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Non-exporting
of electronics proves profitable
To date, the federal government has done little
to curb the export of electronic wastes beyond the Environmental
Protection Agency’s (EPA) cathode ray tubes (CRT) rule that requires
American companies to notify EPA before exporting them. While
well intentioned, the rule is easily circumvented by declaring
CRTs as used equipment for resale rather than as electronic waste.
Since CRT manufacture is rapidly being supplanted
by new display technologies, and that the majority of CRT production
will have vanished before EPA gets to any serious enforcement,
the CRT disposal problem will largely solve itself. However,
there is still a huge backlog of CRTs to be processed.
While the federal government is stalled on
e-waste exports, private interests have stepped up to fill the
legislative void. Whether motivated by purist environmental concerns
or potential exposure to bad publicity, there is a small but
growing trend among American consumers, businesses and institutions
not wanting to be associated with irresponsible export of hazardous
e-wastes.
The dilemma is that it is more costly to responsibly recycle
e-waste domestically than it is to profitably export it for overseas
processing by cheap labor and questionable practices.
As a result of state and local regulations,
and public awareness, landfills have and are banning electronics
– funneling even greater volume to export markets. At the same
time, the need for domestic plants capable of processing e-waste
has increased substantially, yet the volume being processed by
them today is estimated at only 15 to 20 percent of the total
volume generated by the American economy.
Realizing that electronics is a large stream
of solid waste with a budding demand for responsible domestic
recycling, a new cadre of processors are emerging with business
plans promising non-export, non-landfill, responsible disposal.
More than just an appealing marketing gimmick,
responsible domestic disposal is also proving to be a profitable
business model.
Case in point is All Green Electronics Recycling.
Arman Sadeghi, company founder and CEO, shows how media influence
and entrepreneurial spirit combined to create a thriving new
business that is helping control electronic waste in California.
After earning a neuroscience degree from
the University of California at Berkeley, Sadeghi dropped out
of Harvard Medical School to pursue a business idea. On November
17, 2008 he watched “The Electronic Wasteland” on CBS’s 60 Minutes
along with millions of Americans and saw the problem of unethical
dumping of American e-waste in China. He also saw an opportunity
to combine his knowledge of computers with his environmental
interests.
Sadeghi created a business plan that promises
customers that e-waste will not go into landfills, nor dumped
on developing countries.
Between January and May of 2009, using a
borrowed van and a rented storage unit, Sadeghi collected about
10,000 lbs. of electronic waste. By November, All Green had collected
280,000 lbs. and made its first profit. Six months later the
company moved to a 50,000 sq. ft. facility in Tustin to service
southern California, and opened a 30,000 sq. ft. operation in
Sacramento to cover the northern part of the state. By the end
of 2010, the company was collecting over 2,000,000 lbs. of e-waste
per month and employed nearly 100 people.
“All Green did about $5 million in sales
in 2010, our second year in business, and we are on track to
do about $10 million for 2011,” said Sadeghi. “While we do business
nation wide, very soon we plan on opening processing facilities
in Las Vegas and New York and hiring more people.”
Like the most reputable e-waste recycling
companies, All Green has achieved e-Stewards status. This program
is designed to assure the integrity of recycling operations through
an independent audit process and operates under the framework
of the Basel Convention and the Basel Ban that prohibits the
export of toxic e-waste to developing nations.
All Green is also in the process of obtaining
an R2/RIOS certification as an electronic recycler, the other
industry standard.
Many e-recyclers are adopting both certifications
as well as achieving the ISO 14001 standard status that implements
best practices and procedures for an environmental management
system.
All Green routinely hosts community e-waste
collections around the state and provides e-waste solutions to
corporations, government entities and large and small businesses
and has formed a partnership with California State University
campuses.
For entertainment companies like Ticketmaster
and Live Nation, All Green provides national IT assent management
and recycling services. For Fox Entertainment it does asset management,
hard drive destruction and electronics recycling. The company
also holds various government contracts to destroy government
owned electronics and counterfeits.
As most legitimate e-recyclers have realized,
businesses and consumers have heightened data security concerns.
All Green erases all data at no charge in accordance with Department
of Defense standards. For a small fee, customers can also receive
documented certification verifying the secure process.
When asked about the challenges of doing
business as a non-exporting e-recycler, Sadeghi replied, “There
is a good amount of competition when it comes to the large enterprise
accounts and fortune 500 companies. On the local level, however,
most of the competition is with small recyclers who ship overseas.
The government should certainly be doing more to ban illegal
exportation of electronic waste. Too many unscrupulous recyclers
are getting away with shipping their product overseas. As more
laws are passed and people become more aware of the export problem,
recyclers like All Green will be better able to compete for that
business.”
Another well established California electronics
recycler has proved the viability of implementing a non-export,
non-landfill policy. ECS Refining, headquartered in Santa Clara,
processes more than 10 million lbs. of electronics per month.
ECS holds the distinction of being one of the oldest and the
largest United States processor in the e-Stewards program, and
the second largest recycler of electronics in the country following
Sims Metal Management.
Founded in 1980, ECS started out handling
post-manufacturing scrap residues for Silicon Valley high-tech
companies. “When we started out we didn’t call it e-waste processing
– we called it precious metal refining from electronics. Precious
metal recovery is still one of our core competencies, but 95
percent of what comes in is electronics,” said Jim Taggart, company
founder and president.
Today ECS is one of only a handful of e-Steward
Certified recyclers in California. It has another processing
plant in Texas which was recently e-Stewards Certified with their
Environmental Management System being registered to ISO14001:2004
making it one of the few in that state to hold the certification.
The company is undergoing expansion with plans over the coming
months to open new processing plants on the east coast and in
the mid-west. “We now employ approximately 280 and are privately-held.
We did over $60 million last year. We will do over $90 million
in the electronics processing part of our business this year,”
Taggart said.
With processing plants in Stockton, California
and Terrell, Texas, ECS does business nationally, but its primary
collection area of electronic goods covers the western states.
It operates collection and transfer stations in northern and
southern California and has an established a network of over
300 collection points throughout the state. In early 2012, ECS
will have national processing facilities in the mid-west and
east coast.
Taggart explained how his collection system
works and differs from most drop-off locations, “Post-consumer
electrics are our big supply category followed by corporate and
manufacturers’ discards. We’ve found that non-profit organizations
are natural collection points, but we require all our collectors
– which include municipalities – to maintain certain standards
and verification requirements that align with our e-Stewards
certification. We audit the collectors to make sure they do what
they say they are doing. That way people dropping off items are
assured that their products are being handled properly, their
data is being destroyed, the items are processed domestically
in an environmentally-sound manner and all of the material is
recycled properly.”
To encourage people to drop off obsolete
or unwanted electronics, ECS Refining set up its “ecollective™”
organization of drop-off locations and a website, www.myecollective.com.
A consumer can go to the site, enter their zip code and get a
list of the five nearest ecollective locations. “We kicked off
this program about a year ago and we do advertising to drive
people to the website and collection points,” said Taggart.
Drop-offs are free for consumers, businesses
and institutions, and many ecollective members will do pickups.
In turn, ECS picks up bulk loads from collectors or has them
shipped to its processing plants.
“When we talk about no-landfill, we mean
we don’t landfill anything that comes from customers and we don’t
landfill any hazardous materials,” Taggart emphasized. “Besides
being an electronics recycler, we are also a hazardous waste
treatment facility, and virtually 100 percent of what comes in
essentially gets recycled. That includes pallets, plastic wrap,
foam rubber, wood and fabric. It all gets recycled.”
ECS makes money on recovered precious metals,
recycled commodities and from the State of California under the
Electronic Waste Recycling Act of 2003. Taggart explained, “In
California it’s a consumer-paid program. The state collects a
fee when the consumer buys a display device and disperses payments
to recyclers for processing CRT and flat screens. It’s a fixed
price of 39 cents per pound for qualifying devices and we have
to provide the name and address for each device.”
Taggart gave the following rough commodity
yield breakdown on the typical mix of electronics his company
receives: 25 percent glass, primarily from CRTs and display screens;
25 percent steel, 15 percent plastics, 7 percent aluminum, 5
percent copper, 1 to 2 percent precious metals and the balance
miscellaneous materials such as wood and fabric.
He has found ready markets for all commodities
with glass being the weakest. Unleaded CRT glass goes into manufacture
of fiberglass and structural products and leaded CRT glass with
20 to 30 percent lead content goes to smelters for recovery.
“With a qualified ‘yes,’ I would say increased
recovery of materials is helping offset the high cost of recycling
electronics. There are fairly high commodity markets right now
for metals and plastics. Those things are helping subsidize the
recycling. If we were to eliminate the export of these materials
there would be a lot more materials to process and the economics
would improve allowing more automated processes and more of a
domestic market for these materials.”
“There are an infinite number of people out
there, who will collect electronics, but most are brokers, not
processors and to a large extent they sell to exporters. The
more responsible customers know the difference. There is also
a growing awareness that there is a difference between the two
certification bodies, however, e-Stewards is considered the “Cadillac”
– the most environmentally safe standard. Informed customers
appreciate that distinction and are moving in our direction.”
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