Input to the internet consultation process on Annex II. Provided by: Ford of Europe / Volvo / Land Rover / Jaguar / Aston Martin

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1 Input to the internet consultation process on Annex II Provided by: Ford of Europe / Volvo / Land Rover / Jaguar / Aston Martin Content: Introduction Page 2 Response to Commission questions Page 3 Other issues that need a resolution Page 6 Summary of proposed revisions of Annex II Page 7 1

2 Demand for balanced policy measures: We support environmental policy efforts to minimize negative environmental impacts during all life cycle stages of a vehicle. In order to reach the goal to manufacture, market, operate, service and recover a product with as little as possible impact to environment or human health, the exact environmental impact, the relevance of certain substances and their technical and economical implications need to be understood prior to mandating substance restrictions. This is why balanced policy measures need to be based on a thorough risk assessment as well as on a thorough business impact assessment. Unfortunately such a broad basis for the heavy metal restrictions acc. to article 4.2 of the directive 2000/53EC is not known to us. Challenges for the entire automotive industry: We, like all of our competitors, have set up internal goals and environmental guidelines regarding the product as well as the production processes and included these requirements in the contracts with our suppliers. As self-responsible partners, the suppliers are affected in a special way, having to deal with their global supply chain, sometimes down to the raw material basis. The challenge for the supplying industry is to inform their lower tier suppliers as well as changing well proven, quality optimised designs according to the new requirements. During this process some unclear definitions of exemptions in Annex II are the reason for different interpretations and have caused a situation of uncertainty in some areas. Reliable planning basis: Continuing the process of implementing the provisions of Article 4(2)(a) of the directive 2000/53/EC, the upcoming phase-out dates of exemptions mentioned in Annex II of the directive have been assessed again in depth. Even though the industry has been already successful in developing some substitutes (e.g. wheel balance weights) or is confident to have them developed in time (e.g. valve seats, stabilizer in protective paints) the entire industry is still facing a number of problems to get substitutes or alternatives ready for implementation in our vehicles without risks for safety and reliability of our products. The continued improvement process of the overall environmental performance of products and production processes requires that the industry is assessing carefully the environmental performance of substitute materials to allow for long lasting decisions regarding optimized materials in each application. The industry is depending on a reliable planning basis for these substitute materials for at least one development cycle of a car. As a result of the internal assessments, there are some indications that for a number of exemptions the phase-out of heavy metals will need a longer period of time than currently foreseen. The path forward: Attached our proposal that reflects the current knowledge for a revision of the Annex II by year end of It is our aim to improve the definitions of exemptions and phase-out dates in order to achieve a high level of legal certainty and to guarantee a continued production of safe and reliable vehicles for the European market. We as part of the automotive industry take the challenge to transfer material restrictions into all new products. It is up to the Commission to assess this input and to require that overall environmental and socio-economic benefits are being achieved for each application. Besides the response to the detailed questions put forward by the Commission, we are also commenting on other aspects of primary importance (e.g. the spare parts issue) and all other elements and entries of Annex II. This approach is meant to assist the Commission in refining the wording for some of the other entries, based on the current status of the developments and the experience gained so far during the implementation of restrictions for July 01, A summary sheet for all proposed revisions of Annex II entries is also attached. We would appreciate an open dialogue on this and all future developments at the earliest possible time. On behalf of Ford of Europe / Volvo / Land Rover / Jaguar / Aston Martin Dr. Bernd Gottselig (bgottsel@ford.com) 2

3 4.1. Review of entries 2 (a) and (b): exemption for the use of lead as an alloying element in aluminium for machining purposes with a lead content up to 2% by weight until 1 July 2005 and with a lead content up to 1% by weight until 1 July Question 1: (a) Are there currently leaded aluminium alloys with more than 1% lead by weight put on the market? (b) If so, in which applications? (c) What are the predicted market evolutions for the next 5-10 years? Answer 1: (a) Our internal assessment has shown that some aluminium grades currently in use have an Al content up to 2% lead by weight for machining purposes acc. to Aluminium Association (AA) or acc. to international standards (e.g. EN 573-3). We and our suppliers buy all materials according to these international standards. The international standards would have to reflect the demands of the Annex II requirements. The agreement on changing the affected standards would have to be achieved with all other industries using these standards. Also industries other than the automobile industry are the main users of these alloys. (b) Based on consultations and testing done in conjunction with our main suppliers (e.g. Bosch) these grades will still be required for several mainly safety related parts e.g. brake system, steering system, chassis and powertrain parts. (c) We expect that these Al-grades are needed also for the next 5 to 10 years. However, we do not expect that the application patterns of these alloys will increase over the next years. Question 2: (a) Are there any technical impediments to phase-out the use of leaded aluminium alloys? (b) If so, for which applications? Answer 2: (a) Yes. The metal producing industry considers tin as a possible substitute for some applications, but it is not clear if AlSn alloys can substitute AlPb alloys for all intended applications. Main concern today is the failure to meet corrosion and durability requirements for the applications listed above. Specific examples are the brake system and fuel system especially when alternative fuels are added or used (e.g. ethanol). (b) Only if all requirements of substitute alloys can be met, the automotive industry can implement the substitute materials for the applications outlined above. Question 3: (a) Is the scheduled phase-out date (1 July 2008) feasible? (b) If not, please give detailed reasons and specify for which applications this is not feasible. Answer 3: (a) We don't regard the July 01, 2008 phase-out date feasible at this point in time for safety related parts e.g. brake system, steering system, chassis and powertrain parts. (b) Main reasons are the technical impediments outlined above. Also the global availability of alternative alloys meeting all requirements is still not ensured. The move from lead to tin would cause additional material cost of roughly 3 Mio annually. Question 4: If the scheduled phase-out date is not feasible (for certain applications), which phase-out date would be appropriate? Answer 4: No phase out date at all is recommended at this point in time. Lead is fully inert in the Al-matrix, is not water-soluble, cannot be released into the environment and is finally going with the non-ferrous metal fraction to the Al-mills and to the re-melting process. Other industries will be able to use all kinds of lead containing aluminium alloys also in the future, currently without limitations. Because of all these 3

4 uncertainties mentioned above and an equal treatment of all Al alloy users, we would suggest a review date for this entry in Review of entry 7: exemption for the use of lead and lead compounds in wheel balance weights used in vehicles type-approved before 1 July 2003 and wheel balance weights intended for the servicing of these vehicles until 1 July 2005 Entry 7, which was inserted by Commission decision 2002/525/EC in 2002, allows the use of lead and lead compounds in wheel balance weights until 1 July 2005 for vehicles type-approved before 1 July 2003 and wheel balance weights intended for the services of those vehicles. By 1 January 2005, this exemption should be assessed in relation to road safety aspects. Question 5: (a) Did the alternative market for non-leaded wheel balance weights develop and are the necessary adaptations made in order to ensure the road safety? (b) What are the predicted market evolutions for the next 5-10 years? Answer 5: (a) Yes, the markets and production capacities for substitute materials are established and continuously increasing. Main reason for this success was the gradual phase-in due to the link to the type-approval date. During these times the necessary personal and testing resources are available within product development that allow for a structured release process. For vehicles, type approved after the alternative materials are in use for balancing. (b) We assume a continuous trend to lead-free balancing weights world-wide, even though some environmental considerations seem to be driven by inconclusive studies. For the next years the well established recycling loop for wheel balancing weights in Europe will be challenged due to the rapidly evolving material mix (lead, tin, zinc, steel etc.) and material separation expenses. Question 6: Is the scheduled phase-out date (1 July 2005) feasible and would this not endanger road safety? Answer 6: The scheduled phase-out is feasible for new vehicles. Safety issues have been solved during their release phase. The Zn balancing weights are produced to the shape of the rim. Inter-changeability with balancing weights made from other materials is therefore limited. This is not the same case for current production vehicles type approved before 1 July Review of entry 8: exemption for the use of lead and lead compounds in vulcanising agents and stabilisers for elastomers in fluid handling and powertrain applications until 1 July 2005 The scheduled phase-out date of this exemption should be reviewed by 1 January 2005, in relation to the availability of substitutes of lead. Question 7: (a) Which substitutes have been developed and are currently in use? (b) What are the predicted market evolutions for the next 5-10 years? Answer 7: (a) We have successfully replaced lead-stabilisers are in elastomer types (e.g. ECO). The total replacement will be finished in time by July 2005 for all new vehicles. The future development of parts will be based on requirements for lead-free products from the beginning on. Mainly zinc/zinc-oxide based products will be used. 4

5 For vulcanising agents including the bonding agents however, some issues around long term performance still need to be resolved. (b) With the current level of activities, we do not expect an increase in applications. Question 8: Are there other substitutes still being developed and tested? Answer 8: Considerable efforts were made to finally develop lead free vulcanising agents. However long-term risks regarding safety-related aspects are not assessable at this moment. Some substitutes failed, others provided positive results. This implies that probably the performance levels have to be adjusted. The long-term performance of lead free developments has a very high importance to road safety aspects because a breakdown of the affected parts can put other traffic participants at risk. Only our long-term tests, which are currently in progress, can ensure the reliability of new products in respect to material interactions, component position/function, temperature profiles and influence of fluids. In any case we are talking about a selected number of applications and very thin (few microns) layers. Substitutes are based on zinc or magnesium. Question 9: (a) Is the scheduled phase-out date (1 July 2005) feasible? (b) If not, please give detailed reasons. Answer 9: An assessment about the results of the present tests is not possible until November 2004 when most of the long term testing results will become available. Question 10: If the scheduled phase-out date is not feasible, which phase-out date would be feasible and why? Answer 10: If the tests can not be completed with successful results, new long-term tests with improved vulcanising agents will become necessary. In that case and under consideration of all supply chain and distribution aspects, an extension of the entry until 1. Sept is required. If long-term tests show satisfying results, a phase out by 1. July 2005 appears to be possible Review of entry 21: exemption for the use of cadmium in batteries for electrical vehicles until 31 December 2005 Pursuant to Article 2 of this Commission Decision, this exemption should be reviewed by 31 December This review should include an analysis of the progressive substitution of cadmium and the availability of electrical vehicles. Pursuant to Article 2 of this Commission Decision, this exemption should be reviewed by 31 December This review should include an analysis of the progressive substitution of cadmium and the availability of electrical vehicles. Question 11-15: Answer 11-15: Ford and the other brands do not produce electric vehicles any more. Therefore, we can not comment on these questions based on our own experience but agree with the ACEA position. 5

6 Additional Annex II related issues that need a resolution: Spare parts: We suggest using the following wording to address the customer needs and inconsistencies experienced by the current wording: Vehicles put on the market prior to 1 July 2003 or prior to the respective expiry date of the exemptions listed in Annex II and parts intended for repair or servicing of these vehicles are not affected by the restrictions (of Article 4(2)(a)). A cost efficient and environmentally friendly servicing in the field of older vehicles requires that this clause should be linked to an expiration date. Consider to link expiry dates with date of type approval The expiration dates referenced in Annex II (January 01 / July 01 / December 31) are not well aligned with model changes of the automobile industry. Model year changes occur predominantly after the summer shut down periods which are linked to the school vacation periods in the different Member States. Also engineering resources and testing capacity is aligned with model year changes. Way ahead of model year changes the necessary resources are being identified and testing capacity is being booked because many require new type approvals. We would therefore recommend linking a number of existing exemptions to the date of type approval: a) Wheel balance weights: They are key to road safety. The current approach has shown that a link to type approval supports a smooth transition. Current activities to achieve compliance by 2005 for the remainder of the production volume are facing far more difficulties. For new vehicles the issue can be regarded as solved. b) Carbon brushes for electric motors: for new products a phase out of lead containing carbon brushes by Jan is feasible. Production processes are being modified. But the effect of lead-free carbon brushes on lifetime and reliability of components may in the meantime be a topic of testing and research work. Due to the lifetime construction principle consumed carbon brushes are not replaced separately, so that complete components have to be exchanged. In warehouses of suppliers, dealers and car companies complete components wait for their use in vehicles. Because of the need to exchange complete components and a missing exemption after all these virgin parts would have to scrapped and replaced by new parts, if available. c) Copper in brake linings containing more than 0,5 % lead by weight: brake linings are key to road safety. The current approach has shown that a link to type approval supports a smooth transition. Current activities to achieve compliance by 2004 for the remainder of the production volume are facing more difficulties. For new vehicles the issue can be regarded as solved. d) Pyrotechnic initiators: the current wording would require changing the design of the pyrotechnical devices in running series. There is no inter-changeability between leadcontaining and lead-free solutions. Therefore, the entire testing needs to be repeated and the capacity at authorities and testing facilities needs to be available, which is currently not the case. e) Corrosion preventive coatings: besides a variety of fasteners also a number of other materials (Al, Mg) are being coated with hex chrome. Not for all applications suitable substitute materials have been identified as of today. A variety of these components e.g. like brake systems are covered by type approval. In order to facilitate the general change over process and avoid conflicts with the type approval process we recommend linking the expiration date of this exemption to the date of type approval coupled with a review date January Impurities: Delete the reference to "intentionally introduced". A maximum concentration value up to 0.1 % by weight and per homogeneous material, for lead, hexavalent chromium and mercury and up to 0.01 % by weight per homogeneous material for cadmium shall be tolerated. The use of recycled materials as feedstock for the manufacture of new products, where some portion of the recycled materials may contain amounts of regulated metals, is not to be considered as intentionally introduced. This wording would align the requirements for the automobile industry with those of other industries. 6

7 Summary of proposed Revisions of Annex II Materials and components exempt from Article 4 (2)(a) Current exemption Scope and expiry date of the exemption Proposed exemption Scope and expiry date of the exemption Lead as an alloying element 1. Steel for machining purposes and galvanised steel containing up to 0,35 % lead by weight No changes, Entry still needed as it is 2.a) Aluminium for machining purposes with a lead content up to 2 % by weight Note: a maximum concentration value up to 0,4 % by weight of lead in aluminium shall also be tolerated provided it is not intentionally introduced 1 July 2005 Entry to be reviewed by January Aluminium for machining purposes with a lead content up to 1,5 % by weight Note: a maximum concentration value up to 0,4 % by weight of lead in aluminium shall also be tolerated 1 July 2008 Entry to be reviewed by January b) Aluminium for machining purposes with a lead content up to 1 % by weight 1 July 2008 Entry to be reviewed by January 2005 Shall be deleted See above. 3. Copper alloy containing up to 4 % lead by weight No changes; Entry still needed as it is 4 Lead-bronze bearing shells and bushes 4 Lead in bearing shells and bushes Rewording to prevent different interpretations Lead and lead compounds in components 5. Battery No changes; Entry still needed as it is 6. Vibration dampers No changes; Entry still needed as it is 7 Wheel balance weights Vehicles type-approved before July 2003 and wheel balance weights intended for servicing of these vehicles: 1 July Entry to be reviewed by January Wheel balance weights Vehicles type-approved before July Vulcanising agents and stabilisers for elastomers in fluid handling and powertrain applications 1 July Entry to be reviewed by January Vulcanising agents for elastomers in fluid handling and powertrain applications Only for Vulcanizing agents Sept Stabiliser in protective paints 1 July 2005 No extension of this entry needed 10. Carbon brushes for electric motors Vehicles type-approved before 1 July 2003 and carbon brushes for electric motors intended for servicing of these vehicles: 1 January Carbon brushes for electric motors Vehicles type-approved before 1 July Solder in electronic circuit boards and other electric applications Dismantling if in correlation with entry 14, an average threshold of 60 grams per vehicle is exceeded. Wording of footnote shall be changed and read as follows: Dismantling of lead amounts from entry 11 and 14 exceeding an average threshold of 60g per car only, if lead concentrations after shredding processes do not allow further treatment according to existing regulations. 12. Copper in brake linings containing more than 0,5 % lead by weight Vehicles type-approved before 1 July 2003 and servicing on these vehicles: 1. July Copper in brake linings containing more than 0,5 % lead by weight Vehicles type-approved before 1 July

8 13. Valve seats Engine types developed before 1 July 2003: 1 July Valve seats Engine types developed before 1 July Electrical components which contain lead in a glass or ceramic matrix compound except glass in bulbs and glaze of spark plugs. Dismantling if in correlation with entry 11, an average threshold of 60 grams per vehicle is exceeded. Wording of footnote shall be changed and read as follows: Dismantling of lead amounts from entry 11 and 14 exceeding an average threshold of 60g per car only, if lead concentrations after shredding processes do not allow further treatment according to existing regulations. 15. Glass in bulbs and glaze of spark plugs 1 January 2005 No extension of this entry needed 16. Pyrotechnic initiators 1 July Pyrotechnic initiators Vehicles type-approved before 1 July 2006 Hexavalent chromium 17. Corrosion preventive coatings 1 July Corrosion preventive coatings Vehicles type-approved before 1 July Entry to be reviewed by January Absorption refrigerators in motorcaravans No changes; Entry still needed as it is Mercury 19. Discharge lamps and instrument panel displays No changes; Entry still needed as it is Cadmium 20. Thick film pastes No changes; Entry still needed as it is 21. Batteries for electrical vehicles After 31 December 2005, the placing on the market of NiCd batteries shall only be allowed as replacement parts for vehicles put on the market before this date. No changes; Entry still needed as it is (we follow the ACEA position on this) 8