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Carpet Industry Reality 4.5 Billion pounds of carpet are sent to landfills annually Thats 2% of annual US landfill volume. 20 years ago there were 18,000 public landfills that would accept carpet today there are approximately 1,800 State landfill bans, advanced disposal fees, and likely RCRA 6002 CPG designation by Federal EPA in 2006.

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Annual US Landfill Volume Annual US Landfill Volume (Actual and Projected) sq yds pounds X 1000 = billions Solid waste is the single largest environmental impact made by the carpet industry. Transitional strategies like monofills and WTE will precede C2C.

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Carpet Industry Environmental Footprint 47% increase in yd 2 produced 1990 to 2220

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Paradigms of the Past Cradle-to-grave production has been the carpet norm since introduction of tufting in the 1950s. Shaw grew to industry dominance in 1980s through efficiency and scale. We began reducing waste and recycling 60 different waste streams before it was considered environmentally correct. The industry was challenged in 1994 to move toward sustainability, but it has largely remained a marketing issue. Sustainable technologies are more talk than action.

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Establishing Cradle-to-Cradle Innovation at Shaw Industry must see the business case for sustainability. Doing things right is not enough. The commercial carpet industry was an early adopter of sustainability as a competitive issue. Most carpet industry efforts were initially aimed at raw material and resource use reductions. Reducing waste had a positive financial effect. Shaw had already been doing these things since the mid-1980s. Carpet tile backing presented an opportunity for sustainable innovation due to PVC toxicity concerns and high backing weights of emulsion coating. Metallecene polyolefin offered a pathway to a flexible backing that could be extruded at low weight without the use of plasticizers (1997 Scientific American article).

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Champions Are Key To Success A partnership between Middle Management and Senior Management is critical to setting realistic goals and development budgets. Early successes are essential. Senior Management funded EcoWorx backing development in two stages based on material formulations run on outside equipment that demonstrated the path forward at the same or lower price than PVC. Design parameters were lower weight, equal cost and performance, sustainable recycling, and competitive advantage protected by IP. By June 1999 we had perfected the EcoWorx formulation and developed marketing materials for its introduction at Neocon in Chicago. EcoWorx won Most Innovative Product at Neocon, manufacturing management saw that the market perceived value.

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A Five Million Dollar Investment The biggest hurdle for the project was the 1996 construction of a 1 million sq. ft. carpet tile facility with state-of-the-art PVC backing capabilities. Shaw had the most stable PVC backing in the industry. Shaw spent $1 Million in the pilot phase on a single station extrusion line that produced first quality tile. Production of significant amounts of material for test installations was critical to further funding. Senior Management decided to fund an EcoWorx extrusion line with a capital cost of $5 Million based on early tile success and the promise of a single technology platform for tile and broadloom. Beyond the pressure on PVC, the magnitude of PC carpet and regulatory threat of landfill bans encouraged further development. We expected an exit from PVC in 6 to 8 years (and did it in 4 yrs).

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Cradle to Cradle McDonough and Braungart In 2000 we approached Bill and Michael to learn more about their work to apply it to our own with more rigor. EcoWorx offered a truly recyclable material, but it took optimization under the MBDC Toxicity Protocol to achieve a true technical nutrient. EcoWorx offered a truly recyclable material, but it took optimization under the MBDC Toxicity Protocol to achieve a true technical nutrient. At this time Evergreen depolymerization was running and Shaw was taking over 50% of the output. EcoSolution Q nylon 6 was recoverable as a technical nutrient. All dyes, pigments, and auxiliaries were tested and optimized under MBDC. At this time Evergreen depolymerization was running and Shaw was taking over 50% of the output. EcoSolution Q nylon 6 was recoverable as a technical nutrient. All dyes, pigments, and auxiliaries were tested and optimized under MBDC. Our work with Bill and Michael has provided clarity in our pursuit of sustainable solutions since that time. Our work with Bill and Michael has provided clarity in our pursuit of sustainable solutions since that time.

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Reaching Out To A Cradle-to-Cradle Audience The William McDonough Design Portfolio reflects the sophisticated design interpretation of Bills photographs from China. Its a statement that environmental excellence does not have to sacrifice cutting-edge design and color. Specifiers and owners have made the portfolio one of the fastest growing carpet tile offerings in the industry.

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EcoWorx% of Shaw% of Industry 199942,000 sy.5%.1% 2000723,000 sy8.8%2% 20012,516,000 sy30.5%6% 20023,159,000 sy39.6%7.7% 20034,584,000 sy53.8%10.7% 20047,890,000 sy77.5%19% 2005 (est.) 11,040,000 sy91%23% Growth of EcoWorx Sales Shaw exited PVC carpet tile production at the end of 2004, 4 years after introduction. EcoWorx was responsible for annual double-digit tile growth since 2001. About 9% of 2005 tile sales will be produced with the EcoLogix PET cushion tile backing.

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EcoWorx Environmental Guarantee Every square yard of EcoWorx carpet tile is sold with an environmental guarantee. A toll-free number is imprinted on the back of every tile. Shaw will transport and recycle its EcoWorx carpet tiles at the end of the useful life of the installation, at Shaw expense, back into more EcoWorx tile of the same quality. No EcoWorx backing need ever go to a landfill if the occupier will call this number at the time of uplift, regardless of who originally purchased the tile and regardless of what product may be replacing the tile.

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Elutriation of Eco/Eco Grinding and air classification of backing and fiber streams Current capacity of 3.75 million sy annually. Current return rate of 50,000 sy annually. 2005 production est. of 11 million sy. Current elutriation capacity should suffice through 2010. EcoWorx stream is immediately returned EcoWorx production. Nylon 6 materials pooling agreement with BASF Arnprior not yet utilized.

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Additional Waste Streams Recent addition of post-industrial filler from EVA automotive sound insulation. Replaces 5% to 20% of polymer weight without loss of performance or recyclability. Polyethylene stretch film can also be pelletized and used to reduce virgin polymer weight. Fillers necessary in order to maintain sufficient mass and backstitch coverage. Polyethylene stretch film can also be pelletized and used to reduce virgin polymer weight. Fillers necessary in order to maintain sufficient mass and backstitch coverage. Current EVA latex precoat is now being converted to an EVA hotmelt formulation that will boost thermoplastic content and give higher wet/dry strength. Current EVA latex precoat is now being converted to an EVA hotmelt formulation that will boost thermoplastic content and give higher wet/dry strength. EcoWorx was designed to be a robust low-melt polymer platform. This lowers cost and increases recycled content sources. Focus is on noncarpet sources, but much more needs to be done to identify and evaluate opportunities. EcoWorx was designed to be a robust low-melt polymer platform. This lowers cost and increases recycled content sources. Focus is on noncarpet sources, but much more needs to be done to identify and evaluate opportunities.

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The Philosophy Behind Shaws Vision of A Cradle- to-Cradle Future

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Take Raw material extraction and synthesis Make Manufacturing, production, distribution, use Waste Landfill, incineration Cradle-to-Grave Production

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It would require four more planets the size of earth for every person in the world to reach present US levels of consumption. Cradle-to-Grave Production Resource consumption in China, India, and other rapidly industrializing nations in the global economy is already affecting capacities and pricing.

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Thermoplastic polymer chemistry allows products to be sustainably recycled. Thermosets are difficult to separate into their original components. Thermoplastics vs. Thermosets EcoWorx embodies intelligent design for disassembly. Sustainable carpets must evolve beyond the use of inexpensive thermosets like SBR latex.

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The traditional environmentalist response is an unacceptable solution to industry goals of growth and profitability. Cradle-to-Cradle Design offers the only demonstrated path to a sustainable future. Take Less Make Less Waste Less Sustainability Must Be A Standard Business Practice

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Environmental Influences Shaw had a desire to go beyond simple recycling and the goal of zero waste with sustainable technologies that could become strategic to operational excellence and profit improvement. We chose to treat sustainability as an extension of quality and drive it with a management system approach.

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Biological Nutrients Technical Nutrients Products of Consumption Products of Service Biological MetabolismTechnical Metabolism Cradle To Cradle Metabolisms EcoWorx and EcoSolution Q conform to the concept of technical metabolism as described by McDonough and Braungart. Both metabolisms are valid pathways to a C2C future.

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Shaw Adapts Cradle-to-Cradle Principles

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Cradl eto Cradl e Shaw has adapted Cradle-to-Cradle concepts to describe a future where our carpets are made of technical nutrients that are safe for humans and the environment, make intelligent use of nonrenewable energy, and are returned to sustainable manufacturing through recycling infrastructure.

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Safe and Healthy Materials By what toxicity measure? MBDC Chemical Protocol testing of EcoWorx, Eco Solution Q, and all additives and colorants, tested to 100 ppm level in supply chain. Consensus standards CRI seeking Unified Carpet Standard as a voluntary, consensus, LCA-based approach. Open to 3 rd party and self-certification. Thermoplastics vs. thermosets Recycling of thermoplastics must be weighed against the low cost and high performance of traditional thermosets. Infrastructure of collection must channel thermosets into non-carpet recycled uses. (NyBoard, LA Fibers, Remlon automotive nylon).

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Safety is boring. Until the 30-foot waves start to hit. EcoWorx and EcoSolution Q were assessed and optimized under the MBDC Toxicity Protocol. Shaw will continue to utilize the protocol for product development.

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Coal Fly Ash Toxicity Profile Source: Georgia Power Plant Robins Macon, GA

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Energy Reduction By what energy measure? No adequate embodied energy protocol as yet as an analog to MBDC Toxicity. LCA calculation methods used to validate move from PVC. Matching supply chain speciation down to 100 ppm may be difficult in practice. Role of Life Cycle Analysis Sustainable attributes must be optimized through good science. Shaw EcoWorx vs. Shaw PVC study 2005. Linking Mass and Energy We have no additional future mass income. Material is the focus today. The sun may provide ample future energy income.

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The Promise of Solar Energy True C2C anticipates a solar future that relies on the current solar income of the earth. Adapted C2C recognizes the need to continuously reduce the fossil reliance of todays economy and make intelligent decisions about its use. As part of Berkshire Hathaway, Shaws vertical integration plan does not include energy demonstration technologies at present. Berkshires MidAmerican Energy is planning the largest wind farm project in the US a 310 megawatt project that will power the equivalent of 330,000 homes each year.

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Transitional Strategies Shaw Waste to Steam Facility 90% of all landfilled carpet is a cleaner fuel source than coal Carpet Derived Fuel

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Shaw Gasifier

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Shaw Gasifier Facts Transitional strategy to divert carpet from landfill. Replaces old boilers that burned coal and #6 fuel oil. 16,000 tons/yr of carpet derived fuel and 6000 tons/yr of wood flour from laminate operations will be converted to synthetic gas. Steam production only. No power generation. Reduced emissions for Plant 81. Carpet contains no heavy metals like mercury.

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Value Recovery By what measures? Can we recover carpets for recycling in ways that are economicly, ecologically and socially sustaining? Includes use of LCA and Environmental Management and Cost Systems. Economies of Scale Drivers of collection infrastructure must be diverse and adaptive. WTE is a transitional technology that diverts mass from landfills. Higher value use of waste is the objective. C2C recycling may not yield the lowest LCA impact, but technology can change that. Competition or Cooperation? Alone, together, or with CARE? Eco/Eco products promise EOL recovery. Elutriation is in place, but volume low until 2007-2009. Restart or further development of nylon recycling is critical to success. Material pooling will be difficult until thermoplastics become more widespread in carpet.

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Cradle to Cradle is a beautiful thing even to a bean counter $ if its profitable.

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EcoWorx Backing Development

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Alternative to PVC Cradle to cradle recycling 30% lighter weight than PVC 40% recycled content Environmental guarantee (e.g.)

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Chemical Input Composition of EcoWorx and Permabac Process

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List of additives in Permabac Carpet Tile

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List of additives of EcoWorx Carpet Tile

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Comparison of Permabac PVC and EcoWorx

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ECOWORX Ctg energy, MJ/kg Mass, kg/sy Carpet supply chain, MJ/sy Total, MJ/sy LDPE & HDPE19.346.6 Flyash00.850 Total, approximate 6.6 EcoWorx process, gtg 8.715.3 PERMABAC PVC & plasticizer340.9733 CaCO30.181.96.35 Total, approximate 33.4 Permabac process, gtg 9.843.2 CRADLE-TO-GATE ENERGY COMPARISON for EcoWorx and Permabac Tile

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ECOWORX and PERMABAC Process Energy Comparison ECOWORX energy, kJ/sy Generation efficiency from natural fuel. ECOWORX natural fuel energy, kJ/sy PERMABAC energy, kJ/sy PERMABAC natural fuel energy, kJ/sy Electricity 36200.321130013804320 Heating steam 14000.85165015601830 Direct fuel 36701.0036707000 Energy requirement 8690 16600991013100 In conclusion, at the carpet manufacturing plant (gtg level) the two carpet systems differ by a small amount in energy consumption. The higher energy use for EcoWorx has been directly related to the physical/chemical properties of the principal ingredients. However, this comparison has only a slight dependency on carpet weight.

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Benefits of Sustainable Redesign Chlorinated PVC concerns Phthalate plasticizer concerns Heavy PVC coating for stability Limestone filler Antimony trioxide flame retardant (patent restriction) Nylon contamination Extrusion corrosion concerns Smoke density