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February 2004

Will California Pay Too Much for CRT Recycling?

California consumers may not get the best deal if the state will be paying $.48 per pound to ensure recovery of cathode ray tube (CRT) electronics - at least, that's the opinion of one national electronics recycler.

"That's two times what we expect it to cost," asserts Mark Matza, executive vice president of the Fortune Group, based in Jersey City, New Jersey.

The state has to set a price for what it will reimburse recyclers and collectors under its new CRT recycling law (SB 20). After five stakeholder meetings, and comments with "costs" all over the map, the California Integrated Waste Management Board (CIWMB) and Department of Toxic Substances Control settled on $.26 for recyclers, and another $.22 for collectors.

The state will charge buyers $6-8 per new unit to finance the system. The money will be reimbursed to recyclers, who will reimburse collectors.

Matza tells State Recycling Laws Update that as long as he is allowed to export parts to his ISO 9000 and ISO 14000-certified plants in Hong Kong or China, his company costs should be much lower than the $.26 a pound now set in regulation by the state. He notes that the recycler in Massachusetts was charging the state about $.10 per pound to process mixed electronics on a state contract.

Recyclers make money off units and parts that are reusable, and Matza says nearly 100% of what comes in must be exported for economic reasons. Matza, who has ten U.S. recycling facilities and three in Asia, says his company does manual de-manufacturing, so it can get the majority of the material recycled, including plastics. It is nearly impossible to find U.S. markets for 100% of the parts, because the products are now made in Asia.

He notes that recyclers opting for a fully automated approach with shredders are usually not able to find markets for the left over contaminated plastics, and end up incinerating.

Matza suggests that California could save money if it just put the recycling contracts out to bid instead of setting a price.

Matt McCarron, staffer with CIWMB working on the SB 20 regulations, agreed that perhaps some recyclers can handle material for less than $.26 - but many others say $.26 isn't enough.

He says the law requires them to set a price, though the rate can be amended in July 2005.

McCarron says the government is less concerned if recyclers make a profit - they mainly want to prevent fraud.

Matza says some recyclers are already holding CRTs in warehouses, waiting for the law's reimbursement to start. McCarron says that nothing collected before October will qualify for reimbursement - adding that the state will have to audit recyclers reduce fraud.

How much will the state take in?

McCarron says early estimates put it at about $52 million per year "but that was before they included LCD displays."

Will that be too much or too little? No one knows.


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