1. Processing, Recycling, & Data Collection John Segala Amazon Environmental, Inc.

2. Agenda 1.Work Plan Objectives; –Goal 4, Objective 4.4, Processing –Goal 4, Objective 4.5, Recycling –Goal 5, Objective 5.1 though 5.5 2. Amazon’s Commitment 3. Proprietary Data Issues 4. Summary of Requested Data 5. Goal 5 Task Matrix

3. Goal 4. The statewide post-consumer paint management system should be designed to ensure that it is environmentally beneficial, economical, and convenient. With these considerations, the system should strive to use methods highest on the following waste management hierarchy:The statewide post-consumer paint management system should be designed to ensure that it is environmentally beneficial, economical, and convenient. With these considerations, the system should strive to use methods highest on the following waste management hierarchy: –Reuse –Recycling (into paint or other products) –Energy recovery (generally applicable to – oil-based paint) –Proper Disposal

4. Objective 4.4: Processing 1. Track the quantity (gallons and weight) of materials (by type, e.g., oil-based vs. latex, consolidated vs. original containers) delivered for processing according to the following breakdown: a. Post-consumer paint that is suitable for use as a recycled paint feedstock

5. Footnotes to 4.4.1.a [1] Suitability for purposes of post-consumer latex paint means “usable for consolidation or reprocessing” as defined in Green Seal Standard GS-43, section 1.3.4, published on August 1, 2006. In some cases, suitability may need to be evaluated before the paint is delivered to a processor (e.g., where paint is bulked at the point of collection). For the definition of suitability of post- consumer latex paint, see: http://www.greenseal.org/newsroom/GS- 43_Recycled_Content_Latex_Paint.pdf. http://www.greenseal.org/newsroom/GS- 43_Recycled_Content_Latex_Paint.pdf [2] The Minnesota Demonstration Project will not track the quantity or type of post-consumer oil-based paint that is suitable for use as a recycled paint feedstock unless actual opportunities for using such paint as a recycled paint feedstock arise. If such opportunities do arise, suitability of post-consumer oil-based paint will be determined based on specifications for particular end markets.

6. Footnotes to 4.4.1 [3] In addition to tracking how much of the collected paint is suitable for use as a recycled paint feedstock, the PSO should also make recommendations on how to increase the percentage of collected paint that is suitable for this purpose. Note: Currently only about 20% of the paint we receive is usable as RCP

7. Objective 4.4.1: Processing b. Post-consumer paint that is used as a recycled paint feedstock (e.g., with further transportation from the initial processor to a subsequent processor and/or end market). To the extent possible, also track the transportation distances to the subsequent processor(s) and/or end market(s) and the associated transportation costs and the fraction of the collected paint that is ultimately used for each type of end market (e.g., reprocessed paint vs. consolidated paint).

8. Transportation Tracking transport of the paint problematic –Ask every customer travel distance? –What if sold to retailer? As feedstock? –How to evaluate this? 1 customer travels 5 miles to my store, buys 5g. –Paint travels 1 mile per gallon Sell truckload as feedstock to company 1,000 away? –Paint travels 0.25 miles per gallon

9. Objective 4.4.1: Processing c. Post-consumer paint that is used as a feedstock for another legitimate recycling activity other than the production of recycled paint (e.g., with further transportation from the initial processor to a subsequent processor and/or end market). To the extent possible, also track the transportation distances to the subsequent processor(s) and/or end market(s), the associated transportation costs, and the quantity of the collected paint that is ultimately used for each alternative recycling activity (e.g., production of PLP, concrete products, plastics, and/or virgin paint). Note: Similar issue with trans. Will discuss costs later.

10. Objective 4.4.1: Processing d. Post-consumer paint that is sent to a landfill or otherwise disposed. To the extent possible, track the transportation distances to the landfills and/or other disposal sites, the associated transportation costs, and the ultimate means of disposal. e. Containers (separated by type, e.g., steel, plastic, and/or hybrid containers and lids) that are suitable for recycling. f. Containers that are actually recycled (e.g., with further transportation from the initial processor to a subsequent processor and/or end market). To the extent possible, also track the transportation distances to the subsequent processor(s) and/or end market(s), the associated transportation costs, and the quantity of containers recycled by material type. g. Other recyclable packaging.

11. Objective 4.4.2: Processing Track the total costs and unit costs of items referred to in Objective 4.4.1 above, where applicable and to the extent possible, and considering restrictions on the collection and use of proprietary information. It is expected that cost data for multiple processors will be available for aggregation as additional processors are hired to provide services and/or additional states are included in the system.

12. Objective 4.4.3: Processing Work with collection points and processors to determine the best management methods to minimize costs, maximize convenience and optimize opportunities for post-consumer paint reclamation.

13. Objective 4.5: Recycling 1.Track gallons and colors (e.g., white, off- white, and other) processed by reuse and recycling method and any further costs required (e.g., additional transportation/export) as represented in PPSI reports, if not proprietary information. Note: Will discuss cost later.

14. Objective 4.5.2: Recycling Track data on management methods (bulking vs. shipping in cans) by collection site to determine levels of paint available for paint recycling.

15. Objective 4.5.3: Recycling Track data on reuse quantities by collection site to determine levels of paint reuse diversion from the system and not available for paint recycling.

16. Objective 4.6: Energy Recovery and Proper Disposal 1.Track the quantity and PSO contract costs, if not proprietary information, of latex and/or oil-based paints going to energy recovery. 2.Track the quantity and PSO contract costs, if not proprietary information, of latex and/or oil-based paint going to other proper disposal outlets. End of Goal 4

17. Goal 5. Identify cost-effective alternatives for using post-consumer paint products and explore means to expand the market for products containing post-consumer paint.

18. Objective 5.1: Explore strategies to maximize the market viability of products containing post- consumer paint.

19. Objective 5.1: 1.To the extent possible, track recycled paint sales by the following customer types: local government agencies, state government agencies, federal government agencies, business "end-users" (e.g., contractors, apartment owners, non-profits, etc), business resellers (retail stores, brokers, virgin paint companies, etc.), households, and others. Note: Sales by customer types (except gov’t) difficult to track, depend on marketing strategy, and somewhat proprietary.

20. Objective 5.1: 2.Identify other markets/products for post- consumer paint. 3. Identify and model a “basket” of uses/scenarios for post consumer paint and model cost for these scenarios. 4. To the extent possible, track gallons of recycled paint sales by color (e.g., white, off-white, and other).

21. Objective 5.2: Examine the effect of post-collection product reuse programs on paint recycling programs. Note: Reuse programs may lower costs in the near term. However, if very successful, may also prevent long term price reductions since most good paint will not be available for sale as RCP.

22. Objective 5.3: Develop baseline data in Minnesota on recycled- content latex paint sales, as well as other products containing post-consumer paint. Track changes in sales volume and document concurrent new activities that would potentially increase the sales of recycled-content latex paint through the life of the Demonstration Project and beyond. Information requests should include and protect proprietary data.

23. Objective 5.4: Seek opportunities to most economically use what is collected, including avenues to increase the markets for post-consumer paint through federal, state, and local government procurement and consumer and contractor promotion, where applicable. Note: How to increase government procurement?

24. Objective 5.5: Examine the economics of the recycled paint product market on paint management costs. Note: I could provide scenarios but don’t expect any changes in the short run End of Goal 5.

25. Amazon’s Commitment Moving into larger facility in Fridley, MN this summer –23,000 square feet –More room for paint processing, deliveries, storage, roll-off boxes, etc. a retail sales area? –Clean Facility - dedicated to sorting and manufacturing reprocessed content paint (no PLP)

26. Amazon’s Commitment Moving PLP manufacturing to a facility on the property of Buzzi-Uncem Cement this summer –Erecting a 10,000 sf building –10 year contract with plant to supply PLP –Capable of processing very large volume of non- usable paint annually –Buzzi has 3 other plants that are also interested in using PLP as an alternative raw material –Successful trail with another plant in Southeast –Note: Enough time or interest for 10 minute overview of PLP process?

27. Amazon’s Commitment Developing new marketing materials and strategy for selling more reprocessed content paint –New logo, new brochure, new website –More colors –MPI approval and Green Seal approval pending –Dedicate more time/money to developing markets Will increased paint sales justify higher costs? –I’m expecting to get more usable paint Reuse shelf issue? More paint but less usable? Amazon takes all the risk of its decisions (as do other recyclers)

29. Risk Increased commitment increases risk – ‘Skin in the game’ –Amazon has no commitments for current or future business Competitive Situation –Anyone can start a paint recycling business in MN or anywhere else at any time (and some are) –Success for existing recyclers is not guaranteed EPI, Paint Solutions, Angel’s Touch, all bankrupt –Alternative for non-usable paint may arise that puts current recyclers out of business –LCA/CBA could recommend landfill/disposal?

30. Prices Inflation adjusted prices have declined Amazon’s inflation adjusted MN price down over 15% since 2000 Labor, insurance, and fuel prices way up 1994 AEI in CA charged $145/drum, or about $210 in today’s dollars –Prices lower due to; Economies of Scale – larger volumes Increased efficiency More paint sales Competition –I believe the same is true for other existing recyclers (similar prices)

31. Incentives Recyclers are competitive –Seek best way to process, market & sell paint Different models: export, sell as feedstock, sell to retailers, sell direct, sell in bulk, private label –Seek alternative for “non-usable” paint –It may look like we aren’t doing much but we all work on this all the time In other words paint recyclers strive to…..

32. Goal 5. Identify cost-effective alternatives for using post-consumer paint products and explore means to expand the market for products containing post-consumer paint.

33. Proprietary Data Concerns The PPSI is requesting detailed data on volumes, customers, products, processes, marketing strategies and costs. The PPSI is composed, almost entirely of; – existing customers (MN, CA, etc.) – potential customers (FL, NC, IA, WA, PSO) –Competitors who recycle paint (Boomerang, Metro, Visions, Hotz) –Competitors who sell paint (long list)

34. Proprietary Data Concerns What is goal of data collection & analysis? –to improve effectiveness of other recycling programs and increase their paint sales? helps competitors (don’t want to do that) –to negotiate lower recycler fee? (nor this) –to use as an audit trail? (this one fine) –to use as input into the LCA/CBA? evaluate environmental benefits/costs in order to –justify paint recycling (okay) or –justify landfill/disposal (not so good)

35. Proprietary Data Concerns Does Product Care or EcoPeintue have data that may be useful? –What data does Boomerang provide? –What data does Product Care receive?

36. Proprietary Data Concerns Willing to provide certain summary data for unrestricted use –Volumes of drums/cans delivered, gallons bulked, gallons of usable paint. Willing to provide certain detailed proprietary data for restricted use Cost data won’t be provided (except possibly under very restrictive and special circumstances)

37. Proprietary Data Concerns Summary of requested data –Okay = Volumes reported for unrestricted use –P = Proprietary data reported for restricted use, based on demonstrated need to know, with confidentiality agreements –NR = Not reported –NA = Not applicable

43. Goal 5 – Task Matrix