Recycling White Goods

September/October 2000

It may not be easy, but processors can recycle white goods safely—and profitably—with a little regulatory know-how.

By Tom Tyler

Tom Tyler is Associate Counsel and Director of State and Local Programs for ISRI

The recycling of appliances—dubbed—"white goods"—and automobiles is one of the great ongoing success stories of modern recycling.

In 1999, the U.S. scrap industry recycled around 40 million appliances and 13.5 million cars, achieving recycling rates of about 77 and 91 percent, respectively, for those products, according to the Steel Recycling Institute (Pittsburgh).

The recycling of these products is nothing new. They've been reclaimed since before the word "recycling" came into vogue. And throughout the years, their recycling has been good for the economy and good for the environment, providing jobs, raw materials, and tremendous energy savings.

What is relatively new is the stricter regulation of appliance and automobile recycling, especially related to the refrigerants in those products, such as chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), hydrofluorocarbons (HFCs), and other refrigerants. Though meeting these regulations is certainly a challenge, recyclers with the right knowledge can still handle these items safely and profitably.

Refrigerants and the Ozone
CFCs, HCFCs, and related chemicals have been used widely as refrigerants for decades. As refrigerants, they're odorless, colorless, safe to handle, nonflammable, inexpensive, long-lasting, and effective. Many have also been used as propellants in aerosol cans and in solvents, cleaners, and insulating foams.

Why the big concern over such chemicals? Because they're ozone-depleting substances. When released, they're carried into the stratosphere where ultraviolet light breaks them down, releasing chlorine atoms. Those atoms react with ozone, starting a chemical cycle that depletes the ozone layer. One chlorine atom can break apart more than 100,000 ozone molecules.

As the ozone layer is diminished, more ultraviolet-B radiation reaches the Earth. For people, overexposure can lead to skin cancer, cataracts, and weakened immune systems. Other repercussions can include reduced crop yields and disruption of the marine food chain.

Ozone-depleting substances are also greenhouse gases. Working somewhat like the glass panels of a greenhouse, these gases trap some of the sun's radiant energy reflected off the Earth, contributing to the phenomena of global warming and climate change.

In 1987, the United States joined other countries in agreeing to the Montreal Protocol, an international treaty focused on reducing the use of ozone-depleting substances. The treaty has since been amended to ban CFC production. Since 1996, only recycled and stockpiled CFCs have been legally available in the United States. Smugglers have imported CFCs illegally, however, garnering both big profits and, when caught, significant penalties and fines.

The Clean Air Act Controls Refrigerants
The U.S. Congress codified the Montreal Protocol requirements in Title VI of the Clean Air Act. U.S. EPA has since implemented the act in regulations and will continue to do so as additional deadlines in the act come due. Canada's Parliament also adopted the requirements of the Montreal Protocol, which the provinces are implementing.

CFCs are considered Class 1 chemicals under the Clean Air Act because they're so destructive to the ozone layer. HCFCs, used as a replacement for CFCs, are Class 2 chemicals because they're much less destructive to ozone but will still eventually be phased out. While HFCs don't deplete ozone, some have global-warming potential.

Above all, the Clean Air Act prohibits anyone from knowingly venting regulated refrigerants into the atmosphere and imposes significant penalties on violators. (For details on penalties against scrap recyclers, see EPA Drops the Hammer.) Cutting the lines of a charged appliance, for example, is a violation, as is knowingly handling an appliance in a manner that would likely vent any refrigerant. The act also covers refrigerant production and sales; the operation, maintenance, and servicing of refrigeration equipment; and the proper handling and disposal of the refrigerants themselves.

Congress specifically directed EPA to develop rules so that remaining refrigerant would be removed from each "appliance, machine or other good prior to the disposal of such items or their delivery for recycling." EPA wrote regulations for those who dispose of appliances and explicitly stated that several portions of the regulations apply to scrap recyclers.

Municipalities also aren't immune from the Clean Air Act requirements. EPA, in fact, has taken enforcement action against municipalities under the refrigerant recovery rules, including a lawsuit against New York City for more than $50 million for allegedly crushing discarded household appliances without removing remaining refrigerant. As it can in any suit, the agency sought penalties of up to $27,500 per violation per day.

Understanding the Rules
The Clean Air Act uses the term "appliance" to refer to any device that uses an ozone-depleting substance as a refrigerant and that's used for household or commercial purposes, including motor vehicle air conditioners (MVACs). The law distinguishes between large and small appliances and has special provisions for MVACs.

The owner or operator of large appliances—such as retail food refrigerators, rooftop or central air conditioners, or warehouse refrigeration systems—or the person servicing or dismantling them must properly recover any remaining refrigerant before the item is dismantled or sent to a recycler or landfill. Scrap recyclers receiving such large appliances don't face the same requirements they face for small appliances but are, as always, prohibited from knowingly venting refrigerants into the atmosphere.

Small appliances are those that typically enter the recycling stream more or less intact, including household refrigerators and freezers, room air conditioners, MVACs, packaged terminal heat pumps, under-the-counter ice makers, drinking water coolers, dehumidifiers, and vending machines. Under EPA's safe disposal regulations, the last entity in the "disposal" chain must either remove the refrigerant from the small appliance or MVAC or must "verify" in a specific way that the remaining refrigerant has been removed (see "Reviewing the Options" on page 46.)

In 1996, EPA clarified that an appliance is no longer subject to the safe disposal regulations if the recycler receives an item that "has been put through a process in which refrigerant should have been previously recovered ... For example, appliances that have been crushed, flattened or otherwise demolished are no longer considered subject to the safe disposal requirements. The person responsible for compliance with the safe disposal regulations is the entity upstream that conducted the processing where the appliance was crushed, flattened or otherwise demolished ... ."

Recyclers who only accept appliances that have been crushed, flattened, or otherwise demolished should take steps to alert suppliers to the Clean Air Act requirements concerning refrigerant recovery.

The regulations do apply to appliances that are otherwise basically intact, such as refrigerators that have been abandoned and had their lines cut. EPA has also stated that recyclers can presume that crushed cars no longer contain refrigerant, but the recycler must still have the supplier verify refrigerant recovery by certification or contract (again, see "Reviewing the Options").

In addition, EPA has clarified that, if an appliance contained several components and the component responsible for the refrigeration—such as a compressor—is removed, then the remaining parts are no longer subject to the requirements. Using this interpretation, however, a removed compressor must be treated as an "appliance," even when it no longer contains refrigerant.

Beyond these federal rules, it's important to note that states can, and several do, impose requirements that are more stringent than, or in addition to, federal requirements. Recyclers must, therefore, take into account not only the federal rules but also those specific to their state to ensure that they're operating in compliance.

Reviewing the Options
When it comes to recycling white goods and automobiles, recyclers have three basic options:

1. Refuse Them. The first option is to not accept such materials at all. Companies that choose this option must make this policy abundantly clear to their suppliers and employees. EPA inspectors have taken harsh enforcement action against scrap recycling facilities that, as a policy, didn't accept appliances but that, in reality, had a few in their plant.

   Recyclers who opt not to accept these items can communicate this policy by posting signs at entrances, sending letters to suppliers, and providing brochures or pamphlets to visitors. Also, employees who interact with the public and suppliers should be able to explain the company's policy and reject unacceptable materials.

2. Require Suppliers to Verify That Refrigerants Have Been Recovered. Scrap recyclers who accept small appliances and/or MVACs but who don't recover the refrigerants must carefully follow the requirements spelled out in the regulations. The regulations require recyclers to "verify" that remaining refrigerants were recovered. Recyclers can do this by (a) requiring suppliers to certify that any refrigerants were properly removed or (b) requiring suppliers to agree by contract that they'll only deliver appliances from which remaining refrigerants have been properly removed.

   Certifications from suppliers, provided per item or per load, must include the specific information required in the regulations. Recyclers must ensure that suppliers fill out such paperwork completely and legibly and must retain the paperwork for three years.

   Recyclers must carry out their policies in good faith, including making their policies known to suppliers—again, through signs, letters, brochures, and so on. One recycler, for example, has suppliers with contracts put a special sticker on their windshield, so that the facility knows when an uncontracted supplier drives in. Several others require their suppliers to mark inspected appliances, such as with a spray-painted red X, to show that they've been inspected and properly emptied of any remaining refrigerant.

   Recyclers can also take extra steps to help suppliers arrange to get refrigerants recovered. "Though we don't allow individuals to give us units to purge, we let them know that there are others who do recover," says a Northwestern recycler. Others refer suppliers to a toll-free number sponsored by the Steel Recycling Institute (800/937-1226), which helps callers find local businesses that accept items that may contain refrigerant.

   Notably, recyclers aren't required to inspect incoming appliances that are covered by a supplier's certification or contract. Even so, some EPA regional personnel have implied that inspections are required or preferred.

   On the contrary, recyclers who inspect incoming appliances may expose themselves to additional liability. According to a 1996 EPA memo, "If a scrap recycler inspects incoming appliances for CFCs, any appliance containing refrigerant found beyond that point is a violation by the scrap recycler. If a scrap recycler simply accepts appliances with verification forms and a charged appliance is found about to be processed, it is not a violation by the scrap recycler, but for any subsequent shipment of appliances [from the same supplier], the scrap recycler can no longer accept verification statements from this supplier in good faith without some independent means of verifying that the statements are truthful and accurate because the scrap recycler knows or has reason to know that the verification statements were false."

   The agency didn't elaborate, however, on the difficulty of identifying the supplier who provided particular appliances or on the "independent means" of verifying the truthfulness of statements from suppliers.

3. Recover Remaining Refrigerants On-Site. As an alternative to the above supplier-verification requirements, some scrap recyclers instead prefer to recover remaining refrigerants themselves, sometimes in hopes of selling them at a profit or to serve certain customers such as municipalities. Some choose to have a third party come on-site to recover the refrigerants, sometimes charging suppliers extra for the service. It should be noted that scrap recyclers who recover refrigerant generally must sell it to reclaimers who will purify it, or they must arrange for the refrigerant to be properly destroyed.

   Recyclers who opt to recover remaining refrigerant should know that the CFC-recovery equipment they purchase must meet EPA criteria, and they must send a registration form to the agency. Also, unlike service technicians, recycling employees who operate such equipment don't need EPA certification to recover refrigerant but must operate the equipment in compliance with the regulations.

   Recyclers who do business with municipalities must, as with other suppliers, either recover remaining refrigerant or have the municipality verify that the refrigerant has been, or will be, recovered.

Weighing the Pros and Cons
Complying with the above refrigerant requirements has, at times, been a challenge for scrap recyclers.

On the positive side, the rules have "brought an awareness at all levels, including small peddlers, of the problems and consequences, real and legal, of CFCs. That's a pro," says a Southern recycler.

A Western processor adds that the program "provides a workable mechanism for checking and protecting loads from having any of that material in them. It's something that's easy to communicate with the yards and easy to track by computer with customers coming in."

On the negative side, some recyclers maintain that EPA personnel seem at times to place all responsibility for proper refrigerant recovery on scrap recyclers, contrary to the regulations and the law. Some ReMA members hope Congress will set the record straight. As one puts it, "Last year, Congress finally clarified that when it said 'arranging for disposal' in Superfund, it indeed meant 'arranging for disposal' and not 'arranging for recycling.' ReMA should ask Congress to clarify that when it said 'refrigerant removal prior to delivery for recycling,' that's what it meant. Congress didn't want recyclers facing liability for the refrigerants left in by those delivering the items for recycling."

Some recyclers have also found EPA too willing to treat errors in paperwork as violations of the law. One processor says the verification program wouldn't be so discouraging "if EPA just wouldn't be so rabid about details like the dates on certifications" and instead acknowledged good faith efforts on the part of recyclers who try to meet the requirements. 

Another recycler expresses frustration about what he sees as EPA's failure to understand how recycling works. "It's important for the public and EPA to know that some of these laws that they put out there don't always work. When you're in a commodity-based market like we are, sometimes, in fact, they do the opposite—the appliances end up getting thrown in a ditch with all the CFCs in them."

A few complain about lost business and other hassles of verification. "It just adds another layer of something you've got to do," says one. A Southern recycler adds, "By making the recycler the traffic cop, these requirements have created a bottleneck at our scales and a paperwork nightmare, where trucks are backed up as we try to determine who we have certifications from and who we don't." Another processor observes, "It seems to require us to make almost a psychological evaluation of the honesty of the people who supply us with white goods. Good faith is a difficult standard to apply for people who work with the public on a daily basis."

Recyclers who recover refrigerants also face difficulties, such as small amounts of refrigerant available for recovery. As one points out, "Appliances are often abandoned because they stopped working when the refrigerant leaked out. And cars also have often lost refrigerant by the time they're abandoned." Others who have found little refrigerant in white goods express frustration with EPA's large fines and enforcement actions, which give the impression that appliances contain significant amounts of refrigerant when they arrive for recycling when, in fact, many do not.

Moreover, some recyclers who have sought a third-party contractor to recover refrigerants on-site have found such parties hard to find. Part of the reason is economics. Demand for recovered refrigerants was expected to drive prices high enough to make recovery attractive.

"We predicted that prices would climb," says Sue Stendebach, chief of EPA's stratospheric program implementation branch. "We've seen some incredible price spikes, but prices have gone down each time, settling to about $400 for a 30-pound cylinder. Recently, they climbed again to about $600 to $800 per 30-pound cylinder and will continue to climb as long as the demand remains and the supply shrinks. We'll get to a point, however, where consumers purchase enough new vehicles and white goods using substitute refrigerants so that the old refrigerant isn't in great demand. At that point, the price will drop and it won't be as lucrative to sell."

What's Ahead?
Recyclers are already starting to receive white goods and cars that contain substitute refrigerants. EPA regulates the recovery of these substitutes because some still deplete ozone, many contribute to global warming, and each so far raises some environmental or health threats.

According to EPA's Stendebach, however, the agency intends to keep the rule for these substitutes as consistent as possible so recyclers won't need to create compliance plans entirely different than those for CFCs. "We don't intend to change things on people," she says. "There'll be outreach when the rule is published to let everybody know what it says, helpful hints on how to comply, and details on how to contact relevant staff at EPA."

In addition to working on regulations for substitutes, EPA is considering requests from various parties who want it to impose new regulations requiring the use of reusable cylinders for refrigerants to prevent the release of the refrigerant "heel" remaining in “disposable” refrigerant containers.

In general, the recycling of white goods and automobiles continues more or less as Congress intended, with rules in place to try to avoid the venting of CFCs into the atmosphere. Though the rules are not without problems, they do seem to work fairly well in most places. With increased cooperation among individuals, industry, and government, hopefully we can continue to provide both the many benefits of recycling today and a restored ozone layer tomorrow. 

This article is provided for information purposes and does not constitute legal advice.

Editor's Note: ReMA members can access the association's refrigerant-recovery compliance guideline online at www.isri.org or by calling Tom Tyler at 202/662-8516. The association can also provide copies of the relevant federal laws, rules, and EPA documents, as well as information on the requirements in particular states. Other ReMA guidelines address related issues such as PCBs (from capacitors), used oil, mercury (from switches), air bag canisters, auto shredder residue, air permits, and much more. Additional information from EPA is available online at www.epa.gov/ozone or by calling EPA's Ozone Hotline at 800/296-1996.