Report on carpet sales' impact on carpet recycling in the state

1. CARE Update: Q2 2023 Results
8/25/23
1
California Carpet Stewardship Program Approved Results

2. • Quarterly Overview of Results
• Manufacturers Report
• Quarterly Subsidy and Expense Payouts
• Drop-off Program Update
• Approval Request
• Program Updates
California Carpet Stewardship Program Q2 2023 Approved Results
2
Agenda

3. CAREExecutiveDirectorMessage
The second quarter saw another major decline in new carpet sales – well beyond the approved budget
used to set financial and performance targets. This comes at a time when the flow of used carpet is
getting more difficult to secure for recyclers. In addition, the reduced revenue puts cash flow pressure on
the fund balance. The good news, revenue did increase in Q2 due to an assessment increase on April 1st.
Q2 saw recycled output and collections increase significantly. Unfortunately carpet sales continue their
decline falling a million square yards below budget and 15% less than Q2 of 2022. This combination of
factors resulted in a Recycling Rate of 35.4% which is flat vs. Q1, but well ahead of the 2023 goal of 31%.
It is worth noting, Q2 sales were LOWER than Q2 of 2020 during the pandemic.
Overall, 77% of expenses were paid out in the form of subsides, 71% of which were paid out to California
recyclers. Revenue exceeded expenses due to the assessment increase in Q2 and resulting in a fund
balance of $1.8M, up from an audit adjusted $0.8M at the end of Q1.
Finally, all stakeholders are encouraged to go to the CARE website, click on the CA tab and sign up for
the monthly e-news letter to stay abreast of the latest developments. www.carpetrecovery.org
California Carpet Stewardship Program Q2 2023 Approved Results
3
Robert Peoples, PhD
Executive Director

4. AB 2398 Summary Results
California Carpet Stewardship Program Q2 2023 Approved Results
4

5. Quarterly Overview of Results
California Carpet Stewardship Program Q2 2023 Approved Results
5
Readers note: There may be slight differences in numbers versus prior reports since
some data are based on accruals and may change when actual data is available, or
adjustments must be made. Adjustments typically occur with audits, are routine, and
are usually minor with minimal impact and no implications for the Program.

6. AB 2398 Performance Trends (millions of pounds)
6 Table Note: 2015 – 2022 data represents the quarterly average during the year.
25.8
26.8
24.5
23.4
20.5
19.4
22.1
23.3
20.4
23.6
8.7 9.4
11.8 12.3
14.5
13.2
16.9
18.4
15.8
17.5
-
5.0
10.0
15.0
20.0
25.0
30.0
2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 Q2 2023
Pounds
(Millions)
Gross Collections Recycled Output
The following corrections (PC4) were made to Q1 2023 data:
Gross Collections: previously stated 21.3M
Recycled Output: previously stated 16.0M

7. AB 2398 Performance Trends (percentage)
7 Table Note: 2015 – 2022 data represents the respective rates on a full-year basis
29.8% 31.3%
29.0% 29.1%
27.0%
30.8%
36.4%
42.9%
45.6%
47.7%
10.1% 11.0%
14.0% 15.3%
19.1%
20.9%
27.9%
33.9% 35.3% 35.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 Q2 2023
Percentage
Gross Collections Rate Recycling Rate
The following corrections were made to historical data:
Q1 2023 Gross Collections Rate: previously stated 47.5%
Q1 2023 Recycled Output Rate: previously stated 35.6%
2023 target = 31%

8. Gross Collected PCC Sent Back to Landfill 1
8
1. Percentages shown are % of Gross Collected PCC sent to landfill as unrecyclable PCC or process waste.
2015 – 2022 data represents the quarterly average during the year.
Q2 2023 Gross Collected: 23.6M lbs. – 1.6M lbs. sent to landfill | Cumulative back to landfill 2015 – YTD 2023: 134.4M lbs.
5.2 5.3
4.9
5.8
4.0
2.6 2.2 2.3 2.0 1.6
21% 20% 20% 25% 20% 13% 10% 10% 10% 7%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 Q2 2023
Pounds
(Millions)

9. Calcium Carbonate (PC4) by Quarter1
9
1. Beginning with Q4 2022, PC4 pounds were adjusted to correct for excess water content.
2,698
3,536 3,600 3,721
4,811
4,221 4,311 4,652
5,244 5,134 5,239
4,053
4,738
0
1,000
2,000
3,000
4,000
5,000
6,000
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Pounds
(Thousands)
The following correction was made to the Q1
2023 PC4 Pounds: previously stated 4,086

10. AB 2398 Manufacturers/Mills
Quarterly Summary Report
California Carpet Stewardship Program Q2 2023 Approved Results
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11. AB 2398 Mills Summary
11
Cumulative SQYD Sold: 1,018.9M Cumulative Remittances: $197.7M

12. Sales by Quarter
12
24.2
25.4
26.6
24.3
23.6
25.7 26.1
23.5
22.9
25.2
26.4
22.5
22.2
24.8 25.2
21.9
21.1
24.0 23.9
21.4
20.5
22.9 23.2
19.5
18.8
21.7 21.8
18.3
17.1
14.4
18.4
16.8
16.1
17.9 17.8
15.5
15.1
16.9 16.5
13.4
12.8
14.2
0
5
10
15
20
25
30
Q1 Q2 Q3 Q4
Square
Yards
(Millions)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Q2 sales = 1M yd2 below budget
pandemic

13. AB 2398 Quarterly Subsidy and
Expense Payouts
California Carpet Stewardship Program Q2 2023 Approved Results
13

14. Summary of Payouts Q2 2023
14
1
2
3
4

15. Summary of Expenses
15 Note: All data from Finance Director confirmed 8/22/23

16. Fund Balance Trends: Accrual Basis
16
The 2022 audit is complete and the financials through Q2 are final.
Reserve = 2-month average of the last quarter total expenses (effective Q1-2019) Financial Director confirmed 08/25/2023
Fund Reserve
$5.8
$5.1
$6.4
$5.9 $5.5
$6.2 $6.4
$5.4 $5.3
$6.2 $6.1
$5.0 $4.7
$9.2
$4.8
$5.8
$6.8 $6.8 $6.7
$7.3
$8.4
$7.4 $7.0
$8.2 $8.0 $8.4
$7.1
$8.2
$20.3
$19.6 $19.2
$18.3
$17.1
$16.1
$14.2
$12.1
$10.4
$8.5
$6.6
$3.2
$0.8
$1.8
$3.2 $3.9 $4.5 $4.6 $4.5 $4.9 $5.6 $4.9 $4.7 $5.4 $5.3 $5.6 $4.7 $5.5
$-
$5.0
$10.0
$15.0
$20.0
$25.0
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Dollars
(Millions)
Revenue Expenses Fund Balance

17. CA Employees (FTEs)
41
FTE = Fulltime equivalent employees
60 58 65 60 70 68 73 74 77 81 86 87 91
72 72
74 75
74 74
79 79 86 84 84 84 84
23 27
27 27
27 26
26 28
28 31 30 28 28
14 14
13 13
13 13
12 12
12 12 12 12 12
169 171
179 175
184 181
190 193
203 208 212 211 215
-
50
100
150
200
250
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
CSE FTEs Processor FTEs Manufacturer FTEs CARE-related FTEs

18. Drop-Off Site Program Update
California Carpet Stewardship Program Q2 2023 Approved Results
18

19. Total Drop-off Sites
19
Note: Public drop-off site data includes one union site and three regional distribution sites.
176 185 178 189 192 197 202 207 211 202 201 193 201
78 79 83
86 89 90 98 101 102 115 135 135 138
254 264 261
275 281 287
300 308 313 317
336 328 339
0
50
100
150
200
250
300
350
400
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
#
of
Drop-off
Sites
Private Drop-off Sites Public Drop-off Sites

20. Drop-Off Site Total Program Costs
20
$107 $130 $147 $124
$170
$203
$235
$202
$285 $282 $267
$225 $245
$57
$58
$64
$51
$52
$56
$61
$67
$70 $69 $73
$58
$70
$71
$82
$86
$71
$85
$100
$83
$88
$127 $122
$114
$96
$115
$235
$271
$297
$246
$307
$359
$379
$358
$482 $474
$454
$379
$430
$0
$100
$200
$300
$400
$500
$600
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
Cost
$
(Thousands)
Hauling Cost Storage Cost Recycling Fees
Note: Q1 2023 Program Costs have been
adjusted to reflect updated information
after the release of the Q1 Report.

21. Annual Cost Comparison
21
% of YTD 2023 Total Program Costs: Hauling: 58% | Storage: 16% | Recycling Fees: 26%
$450 $504
$733
$1036
$470
$209
$234
$219
$280
$128
$344
$322
$339
$451
$211
$1003
$1060
$1291
$1767
$809
$0
$200
$400
$600
$800
$1000
$1200
$1400
$1600
$1800
$2000
2019 2020 2021 2022 YTD 2023
Cost
in
Thousands
Hauling Cost Storage Cost Recycling Fees

22. Material Collected by CARE Drop-Off Sites (Annual)
22
2023 lbs. collected YTD: 50% of total 2022 lbs. collected
Q2 2023 lbs. collected: 22% increase from Q1 2023 lbs.; 1% increase from Q2 2022 lbs. collected
10,167 10,226
12,773
17,053
8,557
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2019 2020 2021 2022 YTD 2023
Pounds
(Thousands)

23. Drop-Off Site Program Summary 1
23
• 201 operational private sites reported at the end of Q2 2023.
• 138 operational CARE Drop-Off Sites in 56 CA counties at the end of Q2 2023. Public drop-off site data includes one union site and three
regional distribution sites.
1. Cost/Capita uses updated U.S. Census information as available.

24. Private vs. Public Collection Sites
24
82%
86% 84% 85% 84%
82%
84%
80% 77% 79% 76% 77% 74%
18% 14% 16% 15% 16% 18% 16% 20% 23% 21% 24% 23% 26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
Private Collection Sites - Lbs. Collected Public Collection Sites - Lbs. Collected
% Lbs. Collected - Private Sites % Lbs. Collected - Public Sites

25. Recycling Rate Trend
25
1. Recycling rate increased by an average of 34% year of year from 2015 to 2022.
2. 2023 reflects YTD through Q2 2023.
10.1% 11.0%
14.0%
15.3%
19.1%
20.9%
27.9%
33.9%
35.3%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2015 2016 2017 2018 2019 2020 2021 2022 YTD 2023
Recycling Rate (Annual) Expon. (Recycling Rate (Annual))
2023 target = 31%

26. Recommendations to SFOC
California Carpet Stewardship Program Q2 2023 Approved Results
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27. Recommendations for SFOC Approval
27

28. CARE Program Update
28
 Education & Outreach
 Collection
 Grants
 Market Development
 Newsletters & Communications

29. Education & Outreach
29
 Retailer and Installer Outreach
– 628 phone outreach calls to flooring retailers in 2023 YTD
– Tabled at Shaw’s Cypress Regional Distribution Center
– CARE Highlights newsletter mailed to all retailers and C-15 installers
 Consumer Outreach
– Lowe’s instore carpet recycling signage installed in 113 locations
– Carpet maintenance article in preparation
 Drop-off Site Outreach
– Three quarterly outreach efforts
• Technical assistance phone calls with CARE drop-off sites
– Two bi-annual educational webinar for Drop-off Sites

30. Collection
30
 CARE Drop-off Sites – 142 sites
– 138 public drop-off sites supporting 56 counties.
– Four semi-public Drop-off Sites supporting flooring installers
 Five new Drop-off Sites (9 YTD):
– 2 in Northern CA
• Modoc County, Alturas, Blue Water Recycling
• Santa Clara, San Jose, AMS Flooring
– 3 in Southern CA
• Los Angeles County, Agoura, Calabasas Landfill
• Los Angeles County, La Mirada, Event Carpet Pros
• San Bernardino County, Bloomington, HM Flooring Group

31. Collection
31
 Convenient Collection
– One public Drop-off Site per 500k population: Goal met in 2022
– Per the 2023-27 Plan, CARE will use 2020 Census data beginning in 2023
 Growing Collections
– Expanded site-visit effort initiated at current Drop-off Sites
• Technical assistance and support for low performing sites
– Phone and mailing outreach effort to large volume waste facilities throughout CA
• Adoption incentive included
– Collaboration with Waste Management in process
• Template contract for use with other Waste Management Sites

32. Grants
32
 Micro Grants
– Cycle 5 of micro grants is evergreen and continues to take applications through year end
– One new award is under contract and two projects are underway and will close in 2023.
– One application is under review.
 Pilot Collection Awards for Small-Volume Projects
– One project continues through 2023.
 Capital Grants
– Cycle 5: One project is ongoing through Q3 2023, one project closed this quarter.
– Cycle 6: Five new applications were received and are under review this month.
 Testing Grants
– Cycle 5: One new application was received and is under review this month.
 Innovation and Design Grants
– CARE has approved two new awards. The contract process is underway.
 Grant Case Study on Tile Reuse

33. Market Development
33
 98 Products containing PCC recycled content
– 23 Tier two manufacturers
• 9 in California
• 14 outside of California
 Attendance at CAPPO Conference.
 Sent mailing about carpet recycling and recycled-carpet products
to CAPPO conference attendees.
 Ongoing technical and business development assistance to
processors, and manufacturers.

34. Newsletters/Communications
34
 Three e-news sent - June, July, August (8 YTD)
 Added 3 blog posts:
– Decline in Carpet Sales in Q1 2023 Impacts Collection
– Program Highlights Sent to Retailers and Installers
– CARE Drop-Off Site Pounds Collected to Stay in California
 Ongoing: reporting, collateral, presentations, website and
Twitter.

35. Plan Table 3-2: Summary of Program Performance Goals and Metrics, 2023
Performance Progress as of Q2 2023
35
Metric 2023 Goal Status as of Q2 2023
Recycling Rate 31% On Track
Recycling Efficiency Rate (formerly Yield) 75% On Track
Collection Rate 41% On Track
Public Access to Drop-off Sites (Collection Convenience)
One site per 500,000
residents in each county,
(minimum of one per county)
Some Risk
Flooring Professional Proximity: % of residents within 15
miles of a location that accepts carpet from all flooring
professionals
75% On Track
Reuse of PCC (% of Recycled Output) 1.4% of Recycled Output On Track
Gross Collection
(thousand pounds)
93,000 Market Impacts
Disposal of PCC (thousand pounds) 132,000 Some Risk
Processor Capacity (West Coast) 134 million pounds capacity On Track
Recyclability: Recyclable Products
Ensure program capacity to recycle 70% of PCC
types and understand baseline PCC types not
being recycled at recycling locations
On Track
Recyclability: Innovation Grants Award 2 Innovation & Design grants On Track
Markets:
New Products
2 new products; 105 total products Market Impacts
Markets: New Vendors
1 new vendor;
28 total vendors
Market Impacts

36. End of Review
California Carpet Stewardship Program Q2 2023 Approved Results
36