While crystal-ball gazing is often viewed as an “inexact science,” the American presidential election and, before that, the UK “Brexit” vote demonstrated that it is, in fact, more akin to a “fool’s paradise”. In the face of this, imagining that you can predict the future is clearly impossible. So of course I’ll try.
2017 will be an interesting year, even in our little corner of the world. I think the best I can do is predict more unpredictability. But some things will come to pass. So here we go:
In mid-November the European Commission issued its Commission Delegated Directive drafts covering extension of exemptions 13(a), “Lead in white glasses used for optical applications” and 13(b), “Cadmium and lead in filter glasses and glasses used for reflectance standards” to the World Trade Organization Technical Barriers to Trade (WTO TBT) Commission for review and comment.
Both essentially follow Öko-Institut’s recommendations in their Pack 7 Final Report, issued back in early February 2016. While 13(a) stays the same and is simply extended to July 21, 2021 for all categories besides category 8 in vitro diagnostic devices (July 21, 2023) and category 9 industrial monitoring and control instruments and category 11 (July 21, 2024),
13(b)’s change is more dramatic: it will be split into four parts:
1. Cadmium and lead in filter glasses and glasses used for reflectance standards
a. This part applies only to categories 8, 9 and 11; expires on:
i. 21 July 2023 for category 8 in vitro diagnostic medical devices;
ii. 1 July 2024 for category 9 industrial monitoring and control instruments and for category 11;
iii. 21 July 2021 for other subcategories of categories 8 and 9
2. Lead in ion coloured optical filter glass types
3. Cadmium in striking optical filter glass types; excluding applications falling under Ex. 39 of this Annex
4. Cadmium and lead in glazes used for reflectance standards
a. The three parts above apply only to categories 1-7 and 10 and expire on 21 July 2021.
These are open for comment through January 17, 2017.
In the RoHS exemption world, only Pack 9 remains to be addressed. The analysis of and recommendations for Pack 9 was issued by Öko-Institut four months after Pack 7, in June 2016. So we can and do expect to see the European Commission’s decisions on approving or denying the extension applications for the Pack 9 exemptions over the next few months. And, given how closely the Pack 7 results hewed to the consultants’ recommendations, it may tend to look more like Öko-Institut’s recommendations than the industry would like.
Mr. Canova and DG Environment have other issues to address as well, including clarification of certain scope-related problems and what category 11 really means. Stay tuned!
US TSCA Reform
And what of TSCA reform? With a president-elect who wants to further weaken, if not entirely dismantle, the EPA the sole shining accomplishment of the 114th United States Congress, passage of the “Frank R. Lautenberg Chemical Safety for the 21st Century Act”, stands at risk. President-Elect Trump’s apparent distrust, or lack of understanding, of science and how properly defined and implemented environmental regulation protects human health and the environment threatens to undo substantial progress made in both TSCA reform and slowing climate change. Unless business steps in and explains why it pushed TSCA reform, I fear its elimination as part of dismantling the EPA will result in 50 states with different regulatory requirements and far more complexity than necessary for the chemical industry and its downstream customers.
We’re just going to have to wait and see what happens here.
US Conflict Minerals
The President-Elect’s website says “The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.” As Section 1502, which required the Securities and Exchange Commission to implement the Conflict Minerals rule, is part of Dodd-Frank, the possibility exists that it will be withdrawn.
On the other hand, there are two things to keep in mind:
1. Dismantling Dodd-Frank would be a rather extreme measure; it was put in place for a solid reason: to eliminate the issues that caused the Great Recession. According to a recent report on CNN Money, some are expecting it to be modified, particularly for smaller banks, rather than eliminated entirely. And that would follow the trend we are seeing of Trump initially taking an extreme position, then moderating it when reality sets in.
2. The genie is out of the bottle. Regardless of whether the US continues to regulate conflict minerals or not, the EU recently passed a rule (somewhat more sensible in that it impacts only importers of raw materials), China has issued a voluntary guideline as a possible precursor to a mandatory rule, and customers are aware of the issue and demanding compliance. The last issue, customer demand, is unlikely to go away should Section 1502 be repealed as the NGOs monitoring this will keep the pressure on retailers and manufacturers.
REACH Article-Related Reporting and Disclosure
The European Chemicals Agency is set to issue an update to the Guidance on requirements for substance in articles, taking into account the Court of Justice’s “clarification” of the definition of “article" from September 2015.
Regardless of how this plays out, it will make the lives of manufacturers of articles of all kinds more difficult for a return on investment that is currently unclear. Reporting will have to be done at a lower level than the finished article – sometimes at a much lower level. The degree of analysis required to determine what is actually an article will climb dramatically, given the absolute and unflinching examples provided in the July 2016 draft. And the subsequent expenditures of time, effort and analysis to collect the information from the supply chain and render it useful and reportable will expand dramatically as well.
The return on investment could be improved when manufacturers are driven to eliminate candidate list SVHCs identified in the bowels of their products by working with their supply chains to make the necessary changes. This could be the motivation and end goal, but if ECHA were more explicit in defining and driving it, this end goal may become more achievable.
Watch for the European Commission and ECHA to start enforcement of Article 33 disclosure with a vengeance by the end of 2016; I believe their goal is to enable more extensive learning about what actually comprises articles in order to more concisely regulate it over time. Manufacturers would do well to plan changes in product development processes that can identify potential uses of SVHCs and thereby drive their removal before the uses of these substances become even more heavily regulated.
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