Paint Product Stewardship Initiative

1. Paint Product Stewardship Initiative Presentation to Retailers Scott Cassel, PSI Executive Director/Founder December 13, 2007

2. What is the Product Stewardship Institute? • Non-Profit based in Boston • Membership • 43 State members • 50 Local agency members • Board of Directors: 7 states, 4 local agencies • Multi-stakeholder product stewardship network • Adjunct Council: Business, Environmental/Organizational

3. PSI Full and Affiliate State Members

4. Paint Mercury Thermostats Fluorescent lamps Electronics Pharmaceuticals Radioactive Devices Telephone books Gas Cylinders Tires Beverage containers Motor oil PSI Projects

5. What is Product Stewardship? “Product Stewardship" is a principle that directs all those involved in the life cycle of a product to take shared responsibility for reducing the health and environmental impacts that result from the production, use, and end-of-life management of the product.

6. PSI Role in Paint Dialogue • Research/technical competency • Forum for multi-stakeholder dialogue • Design and implement pilot projects • Clearinghouse for paint product stewardship policies and programs

7. Reasons for Paint Dialogue • Threat of multiple state legislation (CA, MN) • Coordinate interests of all stakeholders • Efficiency: One set of laws, regulations • Coordinate goals, objectives, strategies • Share information (laws, regulations, policy, programs) • Collaborative vs. Confrontational

8. 64 million $8 $512 million Estimated # of gallons/year leftover in U.S. Estimated average cost/gallon to manage Estimated total cost to manage leftover paint 20% of current sales are oil-based 30-40% oil-based being returned at HHW facilities Little recycled paint being purchased This is not sustainable!! Why Paint?

9. Why Manage Latex Paint? • Collection of oil-based paint was always agreed to • Most states prohibit disposal of liquid wastes • Liquid paint is not accepted by waste mgt companies • Still developing consensus on latex paint management • Focus on collecting in rural locations and collecting small amounts left in can

10. Why Manage Latex Paint? • Government perspective: • Latex paint is a valuable resource like any other recyclable • Residents cannot distinguish between latex and oil-based paint • Drying paint is resource intensive – small amounts possible • Industry perspective : • Latex is not hazardous so less need to collect • Is it worth the cost?

11. Lifecycle Assessment/Cost Benefit Analysis • NPCA funded/managed – PSI facilitated • Seeking consensus • Comparing environmental and economic costs of dry and dispose to reuse and recycle – full lifecycle • Tool for decision making by PPSI group – Identify scenarios when cost-effective (or not) • Apply to rural areas and where small amount left in can • Completion expected March/April 2008

12. Key Dates • Sept. 2002 – PSI presentation to NPCA • Sept. 2003 – Completion of Paint Action Plan • Sept. 2004 – Completion of 4 meetings • March 15, 2005 – 1st MOU Signed • March 15, 2007 – end of 2-year 1st MOU • March 21, 2007 – NPCA Board Resolution • Oct. 24, 2007 – 2nd MOU completed/available to sign • Nov. 1, 2007 – beginning of 3-year 2nd MOU

13. The 1st MOU was… • A first step toward a nationally coordinated leftover paint management system • 8 Projects  Raised $1 million+ • Demonstrate potential to reduce the volume of leftover paint and the cost of managing leftover paint

14. Financial Investment(not including in-kind or HHW collection costs) • State and local government $685,000 • NPCA $465,000 • U.S. EPA $230,000 • Dunn-Edwards $35,000 • PSI Foundation Grant $30,000 • Recycled Paint Mfrs $27,000 • Organizations $6,000 TOTAL: $1,478,000 (est. to date)

15. 1st Paint MOU Project Portfolio • Source Reduction Survey/Pilot • Reuse Manual/Pilot • Infrastructure Report • Recycled Paint Standard (Green Seal) • Recycled Paint Marketing • Recycled Paint Regulatory Issues – White Paper • Sustainable Financing Options • Lifecycle Assessment and Cost/Benefit Analysis (LCA/CBA)

16. Infrastructure Report • Infrastructure report evaluated best ways to collect, consolidate, transport, and process leftover paint in U.S. • Using infrastructure report as basis for performance goals. • Collection points needed for convenience (2,000 to 11,000) • About 1 site per 10,000 households • Phased implementation over time to meet highest performance goals. • Cost to collect, aggregate, transport, recycle = $8.59/gal

17. Infrastructure Report • Use of existing government infrastructure • Need for additional collection locations • Encourage diversity of collection sites (private) for public convenience

18. 2nd Paint MOU 3-year continuation of partnership (until November 2010) November 2007 to July 1, 2008 (no later than) Design and develop industry-run Paint Stewardship Organization (PSO) and Demonstration Project in Minnesota. January 1, 2008 Establish performance goals for source reduction, reuse, collection, and recycling for the Demonstration Project.

19. 2nd Paint MOU July 1, 2008 (no later than) Implement Demonstration Project in Minnesota funded by “consumer-based cost-recovery system.” April 2009 to September 2009 Evaluate the Demonstration Project. Roll out to other states • July 2009 – OR, WA, VT • January 2010 – CA • July 2010 – IA, FL, NC, IL

20. 2nd Paint MOU Financing system is key remaining element • Manufacturer payment into industry-run PSO. • Payment covers collection, transportation, recycling/disposal costs. • Payment recovered from consumers. • Fee can be invisible or visible – left to manufacturers and retailers to decide.

21. 2nd Paint MOU • NOT discussing a fee collected at retail into a government fund (e.g., CA electronics law). • Legislation likely needed to address anti-trust and free rider issues • Goal: Consensus on legislation

22. Next Steps • Sign MOU • 13 signed to date (expect over 75) • Lowe’s only retailer to sign 1st MOU • Negotiate financing system (mfr/retailer focus) • Complete LCA/CBA • Establish framework for PSO • Design Demonstration Project in MN – Retail committee members needed • Design Project Evaluation Coordinated by PSI through the PPSI stakeholder group

23. Final Thought • Paint management program will happen. • Retailers have great opportunity for collaborative program replicated in 50 states. • Current program has certainty. • Retail risk • Different state programs – more costly and not as effective without full collaboration • Some states might push mandatory retail collection • Best to fully engage in 2nd Paint MOU !!

24. For More Information Contact… Scott Cassel PSI Executive Director/Founder 617-236-4855 scott@productstewardship.us www.productstewardship.us