1. Packaging Sustainability 2006 EMA Spring Meeting

2. Interest is Growing Albertson Coca Cola The Dannon Company Estee Lauder Company Johnson & Johnson Kraft Foods McDonald’s Microsoft Nike Pepsi Cola / Frito Lay REI Starbucks Target Unilever Members: How long before you may be asked what you are doing about sustainability?

3. Vision of Sustainability The Sustainable Packaging Coalition envisions a world where all packaging is…  Sourced responsibly  Designed to be effective and safe throughout its life cycle  Meets market criteria for performance and cost  Made entirely using renewable energy  Once used, is recycled efficiently to provide a valuable resource for subsequent generations  In summary: we envision a true cradle to cradle system for all packaging.

4. Definition of Packaging Sustainability  Is beneficial, safe, and healthy for individuals and communities throughout its life cycle  Meets market criteria for performance and cost  Is sourced, manufactured, transported, and recycled using renewable energy  Maximizes the use of renewable or recycled source materials  Is manufactured using clean production technologies and best practices  Is made from materials healthy in all probable end-of- life scenarios  Is physically designed to optimize materials and energy  Is effectively recovered and utilized in biological and / or industrial cradle-to-cradle cycles

5. Beginning the Journey  No company in the world has achieved a truly sustainable package.  Assess current status (benchmark) Energy use Materials use Transportation End of life options  Move incrementally to sustainability Develop long term goals Set annual objectives

6. Sustainability – not entirely about oil BUT – oil drives the economics  At $70/barrel the market will seek out alternatives to petrochemical derived materials and energy sources  There is an oil price point that either drives or diminishes movement to other technologies 1970’s – solar heating/solar panels 1990’s – that market goes bust  Uncertainty will inhibit the progress New technologies are capital intensive Oil was $13/barrel as recently as 1999

7. Uncertainty in the Oil Fields  Petroleum Intelligence Weekly (PIW) Internal Kuwaiti records reveal that the nation's oil reserves are far below the officially stated amount of about 99 billion barrels.  Simmons and Company analysis of the International Society of Petroleum Engineers statistics on Saudi Arabia: 90% of its oil comes from the five super giant fields discovered between 1940 and 1965. No new discoveries of giant fields since the 1970’s. Ghawar oil fields are 55-60% of total production - 6.25% of the world's oil production. The northern regions are almost depleted. Two other giant fields, Abqaiq and Berri, also seem to have peaked in the 1970s.  Hubbert peak theory – Diminishing new oil discoveries The worldwide peak in oil production has already passed.

8. Non Sustainable Envelope Inks All Petroleum Based Chemistries  Vehicles – Styrene Acrylic  Organic Pigments - bright, clean, intense Reds and Yellows  Azo and Diazo  Napthol and Beta Napthols Blues and Greens  Phthalocyanide Violet  aniline  Dioxazine Black  Carbon  Additives – Waxes – Defoamers – Wetting agents

9. Sustainable Envelope Inks What is Available?  Vehicles – the good news Soy Protein - already commonly used (Soy Seal) Wood based resins – the original water envelope ink resins – still in use  Wood Rosin - aged tree stumps  Gum rosin - sap  Tall oil rosin - by-products of the paper making process Methylcellulose – some usage Shellac – Insect secretion - seldom used Casein – milk protein Polysaccharides - agricultural raw materials – interesting properties for envelope inks Recycled PET – plastic beverage bottles – new PLA (polylactic acid) – derived from corn – new, nothing yet available for graphic arts

10. Sustainable Envelope Inks What is Available? (cont.)  Pigments Natural pigments – made from plants and insects some examples:  Madder root - made from dried, ground roots  Indian Lake – derived from the same insects as shellac  Anthocyanins – derived from flowers and fruits - bright red to blue.  carotenoids – common to plants -reds, orange, and yellow  Betalains – beets or beetroots  Cochineal (carmine)– insect based crimson color Iron Oxide pigments  Were manufactured from natural clays but now typically synthetic  The bad news: natural pigments typically lack the color intensity, strength, permanency, or compatibility as expected from petrochemical derived products.  Oxide pigments are dull muted colors but otherwise suitable

11. Is landfill disposal sustainable?  No – landfills are “graves” in unsustainable “cradle to grave” approaches to waste  Current reality: the majority of envelopes end up in landfills If the question arises: what is the impact of ink on the biodegradability of paper?  Ink can be broadly described as a plastic ASTM D 6868-03 – Biodegradable Plastics used as Coatings on Paper and other compostable substrates  References lamination and extrusion to paper ASTM D 6400-04 – Standard Specifications for Compostable Plastics

12. Ink Effect on Paper Degradation - Composting  ASTM D 6400-04, Section 6.2 Disintegration During Composting Notes that satisfactory disintegration occurs, if after controlled composting, less than 10% of the original dry weight remains after sieving.  Industry Interpretation: The weight fraction of a typically applied ink comprises so little of the printed paper product total weight as it may not be a consideration in the testing.

13. Another Viewpoint  From a press release on the Internet: “Several plastics masquerade as biodegradable, but actually break down into tiny invisible bits that could affect the soil and animals such as earthworms. Of the few plastics that are genuinely biodegradable, many contain toxic residues from catalysts. One plastic, that's biodegradable and contains no nasty residues, is called PHB, polyhydroxybutyrate.”

14. Who will be pushing Envelope Manufacturers to Sustainable Technologies?  Members of the Sustainable Packaging Coalition Direct Mail Advertising Letterhead Envelopes Consumer monthly statements – bill payments  Environmental groups Sierra Club Nature Conservancy Many others  Non Profits  Government Agencies  The EMA – Sustainability is in everyone’s best interest

15. Waste Programs  Ink Companies use of ink separators Fluid Inks – separate water from solids Offset inks –  Reclamation through recycling  Solids created  Printing Companies Some have separators for Flexo Inks Offset inks handled by waste companies – recycle not practical  Cost of Flexo Water Waste lower than cost of Water Ink Waste –  Reduce amount of ink at press (go from 5 gallon pail to smaller quantity)  Chambered systems require less ink and thus creates less waste  Stay open ink systems creates less waste  NO skin on ink that needs to be thrown away  Less press clean up because of drying up on the press

16. VOC Issues  Flexo Water Inks –  Alcohol eliminated from most water inks  pH Neutral Inks reduce the Amines that are main VOC in current products  Costs slightly higher printer  Offset Inks  High Solid Inks provide low VOC products  Some New Offset Inks are VOC free  Costs are higher for printer  Press Washes  Low VOC Products available  Costs are about the same  Some products not as effective

17. Contact Information  Flint Group Michael Impastato 1-314-200-9127 michael.impastato@na.flintgrp.com  INX International Joe Kelly 1-630-681-7131 joe.kelly@inxintl.com  Kohl Madden John Vogel 410-903-3501 john.vogel@kohlmadden.com