June 27, 2007 - From the June, 07 issue

Electronic Recycling Industry Tackles World's Fastest Growing Source of Solid Waste

Citizens of the United States have long been indoctrinated with the practice of recycling. But the public remains largely unaware of the harmful effects generated by discarded electronic devices such as computers, cell phones, and televisions. In the following Metro Investment Report interview, John Shegerian, founder and CEO of Electronic Recyclers, explains how focused legislation and committed entrepreneurial leadership have helped spread the practice of electronics recycling to the rest of the globe.


John Shegerian

What's the niche for electronic waste recycling? And what is the environmental and commercial challenge to being successful?

The electronic recycling industry is a new industry born out of the technological revolution and the constant stream of new products it produces. It's a solution-based industry that addresses the fastest growing solid waste stream in the world-electronic waste. Cell phones have an average life of 11 months and PCs last from 15 to 18 months. This leaves us with a huge surplus of unwanted, obsolete, or simply not-functioning electronic devices.

It has become urgently apparent in the last few years that these devices-often containing lead, mercury, and other toxins-must be kept from our landfills. Our challenge is to effectively and responsibly recycle as much of this material as possible. We're an industry born to serve as a solution to the fastest growing solid waste stream in the world-not just California or the United States.

You have spoken publicly about the tremendous growth opportunities of this segment of the recycling industry, and Electronic Recyclers recycled over 50 million pounds of electronic waste last year. What do your growth projections look like?

Last year, 50 million pounds was the number. This year, we're going to recycle more than 100 million pounds, and that's just in our two locations-California and in Massachusetts. I believe that this business will get professionalized, it will get consolidated by the end of the decade, and then there will be three to five brand names with locations in every state and drop-off points in every city across the United States, throughout Canada, and many other foreign locations, including China, Singapore, Hong Kong, and Mexico.

This is one of the largest environmental growth industries, because it's foolproof, it's profitable, and it's one of those unique industries where you can make a profit, you can make a difference in the society that we live in, and you can also affect people's lives positively. So, it goes way beyond making a profit. This is one of those industries that makes history, because we're cleaning up the environment, we're creating thousands of jobs, and we're making sustainable, profitable businesses. Electronic recycling is an industry that's not going away, and it's only going to become more of a growth industry as the word gets out on how to do it right.

We do this interview as you travel with the governor of California, Arnold Schwarzenegger, in Canada. How important has California's SB 20-the 2003 law that made it illegal to throw away electronic trash such as computers-been for the recycling industry?

The tough recycling laws in California have allowed the state to lead the nation in electronic waste recycling. There's no other state in the country that can claim they've reached 10 percent of our numbers. In 2005, when the Governor enacted SB 20, we recycled 65 million pounds as an industry in the state of California. In 2006, we recycled more than 120 million pounds.

Other states are continuing the wholesale liquidation of the environment by filling the landfills with electronic waste. But in California, we are doing a great job of collecting, recycling, and actually reusing electronic commodities. We've taken on a leadership position in this role; that's why I go with the Governor wherever he travels. We've been to China together, Beijing, Hong Kong, and Shanghai. We've been to Mexico City and Monterrey. Right now we're going to Canada-Toronto and Vancouver-and later this year to India, to spread the beacon of light that he and the Legislature have created here in the state of California.

With the success of SB 20, what is the need for AB 1535-a six-dollar processing fee on the purchase of all PCs? If the growth projections for the industry are as strong as you suggest, why is more legislation needed?

Because for Californians it's a tale of two cities, unfortunately. What had happened is, California SB 20 only covers LCDs, plasmas, and CRT monitors. But everything electronic is banned from the landfills. So we're keeping our landfills clean and we're recycling more electronics than any other state in the nation-we're probably leading the world in electronic waste recycling. Other electronics, such as computers, copiers, and fax machines, are not covered by SB 20 but are banned from the landfills. With the new legislation we can start including those types of electronics into the recovery program so that they get recycled in the most appropriate ways.

What does Electronic Recyclers-the company-actually do?

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Electronic Recyclers is both a recycling company and a collection company for electronic waste in the state of California. We also take waste from outside of the state of California, but we don't get paid under SB 20. It's actually a very simple program. How it works is, when electronic materials come into our facility, they are bar coded under an IP process that we created and copyrighted. Thanks to the bar coding and scanning process, we can track all materials from cradle to grave as they go through our facility.

We were also the first recycling facility in the state of California to put up over 40 cameras on our ceilings so people can actually watch their electronics get recycled. We actually tape the recycling process for them and give them a copy of the tape. They can then give that tape to their insurance carriers so they'll know that the liability has been removed with regard to privacy issues.

One wonderful part of the program is that we not are actually classic recyclers as recyclers go. We are de-manufacturers; our plant is like a reverse assembly line-a disassembly line, if you will. When an old product comes into our facility, we break it down into three commodity groups. We break it down into crushed glass, plastics (both light and dark), and metals (the metals contain sub-categories: gold, silver, stainless steel, copper, aluminum). All three of those commodities are then sold to classic recyclers around the world, who then smelt and reuse these materials. So, 99.5 percent of everything that comes from our front door goes to smelters and recyclers for reuse.

Everything in your cell phone, PC, laptop, and television set is reusable. And reuse is the essence of recycling. Under the SB 20 program, everything is being reused, and that's why this program works.

What kind of exchanges are you experiencing on your trade mission with the Governor?

The decision makers we meet want to know how the program in California is working, they want to know the numbers, and they want to know, practically speaking, how the program works in terms of our responsibility to report back to the state, meet requirements, and divide the funds paid by the government.

Beyond that, most of the places we're going in Canada are going to follow the California model, and so they're very interested in our success because they're going to be following our model. They've seen it and they've watched it for two years, and now they want to put it into play there. They want to know what they can learn from any potholes that we hit along the way so they can avoid them as they start implementing their programs in Canada. For instance, Vancouver is starting an advanced electronic waste recycling program. In Alberta, they've already started it, and they're continuing to tweak it all the time. So, as time goes on, the California success story is getting out more and more. Other countries and states are going to follow, and they'll really want to know, from a practical position, how it works and how it can be made even better.

Most think Europe is on the cutting edge of climate change regulations and the development of green commercial markets. What does California have to teach Europe; and, what can we learn from Europe regarding electronic recycling?

European youth are trained and taught from a very young age that recycling is part of good practices of living here on this earth. We can learn a lot from the Europeans about how well they take care of the environment. However, they have not had the tremendous success or the measurability that we've had in California with electronic waste recycling, specifically. So, what we can learn from them is the ground level, big picture issues of nurturing and taking care of our environment as part of our legacy. We should learn that from the Europeans and implement that in California and the United States. What we can offer them is that good legislation like SB 20 actually works, is measurable, is manageable, and has become a runaway success in the state of California.

You've also mentioned that you have a location in Massachusetts. How do Massachusetts and California compare regarding electronic recycling?

Massachusetts was actually the first state to pass a landfill ban on electronics in the United States. They just did not implement an infrastructure to accommodate and pay for the recycling. We bought one of the largest facilities there, and it's proved very successful. I was just in Massachusetts last Monday, testifying at the State Capitol in downtown Boston, and they're trying to choose which model to emulate. They're choosing between the California Advanced Recycling model and the Provincial Responsibility Model. I was there advocating for the Advanced Recycling Model, but both are going to help clean up the environment, and both will create a structure to recycle more products and generate more awareness among the public at large in the state of Massachusetts. That's a great thing for everybody.

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