Up to 7,500 UK businesses and their supply chains are thought to be affected by the RoHS Directive, the compliance deadline for which was 1 July 2006. Some firms, including retailer Halfords, have responded by reducing their supplier base, raising concerns that dependence on fewer suppliers could increase costs.
The Department of Trade and Industry estimates RoHS will cost UK industry between £700 million and £1.3 billion over 10 years. The greatest costs relate to lead restrictions which mean soldering equipment is likely to need replacing or refurbishing.
The RoHS regulations (ENDS Report 377, p 40 ) ban manufacturers from placing equipment on the market if components or materials contain more than 0.1% lead, mercury, hexavalent chromium or flame retardants polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE). Cadmium is also limited to 0.01%.
The body responsible for enforcement in the UK - the National Weights & Measures Laboratory - does not have the power to stop non-compliant products as they arrive at ports. It can only take action once products are on the market.
NWML, an executive agency of the DTI, has a dedicated enforcement team which has been collecting information to create RoHS risk profiles of products and firms.
The team has also spot-tested more than 50 electrical and electronics products, focusing on the consumer market. Each has tested positive for at least one of the restricted substances.
But the picture is not as gloomy as this suggests, according to Chris Smith, technical manager at NWML. "Infringements tend to be minor - 99% of the products appear to be 99% compliant," he said. "This suggests that industry has taken the regulations to heart and worked to comply," he says.
A product might comply with the lead limits overall except for a part such as a mains flex cable or power supply. Rework with leaded solder has made many components such as circuit boards non-compliant.
Lead is also being found in plastics where it can be used as a UV stabiliser or pigment. And chromium VI has been found in screws.
NWML uses X-ray fluorescence (XRF) to test products. The reliability of using handheld XRF equipment is a key concern, according to Markus Stutz, environmental affairs manager at Dell.
He was speaking at an ERA Technology conference on electrical and electronic equipment (EEE) in London in November.
"XRF cannot distinguish chromium VI from other types of chromium," he warns. "Nor can it differentiate between the banned brominated flame retardants PBB and PBDE and the unrestricted tetrabromobisphenol A [TBBA]."
Testing limitationsMr Smith acknowledged these limitations, adding that substances such as cadmium can be difficult to spot. "Screen testing can generate false positives," he says. "But that doesn’t matter. It is a satisfactory method for identifying potential areas for concern."
NWML is using test results to engage with companies and help generate compliance. It is sending compliance notices to hundreds of firms, giving them three to four months to comply.
Companies are being asked for information about suspected restricted substances as well as systems and processes. If a firm claims a product is compliant, the NMWL might carry out a re-test.
If necessary, a legally binding improvement process will be agreed with organisations. While problems with components such as plastics could be resolved fairly easily with suppliers, others could be more difficult to replace due to lack of alternatives, and firms could have to redesign certain products.
The agency is using a collaborative approach and aims to prosecute only as a last resort. "Enforcement is about generating compliance, not penalising industry," said Mr Smith. "Organisations dealt with so far have been cooperative and identified and resolved issues themselves. We have generated better compliance without having to be heavy-handed."
Of the organisations NWML contacted, 20% are in breach of the legislation - having put a product containing a RoHS substance on the market, failed to respond to a request for technical documentation within 28 days, or failed to retain documentation.
Although all samples tested positive, some may have been placed on the market before 1 July and others were imported into other EU member states, which are therefore responsible for enforcement.
Firms could be fined £5,000 for each offence - per batch or per single item. Unlike some other member states, the UK has no power to remove products from shelves. However, the regulator could obtain an injunction to impound serial offenders’ products.
As yet, no member state has taken legal proceedings to prosecute a company for RoHS breaches.
Enforcement is based on self-declaration. Manufacturers are not required to register products or independently verify compliance.
However, the UK RoHS Conformity Assessment Group (URCAG) has developed a conformity assessment protocol,1 which provides guidance so bodies such as Bureau Veritas, SGS or BSI can certify a product is compliant.
Although NWML does not recognise independent verification as proof of compliance, it does see it as reducing risks and considers it in assessments.
The UK regulations allow due diligence to be considered as a legal defence. To qualify, firms will have to prove they took all reasonable steps to control production and material supply to comply. Business size will help determine what is "reasonable".
All firms will have to provide material declarations. Large firms will have to provide evidence of documented compliance assurance systems. Small- to medium-size firms must collect evidence from suppliers, such as certificates or warranties declaring the restricted substances are used within limits.
But laboratories around the world are using different test methods with varying results, making it difficult to rely on suppliers’ compliance certificates. In addition, the limitations of XRF test methods could make reaching a verdict difficult for courts.
While certain test methods identify regulated material content, it is difficult to identify concentrations because electrotechnical products are not homogeneous materials. Most test methods are inappropriate for the sector, according to Dell’s Markus Stutz.
He accepts the usefulness of XRF for screening, but is concerned about its use for verification and enforcement in the EU and countries such as China, where regulations similar to RoHS come into force in March 2007.
"International testing methods for RoHS substances are urgently needed to establish replicable and reliable checks and harmonise compliance and enforcement to avoid technical barriers to global trade," says Mr Stutz.
He is contributing to work on an international standard on analytical testing under the International Electrotechnical Commission. A final draft is unlikely before March 2008.
For now, the initial draft is being used as the basis for China’s standards. Under the Chinese regime, tests will be used to determine whether substances such as chromium VI were intentionally added and therefore in breach of regulations.
In the EU, legislators are likely to focus on enforcing clear-cut cases such as lead. Mr Smith agrees that a common standard with reproducible results could help industry to prove compliance.
Firms are also working under the IEC to develop an international standard for material declarations, based on existing guidance on testing procedures and material declarations.
Data collection, control, analysis and reporting are key to compliance assurance systems. The aim is to create a consistent format for electronic data capture and exchange, making it easier for suppliers to respond to requests for information, minimise cost and improve data quality.
Ambiguities on scopeQueries about waivers and grace periods are commonly received by NWML, but none is available.
Knowingly selling illegal products could invalidate insurance and jeopardise customer contracts. About 15% of companies contacted by NWML thought their products were outside RoHS’s scope, but most turned out to be wrong.
Broad definitions in EU legislation, diverse interpretations across member states and a flood of applications for exemptions are leaving some firms hesitant about investing in compliance.
While most producers are looking at how to ensure compliance at least cost, others are seeking to avoid requirements by lobbying for exemptions or exploiting legislative ambiguities.
Interpretations of "put on the market" vary among member states, affecting when an offence is committed. In Italy, a product is considered on the market in a warehouse, while in the UK, it is when a product is made available for the first time for distribution in the EU.
Some states interpret the market as "national", as under the sister Directive waste electrical and electronic equipment (WEEE).
The scope of categories and exemptions also remains a sticking point, with many products falling into grey areas.
Lack of precise definitions in the RoHS Directive, and divergence from the WEEE Directive, is causing the confusion.
WEEE has ten categories, but only eight apply to RoHS: large and small household appliances; IT and telecommunication equipment; consumer equipment; electrical and electronic tools; lighting; toys, leisure and sports equipment; and automatic dispensers.
WEEE also excludes electric lightbulbs and household luminaries, whereas RoHS includes them.
UK and EU authorities are working to clarify areas open to interpretation. But a DTI spokesperson said "some uncertainty will always remain as the scope of both Directives is drawn from a list of ten very broad categories."
During a meeting of the EU technical adaptation committee in November, one member state suggested the European Commission set out separate and distinct scopes for each Directive in its current review of them. The Commission is likely to propose including medical equipment and monitoring and control instruments under the RoHS Directive.
During the meeting, the UK fought requests by member states to limit a derogation for "fixed installations" such as heating plants by changing it to a derogation for large-scale industrial tools, saying the change would "broaden the scope of both Directives significantly."
The Commission is considering the matter and a draft manual of decision, due in 2007, is likely to provide further guidance on the Directive’s scope.
Most member states apply a broad interpretation of scope, with varying definitions of some products, such as luminaries. Because products authorised under RoHS in one jurisdiction can be sold throughout the EU, challenges over interpretations are likely.
There is no requirement for member states to share information, but the UK and others are networking informally to try to ensure enforcement is consistent across the EU.
Meanwhile, some firms have sought legal advice on how to avoid requirements. One company has used the absence of a definition of consumer equipment under RoHS to argue its products are outside the Directive’s scope.
Producers’ decision-making is likely to be driven by the effect of enforcement activity in their marketplace. NWML is taking a long-term view and while teething problems remain, enforcement is likely to be light-handed. It will tread particularly carefully on products being considered for exemption.
Uncertainties on exemptions
Many firms did not realise the regulations’ impact until it was too late. As a result, the Commission has been "staggered" by the number of applications for exemptions. It has appointed the Okö Institute to consider the latest 23 applications for exemptions and several which have been resubmitted (ENDS Report 382, p 49 ). The UK will submit revised regulations on RoHS next year to take into account further exemptions granted by the Commission.
Although the procedure for exemptions includes stakeholder consultation, the DTI is concerned about the industry’s ability to comment on peer reviews, particularly when issues are not as clear-cut as consultant reports appear to make them. There is no formal right of appeal if an exemption is rejected. A company can resubmit its application, but a decision can take up to 15 months.
Seeking certainty, some member states say no more exemptions should be approved, but the Commission expects to allow the process to continue indefinitely.
A controversial decision was the exemption of the flame retardant deca-BDE in polymeric applications (ENDS Report 378, p 48 ). The UK supports the exemption, calling on the Commission to review the opinion of its legal services that deca-BDE contains nona-BDE, which is covered by the ban, as an impurity.
The Commission is due to publish the results of two related studies early next year. One is likely to say that producing commercial deca-BDE within the accepted tolerance constraints is possible but would be expensive. The other is reviewing alternatives to deca-BDE.
At least four applications for exemptions have been for ‘life-time buy’ components. Some producers were forced to buy components in bulk because their suppliers were stopping production, but these can prove to be non-compliant.
According to Charles Franklin, managing director of the communications technology firm Avaya Norway, some applications were blocked by procedures - they were outside the Okö Institute’s terms of reference. As a result, some firms have had to scrap parts.
An exemption granted for network infrastructure has been important to the reliability of Avaya’s telecommunications services. The company has had 85 people from several departments working over several years to ensure compliance went smoothly. They focused on business processes, using tools including decision-making trees, compliance templates and Q&A documents. Many products have been substituted.
Nonetheless, Mr Franklin criticises RoHS for its "absolute lack of clarity." He would like future regulations to provide clarity early on, flexibility for transitions to allow for fast-track decision mechanisms by regulators, and better awareness-raising among firms.
He sees the EU Directive on the eco-design of energy-using products (EuP) and the forthcoming REACH regime on chemicals as "storm clouds on the horizon".
REACH controlsEEE producers, as major downstream users of chemicals, will be affected by REACH through their supply chains. Producers will need to create an inventory of substances used, keep up requirements as substances are evaluated, authorised and restricted, and create substitution plans for substances of high concern.
Holly Evans, president of Strategy Counsel, a US environmental law and policy consultancy, says that before RoHS came into force, she thought it was "the most radical and costly environmental law that the industry had ever faced."
Now, the industry is struggling to understand China’s version of RoHS, the impact of REACH and its record-keeping requirements.
Under REACH, manufacturers will have to ensure suppliers have a legal entity presence in the EU to pre-register substances for their specific uses. If the information for safety assessments is confidential, they will have to pre-register substances themselves.
Among those preparing for REACH is Honeywell, a technology, manufacturing and speciality materials conglomerate. Honeywell’s director of government relations, Michelle O’Neill, said the electronics industry has been "fragmented, slow and naive". "They should be concerned and preparing for compliance."
Where substances of high concern are used for product safety or reliability, firms will need to prepare a case for continued use. Suppliers of these chemicals might stop producing them.
"One chemical change could cost millions, for instance in the semi-conductor industry."
Systems set up to manage supply chain risks under RoHS could be used for complying with REACH, although it is on a much larger scale.
"At least with RoHS, we knew which substances were going to be restricted and had time to comply," says Ms O’Neill.
Tracking different requirements around the world is a challenge, not least for e-waste recycling legislation. This is spreading rapidly, with measures in place or pending in countries including Australia, Canada, China, South Korea, Mexico and the USA.
"There is a paradigm shift in the industry’s relationship with the planet," said David Burton, project director at B2B Compliance, a WEEE compliance scheme.
"The EEE industry is about to undergo fundamental and radical change whereby recycling will need to be incorporated into product-costing as much as raw material, production, marketing and distribution. Failure to understand these key strategic and commercial issues at senior levels could result in significant costs and market disadvantage."
However, variations in producer responsibilities and product scope in different jurisdictions are complicating compliance. In the US alone, at least 28 bills are being proposed on electronics recycling, mostly at state level. Industry is working to ensure states harmonise to the EU RoHS standards.
Holly Evans says the EU "has set de facto global design requirements for many electronic products." She believes multinational companies largely design their products to the most stringent requirements to ensure they can be sold globally.
The bar is being raised with RoHS in China. It will have a wider scope than the EU Directive; obligate designers, producers, importers and retailers; have no exemptions; include packaging materials; have requirements for certification and labelling and controls at ports; and it could be extended to other substances.
A key challenge for legislation across the board will be developing monitoring, tracking, compliance and supply chain management tools to comply in a manageable and systematic way.
Dealing with issues directive by directive is not the best approach, according to Ms Evans. "It can produce redundancies and unnecessary costs if investments are made in data collection tools that cannot expand to meet new requirements."
She sees design mandates as "most troublesome because they require supply chain co-ordination and introduce legislative mandates into the product design stage."
Globally, the industry is being urged to move towards ‘green’ product design by parties to the Basel Convention on waste shipments. According to the UN Environment Programme, up to three quarters of some 50 million tonnes per year of electronic waste produced worldwide is being dumped in Africa.
Further action to reduce risks from hazardous e-waste are being considered under the Convention and governments are being urged to improve national policies (see pp 48-49 ). At the recent Basel meeting in Nairobi, UNEP executive director Achim Steiner said: "Governments need to develop effective regulatory regimes that empower the market to respond positively to the challenges of e-waste."
Eco-design challengeFor many firms, the forthcoming EuP Directive’s eco-design requirements top the list of concerns. Implementing measures under the Directive will set out requirements on energy and resource use, waste generation and hazardous substances.
Chris Robertson, head of reliability and failure analysis at consultants ERA Technology, says concerns centre on a compulsory CE mark on products as proof of compliance, and a requirement to include eco-design within product development systems.
"Most manufacturers will not have done this and design changes will take time to implement," says Mr Robertson.
"The legislation is likely to increase costs in the short term, but in the long term it could help manufacturers become more efficient and make their products easier to recycle."
EuP energy efficiency standards are likely to be informed by the revised EU and US Energy Star agreement (ENDS Report 377, p 44 ). Manufacturers are particularly concerned about limits on energy use in standby mode which could affect many products.
Under the Directive, the first step in considering whether to set eco-design requirements for a particular group of products is a "preparatory study" addressing impacts throughout the life cycle and recommending ways of improving performance. The next step will be for the Commission to draw up implementing measures setting eco-design requirements.
Several preparatory studies are under way. Draft reports - on external power supplies and battery chargers1 and street lighting - were published in December.
Mr Robertson warns producers will have to plan sufficiently so they "do not miss the boat in the way they did with RoHS."
"Some small- and medium-sized firms in particular didn’t start preparing early enough, received a shock and have had to make the choice between putting products on the market illegally or going out of business. I’d like to think that industry, having been forewarned by their experience with RoHS, will act earlier under EuP. My fear is that the same is likely to happen again."