© 2004 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice

HP’s Vision: Product Stewardship Solution for CRT Devices

Larry KingHewlett-PackardNAHMMA September, 2005

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Federal Law

Our preference is for a harmonized federal approach

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Overview• HP experience• HP position• Alternative approaches• Summary

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HP Experience• In-house recycling since 1987; to date over 500M

pounds recycled – target is 1B pounds by 2008• HP has offered web and mail-back take back

services (HP Planet Partners) to customers since 2000

• Over 10.7 M pounds collected through a free drop-off program in 2004 run in partnership with Office Depot

• Partnered with various other retailers offering take-back opportunities for consumers throughout the US

• Member of EPA’s Plug-in To e-Cycling program

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A Product Stewardship Solution• Implement a market driven system for

recycling CRT-containing computer monitors and TVs (“CRT devices”)

• Key factors: −Require manufacturers to take responsibility for

the recycling of a specified amount of CRT devices−Place limited responsibilities on retailers and

state government−Avoid creation of new taxes and government

bureaucracies −Provide funds to local governments for CRT

device collection, consolidation, and recycling not otherwise covered by a manufacturer program

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Benefits of This Approach• Provide efficiencies through market based solution• Place key responsibilities on manufacturers, not

government, to achieve recycling goals• Place minimal responsibilities on retailers• Limits government involvement to enforcement and

other necessary functions• Relieve burden on local governments by:− providing manufacturers with incentives to keep CRTs out

of the municipal waste stream − providing a funding source for CRT collection, consolidation,

and recycling including orphans

• Provides opportunity for design incentives• Avoids new taxes on consumers

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Legislature

Local govts & charitie

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Retailer

Manufacturer

Household

Roles of Various ActorsReturn unwanted CRT devices to the manufacturer or other available recycling program

•Prohibited from selling CRT devices from manufacturers not registered with the State•Discretion to partner with manufacturers or others to provide convenient options for consumer collections

•Pass the CRT Device Recycling Act•Establish the roles that manufacturers, state and local governments, retailers, and houeholds play in the recycling system

•May elect to offer collection and take back programs•Local an state governments may not accept CRT devices for disposal in landfills•Local and state agencies cannot purchase or lease CRT devices produced by manufacturers who are not registered with the State

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Enforcement: Achieving a level playing field• The Act contains clear enforcement

provisions to use against non-compliant manufacturers and retailers

• Manufacturers are accountable to the state to meet their equivalent share obligations

• The Act contains a provision to require new entrants to take on a share of orphans and to pay the registration fee that offsets some fixed costs

• The Act also requires that state agencies purchase CRT devices only from persons who are in compliance with the Act

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Alternatives to Product Stewardship• Fees at end of life• Increase in general taxes• New tax at point of sale−Administered by government−Administered by TPO

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Deficiencies of an ARF Financed Solution (Govt Run)• The ARF system fails to provide the benefits of

the Product Stewardship Solution−The ARF “fee” is a new tax on consumers−The ARF is burdensome to retailers−The ARF creates a huge new government

program−The ARF does not guarantee that any

amount of electronic devices will be recycled−The ARF does not create any incentives to

reduce overall cost or increase product performance−Application of fee to remote sellers

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Deficiencies of an ARF Financed Solution (TPO Run)• A TPO provides additional challenges when

compbined with an ARF−The TPO duplicates the existing state tax

agency and is of uncertain legality−TPO does not create competition−TPO adds layer of cost and complexity,

resulting in decreased efficiencies (increased cost)−Legal questions exist regarding the receipt

and spending of government funds−European and Canadian models demonstrate

difficulties in oversight an cost management

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HP view of existing proposals• California: this new tax has done a good job

of generating funds −CAW reported that state intends to collect

~$60M-$70M in taxes and recycle ~50M pounds (best case), >$1.20 per pound cost, not including retailer reimbursements of 3%!!!− IWMB reports recycling rate has not increased−15% - 20% of sales are escaping the fee

• Maine: Department is working on finalizing regs; our hope is for a positive outcome

• Maryland: “registration” fee clearly will not be high enough to cover costs but good model for legislation and supported broadly by industry

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Summary• Producer Responsibility system will work

without adding new “taxes” or creating a large government agency to collect fees

• Easy of transition to National System if implemented at state level

• Flexibility in collection and recycling programs

• Limited government role• Limited burden on retailers

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Contact information:

Larry King

Hewlett Packard Company

8000 Foothills Blvd, MS RN

Roseville, CA 95747

916.785-3093

Larry.r.king@hp.com