Northwest Hazardous Materials Management Conference June 8, 2010

1. Northwest Hazardous Materials Management Conference June 8, 2010 Stewardship Ontario – Partnering with stewards to build sustainable communities

2. Agenda EPR in Canada Focus on Ontario Stewardship Ontario: who & what? Blue Box Program – quick facts Municipal Hazardous and Special Waste Program What’s next in Ontario & how will it impact industry? Industry challenges 2

3. Canada moving towards EPR • Canada, shifting from “product stewardship” to “extended producer responsibility” (EPR) which requires industry to cover 100% of the costs to manage products at their end-of-life • Canada-wide Action Plan for EPR • Initiatives transforming "product stewardship" into full EPR programs have already begun 3

4. 65 programs 4

5. GLASS ELECTRONICS More to come EXTINGUISHERS FLAMMABLES AEROSOLS BATTERIES BLUE BOX MERCURY PROPANE PHARMA SHARPS TIRES PAINT AUTO MILK OIL CONST/RENO/DEMO SERVICE PACKAGING PLASTIC / ALUMINUM 5

6. How stewardship works in Ontario Waste Diversion Act (WDA), 2002 Ministry of the Environment Regulates materials that must be “stewarded” & sets targets and other requirements industry must meet Waste Diversion Ontario (WDO)Ensures regulations & requirements are fulfilled; oversees industry programs Stewardship Ontario Develops and operates diversion programsfor printed paper & packaging and household hazardous & special wastes 6

7. Who are we? Ontario, Canada based not-for-profit industry-managed organization Driven by legislation (WDA) Funded by stewards, governed by stewards A steward is a company that makes and/or markets products and/or packaging that is managed in either of our programs: Blue Box or Municipal Hazardous & Special Waste Program (MHSW) Brand owner/first importer of designated material Party responsible for putting the designated material into the marketplace 7

8. Government mandate • To create and run cost effective stewardship programs that: • Divert household printed paper & packaging from landfill (Blue Box ) • Responsible for 50% of program cost; full EPR within 3 years • Provide environmentally responsible end-of-life management for familiar consumer products requiring special care e.g., fertilizers, pesticides, batteries, paint, solvents, automotive products (MHSW) • Responsible for 100% of program costs 8

9. Blue Box Program – a success story • Diversion targets met & exceeded year after year (50% - 60% -70%) • Blue Box Program runs in over 209 municipalities across Ontario • Over 65% of printed paper and packaging waste is diverted from landfill Blue Box Stewardship Program 9

10. Blue Box Program – exceeding expectations Recycling up 20% over 6 years 10

11. Key accomplishments • Nearly $1/2 billion provided to the Blue Box Program since 2004 • $61M for system optimization • $14M for market development • Approximately 1500 stewards currently contribute fees to the Blue Box Program 11

12. Challenges – aggressive targets 2012 TARGETS 2008 PERFORMANCE 12

13. Market Development - challenges • Ensuring end markets for hard to recycle materials eg. Rigid plastics and laminants • Requires aggressive action to construct complete supply chain: • Secure supply • Proved technology • Manufacturing capability • Market demand Reliable, Consistent Just-in-Time Scale & Throughput 13

14. The rapidly changing landscape • A lot of packaging innovations in the bio space • Pressure to keep ahead of innovation • Two systems to fund • Fossil fuel based • Bio based 14

15. Municipal Hazardous & Special Waste Program (MHSW) 15

16. Program purpose • To collect designated materials so they can be managed at end of life in environmentally appropriate ways” • Promote 3Rs (reduce, reuse, recycle) options for many materials (e.g., paint) and safe handling and disposal where 3Rs are not feasible (e.g., pharmaceuticals) • Operate reverse logistics supply chain 16

17. Legislative foundation • Build a consolidated program for the 22 wastes designated under Ontario Regulation 542/06 • Full EPR • Incent 3Rs • Stimulate markets to maximize MHSW management • Expand collection infrastructure • Promote recycling best practices & innovation • Drive changes to consumer behaviours 17

18. Step 1 – How is the plan built? What materials? How much? What’s available? Collection? Targets? R&D? Consumer education? Cost$ Who pays what? Performance measures? The Plan 18

19. Materials included? • Phase 1 - launched in July 2008 and included nine material categories: • Paint/coatings, solvents, batteries, pressurized containers, fertilizers, pesticides, antifreeze, oil filters and oil containers • Phase 2 – Launches July 1, 2010 with 13 new material categories: • Aerosols, Batteries, corrosives (including irritants), fire extinguishers (portable), flammables (including solvents), fluorescents, pharmaceuticals, sharps and toxics 19

20. How it works • Stewards pay fees based on type and quantity of material they supply for sale or use in Ontario • The fees are then used to operate the MHSW program, including collection, transportation and processing (or safe disposal) of all designated materials 20

21. Program infrastructure • Three collection streams developed • Municipal-based depots and collection events • Retail-based collection of paints and batteries • Incentive-based system for automotive materials • Collection network consists of • 91 permanent municipal depots which sponsor collection events • 51 municipalities with temporary depots & 127 collection events • 4,249 retail collection locations for paints, batteries and pharmaceuticals • 106 collection locations for automotive MHSW • Post-collection network consists of • 40 approved transporters & processors • 26 approved material processors 21

22. MHSW Program on a page Household & Small IC&I Consumption Stewards Quantities Stakeholders • Multi-material collection channel • Specialty channel • Post-collection strategy • Procurement & contracts team • Steward & materials stream Product Product Container Toxic Taxi Events Return to Retail Household Collection Depot Depot in a Box SSC Transfer Station Transportation Intermediate Processor Processing Disposal 22

23. Our customers • Over 2,036 stewards registered (funders) producing a diverse range of materials • Manufacturers of home improvement and other consumer products • Retailer-owned brands • Automotive product manufacturers 23

24. 85¢ of every dollar goes to diversion 24

25. Role of SO in establishing fees for stewards SO determines cost to manage program and sets fees based on market share Pay to pollute program Each steward decides how to manage cost: Within their business Within their supply chain With their customers Products often bear visible eco fees at point-of-sale Stewards who fail to pay fees on time will be subject to penalties 25

26. Assessing costs to stewards 4 3 2 1 … and promotion & education … like research & development Consider investments needed to reach targets Determine material management costs 6 5 Define contingency for forecast risk Calculate share of common costs Divide cost by sales 26

27. Targets & performance – year 1 27

28. Targets & performance – year 1 28

29. Targets & performance – year 1 29

30. Targets & performance – year 1 30

31. Targets & performance – year 1 31

32. What’s on the horizon? New waste diversion legislation is expected from Ontario’s Ministry of the Environment – fall 2010 32

33. How will it impact MHSW stewards? 33

34. Impact Steep monetary penalties for non-performance Individual companies exposed to risk Stewardship organizations will be held to higher standards 34

35. Industry challenges Establishing targets that are reasonable but ambitious Balancing 3Rs requirements Sustainability V. EPR Plethora of disparate programs across Canada No harmonization in legislation or regulation re: definitions of materials, definitions of stewards/obligated parties Administrative overkill for Canadian CPG companies who must discharge obligations differently in every jurisdiction 35

36. Questions? THANK YOU!

37. Contact Gemma Zecchini, CEO gzecchini@stewardshipontario.ca 647-925-1009