In this issue: Changes to RoHS in 2014 and Beyond
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1 Issue 95 January 16, 2014 In this issue: Changes to RoHS in 2014 and Beyond Q&A with: Mike Kirschner ENVIRON
2 Changes to RoHS in 2014 and Beyond Q&A WITH MIKE KIRSCHNER, ENVIRON Overview The European Union s Restriction of Hazardous Substances (RoHS) directive, which restricts the use of certain chemicals in electrical and electronic goods, has already had a profound effect on manufacturers of computers, appliances and other common products. But the RoHS landscape is still changing. In 2011, the EU passed a new version of the directive, commonly called RoHS 2 ( This will affect a large number of companies including some that might not even think of themselves as electronics manufacturers. We spoke to Mike Kirschner about the changes. Environmental Leader: What are the big changes to RoHS that companies should be concerned about? Mike Kirschner: There are four substantial areas of change. The first is that RoHS 2 brings in new categories of electrical and electronic equipment. These products must be compatible with RoHS by the following dates: Medical devices: July 22, 2014 Monitoring and control instruments: July 22, 2014 In vitro medical devices: July 22, 2016 Industrial monitoring and control instruments: July 22,
3 Everything else: July 22, ( Everything else means everything that meets the definition of electrical and electronic equipment, but is not captured by the categories defined in the directive.) The second area of change is an expansion to the list of restricted substances. Right now there are four additional substances proposed to be added to the list. They are three phthalates Bis (2- ethylhexyl) phthalate (DEHP), butyl benzyl phthalate (BBP) and dibutyl phthalate (DBP) and a flame retardant, hexabromocyclododecane (HBCDD). A study examining whether to add the substances is ongoing ( with a stakeholders consultation due to begin in February, and those interested in providing input can sign up for updates ( Another big change is the expiration of all the exemptions, listed in Annex III, that apply to the current scope of categories 1-7 and 10. They expire in July 2016, unless the industry applies to extend them and the European Commission grants that extension. Finally, the definition of products covered by RoHS has changed, from the primary function of the product being dependent on electric currents or electromagnetic fields, to any function being dependent. So before, sneakers with flashing lights did not come into the scope of RoHS because, even if the lights didn t work, the sneakers still fulfilled their primary function. Now the whole sneaker has to comply with the RoHS directive. This could affect all sorts of products, such as toys that talk or have blinking eyes, or lawnmowers with electric ignitions. Manufacturers that didn t think about RoHS before might have to now. EL: Which of these three areas seems to be of most concern for electronics manufacturers? MK: The first area, the expansion of scope, is absolutely the biggest thing if you re a manufacturer of medical devices or monitoring and control instruments. The monitoring and control scope is very broad, so there are a lot of companies that are working intensely on compliance. 3
4 If you go to the next level, what's really important for the component suppliers is this exemption expiration. These are the companies that make the integrated circuits, resisters, capacitors, connectors and cables they re the ones that select the materials and in a lot of cases they have to use some of these restricted substances. So they are feverishly looking at what it s going to take to replace substances, and if they can t, how to justify continued use of those substances. The potential for additional restricted substances is actually not a very big issue at this point. Of the three phthalates, two are virtually unused in the electronics industry, and the third one is on its way out - it was broadly used but was then listed as a substance of very high concern under the EU REACH regulations. Phthalates can be used to soften PVC, so cable sheathing is one big application. The manufacturers who have really been pushed to change are makers of cables, or anything that has a soft plastic. But most electronics use hard plastics. The fourth proposed substance is a flame retardant that is really not used in electronics. EL: What sorts of products will now be covered by RoHS that weren t before? MK: Medical devices will include things like radiotherapy equipment and cardiology equipment. In vitro devices are laboratory equipment for doing cell-based research. Monitoring and control includes all sorts of lab equipment, frequency analyzers, thermostats, smoke detectors, heating regulators and scales, and industrial monitoring and control equipment includes meters that measure gas flows, electrical flows, voltages and pressures, distance measurements that use lasers and GPS all sorts of measurement equipment. Both of those are pretty broad. As for the everything else category, I expect some clarification on that before I think everybody would like to see examples of its scope. One of the big challenges is how to treat used products - for instance, antique electrical goods and used medical equipment like MRI machines. 4
5 EL: What do the Annex III exemptions cover, and why are these uses exempt? MK: There are exemptions for specific applications of restricted chemical substances. For instance, copper alloys can contain up to 4 percent lead by weight. Other exemptions include lead in glass, mercury in certain types of lamps, certain uses of lead in solder, and certain uses of cadmium in contacts and glass. These exemptions were granted because there is no technically or economically feasible replacement for using these substances in these specific applications. Once a feasible replacement is found, then it s OK for the exemption to expire, and several have. But the old RoHS directive didn t have any expiration date. EL: Will these exemptions expire? MK: Companies and associations have until January 21, 2015 to apply for exemptions. There are several that I think industry will let expire, and there are several substances that will be difficult for industry to replace, so we re going to end up seeing some applications. That s a set of big projects for these industry associations. EL: Does it seem like companies are prepared to make these changes? MK: They have to be. The challenges today are different from challenges that existed 10 years ago, when RoHS first hit. Then the primary target was the higher volume mainstream electronics products, for both home and business users computers and laptops, servers, networking equipment, cell phones, household appliances, stereo equipment, handheld tools and it was expensive and challenging to comply. At my former company, we did a study and found that RoHS cost the worldwide electronics 5
6 industry $32.7 billion from about 2004 to 2006, with a maintenance cost of about 11 percent of that amount per year. At this point all those companies are very comfortable with it and it s relatively easy for them to make a compliant product. But medical device and monitoring and control companies have a different set of concerns. They tend to have longer product use lives. When they design something it takes longer, and they sell the same product for several years and support it in the market for a long time. To go back to a product you may have designed 10 years ago or longer, open that up, review it and maybe then make design modifications, is a big challenge. EL: Does it make things easier for these manufacturers that RoHS has already been around for a number of years, so you will have seen changes in the supply chain? MK: That makes things easier but also more difficult. Yes, there are a lot of overlapping electronic components. It s easy to find compliant parts. But parts also go obsolete. So it may not be so easy for a medical device manufacturer to find a compliant part equivalent to a non-compliant part it designed in 10 years ago. Because component parts go out of date quickly, companies often buy a huge number of components and put them in inventory and hope they don t run out. They could end up losing money on this inventory. Of course, they could continue to sell non-compliant versions in places without RoHS or RoHS-like regulations in most markets in the US, in China, Canada and most of Latin America. But manufacturers are generally loathe to sell two versions of the same thing for very long. 6
7 EL: What other challenges will manufacturers face in preparing for these changes? MK: I think the biggest challenge is coming to terms with it: defining the scope of the product, defining operational changes, getting budgets and personnel for implementing the compliance throughout their product lines and throughout their business processes, and buying tools as needed. One of the new requirements of the RoHS directive is managing and maintaining a rather huge amount of evidence to show that your product actually is compliant. You have to collect info from suppliers on why they think this part is compliant, and you must be able to provide that to the EU enforcement authority on demand. For companies with very large, broad product lines, they have to invest in systems and tools to be able to manage that requirement. EL: How much will these efforts cost them? MK: What we found is it cost about 1.1 percent of companies annual sales to comply with the RoHS directive. I think it would generally be a little bit lower than that now because it s easier to get compliant parts. But that s counterbalanced the complexity of some of these products, the real likelihood of having to invest in significant redesign, and the requirement to collect proof of compliance. EL: What should companies do now to get ready? MK: Manufacturers need to understand whether their products are in scope and if so, which category they fall in especially for these very strange products manufactures can produce with electronics these days, like the sneakers and toys I mentioned. Manufacturers also have to designate somebody to own responsibility for compliance with the RoHS directive. That person needs to convene a team because the directive s impact cuts across virtually every department that has anything to do with the product. 7
8 There s an ecosystem of support entities out there, much of which wasn t there 10 years ago: software providers, consultants, the supply base, service providers that can collect material data. Companies don t have to do everything internally but they do have to own compliance. Waiting until the last minute does not work. We saw plenty of manufacturers that didn t give themselves enough time with the original RoHS directive and it actually hit their bottom lines. Even IBM, if you look at their Q financial statement ( they blame the RoHS directive for not hitting their targets. They didn t get their products compliant as quickly as they would have liked. So companies really need to plan ahead because it can take quite a long time, especially with these types of complex products that are going to require substantial engineering, to bring them into compliance. The bottom line is manufacturers have to view this seriously. It needs to be treated as a serious project that needs executive level approval, funding and backing, not something you can do on the sly. And you can t take a regulation individually and just comply with it. You have to see what it s going to take to comply with the ecosystem of regulations around the world. About ENVIRON Since 1982, ENVIRON has worked with clients around the world to help resolve their most demanding environmental and human health issues. We combine resources across geographic boundaries and technical and scientific disciplines to provide clients with the best, most responsive teams whether responding to existing challenges, evaluating opportunities to improve performance or seeking to reduce future liabilities. Clients benefit from our unique ability to bring clarity to issues at the intersection of science, business and policy. The entrepreneurial spark that defined ENVIRON's beginnings remains evident in each innovative, forward-thinking solution we deliver. Advances in science and technology and evolving regulatory, legal and social pressures create increasingly complex challenges for businesses. We evolve to keep pace with these changes by adding new services, contributing to scientific advances or expanding geographically all with an eye to supporting our clients' changing needs. 8
9 Author Profile: Mike Kirschner Mike Kirschner is a product environmental compliance and performance expert who provides advice and expertise to manufacturers in a variety of industries. His primary areas of focus include EU RoHS, the impact of EU's REACH regulation on article manufacturers, California s Safer Consumer Products regulation, and performance standards like IEEE-1680.x for electronics. He contributed two chapters to the Governance, Risk, and Compliance Handbook, published by Wiley in 2008, and is featured in the critically acclaimed book, Exposed: The Toxic Chemistry of Everyday Products and What's at Stake for American Power. In 2009 he was appointed to the California EPA Department of Toxic Substance Control's Green Ribbon Science Panel. Prior to joining ENVIRON, Mike founded product lifecycle and environmental consultancy Design Chain Associates, LLC, where he served as president and managing partner. Before founding DCA in 2001, Mike spent 20 years in engineering and engineering management roles within the electronics industry, with manufacturers including Intel and Compaq. He holds a BS in electrical engineering from Worcester Polytechnic Institute. Contact Information Tel: Jeanne Bezerra, Global Director of Communications, jbezerra@environcorp.com URL: LinkedIn: 9
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