White Out

The success of the “Cash for Clunkers” program is being replicated, with a twist.

The U.S. Department of Energy (DOE) has introduced a program to replace older, less energy-efficient appliances with Energy Star products. The program will offer a rebate to consumers who purchase energy-efficient replacements for their older appliances. These rebates are being funded with $300 million from the American Recovery and Reinvestment Act (ARRA) of 2009.

Currently, the U.S. DOE has awarded funding to 36 states and/or territories, and a number of additional states are expected to apply for funds through the program.

According to the DOE, states can select which residential Energy-Star-qualified appliances to include in their programs and the individual rebate amount for each appliance. Energy-Star-qualified appliance categories eligible for rebates under the program include central air conditioners, heat pumps, boilers, furnaces, room air conditioners, clothes washers, dishwashers, freezers, refrigerators and water heaters. “DOE recommends that states and territories focus their program efforts on heating and cooling equipment, appliances and water heaters, as these products offer the greatest energy savings potential,” a press release from the DOE notes.

Mike Dunham with Jaco Environmental, a Snohomish, Wash.-based company that specializes in appliance demanufacturing and recycling, says the ARRA funds administered through the DOE will be given to individual states based on population at a rate of roughly $1 per person.

As a result of the DOE program, the number of white goods, particularly refrigerators, entering the recycling stream could jump significantly. This could be a boon to auto shredder operators, who may be in need of additional material to economically operate their shredders.

The sticking point of the DOE appliance recovery program, according to Jack Cameron, president and CEO of Appliance Recycling Centers of America (ARCA), based in Minnesota, is that while the government is offering an incentive to encourage consumers to purchase energy-efficient appliances, it provides no incentive to encourage the recycling of the recovered appliances rather than their sale on the secondary appliance market. However, while some of the older appliances could be resold, the heavy emphasis is on scrapping them for recycling, as many retailers seek to advance their environmental initiatives.

The DOE program seeks to replace older, less-efficient refrigerators and also stresses “removing the older refrigerators from the grid,” according to Dunham.

For recyclers looking for another source of supply, this could turn out to be a benefit. However, before recyclers are inundated with old appliances, a number of issues can slow or curtail this potential increase.

AT ISSUE
Many of the white goods included in the rebate program contain substances that need to be properly removed before significant processing can take place. Some goods, such as water heaters, do not require such remediation work, as most of the problem materials are found in refrigerators, freezers and air conditioners.

ARCA, one of the largest appliance recyclers in the United States, presently operates 10 processing centers, though only a handful of the company’s facilities take steps beyond demanufacturing appliances. In addition to demanufacturing appliances, ARCA also is an appliance retailer and provides energy conservation programs.
The company currently provides services for 150 utility programs in the U.S. and Canada. ARCA’s services include the safe removal of harmful materials, such as ozone-depleting refrigerants, PCBs, mercury and oil from appliances.

In addition to the refrigerants used in refrigerators, the polyurethane foam used in these appliances also can pose a problem for recyclers. That material also needs to be removed before the refrigerator is shredded.

ARCA has worked with utilities on programs to recover appliances that are no longer efficient. Most recently, the company was awarded a contract by utility firm Great River Energy to provide refrigerator and freezer recycling services to its member cooperatives in Minnesota.

Many appliance demanufacturers are working with utilities on programs to bring in older appliances. Depending on the age of the appliance, it could contain PCBs, mercury, CFCs and other materials that need to be safely removed before the appliance is scrapped. Failure to do so could result in significant fines.

Because of the issues related to these substances, many scrap metal recyclers who have the equipment to process these white goods prohibit anyone from dropping off an appliance at their facilities without proof that the potentially damaging materials have been removed.

Frank Goulding, vice president of marketing for Newell Recycling, a scrap metal recycling facility headquartered in Georgia, says that while the company does take in appliances, including refrigerators, it mandates that anyone dropping off an appliance must provide documentation that sensitive materials have been removed.

Despite these potential issues, Goulding says white goods are a good source of scrap. The company gets a ready supply of appliances, whether through municipalities that handle the removal of these substances or through third parties such as ARCA that also remove these materials.

Goulding says when someone shows up at a Newell yard with an appliance that does not have the proper documentation showing that sensitive materials have been removed, Newell will send the appliance to a demanufacturing facility for pre-processing.

STEP BY STEP
Jaco Environmetnal has 17 locations where it performs demanufacturing services and will be opening two more facilities by early 2010. The company’s demanufacturing process includes pulling out capacitors, CFCs and polyurethane. The polyurethane is then shipped to a waste-to-energy facility for disposal.

The company, through its patented process, says it properly recycles refrigerators and freezers and usually works with utility districts and states. Jaco will remove the consumer’s old refrigerator or freezer for free and will recycle at least 90 percent of each unit, the company says.  

Dunham estimates that the company demanufactures roughly 300,000 refrigerators per year through utilities, as well as an additional 300,000 appliances that it collects from retailers.

Three states—California, Illinois and Minnesota—have required that all older refrigerators be dismantled and scrapped according to the Responsible Appliance Disposal (RAD) standards introduced by the U.S. Environmental Protection Agency (EPA).

The RAD program, which the EPA launched in October 2006, is a voluntary partnership that includes municipalities, retailers, manufacturers, utilities, universities and other interested organizations. As part of the program, partners recover ozone-depleting chemicals from old refrigerators, freezers, air conditioners and dehumidifiers. According to the EPA’s Web site, “Using best practices, RAD partners ensure that: refrigerant is recovered and reclaimed or destroyed; foam is recovered and destroyed or the blowing agent is recovered and reclaimed; metals, plastic and glass are recycled; and PCBs, mercury and used oil are recovered and properly disposed.”

The EPA adds that it “serves as a technical clearinghouse on responsible appliance disposal program development and implementation; calculates annual and cumulative program benefits in terms of ODS (ozone-depleting substances) and GHG (greenhouse gas) emission savings and equivalents and, as available, potential cost savings; and provides partner recognition for achievement, such as through press releases, brochures, articles and awards.”

OPPORTUNITY KNOCKS
While many of the companies that offer demanufacturing of refrigerators specialize in the operation, there are recycling companies that recognize the opportunities in providing such a service. In the United Kingdom, Sims Recycling Solutions operates what it says is the largest refrigerator recycling facility in the world. The plant, in Newcastle, U.K., is capable of processing more than 1 million refrigerators per year. Harmful CFCs are captured, and metals, plastic and foam are recovered for recycling. The center also is equipped to treat other electrical devices containing ozone-depleting substances, such as air conditioning units.

Recognizing the market opportunities associated with providing additional processing, ARCA, which is the exclusive North American distributor for Germany-based Untha Recycling Technology (URT) Refrigerator Recycling and Reclamation Systems, is looking to install an Untha shredder at its Philadelphia facility. This would allow the company to shred appliances once they have been demanufactured. The company says it expects to have the shredder installed by the first half of 2010.

While companies providing demanufacturing and remediation services for appliances see opportunities in expanding their processing capabilities, it remains to be seen whether this new form of competition will cut into the supply of white goods entering the feedstock streams at traditional scrap recycling facilities. 

The author is senior and Internet editor of Recycling Today and can be contacted via e-mail at dsandoval@gie.net.