CAM Weblogs

Federal bill to ban the export of E-waste, suffers from a big loophole

Neil Peters-Michaud — Tue, 19 May 2009 15:00:54 -0700

Earlier, I supported a US House Resolution to ban the export of toxic e-waste to developing countries. That resolution was turned into a bill by Rep Greene that I can now no longer support. I understand this bill will be introduced this Friday, May 22. I urge our legislators to NOT co-sponsor this legislation and instead ask Rep. Greene and the other co-authors to strengthen the bill to match the intent of the original resolution – to stop the dumping of toxic e-waste on developing countries not equipped to safely and sustainably handle this material.

The main issue I have with the bill is the last exception to the ban on exports of used electronic equipment or parts. It essentially creates a huge loophole that allows anyone who claims the e-waste they ship to developing countries is “intended” for repair and reuse. I know of many companies in the industry who ship equipment to China where it is clear there is no chance the majority of this equipment would actually get repaired and refurbished. Instead, it pollutes countries that are powerless to stop the tide of these toxins.

This bill also negatively impacts a thriving industry in the United States. Hundreds of domestic IT asset retirement firms create sustainable jobs by engaging in the valuable refurbishing and remarketing of reusable electronics and responsible domestic recycling of unusable equipment. It is nearly impossible to compete on price, especially in this economic climate, with low wage, unregulated processing firms from abroad.

The bill could be corrected to ensure that legitimate reuse and repair happens both in the United States and in developing countries where these jobs are also needed and these repaired products do have a place in the market.

But let’s not kid ourselves. Unscrupulous processors will use the bill in its current form to legitimize the dumping of unrepairable electronic scrap into Third World countries. The general public will be duped once again, until another 60 Minutes report exposes the fallacy of our good “intentions.”

Comments on the Newest Wisconsin E-Waste Proposed Regulation

Neil Peters-Michaud — Thu, 07 May 2009 14:47:23 -0700

It's time for another try . . . Senator Mark Miller, and a large number of bi-partisan supporters, have put forth another iteration of an electronics recycling law for Wisconsin (SB 107). A lot of stakeholder input has gone into this legislation, and I believe it's something everyone from the state should get behind.

This legislation is important because (1) it will increase access to responsible recycling for individuals; (2) it bans households from disposing the same toxic electronics that businesses have been restricted from landfilling for decades; (3) it protects the state from unscrupulous recyclers, and; (4) it shifts the burden of recycling from the taxpayer to the manufacturer and the consumer. I’d like to speak to each of these points briefly.

(1) Previously, there was a concern about the availability of an infrastructure to meet the growing demand for electronics recycling. In the past several years, a significant number of new companies have emerged in the state and region to increase recycling capacity. Trade groups and certifying bodies provide useful guidance and tools to aid in the development and expansion of e-scrap businesses.

The nature of this industry is one in which capacity is often limited by staffing for production and not by large capital equipment. By passing this legislation, you will foster investment and growth of businesses in Wisconsin as we prepare for the known increase in volumes of electronics to recycle. In every other state where electronics legislation has passed, collectors and processors have increased the availability and choice to individuals looking to recycle. Today, more than ever, we need to create more jobs and develop new markets for Wisconsin commodities – and this legislation will foster this type of growth in relatively short order.

(2) This legislation also makes Wisconsin’s disposal policy fair. Under federal hazardous waste rules, businesses were not allowed to dispose of most electronics in Wisconsin landfills for decades. The lead solder on circuit boards, mercury lamps in laptops, and cadmium in video phosphor powders turn electronics into a hazardous waste when disposed. But individuals have been allowed to throw these same toxic elements into our dumps.

By enacting an across the board landfill ban on specific electronic devices, we treat all hazardous waste the same. We also help to clarify what can and cannot be recycled, which will reduce ambiguity around this issue and improve recovery rates.

(3) I am very pleased to see this round of legislation including some additional requirements of recyclers. As a member of this industry, it is important to me that all recyclers who offer services to the state meet basic standards that protect the health of their workers, reduce liability and risk to the customers they serve, and promote a healthy environment. While I think these standards could go further, they are an important first step.

One important requirement in the legislation that should not go unnoticed in this day and age is the need to have a financial assurance program in place in the event a recycling firm closes. When the economy took a nose dive last fall, recyclable commodity prices dropped precipitously. I am aware of several large recyclers that went bankrupt or shuttered their doors and left warehouses of unprocessed electronics for their state to deal with. If Wisconsin is to endorse the use of certain recyclers through this program, it must ensure protections are established so that the state is not liable for recyclers who go out of business, pollute the environment, harm their workers, or dump electronics improperly. Adequate funding and support of the DNR to provide continual monitoring of recyclers and their protection programs is essential to the long term viability of this program.

(4) Finally, this legislation helps to ease taxpayer subsidies which pay for recycling programs and electronic waste clean-up that should be borne by the manufacturer of those products and the consumers who purchase those products. We’ve seen in Madison, where people are asked to pay to recycle their own electronics, that consumers are willing to pay to ensure their computers and TVs are disposed properly. But the pay as you throw model limits the opportunity for capturing electronics from the general public. There are free riders in this system. Those people enjoy their electronic gadgets and toss them in the trash with little regard for the externalized costs of their action. By essentially embedding recycling costs in the purchase price of consumer electronics, this legislation will fairly distribute the total life cycle cost to the consumer of that product while creating incentives for manufacturers to improve the environmental performance of their product. People take greater care of their goods when they bear the full extent of their costs.

In closing, Senate Bill 107 is good for Wisconsin. It protects the environment, supports business growth, and reduces taxpayer costs. The bill has evolved over the years and has been improved by understanding the impact of other state e-scrap laws. My company, and I personally, strongly encourage your support of this bill a so that we can get working with our industry colleagues, manufacturers, municipalities and the DNR to successfully implement this law.

Consumer Electronics Show 2008 – How green is my new gadget?

Thanh Nguyen — Tue, 11 Mar 2008 04:10:42 -0700

The Consumer Electronics Show (CES) concluded in January, 2008. This is the world's largest tradeshow for consumer technology . It is the place where you can find the latest and greatest electronics gadgets, from Panasonic's 150" screen TV to a $20,000 cell phone case. CES is all about buzz and extravagance. This year, for the first time, CES announced its intention to be a carbon-neutral tradeshow incorporating the use of sustainable and energy efficient practices.

The show organizer partnered with CarbonFund.org to offset approximately 20,000 tons of carbon emissions associated with the show by investing in a combination of certified renewable energy, reforestation, and energy efficient projects. In addition, CES worked with its Las Vegas-based vendors to use environmentally friendly solutions such as biodegradable utensils and plates, recycled carpet, increasing the number of recycling containers for attendees, printing materials on post-consumer recycled paper with soy ink, as well as other efforts.

So the show organizers are going green, what about earth-friendly gadgets? No need to worry, manufacturers are paying close attention. At Nokia's booth, the company acknowledged that consumers are asking more about the sustainability effort of new products. Nokia is taking the holistic approach to their product designs from low-power components and recycled content materials, to green packaging design considerations. Also, Iqua, a Finish company, introduced the first solar-powered Bluetooth headset. The headset is priced around $100 with 9 hours of talk time in darkness or 12 hours talk time in direct sunlight and 200 hours of standby time. NGR introduced a solar-powered charging station for all of your electronics (Blackberry, iPod, and more). Sony unveiled a flat panel TV based on Organic Light Emitting Diode (OLED). The 11" TV will consume about 45W of power vs. 350W for an average power consumption of a Plasma TV.

Last but not least, Electronic Product Environmental Assessment Tool (EPEAT) from Green Electronic Council made its debut at the show. EPEAT allows buyers to identity and evaluate green electronic products according to three tiers of environmental performance. As of December 2007, federal government agencies are required to buy only EPEAT-registered products. EPEAT covers only desktops, laptops, and monitors today but the program is expected to expand to other products, as soon as late 2008.

Have you looked into your datacenter lately?

Thanh Nguyen — Thu, 28 Feb 2008 03:42:09 -0800

In early 2007, an article in eWeek reported that the electricity bills for U.S companies totaled $2.7B in 2005. During that same year, the cost of electricity for the entire world topped $7B and the total cost to power a datacenter was about 1.2% of the $7B.

With an increasing demand for Internet services, music and video downloads along with telephony, the article estimated that the power consumption for datacenters would grow 40% by 2010. Further research shows that beginning in 2004, infrastructure costs have already exceeded the s cost of a server; in 2008, the energy cost alone will exceed the server cost ; and the combination of infrastructure cost and energy cost will be 75% of the total cost running a data center while IT will be only 25% in 2014. What does that really mean? It means that the traditional total cost of ownership (TCO) may not accurately reflect the true cost of ownership. A new model is needed to include the server cost as well as the infrastructure and energy cost. Moreover, the data center design will need to take optimization for the environment into consideration.

Research funded by Symantec, in late 2007, of nearly 1000 datacenter managers revealed that the energy efficiency was their top priority. To improve the energy efficiency, researchers identified several strategies; such as reducing the number of physical devices to manage, specifying energy efficient CPUs, using high efficiency power supplies, implementing overall cooling systems from device-specific to racks, and implementing overall electricity-distribution systems. From the manufacturers' perspective, companies are creating technologies and products to assist datacenter managers. Multi-core processors promise increasing performance in smaller footprints. Virtualization reduces the number of servers in datacenters. Finally, Next-generation power supplies architecture facilitates improved power management strategies.

These technologies and strategies point to one conclusion: future datacenters will be greener for the environment and the enterprises' pocketbook.

What do you think? Do you think green datacenters are reality? I welcome your comments.

Testimony in support of Wisconsin’s Electronic Recycling Bill: Senate Bill 397

Neil Peters-Michaud — Thu, 24 Jan 2008 23:45:08 -0800

Senator Miller, thank you for this opportunity to speak to this committee in support of electronics recycling. By enacting this legislation, Wisconsin will accelerate the safe and sustainable recycling of electronic equipment to help protect our environment and generate recoverable resources. It will also directly reduce taxpayer subsidies of electronics disposal and create lasting, valuable service and manufacturing jobs in the state.

As the owner of Cascade Asset Management, an electronic equipment reuse and recycling company in Madison, I have a keen interest in any legislation related to electronics recycling. Cascade has collected and processed for reuse or remarketing more than 37 million pounds of old electronics since 1999. We are a part of a growing number of responsible processors converting computer cast-offs into valuable resources.

Unfortunately, relatively few people and institutions seek out legitimate recovery operations because of the lack of access to collection programs, the relatively high cost of recycling, and the absence of a landfill ban pertaining to household electronics. The US EPA estimates that in 2005, of the approximately 2 million tons of unwanted electronics generated each year, only about 350,000 tons (or 17.5%) is recycled. The rest are either landfilled, passed onto others, or stored in basements and closets to be dealt with another day.

This bill helps to address this deficiency in our electronics recycling infrastructure by creating a sustainable financing mechanism to pay for the collection and responsible processing of unwanted electronic equipment. It does this by shifting the burden of infrastructure development from the taxpayer, the current source of financing in the absence of better alternatives, to the manufacturers and their consumers – the people who directly benefit from the use of this technology.

This legislation also promotes sustainable economic development in Wisconsin. The Institute for Local Self Reliance indicated that recycling operations promote ten times more jobs than if items were landfilled or incinerated. But this is even more the case in the electronics recycling industry. This same organization indicated that computer reuse activities generate 296 jobs for every 10,000 tons of equipment processed per year, compared to only 1 job required to landfill the same amount of waste.

No where do I see these data more true to life than in my own business. Eight years ago, the three founders of Cascade were responsible for all aspects of our operation. Now, Cascade Asset Management employs over 80 individuals to collect and process approximately 10 million pounds of equipment each year. In addition, we generate more than 150,000 pounds of clean cathode ray tubes each month to be processed by a Wisconsin recycler, who in turns employs numerous individuals to manage our material. Scrap metal is shredded and sorted by a Wisconsin auto shredder and broker and then sold on global markets. Plastic has been sent to an Oshkosh extruder who can manufacture value added, co-injection molded consumer products for a Wisconsin based firm that sells these products globally. Reusable printer components are sold to one of several Madison printer refurbishers who rebuild housings and install new fusers for thousands of customers around the world. Cascade itself sends 80% of its usable computer equipment overseas where demand for low cost, but reliable technological equipment is strong.

In addition, all of these businesses purchase services and equipment from other Wisconsin firms and generate millions of dollars of tax revenue for the state. The web of job creation throughout Wisconsin from the relatively small amount of computer equipment passing through Cascade’s doors is impressive.

Senate Bill 397 will help to accelerate this economic growth by favoring responsible, local processing over sham recycling from overseas brokers. It will stimulate job growth in the transportation, recycling, and manufacturing sectors. It will allow us to harvest raw materials from within our state to create new products marketed around the world.

We know responsible recycling can work. A basic infrastructure for electronics recovery has been developed to support the business community in Wisconsin, which is already restricted from disposing of e-waste in landfills. A computer monitor from a home contains just as many toxic elements and valuable resources as one from Harley-Davidson. By including household electronics in a landfill ban, we will vastly expand the amount of electronics entering recovery markets, and can do so at a reduced taxpayer expense. In turn, the electronics recycling industry will continue to innovate and create efficiencies to drive down costs for all involved, both businesses and individuals.

In summary, this legislation will provide true environmental benefit, a growth in clean technology jobs, reduced taxpayer subsidies, and a stronger manufacturing sector. I encourage you to pass this bill, so we can get to work for you.

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Note: Additional details and fact sheets on the legislation are now available on Senator Miller's Web Site.

Listening and learning - the opportunity for Wisconsin is now

Neil Peters-Michaud — Thu, 03 Jan 2008 13:06:47 -0800

Wisconsin is due to see an computer and electronics recycling law introduced into the legislature this month - and all stakeholders have a great opportunity to help shape the language of this text. I'm impressed to hear that the lead author of the bill, Senator Mark Miller, is actively engaging with other legislators, business groups, environmental organizations, processors, municipalities and other states with similar laws on the books to solicit their ideas and get reactions to the proposed language in the bill.

It's clear there's a much stronger interest to get this bill passed this session. During the previous two sessions that Senator Miller brought forth this issue, it barely garnered a small time slot at an Assembly hearing. Things are different this time. It's a workable piece of legislation modeled after successful efforts at other states to expand the opportunities for households to responsibly recycle some of their unwanted electronics at reduced taxpayer expense.

I believe we need to recognize this bill for what it really is - shared responsibility among a large number of stakeholders to provide a solution to the electronics disposal problem. Manufacturers (and their consumers) cover much of the cost of the program. The DNR educates and enforces the law. Municipalities, retailers and other organizations may (though they are not required) to aid in the collection of old electronics from households. Processors and recyclers invest in best practices and independent audits to ensure equipment is handled properly. Individuals bring their old electronics to a collection depot and start the recycling process.

With so many groups involved in the potential implementation of this new program, they ought to get involved in what it entails. We have that opportunity now - but we must act. Tell Senator Miller and your own legislators what you think about banning certain electronics from Wisconsin's landfills and setting up a new system for no/low cost responsible recycling of electronics. We're involved in the conversation and we hope to hear you, as well.

A recent security breach headline....

Thanh Nguyen — Thu, 20 Dec 2007 07:39:55 -0800

There is a recent headline about UK goverment losing data: Read It Here and yet you won't find it on our webiste, except for this blog. Our industry loves headliners like this because it demonstrates how important data security is, especially in the reitred IT equipment where they got the least of attention. Some companies in our industry will post these type of stories on their websites and some cases, email the stories to their customers. This is what our security manager, Kevin Myrant, said:

What seems to be lacking (in my opinion) is constructive, educational or useful commentary about each story and how using specific services (that we offer) could have mitigated the specific issues in selected situations. Prominently displaying a link to a story containing only a summary of the horrors of data loss makes for good attention grabbing headlines however it does little more of value for the customer. Just offering links to these stories may be of some value but without adding anything, it could be seen as selling fear, “finger wagging” or generally preying on the misfortunes of others.

Kevin said it best and I am in total agreement with Kevin. I am sorry that the UK government had to deal with the incident and all the backlash at home. I am also very proud that we are providing valuable services for our customers and keeping them out of headliners like this.

IAITAM Annual Conference December 2007: A report from our partner

Neil Peters-Michaud — Wed, 12 Dec 2007 02:23:37 -0800

Cascade and Software Success Partners had joined forces at the International Association of IT Asset Managers (IAITAM) 2007 annual conference. Thanks to Software Success Partners for putting a comprehensive report.

An excerpt from the report:

The 2007 IAITAM conference was very well-received. Participants who have attended past conferences described it as “mature” - in the field itself and in the selection of topics and vendors.

End-users described the conference as “enlightening and educational” as well as “very practical and useful.” An IT Asset Manager said, “The CHAMP training prior to the conference was excellent and there were some great take-aways from the conference. It was very educational but also enjoyable to be in Palm Springs.” Additionally, attendees found it invaluable to meet their peers and learn how they were handling a variety of ITAM challenges.

Selling Computer Recycling Credits on eBay

Neil Peters-Michaud — Thu, 08 Nov 2007 13:17:42 -0800

Last week, Cascade tried a new approach to facilitate the exchange of computer recycling pounds to fulfill manufacturer obligations under the new Minnesota e-waste law - eBay. Three auctions were posted to sell about 30,000 pounds of collected and processed Covered Electronics Devices ("CEDs") generated by Minnesota households. The potential buyers of these pounds were manufacturers who are responsible, under the law, for managing and financing the collection and processing of these CEDs.

After one week of open bidding, there were . . . no bids. So, this innovative approach didn't yield a successful on-line transaction, but what did it do?

Here are some basic facts. The auctions were viewed 170 times. Several individuals registered on eBay to "watch" the progress of the auctions. The story was picked up by industry publications and discussed at the E-Scrap conference in Atlanta.

The buzz was more significant. Cascade received substantial interest and feedback in this initiative from Minnesota counties and CED collectors. Manufacturers were "intrigued" by the program and wanted us to keep them informed of the progress.

Most manufacturers, when asked if they would bid, said they would pass. The reasons are mostly logistical. Large multinational companies don't tend to buy things on eBay, nor do they operate in an environment where cash is paid up front for services or decisions are made within a 7 day auction window. They also don't know their obligations under the Minnesota law yet, and are not motivated to start buying recycling pounds to fulfill their obligations until the summer of 2008.

So why did we try to sell some of our processed CED pounds on eBay? We stand by what we said in our announcement from October 25th:

"By taking advantage of existing technology that allows for real-time trading of these processed recycling weights, this system avoids the need for a new government bureaucracy or a non-profit third party organization (TPO) that has emerged in other states legislating manufacturer responsibility for electronics recycling. By treating the recycling weights as a commodity and trading them in real time, both the manufacturers and recyclers can plan for the future and the market can best determine the true value of recycling and collection."

In addition, we posted these recycling pounds in hopes of jump starting efforts to build a dynamic, technology based commodity trading system. We prefer to focus our efforts on responsible processing of e-scrap. We believe manufacturers would rather spend their time making quality products than developing and managing e-scrap collection and processing systems. We feel government is already stretched in resources to adequately manage a financing program for this industry, and should instead focus their efforts on education and enforcement. Since the technology already exists to trade CED recycling pounds/credits as other commodities are traded, why not use that technology? It is not only more efficient, it is the fastest way to determine a fair market value for an effective and sustainable computer recycling program for a state.

It should also be noted that while the weights listed on eBay didn't receive any bids during the listed auction, we were able to sell those weights, and much more, directly to a responsible manufacturer soon after, at a price above the "reserve" set in the auction. So, for us, this experiment was a success. We hope in the future the rest of the industry catches up with us to see this as a viable option for managing the financial obligations of e-scrap legislation.

Links to other blog resources

Neil Peters-Michaud — Mon, 08 Oct 2007 10:19:57 -0700

Be sure to check out the IT Asset Retirement blog for additional discussion on this industry.

The Infrastructure of the IT Asset Retirement Industry

Neil Peters-Michaud — Mon, 08 Oct 2007 09:52:54 -0700

This blog was written to capture some of the background information and links to resources shared by Neil Peters-Michaud at the October 8, 2007 e-scrap issue panel held at the Ritz-Carlton in Naples, Florida, sponsored by the Environmental Industry Association Women's Council.

The IT Asset Retirement industry may be relatively new, but its evolution is a reprise of a variety of other niche businesses in the more general waste disposal and processing industry.

Learning Lessons from Auto Scrap Businesses

Soon after the automobile was introduced, a secondary market emerged to service these vehicles during their use, and then manage them when the original owner was ready to pass on their vehicle to someone else, be it due to it becoming obsolete (to them) or unworkable (or at least not worth repairing themselves).

The lifecycle of the automobile involves a large number of players. The Original Equipment Manufacturers (OEMs) are fed components built from raw materials by global parts producers. These OEMs design the final products based on their perception of customer demand and value engineering and then assemble them into the final product. These cars and trucks then move to resale channels, including franchised consumer auto stores and direct fleet sales. Consumers, including individuals and institutions, purchase these vehicles, and sometime even trade-in their old cast-offs at the same time. They might finance the purchase through cash up-front, bank financing or a lease.

While in use, drivers take different care in operating and maintaining their vehicles. Some are reckless and may do little preventative maintenance, so that after a few years the vehicle has rapidly depreciated in value. Others may invest in preventative maintenance and careful road operation, and will find their vehicle is still valuable as they look to part with it. More importantly, they find this investment in the sound maintenance and operation of their vehicle reduces the time it is in the shop due to breakdowns and failures. To support the maintenance of vehicles, a large number of auto repair shops and supply houses provide the labor and equipment to keep cars running.

Once that vehicle is ready to be left behind by its owner, he or she can look to a variety of channels to “retire” it. This may be through a convenient but lower value trade-in. It may be through selling it directly through classified ads or eBay. It may be by getting an auto wrecker to salvage it for scrap. There are a lot of options and a huge network of brokers, auction houses, parts and vehicle refurbishers, and junk yards available to cascade these cast-offs to the next best spot in the supply chain.

If the vehicle is not reintroduced into the marketplace as a “pre-owned” vehicle or recovered part, it is typically recycled. Salvage yards pull out specific items with high value, such a platinum rich carburetors, and hazardous materials that can’t be shredded, such as mercury switches (or at least they should pull these out). Tires need to be removed, as well as some other materials not suitable for the shredder. The carcass is shredded and metals are segregated using various mechanical separation techniques. Unusable waste turns into fluff that is likely to be landfilled. Many recovered materials are then converted into raw materials that may end back up in new cars or other products.

The lifecycle for information technology equipment follows nearly the same model, with similar players in the supply chain. The five primary stages in the life of a typical IT device are illustrated in the figure below.

The lifecycle begins with the design and manufacture of the IT equipment, and continues to the purchase of the equipment in the marketplace, its use, and then retirement, where it follows one of four possible downstream options. In this diagram, the sizes of the arrows represent the general percentage breakdown of products moving between each stage.

Similar to the auto salvage industry, there are a variety of paths used IT equipment may go during the retirement stage. In the young IT Asset Retirement industry, there is little good information available to the users of IT equipment about which disposition channel to use, resulting in many firms choosing instead to store the equipment until they make a decision later or just throw it out and remove it from the productive lifecycle.

With this understanding, one can conclude that decisions made at retirement are critical to determining the optimal disposition strategy for each IT device, so that it is cascaded to its next best use, be it refurbishing and reuse as a whole unit, harvesting of parts for component recovery, processing for recycling or disposal.

It is at this stage where there is the greatest opportunity for development and investment to improve efficiencies and effectiveness of service providers to optimize retirement solutions for IT equipment.

In contrast, the other stages are fairly evolved and opportunities for growth are limited. A list of the major types of players in each stage is provided in the following table.

Depending on who you talk to, IT asset retirement is a $2 billion to $11 billion industry. There are thousands of companies involved in all aspects of the business. Much of the talk of consolidation in the industry has yet to happen. Most major consolidation has taken place in the Salvage stage with Sims group adding mostly recycling and salvage operations into its fold in the United States, and only limited asset retirement triage and recovery capacity as a percentage of its total holdings. On the flip side, IBM Global Finance manages over $2 billion in retired IT assets each year, but a vast majority of these assets are run through independent service providers.

The Role of Waste Companies in the IT Asset Retirement Industry

One of the most significant opportunities to enhance the efficiency of the IT lifecycle flow is by improving the retirement supply chain. Waste haulers could have a significant role in this part of the industry. By leveraging their existing logistics supply chain to help make it as easy to responsibly dispose of an old IT device as it is to buy a new one, and to do this at a low cost to the consumer, waste haulers can help convert the 80% of old IT assets that either linger in the Retirement stage as stored devices or discarded improperly into more productive equipment continuing on in the IT lifecycle.

Whether through partnerships or by building internal capacity in retirement services, there is a lot opportunity to get in on the ground floor of this immature, high growth market segment.

It is important to also recognize there is a web of regulations related to state, federal and municipal environmental requirements, as well as federal and state privacy protection/data security issues. Companies need to understand their obligations under these various laws or ensure their partners are in compliance. Trade associations and government groups have done a good job outlining many of these issues and how to set up operations in compliance. The regulations also offer companies new opportunities to develop value added services to appeal to a wider market.

Additional Resources:

For waste companies looking to enter this industry, look to these following resource guides:

E-Scrap Conference, hosted by Resource Recycling and E-Scrap News, taking place in Atlanta, GA from October 24 – 25: A great way to get introduced to the industry and meet many of the players. Last year’s show had more than 800 people in attendance.
International Association of Electronics Recyclers: Their web site has a very thorough and validated directory of e-scrap processors and haulers, as well as other basic resources for the industry.
WI Department of Natural Resources e-scrap web resource: A very nice collection of information on regulations as well as a checklist for evaluating processors.
US EPA e-scrap web resource: Links to detailed resource papers and tools for generators and processors of e-scrap.

Building momentum in Wisconsin for Producer Responsibility

Neil Peters-Michaud — Wed, 26 Sep 2007 00:21:02 -0700

I am very excited about the discussions among a variety of stakeholders at yesterday's Midwest Regional e-Waste meeting hosted by the Computer Take-Back Coalition. The event was well organized and the presenters offered practical guidance to continue the progress toward crafting and initiating meaningful e-scrap recycling legislation.

We learned about the content of the legislation already passed in 9 states, and why some of these laws were designed as they are, recognizing the impact of politics, interest groups, and industry maturity. There is a set of realities that each state must deal with in order for this type of legislation to pass.

I believe the conditions in Wisconsin are well suited to actively advance meaningful e-scrap legislation in the state. Senator Mark Miller's aid was at the event in Chicago yesterday, along with state Representative Gary Sherman. They are very interested in this issue and I would expect legislation modeled after the Minnesota law to be introduced this fall.

With some refinements, the Minnesota law would be well suited to Wisconsin. I believe there was consensus among the Wisconsin Caucus at the meeting to move forward with this bill language and be open to tweaking it based on input from other interested parties.

Now, the focus must be turned to building a diverse support base for this legislation. It really is a win for so many groups. Cities, towns and counties can shift the cost of e-scrap recycling from their tax base to the producers (and consumers) of these products. Wisconsin business and industries can benefit by leveling the playing field and cost of e-scrap disposal and by reducing tax liabilities. (See an article I wrote last year about why businesses should support e-scrap legislation: http://wistechnology.com/article.php?id=3190) Environmental organizations can get behind the resource conservation issues. Retailers can support it in Wisconsin, following the strong backing Minnesota saw from Best Buy and Target. Recyclers can support it because it provides an increased supply of equipment to process. OEMs would appreciate its similarity with other regional legislation, thereby reducing the "patchwork" problem they fear.

I was encouraged to hear that Minnesota's and Washington's e-scrap laws passed with bi-partisan support. I was even more impressed to hear that Oregon recently passed legislation unanimously in both houses. This does not need to be controversial - it just needs to be effective. Now is the time for us to build that coalition of support, introduce the legislation, and start moving it through the process.

Effective IT Asset Retirement starts with proper planning

Neil Peters-Michaud — Sun, 23 Sep 2007 14:42:09 -0700

While computer equipment disposal may be the focus of your company now, the optimal strategy for reducing the Total Cost of Ownership (TCO) of your IT infrastructure is through an effective life cycle management strategy that involves:

Planning
Procurement
Deployment
Management
Support
Retirement

It has been reported that the cost of hardware represents only 20% of the total cost of ownership of the equipment (Gartner Group, 2003). Other factors related to the management, service, support and retirement of IT equipment represent the bulk of the costs to an organization.

It's best to focus early in the IT procurement and disposal planning process to investigate opportunities to improve the productive use and reduce the undesired costs related to IT asset management.

Focusing on Asset Retirement: Opportunities to Increasing ROI

Research on industry approaches to IT asset retirement concludes that simple changes in how old electronics are managed at organizations can provide a true economic benefit to the company. The Aberdeen Group reports that any organization removing as few as 3,000 PCs can save as much as $1 million per year in unnecessary storage and disposal costs by implementing an effective asset disposition program. (Aberdeen, 2003). Additionally, the report cited the fact that if stored IT equipment has any resale or recycling value, it depreciates between 6% and 10% per month. Some cost savings strategies focus on improvements in the following areas:

Handling of assets
Logistics costs
Reporting costs
Property tax liabilities
Data removal
Recycling/Disposal costs
Donation program administration
Employee sale administration
After sale support
Revenue from the sale of assets
Environmental liability protection
Management of outsource partner

It's best to consider all of these issues when embarking on developing a new IT Asset Retirement program.

Introduction to the ITAR Value Optimization Blog

Neil Peters-Michaud — Sun, 23 Sep 2007 14:06:43 -0700

I am excited to introduce an interactive forum for enterprises, service providers and other stakeholders to exchange ideas on how to help companies maximize value through responsible IT Asset Retirement (ITAR) practies. I interact with hundreds of companies each year and learn best practices from them to maximize their returns from a better management of IT assets. I'd like to share some of these lessons with you.

I also want to learn more from you through this discussion to help me understand this industry better. This is a very immature industry and many companies are addressing planned and responsible ITAR for the first time. It may be due to increased security requirements or the need to demonstrate a positive ROI from this business unit, but there is often a particular motivating factor causing companies to rethink how they dispose of their surplus IT assets. Since it may be the first time a company has looked outside for resources, I'm sure there are many questions, and this would be a great place to ask those questions.

Finally, I would like to use this opportunity to share research performed I've conducted and other information I've come across to help companies excel in ITAR. Enjoy, and let me know what you think.

Simple changes to make Minnesota's law fairer (and more effective)

Neil Peters-Michaud — Sun, 23 Sep 2007 13:51:37 -0700

In my previous post, I listed some of the problems I see, through a recycling company's eyes, with the Minnesota e-scrap law. They can be summarized in two main points. First, very few resources are allocated to ensure registered recyclers provide responsible and legal processing of Covered Electronic Devices (CEDs). Second, the annual reporting requirement for OEMs to demonstrate compliance with their obligations creates confusion in the marketplace, where recyclers (and collectors and municipalities) are unsure if the CEDs they collect will be compensated by the OEMs at the end of the year, and OEMs are uncertain of what they might have to pay to fulfill their obligations.

I believe the first problem can be addressed by adopting California's on-site audit and registration requirements used to fulfill the Advanced Recovery Fee (ARF) program it established to manage the collection and financing of their CEDs. While my company doesn't operate in California, I've spoken with several recyclers who say that some of these on-site visits by the state are quite thorough and effective in establishing the business as credible and responsible. When a state sponsors and requires its citizens to follow the direction it sets in e-scrap legislation, I believe it ought to provide an assurance to its citizens that the companies which process their CEDs are viable and responsible operations. If it doesn't have the resources to perform some type of due diligence on registered processors (or allocate resources through the legislation), it should keep the status quo and let the individual or market decide who they want to use.

On the second issue, I believe a simple means to create a more efficient transfer of what is amounting to recycling credits from recyclers to OEMs is a more robust and dynamic exchange system. Right now, OEMs are seeking out recyclers and recyclers are trying to engage OEMs in an ad hoc fashion. Due to the maturity of the e-scrap industry, there is an inherent power difference in these negotiations. OEMs hold the cards in Minnesota, because they hold the funds to pay the recyclers, and they don't need to fulfill their obligations until the end of the fiscal year. Younger, cash strapped e-scrap recyclers find it difficult to carry what amounts to a huge receivable in the hopes that a manufacturer will buy their recycling credits later in the year. I do get the feeling that manufacturers have no intent to put recyclers out of business and they are doing good work to advance the industry. But the way the Minnesota law is written, OEMs may unintentionally bankrupt some recyclers.

How to fix this? Simple. Require OEMs to reconcile their obligations on a monthly or quarterly basis. Sales data for these shorter time frames are available, so there is no legitimate need to have OEMs report on their obligation only once a year. If the state increased the reporting frequecy, then trading and payments between OEMs and recyclers will become more efficient. You will also find the market respond to changes more quickly, thereby reducing costs to all involved and increasing service levels. As things shake out with this new regulation, we need to review costs and service levels more regularly to ensure the citizens of Minnesota get the best deal and the environment is protected.

Better yet, technology now exists that allows for real-time trading of these new recycling credits. There's no need to create a government bureacracy or non-profit Third Party Organzation (TPO). Let's auction off these credits as we do with so many other commodities that are traded through on-line auctions. As recyclers collect CEDs from collection events or through the normal course of business, they would post these credits on the trading site for a short time period. OEMs would bid on these credits. The OEMs that bid early (and pay the recycler early) in the quarterly (or monthly) reconciliation period would probably pay less for the credits. The recyclers would be willing to accept less for the credits because they get the cash sooner - and that matters a lot to these small businesses. OEMs that bid later risk paying more and recyclers that post later risk not getting paid at all.

An on-line trading program would also provide real-time information on the value of these recycling credits, helping both OEMs and recyclers plan for the future. It will also be the best way to determine the fair price for recycling.

Now the only way this trading system would work is if the credits are treated as a commodity. So the value and legitimacy of recycling credits from Recycler A are worth the same (per unit) as from Recycler B. But if Recycler B is just speculatively accumulating the e-scrap or shipping it unprocessed overseas while Recycler A does responsible demanufacturing in the state, then we would have a problem and the system would not be effecient. So, to make the trading fair and to meet the needs of the citizens of Minnesota, the state would need to ensure all recyclers do in fact meet a set of minimum requirements in order to list CEDs for trade. If they discover that a recycler does not perform to these standards, it could be barred from participating in the program and face fines.

I would be very interested to hear what others think about these ideas. As more states consider Producer Responsibility for the financing of e-scrap recycling, I hope they consider including these two components in the legislation.

Minnesota e-Scrap law's adoption creates "unforeseen" challenges - a recycler's perspective

Neil Peters-Michaud — Fri, 21 Sep 2007 02:22:20 -0700

The Midwest may be relatively late to the game, but that doesn’t mean we can’t add to the excitement on the electronics recycling legislation front. With the adoption of Minnesota’s Producer Responsibility legislation this past summer, a flurry of activity is breaking out among municipalities, recyclers and OEMs to figure out how they will come out best under this law. This chaos is bringing to the forefront some of the unforeseen, and perverse, consequences of this approach to e-scrap recycling. It also provides a real world case study to better define new opportunities that are more difficult to define when hypothesizing about the consequences of potential legislation.

I don’t want to restate what’s involved in the Minnesota legislation, because I believe most people reading this have a good understanding of its framework. If not, the Minnesota Office of Environmental Assistance put together a great web site to serve as a comprehensive resource and information guide for this legislation at www.pca.state.mn.us/electronics. I’d rather start a discussion among interested parties about how we are impacted by this law and how we thing we can make it better.

For the record, I serve as CEO and co-founder of Cascade Asset Management, an IT Asset Retirement company with headquarters in Madison, WI. Our company has been around since 1999 and we’ve processed more than 38 million pounds of electronics since inception. We are a registered “recycler” under the Minnesota Electronics Recycling Law and partner with Retrofit Recycling of Little Canada, MN to collect electronics from municipalities throughout Minnesota.

From a recycler’s perspective, we are in the precarious situation of trying to collect Covered Electronic Devices (CEDs) through municipal collection programs at no cost to the individuals and municipalities while hoping we can match up with an OEM to cover the cost as we “sell” the volume we collect to cover the OEM’s obligations under the law. It’s been difficult to find OEMs to commit to purchase these volumes up front, because they don’t need to report on how well they cover their obligations until July, 2008.

We’ve had several municipalities tell us they want to use the Cascade/Retrofit solution because we provide the highest quality collection service and most responsible processing option. They tell us they need the equipment removed efficiently and they don’t want to export their old computers, even though these service criteria are not addressed in the legislation. There’s good reason for them to make these demands, because they are the ones who need to deal with poor collection service issues (not the OEMs) and their reputations and exposure are at risk if e-scrap they collect is sent to a processor who doesn’t properly destroy the data or if equipment is dumped improperly. Since the legislation has no provision to license or audit processing facilities, the municipalities are feeling the need to step up in this role.

Meanwhile, we’ve seen some OEMs team up with the lowest cost processor to collect and recycle electronics in the state, because that’s in compliance with the law. I guess I can’t fault them for that. We’ve had numerous OEMs tell us they’d never pay us more than $0.20/lb to collect and process electronics. Remember that the current reimbursement rate in California for the Advanced Recovery System (ARF) is $0.48/lb to collectors and processors. While the cost of doing business in Minnesota is cheaper than in California, this is a ridiculous expectation. There are deeper reasons as to why the compensation rate is so low. It is because there are essentially no provisions in the Minnesota law to specify minimum health and safety standards for e-scrap processing, whereas in California processors must pass an on-site audit by state officials? Is it because other stakeholders (like the taxpayer via the municipality) are still expected to share some of the costs?

Unfortunately for us, we can’t provide our domestic, independently audited, responsible processing and collection service at that low rate. As a result, we can’t get commitments from OEMs to compensate us for collected volumes they can apply to their obligation to the state. At the same time, municipalities are telling us they won’t do business with the low cost collectors and processors because of the risk they see in working with them. What a paradox! OEMs have contracts with processors that can’t secure volumes of e-scrap to meet their obligations while municipalities have agreements with responsible processors who can’t get compensated by OEMs.

There must be a better way. I believe the free market can make this work for everyone, and it can be done through the framework of the Minnesota legislation. Read the next post for our plan to make it work.