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California Carpet Stewardship Program: Q3 2019 Update

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An update on results for Q3 2019 for California Carpet Stewardship Program: Grants, Subsidies, Industry Developments

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California Carpet Stewardship Program: Q3 2019 Update

  1. 1. CARE Sustainable Funding Oversight Committee Q3 2019 California Summary & Recommendations for Approval Updated 11/26/19
  2. 2. 2 Agenda  Quarterly Overview of Results  Manufacturers Report  Quarterly Subsidy and Expense Payouts  Drop-off Program Update  Approval Requests  Other Information (as required)
  3. 3. 3 CARE’s Executive Director’s Message The 3rd quarter has proven to be a big one for CARE in several ways. First, it was a record quarter in terms of recycled output and recycling rate. The recycling rate for Q3 was 19.9% vs. 18.4% in Q2! Carpet sales increased slightly (ca. 100,000 yd2) in Q3. PC4 volume continues to grow at a slow, steady pace. N6 shipments continue to climb as a result of expanding market demand. Finally, almost $750,000 in grants were paid out in Q3. Second, Q4 is setting up nicely for new capacity to come on line. CalRecycle has elected to continue to work with CARE on carpet recycling in CA by signing the RFA for Chapter 0 on November 20th after the public hearing. While this is not a Q3 event, the significance is important and is included here for timely communications. CalRecycle found CARE met 2 of the 5 objectives completely and only partially met 3 others. CARE has until January 13th to reach agreement on timelines and plans to finalize the partially completed objectives. In addition, CalRecycle has indicated CARE must develop a plan to comply with the recently signed AB 729 law which includes: a transition plan in the event CARE is decertified, creation of a trust fund or escrow account for transfer of fund balance in the event of a transition, and implementation of differential assessments tied to the costs to recycle different materials. In early November Eastman Chemical Company made a major announcement regarding the use of PET as a feedstock component for its Carbon Renewal platform for the synthesis of chemical building blocks. Circular Polymers, a grant recipient, will be the key supplier to Eastman. The expansion by CP to meet this demand will enable further growth in collections which will facilitate the availability of more nylon 6 and 66 as well. One final note: We have learned that Director Smithline will be resigning his position by the end of December. A replacement has not been named at this time. All stakeholders are encouraged to go to the CARE website, click on the CA tab and sign up for the monthly newsletter to stay abreast of the latest developments. www.carpetrecovery.org Bob Peoples, Ph.D., Executive Director, December 5, 2019
  4. 4. 4 AB 2398 Summary Results
  5. 5. 5 AB 2398 Performance Trends (millions of pounds) *Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average
  6. 6. 6 AB 2398 Performance Trends (percentage) *Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average
  7. 7. 7 Gross Collected PCC Sent Back to Landfill** *Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average **Percentages shown is % of Gross Collected PCC actually sent to landfill as PCC or process waste. Data above includes CSE and Processor landfilled pounds beginning in Q2 2014. Q3-2019 Gross Collected: 22.5M pounds – 3.4M sent to landfill Cumulative to landfill: 169.0M lbs.
  8. 8. 8 Disposal % Change in Disposal: -1.3%
  9. 9. 9 Calcium Carbonate (PC4) by Quarter
  10. 10. 10 AB 2398 Manufacturers/Mills Quarterly Summary Report
  11. 11. 11 AB 2398 Mills’ Summary Cumulative SQYD sold: 777.7M Cumulative Remittances: $108.5M
  12. 12. 12 Sales by Quarter
  13. 13. 13 AB 2398 Quarterly Subsidy and Expense Payouts
  14. 14. 14 Summary of Payouts Q3 2019 1 2 3 4 * All CSE pounds are now consolidated directly in CSE section. Previously Processors who also collected were reported separately.
  15. 15. 15 Summary of Expenses All data from Melanie confirmed 11/5/19
  16. 16. 16 Payouts Over Time Adjusted Target Q3 2014 Launch Tier 2 Growth Bonus Q2 2015 Launch Retroactive subsidy in Q3 2015 Growth Bonuses Eliminated Q1 2017 *Average: 2014-2017 is 4 quarter average NOTE: All REUSE payouts are counted under the CSE category. Tier 2 N6 Subsidy Q4 2017 Tier 2 N6,6 Subsidy Q1 2019
  17. 17. 17 Fund Balance Trends All data from Melanie 11/12/19 Reserve = 2 month average of the last quarter total expenses (effective Q1-2019) ACCRUAL BASIS Based on unaudited numbers – adjustments may be made after audit closes SPC: Note reserve change consistent with approved Plan
  18. 18. 18 CA Employees (FTEs*) * Fulltime equivalent employees
  19. 19. 19 Drop-Off Site Program Update Q3 2019
  20. 20. 20 Total Drop-off Sites
  21. 21. 21 Drop-Off Site Total Program Costs
  22. 22. 22 Annual Cost Comparison  Hauling: 48% of Q3 2019 Total Program Cost  Storage: 15% of Q3 2019 Total Program Cost  Recycling Fees*: 37% of Q3 2019 Total Program Cost *”Recycling Fees” was referred to as “Tipping Fees” in previous slide decks
  23. 23. 23 Material Collected by CARE Drop-Off Sites (Annual)  2019 lbs collected YTD: 92% of total 2018 lbs collected  Q3 2019 lbs collected: 53% increase over Q3 2018 lbs collected; 54% increase over Q3 2017 lbs collected
  24. 24. 24 Drop-Off Site Program Summary  72 operational CARE Drop-Off Sites in 51 CA counties by end of Q3  158 operational private sites reported at the end of Q3 *Cost/Capita uses updated Census information as available
  25. 25. 25 Recommendations to SFOC
  26. 26. 26 Recommendations for SFOC Approval
  27. 27. End of Review

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