The Electronics Lifecycle Resource TM

1. The Electronics Lifecycle ResourceTM

2. AER Worldwide - What we do • Brand Protection • Environmental Recycling • Value Recovery

3. Global Presence Northeast RENE Partner Facilities Fremont, California Illinois Southeast Guangzhou, China Hong Kong, China Shenzhen, China Guadalajara, Mexico Chennai, India Penang, Malaysia AER Worldwide Facility Subcontractor Facility Rene Partner Facility

4. StEP Task Force ReUse Current Projects: • Definition of “ReUse” • Framework Conditions White Paper • Business Principles White Paper • Global ReUse Forum

5. StEP TF Reuse Framework Conditions • Why promote greater reuse of electronic products? • What is the current situation regarding reuse? • What are the barriers to reuse of electronic products? • How can we overcome these barriers?

6. StEP TF Reuse Framework Conditions 1) Why promote greater reuse of electronics? • Environmental Reasons • Economic Reasons • Social Reasons

7. Environmental Reasons • Eliminate energy consumption used in the manufacturing and transportation of new products. • Reduce GHG emissions if the product itself uses the same or less energy than a newly produced one. • Reduced usage of virgin materials and thus reduced deleterious effects from extraction of those materials from the earth. • Prevents (or delays) the potential release into the environment of potential toxics embedded in the parts of the product, particularly if the product is in a country or region that does not currently have a clean e-waste industry. The toxics stay embedded until a clean e-waste industry is created to process the products in an environmental manner. • Reduces landfill and incineration.

8. Economic Reasons • Extends the economically useful life of a product and thereby provides more value to society for the cost to society of making the product. • Micro-economically, the sale of a reused product provides a return to the owner who sells the product to someone who reuses it. • The reuse industry provides jobs and money to the economy.

9. Social Reasons • Electronic products can be provided to segments of the population of both developed and developing countries who may not otherwise have had access to this technology. • Can provide jobs to segments of the population who may not otherwise have had jobs.

10. Proposed Definition of Reuse • “Reuse” of EEE is to continue the use of EEE beyond the point at which any particular owner is ready to deposit it into the waste stream, or to put into storage and not use it anymore. • Key points of this definition of Reuse: • (i) If the EEE specifications still meet the perceived needs of another potential owner/user, then the EEE should be transferred as the 1st consideration through some means to this new owner/user who then keeps the item in use as EEE and preventing it from becoming waste. • (ii) The 2nd consideration should be to evaluate non-usable EEE to determine if any components can still be used economically. If so, components are harvested and the remainder of the EEE becomes WEEE.

11. StEP TF Reuse Framework Conditions 2) What is the current situation of Reuse? • Definitions • Statistics for Reuse • Whole systems • Pieces • Reuse in Legislation • Legislation that may hinder effective Reuse. • Legislation that may encourage effective Reuse. • Situation in different geographies. • Industry Analysis • Market • Where? How big? Work in Progress

12. StEP TF Reuse Framework Conditions 3) What are the barriers to Reuse of electronics? • Lack of will • Focus on recycling to comply with WEEE legislation • Inefficient economic market for Reused electronic products • Waste being disguised as “products for reuse” in order to move the waste to the developing world for non-environmental recycling • “Murky” perception of Reuse vs. “Clean/Good” perception of Recycling. • Lack of good clear standards for respectable Reuse. • Perception by consumers that use of Reused products is bad. • Legislative barriers to use of Reused components in products. • Other Legislative barriers including Tax ones. • Perception that Recycling is “easier” than Reuse. • Global Reuse industry not fully developed. • Little effort at Design for Reuse. • No defined or recognizable standard for refurbishment. • Long term storage by consumers due to lack of awareness. • The rapid development of technologies and the fast changing fashion and functional design of devices. • The limited professional knowledge about the goods and their components at B2C refurbishers. • The missing design features to enhance reuse of present appliances. • The costs of inefficient repair, which often exceeds the market price of a new product. • The decreasing actual lifespan of new products put on the market. • The poorly developed definition and quality standards of the reuse/repair processes (especially for B2C). • The lack of commercial market tools and professional organizations for secondary markets. • Liability issues downstream • Concerns on data management/destruction.

13. StEP TF Reuse Framework Conditions 3) What are the barriers to Reuse of electronics? • Legislation definition confusion between Electronics for Reuse and E-Waste • Inefficient economic market for Reused electronic products • Waste being disguised as “products for reuse” in order to move the waste to the developing world for non-environmental recycling • Lack of good clear standards for respectable Reuse. • Global Reuse industry not fully developed. • No defined or recognizable standard for refurbishment. • Long term storage by consumers due to lack of awareness. • Stagnation of excess, obsolete & returned items in supply chain inventory • Concerns on data management/destruction. • Perception of cannibalization of sales by Producers

14. StEP TF Reuse Framework Conditions 4) How can we overcome the barriers? • Create a common nomenclature for Reuse. • Create, publish and evangelize Best Practice Standards. • Satisfy producer concerns regarding Reuse and provide an economic incentive for them to promote it. • Warranty issues • Brand protection issues • Grey market issues • Use potential to increase available market as incentive for producers to support increased reuse. • Provide guidelines for legislators so that they do not pass legislation that discourages Reuse. • Create a “certified” labeling program.

15. Reuse in Action AER Worldwide What are we doing about it? • It is our business • Developing economic and environmental business models • Active participation in StEP Task Force Reuse • Member US EPA Reuse Coalition Working Group • Tracking global governmental legislation

16. Reuse in Action Principle 1: Anything that can extend the life and usage of an electronic product or component prevents the waste of the global resources used up in production of that product.

17. Reuse in Action Principle 2: Frequently users discontinue use of a product because the product no longer meets their immediate needs, not due to the failure or technical end of life of the product. That product can still be used and frequently there is a demand for that product (either end product or components used to create an end product.)

18. Foundation of Business Model An important mission is to connect this electronic material that is no longer desired by the first party and make it readily available to other parties (end users or producers) who still desire the material.

19. Business Models for Reuse • Inter-Company Reuse • Supply Chain “Excess & Obsolete” • Parts Harvesting for Reuse • Refurbishment • Bridging the Digital Divide

20. Inter-Company Reuse • Internal Asset Redeployment Programs • Electronic equipment both company branded and purchased no longer needed by the current company owner may be in demand in another part of the company – bridge the gap logistically and communication-wise (web) to connect these two parties. • Employee Resale Programs • Consumer product company may have perfectly good product they do not want to sell for which there is an internal demand – connect the inventory with the employee.

21. Supply Chain “Excess & Obsolete” Supply Chain Inventory “Stagnation” • The Problem • Demand reduction or Mis-forecasting causes buildup of new component inventory in supply chain. • Inventory sits as OEM & EMS debate who is liable and what to do now. • Our Solution • AER ties into SC ERP system such that “e&o” becomes immediately visible and AER can market and move the material immediately. • Return is maximized while material has value.

22. Parts Harvesting for Reuse • Industry has stopped production of a critical component. • These critical components only exist in return inventories. • AER will cull these critical components from returned equipment and make available to the service markets.

23. Refurbishment • Electronic products or components that have been used are no longer desired by the current user. • Product is evaluated for potential market demand. • Scrap or Resell decision is made. • Product is tested/refurbished and data wiped and sold to users who still want the product. • Can be B2B, B2C, or components.

24. AER Value Recovery - Process • Brand Protection • Destruction of proprietary items • Valuation • Decision of Reuse vs. Scrap • Testing/Refurbishment • PC/Laptop testing • Integrated Circuit refurbishment • Data Destruction • Hard drive and flash memory wiping • Inventory • Order Fulfillment

25. Critical Aspects • OEM contracts that clearly define what can be reused and what must be destroyed. • Strict adherence to this split. • Robust internal processes for sorting “must be destroyed” from “can be resold”. • Environmentally sound certified destruction recycling processes for “must be destroyed” materials.

26. Typical Value Recovery Process Flow

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