LIMITING LITHIUM-BASED BATTERY INCIDENTS

LIMITING LITHIUM-BASED BATTERY INCIDENTS Presented by: Carl E. Smith, CEO / President September 20, 2018 Used Oil/HHW Conference Anaheim, CA 1 2018 call2recycle.org Call2Recycle, Inc. All rights reserved. 2018 Call2Recycle, Inc. All rights reserved.

OVERVIEW: the Call2Recycle Program Founded in 1994 by industry to address the emergence of EPR legislation. In the U.S., funded primarily by rechargeable battery stewards and, more recently, fee-based services. In the U.S., we re primarily a voluntary program except in certain states (e.g., Vermont, Minnesota, New York) where collections of some (but not always all) chemistries is mandated. In Canada, Call2Recycle is primarily a mandatory program financed via Environmental Handling Fees (EHFs) applied at point of sale. (NOTE: Call2Recycle Canada was spun off from Call2Recycle, Inc., in January 2017.) 2 2018 Call2Recycle, Inc. All rights reserved.

Call2Recycle in California More than 15 million pounds of batteries have been collected and diverted in California through the Call2Recycle program since 1996. Call2Recycle is formally written into California battery recycling legislation (Rechargeable Battery Recycling Act of 2006). Call2Recycle voluntarily serves 54 of 58 counties in California. There are more than 2,000 Call2Recycle collection sites across the state. Call2Recycle works with county and municipal programs to divert and responsibly recycle single-use batteries. 3 2018 Call2Recycle, Inc. All rights reserved.

What Makes the Call2Recycle Program Different 65%+ of battery volume is generated by major retailers sending in boxes. Approximately 250,000 boxes are sent to sites each year. Two sizes of bags are attached to allow sites to separately protect rechargeable batteries terminals. In 2017, 75% of all batteries collected and 85%+ of batteries collected in boxes were rechargeable batteries. Retailers voluntarily participate. In most areas of the US, retailers are not required to participate in a take back program and manufacturers are not required to provide one. In general, retail employees are younger, often barely paid a minimum wage, and are less educated on managing potentially hazardous material. 4 2018 Call2Recycle, Inc. All rights reserved.

6 2018 Call2Recycle, Inc. All rights reserved. What s At Risk (Besides Direct Costs of Damage) Infrastructures drops us FedEx embargoed our boxes until we made several operational changes. Collection sites don t want the hassle participation in the program is voluntary and sites increasingly don t want to incur the costs, hassle or risk in generating batteries. Escalating costs break the program whether the increased costs are borne from increased regulation, insurance premium increases, shipping surcharges or other factors, they may not be recoverable from stewards financing a voluntary program. Reputational damage the goodwill built over two decades is lost. Government intervention states will choose to further regulate collection due to risks incurred by local government collections.

Four Main Objectives Campaign 1. Foster Employee Leadership. Improve our knowledge, culture and commitment to safety to enable us to serve as leaders and influencers with customers. 2. Improve Collection Site & Sorter Performance. Increase visibility, accountability and behaviors surrounding safe handling, storage and transport of batteries. 3. Drive Consumer Awareness. Improving the visibility and knowledge of safe practices. 4. Engage Stakeholders. Build relationships with other like-minded organizations to influence public and government debate on relevant safety issues. 7 2018 Call2Recycle, Inc. All rights reserved.

: Safety Training Results Group Number of Sites Trained % Compliant Major Retailers (Big Box Stores) 5,573 100% compliant Traditional Free Collection Sites (Stewards, Muni s, etc.) 2,464 58% compliant Fee-based Collection Sites 7,613 78% compliant TOTAL 15,650 88% compliant sites TOTAL (trained and stakeholder engagements) >18,000 Group Number of Sites Not Yet Trained % Non-Compliant Traditional Free Collection Sites (Stewards, Muni s, etc.) 1,753 42% non-compliant Fee-based Collection Sites 2,143 22% non-compliant TOTAL 3,896 12% non-compliant sites 10 2018 Call2Recycle, Inc. All rights reserved.

: Operational Changes Flame Retardant Box Sorter Standards and Random Collection Box Sorter Audits Terminal Protection Guidelines Box Anomaly Reports (BAR) Site Suspension / Terminations 11 2018 Call2Recycle, Inc. All rights reserved.

Flame Retardant Box Liner - Patent pending Third-Party Tested - Extensive testing by independent laboratory (withstood up to 1,100 degrees F) Containment - Prevents flames & heat from spreading outside the shipping container Recyclable & Reusable - Made of Polyester material manufactured from used plastic bottles and can be reused multiple times We Know It Works Pictures are from Actual Returned Boxes 12 2018 Call2Recycle, Inc. All rights reserved.

Avoid the Spark TM Campaign Phase 1 With support of industry groups devoted to batteries, electronics and power tools, Call2Recycle piloted the Avoid the Spark. Be Battery Safety Smart. TM campaign in the Bay Area in May 2018 to generate awareness with stakeholders and residents on battery safety. The first phase of the campaign focused on the Bay Area due to the progressive market, high concentration of technology and leadership of green initiatives in the region. The campaign zoned in on five counties: Alameda, Marin, San Francisco, San Mateo and Santa Clara. Each county offers curbside battery recycling and has high recycling collection rates. 13 2018 Call2Recycle, Inc. All rights reserved.

Avoid the Spark TM Campaign Phase 1 Results & Phase 2 Results 177 total media mentions including print, online and radio 196.7M+ total reach $257K+ total publicity value YOY July unprotected terminal rates down across the five California counties Phase 2 Next month kicks-off the second phase of the campaign, centered on engagement and activation of safe battery practices, including handling, transport and disposal. 14 2018 Call2Recycle, Inc. All rights reserved.

Damaged, Defective or Recalled Batteries Damaged, Defective or Recalled (DDR) batteries are a designation coined by the US Department of Transportation. DDR batteries require unique (and expensive) packaging in order to ship. We ve entered into the business of selling DDR kits to mitigate risk and bolster revenue. Kit Kit Contents Note Small Kit Overpack box Metal can with affixed labeling Metal lid and locking ring Vermiculite Tape Plastic bags Permit and caution labels Return shipping label Instructions Large Kit Overpack box Metal bucket with affixed labeling Metal lid and locking ring Inner box Vermiculite Tape Plastic bags Permit and caution labels Return shipping label Instructions US & Canadian Special Permit allows for no more than 4.4 lbs. (2kgs) of lithium cells and batteries to be contained in a single package. However, a single cell or battery may be shipped within one package provided the cell or battery has a mass of 5 kg or less. 15 2018 Call2Recycle, Inc. All rights reserved.

17 2018 Call2Recycle, Inc. All rights reserved. Next Steps Emerging Issues Material Recycling Facilities (MRFs) which have had numerous fires blamed on batteries are pushing for action to mitigate risk. Managing Reverse Logistics -- movement of waste batteries by sea and by land (e.g., Union Pacific rail no longer accepts new batteries) constrain recycling efforts. Education Continue Avoid the Spark TM and other education campaigns. Maintaining Active Collection Sites 2000 collection sites dropped out of the Call2Recycle program because they would not take required safety training or feel that the cost of properly preparing batteries is more than they can incur. Increasing Regulatory Threat several federal/state agencies and standards development organizations have stepped up their investigation into battery safety (e.g., fire code upgrades and the impact on collections).

Carl E. Smith csmith@call2recycle.org Corporate headquarters: 1000 Parkwood Circle, Suite 200 Atlanta, GA 30339 www.call2recycle.org 18 call2recycle.org 2018 Call2Recycle, Inc. All rights reserved. 2018 Call2Recycle, Inc. All rights reserved.