Legal and Market Drivers of “Sustainable” Material Choice for

Electronic Products

iNEMI Sustainability SummitSeptember 22, 2008

Holly Evans, Esq.Strategic Counsel, LLC

Presentation Overview

• Recent announcements regarding “sustainable” electronics

• Legislative and market forces that are driving this trend

• Impact of this trend on electronics industry• Conclusions/Forecasts• Q&A

Dell’s Bamboo Encased Computer

• Announced at 2008 Fortune Green conference

• PC Encased in laminated bamboo housing

• 81 percent smaller than a standard desktop

• Uses 70 percent less power

• Contains recycled plastics (milk jugs, old bottles)

• Will be available in 2008 ($500 - $700)

HP Workstations meet EPEAT Gold

• Entire personal workstation line meets “gold” Electronic Product Environmental Assessment Tool (EPEAT) standard– More than 90 percent

recyclable by weight– Quick and easy upgrades – Efficient power supply

• First in this product category

Intel’s “Halogen Free” Efforts

• Intel will introduce halogen-free products starting in 2008

• Responds to customer requests

• Intel's move to halogen- free products was motivated by market requirements – not government mandates

What is Driving this Trend? 1. Concern about proliferation of

“e-waste” and impact on environment

2. Concern about heavy metals and other “toxic” substances contained in electronic products

3. Concern about growing energy use of electronic products

4. Concern about worker health and safety

Concerns = Product Related Environmental Restrictions

1. Substance Restrictions– Lead, mercury, PVC BFR restrictions

2. Energy Efficiency Mandates– Limit power consumption while

“on”3. Disposal Requirements

– Finance product recovery at end- of-life

4. Multi-attribute Requirements– Reduce life cycle environmental

impacts

Types of Product-Related Environmental Requirements

• Legal– Government Set– Establish minimum

requirements– Typically are based on

procedural review (e.g., scientific assessment)

– Can be legally challenged if arbitrary

– Examples:• EU RoHS/WEEE

• Market-Based– Customer requirement– May go beyond legal

requirements– May be arbitrary -

perception drives restrictions not science

– No judicial review– Examples:

• EPEAT• Wal-Mart Scorecard

Enacted US Substance RestrictionsBFR Restrictions

CA (octa/penta)

HI (octa/penta)

IL (octa/penta)

ME (octa/penta and possibly deca)

MD (octa/penta)

MN (octa/penta)

NY (octa/penta)

OR (octa/penta, possibly deca)

RI (octa/penta, possibly deca)

WA (octa/penta and possibly deca))

Mercury Containing Product Restrictions

CA MN

CT NH

IL NY

LA RI

MA VT

MD WA

ME

RoHS Restrictions

CA (video displays > 4” only) – reporting only

IL, RI (computers, monitors ,TVs, printers – reporting only)

NJ (computers, monitors and TVs – reporting only)

NY City (procurement preference for RoHS compliant office equipment

US Consumer Product Safety Improvement Act –Lead restrictions for “children’s products”

Please note: this map does NOT cover all US material restrictions

–Aus.

–Ireland

Enacted International Substance Restrictions

–South Atlantic Ocean –South Pacific Ocean

–North Pacific Ocean

–North Atlantic Ocean

–Indian Ocean

–Arctic Ocean –Arctic Ocean –Arctic Ocean

–North Pacific Ocean

–United States of America

–U.S.A.

–Canada

–Mexico

–Brazil

–U. S. A.

–French Polynesia (Fr.)

–Argentina –Uruguay

–Paraguay

–Chile

–Bolivia

–Peru

–Ecuador

–Colombia

–Venezuela –French Guiana (Fr.)

–Suriname –Guyana

–The Bahamas –Cuba

–Dominican Republic

–Panama –Costa Rica

–Nicaragua –Honduras –Guatemala

–El Salvador –Trinidad and Tobago

–Jam. –Haiti –Puerto Rico (US)

–Greenland (Den.)

–Iceland

–Madagascar

–South Africa –Lesotho –Swaziland

–Mozambique

–Tanzania

–Botswana –Namibia –Zimbabwe

–Angola

–Zaire

–Zambia

–Malawi

–Burundi –Kenya –Rwanda

–Uganda

–Congo

–Gabon

–Somalia –Ethiopia

–Sudan

–Djibouti

–Belize

–Egypt –Libya

–Chad –Niger

–Algeria

–Mali

–Tunisia

–Nigeria

–Cameroon –C. A. R.

–Benin

–Togo –Ghana

–Burkina Faso –Barbados

–Dominica

–Côte D’Ivoire

–Liberia –Sierra Leone

–Guinea –Guinea-Bissau

–Senegal –The Gambia

–Mauritania

–Western Sahara (Mor.)

–Morocco

–Norway

–Sweden

–Romania

–Turkey

–Hung.

–Italy

–Portugal

–France

–Spain

–United Kingdom

–Cyp.

–Yemen

–Oman –Saudi Arabia –U. A. E.

–Qatar

–Iran –Iraq –Syria

–Jordan –Israel –China

–Mongolia

–Russia

–Afghanistan

–Pakistan

–India

–Sri Lanka –Maldives

–Nepal –Bhu.

–Myanmar (Burma) –Bang.

–Andaman Islands (India)

–Thailand

–Indonesia

–Malaysia –Brunei

–Philippines

–Taiwan

–Cambodia –Vietnam

–Laos

–Australia

–Papua New Guinea

–New Zealand

–Fiji –New Caledonia

–Solomon Islands

–Kiribati

–Marshall Islands –Federated States of Micronesia

–Guam (USA)

–N. Korea

–S. Korea

–Kuril Islands

–Wrangel Island

–Aleutian Islands (USA)

–New Siberian Islands

–Severnaya Zemlya

–Novaya Zemlya

–Franz Josef Land –Svalbard (Nor.)

–Jan Mayen (Nor.) –Banks Island –Victoria Island –Baffin Island

–Ellesmere Island

–Island of Newfoundland

–Antarctica

–Îles Crozet (France)

–Tasmania

–South Georgia (adm. by UK, claimed by Argentina)

–Falkland Islands (Islas Malvinas) (adm. by UK, claimed by Argentina)

–Kuwait –Canary Islands (Sp.)

–Sao Tome & Principe

–Singapore –Eq. Guinea

–Faroe Is. (Den.)

–Kazakhstan

–Belarus

–Ukraine

–Georgia –Armenia –Azerbaijan

–Turkmenistan

–Uzbekistan –Kyrgyzstan

–Eritrea

–Tajikistan

–Hawaiian Islands

–Galapagos Islands (Ecuador)

–Mauritius

–Seychelles

–60°

EU RoHS applies to a broad scope of “EEE.” Restricted substances include

lead, mercury, hexavalent

chromium, PBBs and PBDEs

(including Deca BDE).

China RoHS applies to a broad scope of “EIPs.”

Labeling requirements

effective 3/1/07. Substance

restrictions (same as EU) to follow

for subset of products

Korean RoHS applies EU RoHS

restrictions to subset of products

See US Map

RoHS restriction for covered EEE.

REACH regulation will require supply

chain reporting

RoHS restriction for

covered EIP

RoHS restriction for TVs, personal

computers, monitors,

keyboards, mobile audio,

mobile phones, printers , copy machines, fax

machinesPlease note: this map does NOT cover all

global substance restrictions

Electronic Product Environmental Assessment Tool (“EPEAT”)

• Multi-attribute environmental assessment tool for computers, laptops and monitors

• Three performance tiers “gold,” “silver,” “bronze” – depends on # of criteria met

• Currently required by Federal Acquisition Regulation - $92 b in 2007

• EPEAT may soon cover Imaging Equipment and TVs

Wal-Mart Electronics “Scorecard”

• Program announced March 2007– Goal: raise awareness of

“sustainable” electronics• Scorecard will provide

assessment of eco-criteria• Electronic companies will fill

out scorecard • Results will be made

available to consumers• Unclear what criteria will be

– EPEAT?

Energy StarGermany’s Blue Angel

Nordic SwanJapan Green PC

Canada Environment Choice

–B–B

ITECO Declaration

–TCO DevelopmentEPEAT

Japan Eco Mark

EU EcoFlower

For more info: http://ecolabelling.org/type/electronics/

Ecolabels for Electronic Products

Impact on Electronic Producers?

• Electronic industry customers are facing “patchwork” of US and international material restrictions

• Producers are looking for replacement materials to meet these requirements

• Producers will choose materials that are not restricted in order to: – Meet legal mandates; and– Position products favorably in global marketplace

Conclusions/Forecast1. Electronic producers are inundated with product-

related environmental requirements2. Requirements are being driven by concerns that

electronic products pose environmental harm 3. Material restrictions are being driven by legal

and market forces4. Producers will be pushing “sustainable” material

requirements on suppliers 5. Trend is likely to increase over time6. Legal or market phase-out of additional materials

(PVC?) is highly likely

For More Information:

Holly Evans, Esq.

Strategic Counsel, LLC

Phone: 703-496-4832

Cell: 703-409-1007

E-mail: h.evans@cox.net