic equipment (WEEE) directive of the
European Union, which requires the elimination of mercury, cadmium,
lead, chromium, and other substances by July 1, 2006?
Response: (For questions #5 and #6, we believe you are referring
not to the WEEE Directive but to the RoHS Directive. It is this latter
Directive that addresses the restriction of metals and other
substances, and is scheduled to take effect on July 1, 2006.)
First, it is important to note that the RoHS Directive does not
require the elimination of the listed compounds; rather, it limits
their concentration in certain products, and also provides broad
exemptions for certain applications when there are no technically or
environmentally-preferable alternatives available.
The EIA manufacturers are fully committed to complying with the
RoHS Directive when it takes effect next year. However, there are still
several major areas of uncertainty regarding the Directive which make
compliance difficult to measure. First, the EU has yet to establish the
uniform testing procedures that will be used to determine whether
products and components are in compliance. As a result, there is still
no formal way to demonstrate that a given device is (or is not) within
the regulatory requirements. Second, the EU has yet to rule on several
dozen proposed exemptions to the Directive. Consequently, even at this
late date manufacturers do not know whether they will be allowed to use
these compounds in certain critical applications. We understand from
recent discussions with representative from the EU and from the United
Kingdom's Department of Trade and Industry that final decisions on
these exemptions may not be made until 2006. This leaves virtually no
time for the global supply chain to make any needed changes in
electronics components. Finally, the EU has yet to issue any guidance
on compliance and enforcement requirements under the RoHS Directive.
Manufacturers throughout the global supply chain therefore do not know
what certifications, declarations or other paperwork requirements may
be needed. In short, RoHS is a moving target. The EIA member companies
have been working diligently to comply with those elements that are
already established, and will also comply with additional requirements
once they are finally set.
Question 6. After July 1, 2006, will your Member companies
discontinue selling electronic products, such as computers or
televisions, in the United States that contain mercury, cadmium, lead,
or chromium and other substances covered by the WEEE directive?
Response: Owing to the uncertainties in the process detailed in our
response to the previous question, there are still numerous questions
regarding what will constitute a ``RoHS-compliant'' product.
Regardless, the EIA member companies are driving the RoHS requirements
throughout the global supply chain. In short order, we expect that all
components used in our products worldwide will meet the RoHS
requirements (once all the RoHS requirements are established).
Many of our member companies have indicated that they will only be
selling RoHS-compliant products worldwide as of next July 1st. Other
companies have noted that, until current inventories are depleted,
there may still be some products sold in U.S. and other markets that do
not meet the RoHS requirements. This will be limited both in terms of
time and number of products affected. From that point forward, and
assuming that all RoHS requirements are finalized by the EU, our
members will be manufacturing and distributing only RoHS-compliant
products throughout the entire global marketplace.
July 26, 2005
EIA STATEMENT ON RECYCLING
General Statement
The electronics industry continues to make significant advances in
minimizing the environmental impacts of electronic products throughout
their lifecycle: from design, to use, to end-of-life. This progress
results from a commitment to sustainability as our companies
consistently design for environment, reuse and recycling. On the whole,
every year our products become more energy efficient, use fewer
materials of potential concern, last longer and become easier to
disassemble and recycle.
Electronics Recycling
EIA and our member companies recognize that reusing and recycling
electronic products at the end of life is the most environmentally
preferable option, and we support the proper management of these
products through public education, grant programs, public-private
partnerships and voluntary industry initiatives. Through these
approaches, we support efforts to reduce the volume of electronic
products being disposed of in landfills and to increase the beneficial
reuse of materials.
EIA promotes shared responsibility for the management of used
electronic products. Shared responsibility involves a system in which
all stakeholders (including designers, producers, governments,
suppliers, consumers and recyclers) accept collective responsibility
and participate in a system for the end-of-life management of
electronics depending on their particular expertise and role. National
consistency is essential in electronics recycling. EIA and our member
companies have been working closely with U.S. EPA and members of
Congress to try and find a common solution to the electronics recycling
challenge.
Implementing a system based on shared responsibility principles
will increase the efficient collection of electronics and ensure
economies of scale by taking advantage of existing infrastructure.
Manufacturers effectively contribute to shared responsibility through
the design phase by enhancing ongoing efforts to limit the use of
compounds of concern in electronic products, increasing their energy
efficiency and making them easier to recycle. Our member companies are
also involved in numerous recycling initiatives--individually,
collectively and/or in collaboration with U.S. EPA, state and local
governments, retailers, recyclers and charitable organizations.
Exports
EIA member companies strongly support the safe and environmentally-
sound management of used electronics. EIA shares the concerns expressed
by many stakeholders over the export of used electronics to facilities
that lack the capacity and expertise to properly and safely manage
these products, and we do not condone this practice.
In fact, our member companies require recyclers to satisfy strict
requirements to be eligible to manage end-of-life electronics. This
includes a verifiable commitment that all used products will be
properly managed in appropriate facilities in developed countries.
Other actions that EIA members typically take to ensure proper
recycling of end-of-life products include:
Site visits;
Independent auditing;
Proper insurance;
Written operational procedures for proper handling of materials;
Proper record keeping;
List of all subcontractors; and
ISO 14001 certification or an equivalent environmental management
system, or compliance with the OECD Environmentally Sound
Management (ESM) guidelines for recycling, or International
Association of Electronics Recyclers (IAER) certification.
Once the used devices are appropriately processed, materials such
as cleaned CRT glass, scrap metal, and sorted and baled plastics become
commodities that should be permitted to move unencumbered for
beneficial reuse in new products.
______
Response for the Record by Mark Murray, Executive Director,
Californians Against Waste
The Honorable Paul Gillmor
Question 1: Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Murray Response 1: Testing of electronic devices by the California
Department of Toxic Substances Control has demonstrated that virtually
all electronic devices possessing a circuit board or batter exhibit the
characteristics of toxic under both state and federal law. We believe
that obsolete electronics pose a very real threat to public health and
the environment, and their disposal in Solid Waste facilities should be
uniformly prohibited.
Having said that, the primary motivation of Californians Against
Waste in addressing the need for and potential of e-waste reduction and
recycling policies is the desire to conserve resources and reduce
pollution associated with the raw materials extraction and processing
in the manufacturer of electronics.
Gillmor Question 2: It seems to me though in listening to your
comments that the biggest problem with e-waste right now is the
question of what to do with all the ``orphan'' and legacy waste that is
sitting in peoples' homes. Do you agree with that assessment? If so,
would a grant program of some sort, for states and local communities,
help finance and build the infrastructure areas need to address this
waste stream?
Murray Response 2: The term ``orphan'' waste as it is used in the
e-waste policy arena generally refers to those electronic devices
carrying a brand name for a company that no longer exists. The
continued existence of these ``manufacture-less orphans'' has been
identified by some as a limiting vulnerability for some public policy
approaches, such as direct manufacturer takeback or a Maine style
producer responsibility approach.
The fact that many households and small businesses have been
stockpiling obsolete electronics represents both a significant
component of the problem, as well as an opportunity. Clearly the e-
waste management ``problem'' is greater than the current rate of
obsolescence. At the same time, the fact that these long obsolete
devices have yet to be illegally disposed presents policy makers with a
``second chance'' for policies and programs to catch up with market
realities.
Worse than doing nothing to address the e-waste problem would be to
rely on ``tail pipe'' waste managers to collect and process devices for
recycling, as well as to finance those efforts with back-end disposal
fees. We know that back-end fees have a tendency to drive illegal
disposal, be it on the side of the road leading to a transfer station,
or stuffed in a garbage can or dumpster.
While local government and private sector waste managers can and
should play a role in the collection and processing of obsolete devices
for recycling, the costs of that management must separately financed,
either through front-end ``Advance recycling fees'' or similarly
internalized into the price of the product by manufacturers.
As a tax payer, I would object to the notion of providing general
fund or some unrelated special fund dollars to address this problem.
In terms of the actual mechanics of providing ``front-end''
collected funds to collector/processers, it is our experience that
performance based payments (i.e. payments for materials actually
collected/processed) is vastly superior to a speculative ``grants-
based'' approach. Grants are notoriously expensive to administer, and,
in our opinion, should only be used to supplement a direct payment
program.
Gillmor Question 3: Collecting of household waste, whether solid
waste or waste that qualifies under the household hazardous waste
exemption, is governed mostly by local officials or in limited
circumstances, the state government. Why do you support a Federal
solution to an otherwise local problem?
Murray Response 3: The regulation and enforcement of wastes,
including hazardous electronics wastes, has long been a responsibility
of state's, and we are supportive of that status quo. Californians
Against Waste is not advocating, nor holding our breath for, a Federal
solution to the e-waste problem.
We have simply called for agencies and facilities of the Federal
government to support and cooperate with state and local governments in
the implementation and enforcement of state and local solid and
hazardous waste policies when operating in jurisdictions. To date, some
Federal agencies have ignored California's e-waste recycling law.
Gillmor Question 4: I am very interested in the involvement of your
group in the passage of California's e-waste law. As I understand it,
many environmental groups pulled their support from the final bill, but
your group did not. Why? What lessons do you think our panel should
know about obtaining or maintaining support from environmental groups
that will still allow for meaningful e-waste legislation to become law?
Murray Response 4: Californians Against Waste was the sponsor of
Senate Bill 20, the legislation which enacted California's first in the
nation e-waste recycling law. In this capacity, we worked with and
negotiated with a broad spectrum of stakeholders representing
electronics retailers, electronics manufacturers, private and non-
profit e-waste collectors and recyclers, local governments, as well as
local, state and national environmental organizations.
During the final weeks of the 2003 legislative session, Senator
Byron Sher and Californians Against Waste had succeeded in organizing
the support of recyclers, local governments, environmental groups and
retailers around a ``hybrid'' proposal that would cover 100% of the
cost of collecting and recycling covered electronics through a front
end fee, while allowing manufacturers to opt out of that system upon
demonstration of a system to takeback devices. It is worth noting that
this ``producer takeback'' option allowed manufacturers to takeback an
amount of any brand of covered devices equal to 50% of sales. While
electronics manufacturers were uniformly opposed to the proposal at
this stage, the industry was split on their rationale. For simplicity
I'll categorize these divergent perspectives as Hewlett Packard (HP) vs
IBM and the TV makers.
While California has historically been a leader in the enactment of
forward thinking environmental policies, California is also the home of
the Silicon Valley and the headquarters of much of the hi-tech
industry, and as such we faced considerable political pressure to forge
a final proposal with at least some support from electronics
manufacturers.
Without getting into a blow-by-blow of those final negotiations, I
will say that there was a real desire by Senator Sher, CAW, and other
supporters, to try to reach an accommodation with HP around the concept
of ``direct producer responsibility''. However, the stumbling block
then (and now) is HP's unwillingness to accept responsibility--
financial or otherwise--for the collection of covered devices, as well
as their recycling. A preliminary analysis by the State of California
indicates that collection costs--which fall predominantly on local
governments and non-profit thrifts (Goodwill), 40-45% of total program
costs. Senator Sher and our coalition could not accept allowing this
cost burden to fall on local governments and other collectors, so we
forged an agreement with the IBM/TV Manufacturer coalition which was
willing to support a proposal covering both collection and recycling
costs.
As part of this agreement, Senator Sher agreed to drop the
``manufacturer opt out'' language. As I recall, this change caused
three environmental supporters--Silicon Valley Toxics Coalition,
Computer Take-back Campaign, and Basil Action Network--to remove their
support for the legislation. Californians Against Waste, along with
most of the major State and National environmental groups, including:
Sierra Club, Natural Resources Defense Council, League of Conservation
Voters, CALPIRG, Planning and Conservation League, and many others;
remained in support of the final legislation.
Gillmor Question 5: One of the more prominent problems in
addressing e-waste disposal is the problem of people who illegally dump
their electronics into landfills. Your testimony mentions that the
California law will: ``reduce/prevent illegal dumping''. Could you
please tell us if you consider illegal dumping a problem and why do you
think the California law will be able to successfully prevent it?
Murray response 5: Because covered electronic devices are
hazardous, their disposal in California's municipal solid waste stream
is prohibited. The bulk of ``illegal dumping'' of covered devices
occurred when residents and businesses disposed of devices in trash
cans and dumpsters, with some devices being dumped on roadsides and
open spaces.
There are three primary factors that prompt illegal disposal:
1) Lack of consumer information regarding the disposal ban and
opportunity for recycling;
2) Lack of opportunities for recycling; and
3) Presence of back end disposal/recycling fees that create a financial
disincentive for generators to properly managed covered
electronic wastes.
California's e-waste recycling policy helps address each of these
factors. The program provides direct resources for public education--
approximately $1million in program funds for the current year. The
program creates an incentive for private sector collectors and
recyclers to provide information to the public in order to drive
volume. The program provides expanded opportunities for collection/
recycling--to date more than 300 collectors are providing ``free and
convenient'' recycling opportunities at more than 500 locations in the
state. While some collectors continue to charges fees--mostly for
additional service such as at home pick-up, consumers no longer face
the choice of ``pay as you throw'' recycling vs ``free'' illegal
disposal.
Gillmor Question 6: The California e-waste law makes the consumer
electronics retailers, who produce a minor quantity of electronic
products, the collector of the advanced recovery fee, even though they
are merely a conduit of commerce; while direct internet sales treated
differently. Why was this choice made to use the retailers? With
California's budget situation, how can you be sure that advance
recovery fees will actually go to e-waste recycling activities rather
than to other state funding priorities?
Murray Response 6: Retailers were designated as fee ``collectors''
under the California law for three basic reasons:
1) Retailers already pay sales tax to the state of California, and it
was determined that the most efficient, lowest cost fee
collection mechanism would ``piggy-back'' on this existing
system.
2) Assessing the fee directly on manufacturers may prove problematic in
some instances where a manufacturer is unable to make a
determination as to where devices delivered to distributors and
ultimately retailers are actually sold.
3) California retailers (via the California Retailers Association)
specifically supported the assessment of a ``retailer'' based
fee in SB 20. This was undoubtedly based on the generally
positive experience California retailers have experienced with
other, similar environmental fees.
The term ``retailer'' as it is used in the context of the
California e-waste law may need some explaining. The definition reads:
``Retailer'' means a person who makes a retail sale of a new or
refurbished covered electronic device. ``Retailer'' includes a
manufacturer of a covered electronic device who sells that
covered electronic device directly to a consumer through any
means, including, but not limited to, a transaction conducted
through a sales outlet, catalog, or the Internet, or any other
similar electronic means.
Many actual ``fee payers'', including most ``computer retailers''
are in fact not traditional ``brick and mortar'' electronics retailers,
but rather electronics manufacturers--Dell, HP and IBM are among the
largest, computer resellers, and others selling over the internet or
through other channels. Because most of these entities are currently
obligated to pay sales tax on these sales--including most internet
sales, the addition of the California e-waste recycling fee has proven
to be substantially less problematic than some critics anticipated. The
California Board of Equalization has thus far identified just under
2400 ``fee payers'' who account for better than 85 percent of
California sales.
The California E-waste Recycling fee is legally an environmental
mitigation ``fee'' and as such the state is constitutionally prohibited
from expending fee revenue for any purpose unrelated to that for which
the fee was collected.
Gillmor Question 7: Your testimony mentions that the drafters and
supporters of the California e-waste law made a clear decision to avoid
a California-specific ban on certain electronics components and their
constituents and rather adopt a European directive on prohibiting
certain wastes? Why was the choice made to mirror European legislation
as opposed to creating a California solution for Californians?
Considering the size of the California market, did you consult with
Federal trade or commerce officials regarding the impacts of your
state's action on larger domestic economic issues?
Murray Response 7: Our researched revealed that the European Union,
in developing the ROHS directive, had developed more than simply a
listing of prohibited toxic materials, but rather an interactive
stakeholder process for identifying and phasing out a range of toxic
materials. We recognized that California had neither the time nor the
resources to replicate this process.
It should be noted that part of our motivation in tracking the EU
directive--rather than being silent on the issue--was to help ensure
that California not become the dumping ground for toxic devices that
could no longer be sold in Europe.
Gillmor Question 8: Maine and Maryland have both enacted state e-
waste laws that are widely different than your own state law. Do you
think that their laws are effectively protecting the environment and
promoting recycling? Do you think it is wise for our country to have
many states with different plans and processes, especially, if contrary
to the construct in the Solid Waste Disposal Act, there is no Federal
set of minimum standards underpinning it all?
Murray Response 8: The e-waste policy adopted in Maine, while
different from the California law in its scope and approach, represents
a valid and responsible policy maker response to the e-waste problem.
Our only issue with the Maine law is that its ``shared responsibility''
approach leaves an unfunded cost burden on local government. To the
extent that generators are required to pay the cost of device
collection at point of ``disposal'' rather than at the point of
purchase, this may discourage participation and result in some level of
``illegal'' disposal.
I'm not sure that the Maryland law in its present form actually
represents any kind of meaningful solution to the e-waste problem.
Whether it is wise or not for the country to have a patchwork of
state e-waste policies, it is decidedly irresponsible for policy makers
and the public to allow the wasting of valuable resources and the
continued disposal of toxic materials in facilities incapable of safely
containing those materials.
While we welcome the attention that this committee and some members
of congress have provided to the e-waste issue, the Federal
government's abdication of any interest or responsibility over
materials recovery policy has been made evident by the lack of any
meaningful Federal action on any problem waste issue over the last 15
years.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Murray Response to Dingell: Both the California Advanced Recycling
Fee and Maine Shared Producer Responsibility approach provide
manufacturers with a direct financial incentive to design their
products for recycling.
Under the California policy, the front end fee on devices sold is
adjustable based on the system costs of recycling. Whether paid
directly by manufacturers or by their customers through third party
retailers, manufacturers want to keep the cost of their product down.
By designing for recycling, manufacturers can lower the cost of
recycling, thereby lowering the front-end fee.
The Maine policy works similarly in that manufacturers, whether
taking direct physical responsibility for the recycling of their
devices, or contracting with a third party recycler, will need to
internalize the cost of recycling. By designing for recycling,
manufacturers can lower the cost of recycling, thereby lowering the
internalized cost.
______
Response for the Record by David A. Thompson, Director, Corporate
Environmental Department, Panasonic Corporation of North America
Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: Our Coalition's view is consistent with the position of
the U.S. Environmental Protection Agency. In its testimony delivered to
the House Energy and Commerce Subcommittee on Environment and Hazardous
Materials, EPA Office of Solid Waste Assistant Administrator Barry
Breen noted that the real issue is resource conservation, not hazardous
waste disposal. In fact, Breen pointed out that of the 2,000 operating
municipal solid waste landfills in the U.S., most meet 1991 standards
for leachate collection. He added that the typical landfill Ph is about
neutral and would not lead to large leaching of metals by landfills.
Similarly, the Solid Waste Association of North America (SWANA)
concluded in a 2004 report that municipal solid waste landfills can
provide safe, long term management of products containing heavy metals
such as electronics. SWANA's report found that ``the natural processes
that occur within a MSW landfill, such as precipitation and absorption,
effectively inhibit heavy metals from dissolving into the leachate or
being released from the landfill in the form of landfill gas.''
Nonetheless, The Electronic Manufacturers Coalition for Responsible
Recycling believes that proper management of the growing electronics
waste stream represents an important policy objective. By supporting an
advanced recycling fee as a viable, long-term financing solution to the
challenge of electronics waste, our Coalition welcomes a uniform,
proactive approach from the Congress.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: Certainly, ``orphan'' and ``legacy'' wastes represent a
challenge to any comprehensive approach to the management of
electronics products at their useful end of life. The challenge,
however, is not so much the volumes awaiting proper recycling or
processing. Rather, our real task is the development of an equitable
approach to financing that does not disproportionately burden long-time
product manufacturers to the benefit of market newcomers, who, it might
be noted, employ relatively few, if any employees in the United States.
Maine's approach to orphan products, however, is especially
arbitrary and capricious in that it relegates financial responsibility
for these products to historical manufacturers. It is not clear that
any economic analysis has been done to justify making one subset of the
current sellers in the marketplace (i.e., those who have been in
business long enough to actual have a waste stream share) versus making
all current sellers responsible for a share of the orphan products.
After all, neither historical manufacturers nor market newcomers are
responsible for creating the orphan problem. Indeed, the return share
approach to allocating financial responsibility may serve to exacerbate
the orphan problem as marginal historic manufacturers are driven from
the market by this arbitrarily imposed competitive disadvantage.
Instead, any approach should be advocated with an eye toward the
potential for greater market development of the recycling industry. Our
Coalition views the ARF as the simplest way to accomplish this
objective.
Grant programs designed to stimulate and develop collection and
recycling infrastructure have long been supported by many of our
Coalition companies. Since 2001, JVC, Panasonic, Sharp and Sony have
supported an innovative program called the Shared Responsibility
Program (SRP). Under SRP, we selected a number of recyclers and
arranged with them to develop and operate collection events for
electronic products. Our contribution was to cover the cost of
recycling our own branded products. The rationale behind SRP was to 1)
develop actual data on collection volumes and costs; 2) stimulate the
development of local collection events and programs by subsidizing
costs; and 3) provide these recyclers with increased volumes of
materials needed to justify new investments in technology and develop
new markets for the materials contained electronic products. SRP, over
the years, supported over 1,000 events in more than 20 states and has
collected almost 10,000 tons of products. While SRP has stimulated
collection and infrastructure development, the program has not been as
effective as we had hoped due to the difficulty of counting brands in
order to apportion contributions.
Thus the Coalition believes that a well-designed grant program will
be productive in stimulating recycling collection and infrastructure.
We also note that perhaps the most important challenge is not just
historical waste, but to assure that present and future products are
increasingly more recyclable. Our challenge is to design a recycling
program that harnesses the ability of the free market to create
competitive pressure on manufacturers to design products that are ever
more easily recycled. Contrary to what the names ``Manufacturer Take-
back'' and ``Cost Internalization'' might imply, because of the long
lives of products such of televisions, little, if any, real market
pressure is imposed on manufacturers to improve the recyclability of
their products. The recycling process does not occur until many, many
years after the product is manufactured and sold. Only an approach such
as Advanced Recovery Fee, which is very visible to the consumer, can
make consumers critically aware of the importance of recycling.
The sure result of this visibility will be that manufacturers will
use recyclability as a way to gain competitive advantage.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: Traditionally, as you note, the collection of household
wastes has been the purview of municipal governments, with many
communities around the country already operating permanent drop-off
sites or hosting frequent collection events. This governmental service
has been funded through locally generated tax revenues, which clearly
link the individual household costs to a public service. However, in
today's era of tighter local budgets, some municipalities are looking
for financial assistance to address a growing source of solid waste:
end of life electronics.
The main problem posed by locally financed collection of waste
electronics is that some communities may elect not to collect the
products, thus reducing consumers' options for disposal. This disparity
in collection availability on a community by community, and state by
state basis, could be averted through federal legislation. A federal
ARF would in effect level the playing field by providing all consumers
with an expanded opportunity to properly dispose of their electronics
products. From a manufacturers' perspective, avoiding a patchwork of
differing state electronics recycling laws is highly desirable.
Question 4. Your testimony strongly supports the use of an advanced
recycling fee being charged to consumers when they purchase their
electronics device. I have three questions. First, you suggest that a
third-party group govern the use of this funding--is there a precedent
for this type of arrangement? Second, aren't you really suggesting
creation of a marketing and educational ``check-off'' program shifts
the ``check-off'' fee from producers to consumers? Third, how can you
be certain that all the money you raise will be available for the
programs you envision rather than used for other governmental spending?
Response: Our broad-based manufacturers' coalition supports an
advanced recycling fee because our experience suggests that it is the
simplest way to achieve an efficient, environmentally sound, and
sustainable system for the collection and recycling of electronic
products. We are proposing that collected funds be managed by a private
third-party organization (TPO) utilizing multi-stakeholder governance.
While we are not aware of direct precedent, we do think Congress
could place the ARF funds in a special recycling account that would be
used by US EPA to contract with responsible Third Party Organizations
(TPO) capable of operating collection and recycling programs for
electronic products that are covered by the program. Several members of
our Coalition are now engaged in a US EPA led project in the Pacific
Northwest to research the development of such a TPO and would be happy
to report in more detail as the project develops.
It is our understanding that so-called ``check-off'' programs used
to promote farm products are funded through assessments based on
product sales, production, or imports. The collected funds can be used
to finance a variety of programs including advertising, consumer
education, marketing research, and foreign market development.
In contrast, an advanced recycling fee is intended to fund all
facets of electronics collection and recycling and is therefore more
akin to a ``user fee'' commonly associated with used oil and tire
recycling, and just recently increased funding of airport security. The
visible fee itself serves as the primary consumer education vehicle. We
also think a visible fee will enable consumers to exert pressure on
manufacturers and government to minimize the cost of collection and
recycling. The fee is NOT intended for marketing purposes but rather to
provide a specific service to consumers of electronics products as well
as to support environmental objectives of resource conservation and
preservation.
Experience has shown there is no absolute way to guarantee a
federally raised source of revenue will not in part be used for
unrelated purposes. Spending of the social security trust fund for
other purposes is perhaps a prime example of this. However, we are
confident that the Congress can adequately ``firewall'' funds earmarked
for electronics recycling, just as funds derived from the federal
gasoline tax are used only for transportation-related initiatives.
Question 5. Your testimony mentions how Panasonic and other
companies in the Manufacturers Coalition for Responsible Recycling have
been leaders in the redesign of your products to address environmental
concerns as well as have taken efforts to promote the use of recycled
materials. What was the motivation for Panasonic and these other
companies to take these steps? What roles did perceived or actual
governmental action, either in this country or abroad, have in
propelling these decisions and practices?
Response: Our Coalition members have been actively redesigning our
products in recent years to place a greater emphasis on energy
efficiency, hazardous materials minimization, and to make them easier
to recycle. Panasonic alone has spent about $850 million in the last 5
years on eco design improvements for our products. Many of our
Coalition companies have attempted to incorporate environmental design
achievements into our marketing programs.
Upon examination of published environmental reports of our
Coalition members, you will find similar commitments to sustainability
and environmental preservation. Quite simply, leading global
electronics manufacturers including all members of our Coalition,
recognize that our future business success is literally dependent upon
meeting society's demands placed upon us. These societal demands
include the expectation that manufacturers develop and market products
that are less burdensome to the environment.
Response: It is accurate to conclude that far-reaching laws such as
Europe's Restriction on Hazardous Substances (RoHS) Directive have
served to hasten product evolution toward global redesigns with a
lesser environmental footprint. However, such broad mandates are often
enacted without the benefit of a basis in sound science and can serve
to unnecessarily inhibit the development of new technologies. All
members of our Coalition market products on a global basis so laws
governing product content in one region can have a great impact on our
design practices.
Question 6. As you know, our full committee has jurisdiction over
telecommunications policy in this country and many of us are aware of
the global nature of telecommunications equipment and electronics
equipment sales. As such, I noticed two things in your testimony: a
call for fair play among all entities involved in the manufacture,
sale, and recycling of electronics products and a reference in your
testimony to the European Union's Waste Electrical and Electronic
Equipment Directive (WEEE). Since Panasonic and all the other
electronics producers in your coalition, minus IBM, do not have their
company headquarters based in the U.S., are your companies seeking a
legal construct on e-waste in the United States that would economically
advantage their positions while at the same time financially
disadvantage hi-tech American based companies?
Response: Due to the global nature of the electronics business,
there are no large manufacturers that market exclusively to one
geographic region. This includes U.S. based manufacturers who are as
dependent upon overseas markets for their business success as they are
on the domestic marketplace. Given that all of our Coalition's members
have a substantial employment presence in the U.S., this issue should
not be viewed as a means by which to advantage ``foreign''
manufacturers.
There exists no sound basis upon which to support the claim that an
advanced recycling fee approach to financing the disposition of waste
electronics hurts ``domestic'' manufacturers. What an ARF does ensure,
however, is equitable treatment for all manufacturers, regardless of
where their primary headquarters is located. It is competitively
neutral, serving to level the playing field for all companies including
those without a presence in the historical waste stream.
Question 7. Your testimony calls for a ``system of consistent laws
and regulations that do not burden commerce in new products and
recyclable materials unnecessarily.'' Could you please expound on this
statement as to what you mean and provide the subcommittee specific
instances of where you see a problem and what recommendations you have
to remedy that problem?
Response: A high profile example of the need for regulatory relief
has been the struggle to get a so-called ``CRT rule'' enacted by the
U.S. EPA. Over the past seven years, industry has worked closely with
the U.S. EPA seeking the enactment of a Cathode Ray Tube rule that in
essence removes current hazardous waste designations as they apply to
shipments of intact waste CRTs across state borders. By removing the
hazardous designation, shipments and treatment of waste CRTs can be
safely done at substantially reduced costs and by additional recycling
facilities, thus contributing to the future economic vitality of this
nascent industry.
Through an EPA-convened, multi-stakeholder dialogue known as the
Common Sense Initiative, the CRT-rule was developed and ultimately
approved by all stakeholders. The rule, although garnering support from
EPA, has unfortunately languished pending extended internal reviews at
the agency and by the Office of Management and Budget. It is
unfortunate a rule that all relevant parties agreed was needed and
would have a beneficial impact on the recycling of waste electronics
has yet to reach fruition despite being conceived back in the 1990s.
Question 8. Your testimony calls for new and expanded research on
the scope the electronic waste as well as an investigation of and what
can be done from an economic and technical feasibility standpoint. With
the voluntary programs at EPA, such as EPEAT, Plug-In to e-Cycling;
work by the Department of Commerce to analyze the current situation;
regional and national stakeholder meetings on electronic waste; and now
this hearing; could you please tell me what you seek to obtain through
your ``support of a national study to be conducted by U.S. EPA'' that
is not already being discussed or debated in these other forums?
Response: The initiatives and studies you cite have all provided
pieces of invaluable information and contributed toward increased
recycling of waste electronics in the U.S. Despite this, there remains
a strong need to learn more about the issue.
Frankly, no one really has a good handle on how many products are
really out there awaiting recycling and the oft-cited data from the
National Safety Council study is now over six years old--a lifetime ago
in the world of high technology. We also need to better understand the
capacity for recycling electronics products in the U.S. in order to
better plan needed facilities. We also have information gaps concerning
the adequacy of secondary markets to promote growth in the electronics
recycling sector.
Perhaps our greatest single need is for a better understanding of
the economics of different recycling systems. Under manufacturer
mandated take-back and cost internalization, recycling costs will be
marked up as the product moves through distribution to the final
consumer. What will this mark-up cost consumers? Allocating financial
responsibility to manufacturers based on return or waste stream share
requires sorting by brand at every recycler, with significant, ongoing
administrative costs? What will this cost consumers? Implementing the
ARF approach is often portrayed as resulting in a costly new
bureaucracy, but it frankly is unknown which approach is most efficient
economically in getting the job done.
We need an objective and comprehensive focus on the economics of
different approaches to the finance of waste electronics collection and
recycling. Absent this detailed analysis, we are left to choose between
various options, many of whom we have little information on and no
existing precedent upon which to make an educated decision.
Finally, the materials contained in electronic products all require
energy inputs to create, and contain an imbedded energy value. It is
quite possible that collecting and recycling them--essentially
reclaiming this imbedded energy value--will consume less energy than
would be required to mine and produce new virgin materials. If so, this
would result in a net reduction of greenhouse gas emissions. In the
Coalition's view it would be very useful to document this saving with a
view to developing a greenhouse gas emission / imbedded energy credit
trading system that recyclers could utilize to market the energy
savings obtained through recycling electronic products.
The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: Electronics manufacturers always have and will continue
to design products based on customers' wants and needs. This process
has produced dramatic improvements to our lives and lifestyles as new
technologies both entertain and inform to levels unimaginable even a
few short years ago. However, with the many benefits associated with
use and enjoyment of new technologies comes a responsibility we share a
manufacturers. Our Coalition members continue to advocate the
sustainable and environmentally sound management of electronic products
at their end of life. We firmly believe it is our societal obligation
to develop an environmentally conscious plan to recycle our end of life
products.
At present, there exists several ``models'' for electronics
collection and recycling. Based on our members' collective experience
recycling used electronics products and in developing product recycling
systems in the U.S., Japan, Europe, and other countries, we have
concluded that a system financed through an advance recycling fee is
the optimal approach.
Our Coalition supported ARF legislation in California that became
effective in January 2005. The California legislation embodies our
concept of a shared responsibility system based on a consumer user fee,
where all stakeholders have defined roles of responsibility. . To date,
the California law has proven to be successful at diverting waste CRT-
containing products from the waste stream. The law also has boosted the
growth of the recycling industry in the state.
It is erroneous, though popular to conclude that manufacturer
takeback mandates will drive meaningful product redesign. Most
manufacturers endeavor to design products where the value of the
materials contained within will cover the cost of collection and
recycling. However, these design changes will not benefit the recycling
process until the newly improved designs are received back into the
waste stream, which in the case of TVs is about 15 years out.
This significant time lag calls into question the belief that
takeback mandates will drive product redesign. In fact, mandatory
takeback requirements could result in the unintended consequence of
limiting the amount of design resources available to implement design
improvements in order to comply with otherwise well-intentioned laws.
There simply is no supporting evidence of any design improvements being
driven by takeback requirements.
Under the California statute, manufacturers are tasked with
designing products that are more environmentally sound. Manufacturers
must comply with the RoHS requirements as well as submit detailed
reports on the amount of designated chemicals contained in our
products, our use of recycled content materials and our plans to make
products easier to recycle. Interestingly, manufacturers that achieve
RoHS compliance do not have to report on chemical content, unless the
subject chemicals are contained in a RoHS exempt component, such as
CRTs. This so-called reporting exemption represents a strong incentive
to achieve RoHS compliance in advance of the deadline.
Still another incentive system can be seen in the fledgling
Electronic Product Environmental Assessment (EPEAT) Tool Project. EPEAT
is a system that scores products based on environmental performance
criteria for computers. This information will be made available to
government and large scale purchasers who can then evaluate which
products are environmentally preferable. An incentive that takes place
at the time of sale will be much stronger than one delayed 15 years
into the future.
Question 2. How much does it cost to recycle an average size
television and what is the value of the recovered materials?
Response: While costs will vary by recycler and will be dependent
up commodity market conditions, we understand that costs to dismantle
and process the materials for shipment to reclamation or recycling
facilities for an average television range from $0.16-$0.22 per pound.
Commodity values for the materials contained in an average TV range
from $0.03-$0.05 per pound.
The average television now weighs about 60 pounds
Question 3. Will your company be able to comply with the waste
electrical and electronic equipment (WEEE) directive of the European
Union, which requires the elimination of mercury, cadmium, lead,
chromium, and other substances by July 1, 2006?
Response: Panasonic will comply with the WEEE Directive. Other
Coalition members also will comply with the European law as enacted by
individual nations in the European Union.
Question 4. After July 1, 2006, will your company discontinue
selling electronic products, such as computers or televisions, in the
United States that contain mercury, cadmium, lead, or chromium and
other substances covered by the RoHS directive?
Response: Panasonic will comply with the RoHS Directive both in
Europe and in all other markets including the United States upon its
effective date.
______
Response for the Record by Michael Vitelli, Senior Vice President, Best
Buy, on behalf of Consumer Electronic Retailers Coalition
Questions from The Honorable Paul E. Gillmor
Question 1. Do you consider the issue of electronic waste one that
is generated from real concerns about the impacts to the environment
from the leeching of hazardous materials used in the construction of
electronics products or does your company or organization regard e-
waste laws as resource conservation measures?
Response: We do not have a position on the nature of environmental
impacts of electronic waste. We understand that many are concerned
about the potential of hazardous materials and that many others are
concerned with the size and space issues of such waste in landfills.
What we do know is that regardless of the nature of the issue, the
surest way to reduce the overall costs associated with electronic waste
is to involve manufacturers in the processes required to deal with the
waste. Only manufacturers can reduce the toxicity of the products. Only
manufacturers can reduce the costs of dismantling these products. And
it is only in a system where the costs of recycling are set by the
market (and not mandated by government) that the costs of recycling are
reduced over time.
Question 2. It seems to me though in listening to your comments
that the biggest problem with e-waste right now is the question of what
to do with all the ``orphan'' and legacy waste that is sitting in
peoples' homes. Do you agree with that assessment? If so, would a grant
program of some sort, for states and local communities, help finance
and build the infrastructure areas need to address this waste stream?
Response: Orphan and legacy waste are not the only or the biggest
problem with e-waste. We do think, however, that there might be some
solutions that haven't yet been discussed if the policy debate can
separate the discussion between orphan waste, legacy waste, and future
waste. There may need to be a couple of solutions, especially if we
want to find a solution that drives to least cost and efficiency. If
there were a funding mechanism or a tax incentive program for existing
orphan/legacy waste, it could go a long way to provide an immediate
incentive to deal with that waste over the next few years. If coupled
with a program of manufacturers' responsibility for future products,
the end result could be a total solution that drives to least cost and
maximum efficiency over time and provides the right, limited incentives
to jump start and capitalize recycling programs in the near term.
Question 3. Collecting of household waste, whether solid waste or
waste that qualifies under the household hazardous waste exemption, is
governed mostly by local officials or in limited circumstances, the
state government. Why do you support a Federal solution to an otherwise
local problem?
Response: Ultimate passage of differing solutions in each of the 50
states would present real compliance challenges and costs for retailers
and manufacturers. In addition, differing solutions in each of the 50
states will cause great confusion for consumers. Products purchased in
one state with a fee added at the time of sale, may need to be recycled
in another state where the solution may be a charge at the time of
recycling. The potential confusion for customers presents the most
compelling reason for a consistent solution. Without consistency,
recycling programs' success could be limited.
Question 4. In searching for a national solution, have you looked
to past Federal policies or examples of recycling, such as batteries,
for guidance and the lessons learned from them in seeking policy
options at the Federal, state, or local level?
Response: We have looked at a number of different solutions. In
short, the vast majority of successful recycling programs are those
where the collected product or its residual parts have a market value
that exceeds the costs associated with recycling of that product.
Unfortunately, that is not the case with a majority of e-waste
products. The recycling of electronic waste will probably always cost
more than value of the residual scrap. Thus a system that provides an
incentive to reduce the costs of recycling through design of the
product has the greatest potential to ultimately provide the least cost
solution to this issue.
Question 5. How is the industry currently reacting to the
implementation of state e-waste laws, particularly in California? Have
you needed to change your business models and strategic planning in
certain areas of the country? What problems have you encountered along
the way and what do you expect to face?
Response: Compliance with the California e-waste recycling law has
been costly for Best Buy. Best Buy has spent nearly $1 million in
California to update our point-of-sale systems, to educate our store
personnel and consumers, and to ensure compliance going forward. Since
these point-of-sale fees are not added to all products, like a sales
tax often is, but rather added to only some products (and not even all
products in a given category of products,) the cost of compliance is
high. In addition, each time changes are made to the fees and to the
list of applicable products, these systems must be updated, adding
costs. Finally, if different states implement differing schedules of
fees, the costs of compliance will increase.
A significant issue resulting from the California e-waste recycling
law is that not all retailers are treated equally under the law.
Retailers who do not have a physical presence in the state cannot be
compelled by the state to either collect or remit the fee on the
products they sell into the state. This establishes an unfair price
advantage for those retailers and lets some consumers avoid paying for
the recycling process established by the state and funded by the fee.
This advantage is in addition to the similar advantage afforded by
sales tax laws in each state. This issue can only be remedied by
federal action and only an act of Congress can satiate the requirements
of the U.S. Supreme Court's Quill decision which controls states'
ability to compel compliance.
A final reason to be concerned about the use of advance recovery
fees, such as those charged in California, is that it lets renegade or
foreign producers ``off the hook'' for the costs associated with the
recycling of their product. Under such a system, these manufacturers
have no requirements to develop environmentally friendly products or to
simplify the recycling requirements of their products. The result is
that their products will drive the cost of recycling up.
Question 6. Although the retailers have a limited role in the
lifecycle of the products you sell, how do you envision a ``shared
responsibility'' approach that will encompass the access that you have
to the consumers without imposing all the costs? How much does product
stewardship really shift the burden of end of life management from the
public sector to include the private sector, especially in light of
other international policies and product directives such as those in
the European Union?
Response: Under any solution, they consumer ultimately pays the
cost of recycling products. If the government provides the solution,
consumers pay in the form of additional taxes. If the government
mandates a fee, the consumer pays. If the manufacturer must include
recycling in their product costs, the consumer pays. But it is only in
this last solution--where the costs of recycling are part of the cost
of the products--that there is an inherent incentive to reduce both the
need to recycle and the long term costs of recycling. Given the reality
that the consumer will pay under any scenario, it seems best to find
the solution that will drive efficiencies and reduce costs over time.
In the manufacturer responsibility model, manufacturers are
responsible for working with consumers to properly recycle their
product. This can mean that they provide direct recycling, work with a
recycler or in some instances, fund a recycling system. Retailers are
responsible for the education and outreach of consumers, working with
manufacturers to ensure that they are carrying product from
manufacturers who are compliant with the law. Retailers are also
responsible as a manufacturer; if they produce private label brand
products (Best Buy brands include Insignia and Dynex.) Consumers are
responsible for the proper disposal of products and recyclers must meet
environmentally sound practices when working with consumers and
manufacturers.
The role of the public sector in this solution can be as large or
as small as the government determines. There will always be some
compliance role for government if it mandates a system.
Question 7. Does the producer responsibility solution you advocate
change the cost of each electronic device if each manufacturer has to
raise its price by the same amount, how is it different than having the
retailer collect it or having the tax levied? Where is the incentive?
Response: In the manufacturer responsibility model, manufacturers
are responsible for working with consumers to properly recycle their
product. This can mean that they provide direct recycling, work with a
recycler or in some instances, or fund a recycling system. Under the
manufacturer responsibility model, the manufacturer is ultimately
responsible for their product at end-of-life which provides the double
incentive to both develop environmentally-friendly products and to find
the most cost effective ways to recycle product. Ultimately consumers
will pay for recycling through either higher taxes, fees at the time of
purchase, or additional costs included in the cost of the product by
the manufacturer. Only the latter offers an economic incentive for
improvements.
If the government mandates the cost of recycling and requires that
each product be assessed a certain fee, the incentive either for
developing more environmentally-friendly products or for reducing the
costs associated with recycling does not exist. Under such a system we
could almost guarantee that the costs of recycling will increase over
time, not decrease, as the bureaucracy of such a system grows. In
addition, the funds raised through the collection of such fees could be
easily ``raided'' when budget issues threaten, thus completely
hindering the original intent of providing a solution.
Question 8. You state that BestBuy has helped consumers nationwide
recycle over 2.6 million pounds of electronics. Just to get a sense of
the problem, how many pounds of electronics has BestBuy sold in the
same time period?
Response: The 2.6 million pounds of electronics we have helped
recycle is a very small fraction of the number of products we have
sold. We do not sell products based on weight and cannot estimate the
weight of the products we have sold during this time.
Questions from The Honorable Tammy Baldwin
While we all enjoy cell phones, personal laptops, and other gadgets
that help us be able to communicate and be more efficient, it is clear
from these e-waste hearings that we must be vigilant in making sure the
toxic substances in these electronic devices are properly disposed of
and safely recycled.
Overall, I believe the manufacturers of these products should have
the primary responsibility for the cost of collecting, transporting and
recycling of electronic products, not consumers or taxpayers. If
manufacturers do not have a financial stake in their products at the
end of their useful life, then they will never have an incentive to
design them to have longer life spans, to be easier to recycle, and to
contain less toxic materials in the first place.
Let me give you an example of why I believe this. I have authored
legislation in this Congress that would help encourage the safe
disposal of recycling of the toxic element mercury, which is found in
dozens of household and industrial products, including many electronic
devices. As you probably know, exposure to mercury can have serious
health effects to a person's liver, kidneys, nervous system, and brain
functions. Small children and pregnant mothers are most at risk to the
harmful effects.
One provision in this bill is a nationwide ban on the sale of
thermometers that contain mercury. As communities have become more
aware of the harmful impact of mercury on the public health and the
environment, more and more state and local governments have passed
their own legislation banning the sale of mercury thermometers.
Manufacturers have since responded to these laws and now make and
sell more digital thermometers, which are just as effective but much
safer. State and local laws may have pushed them to make a less
dangerous product, but they also found it made good business sense that
improved their bottom lines.
As the amount of e-waste grows, I believe we are not doing enough
to give manufacturers the primary responsibility for managing the toxic
substances in their products. This is thwarting the development of a
strong private market for the safe recycling of these products and the
development of products that contain nontoxic alternatives and that are
easier to recycle.
Question 1. Mr. McCurdy, Mr. Largent, and Mr. Vitelli-As
representatives of these industries, do you agree with this, and if
not, how can you justify making consumers and/or taxpayers shoulder
most of the burden?
Response: As a representative of a company that sells many of these
products and a company that commissions the design and products of
private label products, I agree with your assertion that manufacturers
need to be responsible for the end of life issues of their products.
One of the driving reasons this issue requires government action is
that the recycling of electronic waste will probably always cost more
than value of the residual scrap. Thus a system that provides an
incentive to reduce the costs of recycling through design of the
product has the greatest potential to ultimately provide the least cost
solution to this issue.
A complicating factor is that there is currently a significant
amount of historic waste waiting for a solution. These products were
manufactured without the expectation that they would need to be
recycled. This adds a ``hurdle'' of initial cost to any new system. If
the issue of historic waste could be handled through a different
program than the ultimate, ongoing program, the solutions might be
easier to achieve. The Talent-Wyden approach provides a significant
incentive to tackle this initial cost ``hurdle'' and could help start a
recycling process that ultimately does not need the incentives provided
through the Talent-Wyden approach. This is a limited government role,
providing the necessary incentive to reach the ultimate goal of a non-
governmental program.
Questions from The Honorable John D. Dingell
Question 1. Please provide your views as to which approach to
electronic recycling creates the strongest incentives for manufacturers
to design their products for recycling and indicate the reasons for
your views.
Response: There are 3 central points I want to make regarding
electronics recycling:
1. A Federal solution is far preferable to 50 differing state
solutions. This issue needs Federal leadership. Of course I
believe this because it simplifies our participation. I also
think a federal solution in required because it will simplify
the process for consumers and will ensure that no state is
either disadvantaged by a system or left with a large amount of
the waste. The Federal Government needs to actively study this
issue, thereby providing assurance to states that a federal
solution may be found and potentially reducing the number of
individual state actions. Many states are acting only because
they do not see a federal action.
2. This issue is complicated. There is the waste that is currently
waiting to be recycled. There are the products that are still
in use but will need recycling in the near future. Neither of
these categories of products--historic waste--was produced with
the understanding that they would have to be recycled. And then
there are the products that will be produced the future. It may
be helpful in finding a solution to think about these two
categories of waste separately.
3. In any scenario, the public will pay for the recycling of electronic
waste. If the government provides the solution, consumers pay
in the form of additional taxes. If the government mandates a
fee, the consumer pays. If the manufacturer must include
recycling in their product costs, the consumer pays. But it is
only in this last solution--where the costs of recycling are
part of the cost of the products--that there is an inherent
incentive to reduce both the need to recycle and the long term
costs of recycling. Given the reality that the consumer will
pay under any scenario, it seems best to find the solution that
will drive efficiencies and reduce costs over time.
It is the combination of points 2--that there may need to be a
couple of solutions--and 3--that the best solution in the future is one
that drives to least cost and efficiency--that drives CERC to support
the concepts of the Talent Wyden approach. This tax credit proposal
could go a long way to provide an immediate incentive to deal with the
historic waste over the next few years. If coupled with a program of
manufacturers' responsibility for future products, the end result could
be a total solution that drives to least cost and maximum efficiency
over time and provides the right, limited incentives to jump start and
capitalize recycling programs in the near term.
The Honorable C. L. ``Butch'' Otter
Question 1. I understand that retailers have spent a great deal of
money in administering the California fee program, and that the 3
percent retained by the retailers does not cover the costs. Can you
describe the requirements and problems you have encountered?
Response: Compliance with the California e-waste recycling law has
been costly for Best Buy. Best Buy has spent nearly $1 million in
California to update our point-of-sale systems, to educate our store
personnel and consumers, and to ensure compliance going forward. Since
these point-of-sale fees are not added to all products, like a sales
tax often is, but rather added to only some products (and not even all
products in a given category of products,) the cost of compliance is
high. In addition, each time changes are made to the fees and to the
list of applicable products, these systems must be updated, adding
costs. Finally, if different states implement differing schedules of
fees, the costs of compliance will increase.
A significant issue resulting from the California e-waste recycling
law is that not all retailers are treated equally under the law.
Retailers who do not have a physical presence in the state cannot be
compelled by the state to either collect or remit the fee on the
products they sell into the state. This establishes an unfair price
advantage for those retailers and lets some consumers avoid paying for
the recycling process established by the state and funded by the fee.
This advantage is in addition to the similar advantage afforded by
sales tax laws in each state. This issue can only be remedied by
federal action and only an act of Congress can satiate the requirements
of the U.S. Supreme Court's Quill decision which controls states'
ability to compel compliance.
A final reason to be concerned about the use of advance recovery
fees, such as those charged in California, is that it lets renegade or
foreign producers ``off the hook'' for the costs associated with the
recycling of their product. Under such a system, these manufacturers
have no requirements to develop environmentally friendly products or to
simplify the recycling requirements of their products. The result is
that their products will drive the cost of recycling up.
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