The only way that companies can, not just survive, but thrive under REACH is by anticipating changes and keeping ahead of both regulations and competitors. Because it affects all materials and coatings, Rowan is very familiar with REACH, and maintains a constant watch on what is happening with chemicals in Europe (see the Granta/Rowan REACH Solutions page that combines Granta’s Restricted Materials data with Rowan’s engineering consulting).
What does REACH mean for manufacturing in Europe and the US. What opportunities does it create?
Registration, Evaluation, Authorization, and restriction of CHemicals (REACH)
In June of 2007, the European Commission established a new legislation concerned with the registration and authorization of hazardous materials: the REACH directive, which is explicitly based on the Precautionary Principle. To determine which materials are hazardous, REACH has established a list of Substances of Very High Concern (SVHCs), which are ultimately intended to be restricted to specific, allowed uses or requires any company that sells or uses them in Europe to first have an authorization to do so. This legislation has been affecting companies outside the EU because REACH is leading to a loss of chemicals from the global marketplace. What makes REACH so unique is that it is the most wide-spread of all legislations to have been passed, and continues to grow as various Annexes are added on. REACH is also unique in that it has no military and aerospace exemptions.
The main points of REACH are as follows:
- The world of materials is separated primarily into
- Substances (aka Mixtures, i.e. chemicals, including metals, gases, polymers, organic and inorganic salts)
- Preparations (i.e. combinations of substances, such as paints or plating chemicals)
- Articles (i.e. manufactured items from screws to aircraft)
- All substances must be registered according to a multi-year schedule, starting with toxic materials and those chemicals imported or used in the EU >1,000 tonne/yr, and moving in steps down to usages >1 tonne/yr. Registration is a very expensive proposition since it involves reporting all uses of a substance and its environmental and health effects. Under the principle of “No data, no use”, no substance may be used in the EU unless it is registered. This means that, even though the substance may be registered, and even if it is totally benign, it cannot be used for a particular application until it is registered for that use. Only water, the noble gases, and a few other chemicals are exempt.
- Substances considered toxic are known as Substances of Very High Concern (SVHCs), defined as:
- Substances considered as carcinogenic, mutagenic or toxic for reproduction (CMR categories 1 or 2).
- Substances considered as persistent, bioaccumulative or toxic (PBT), very persistent and very bioaccumulative (vPvB).
- Substances, such as endocrine disruptors, or substances identified as causing serious and irreversible effects to humans or the environment.
- The aim of the legislation is that every SVHC will ultimately be substituted by a less toxic material. SVHCs can be Restricted (i.e. only permitted certain uses, or forbidden for certain uses), or they can only be used with Authorization (i.e. entered into Annex XIV and only permitted specific uses by specific users). Obtaining authorization is extremely expensive ($1-2mm), and an authorization will be given only for a limited period of time, which is undefined but likely to be <5yrs.
- There are no military or aerospace exemptions (as there are in other European rules, such as RoHS). Countries are permitted to create narrow defense exemptions, but few have done so or intend to do so, and a patchwork of exemptions would be of no use to US military or aerospace equipment suppliers. Since data on chemistry and use are public, US ITAR materials cannot be registered, and if used at >1 tonne/yr or if containing toxic chemicals that require authorization, they cannot be used in Europe without a defense exemption.
What does this mean for companies operating in Europe?
European manufacturers will need to be constantly aware of what substances are in line for Authorization or Restriction. These materials can be as well defined and obvious as cadmium or chromates used for chromate conversion, or they may be as subtle as minor organic constituents of organic materials, paints, etc.
Manufacturing in Europe will become increasingly expensive and risky, since almost any chemical may become designated or simply proposed as being an SVHC. Once this happens it leads to de-selection by the customer base,, triggers requirements for notification of downstream users, and leads to high costs for testing and assembly of a dossier on its uses and environmental and health impacts. Even if a substance is then declared non-toxic (which under the Precautionary Principle that underlies REACH is unlikely), it will could have lost most of its market unless it is indispensable.
Processes such as aircraft overhaul or chrome plating of industrial tooling, are likely to become severely restricted, expensive and and difficult to do in the EU, forcing them to migrate outside the European Community. However, many SVHCs will be able to be used on imported Articles (e.g. chromated primer on aircraft components), even though they would not be able to be used in the EU, putting European producers at a competitive disadvantage.
REACH does create opportunities for EU companies to develop and put into production materials and coatings that are cleaner, yet cost-effective and work better than current technologies. This is not always possible, but we have seen a number of instances of this approach succeeding.
What does this mean for companies operating in the US?
Due to these regulations, REACH is both a problem and an opportunity. The need to authorize and limit use of these materials will increase the cost and reduce the availability of some of the most important commercial chemicals. This therefore increases the pressure to eliminate those materials that are considered toxic under REACH. However due to this increased pressure, REACH will force the development of better-performing, clean alternatives and many of these alternatives will be developed by US companies and the US DoD. We are already seeing this happen, with the development of better alternatives requiring a proper scientific understanding of how the current materials function, which in turn leads to solutions with better performance.
One of the declared aims of REACH was to stimulate innovation. Of course, the opposite is proving to be true since the development of alternatives to SVHCs is constantly undermined by the fact that that any replacement chemicals are also likely to be designated as SVHCs. E.g chrome plating uses chromic acid, a very toxic chemical, so companies developed cobalt plating alternatives, but cobalt salts are now also becoming restricted under REACH, forcing companies into the next line of defense with nickel plating, but nickel salts are also on the list for elimination.
The opportunities for US companies lie in two areas:
1. Manufacturing and overhauling items using technologies and materials that can no longer be used in Europe.
2. Developing new and better materials and coatings for the European market.
What does this mean for the US DoD and the Defense industry?
Rowan has produced a report for DoD titled “Impact of REACH on DoD” that assesses how REACH is likely to affect the US defense industry and DoD operations in Europe and the US. Clearly, defense will be affected by loss of chemicals for manufacturing and maintenance, in the same way as private industry. However, sustainment of weapons systems in Europe will be more directly affected because of restrictions on bringing authorizable or restricted chemicals into Europe, or using them in operations there. E.g. corrosion prevention on all aircraft depends on chromate conversion coatings and chromated primers, so touch up and repaint operations will become very difficult in the EU. Most of the chemicals used for corrosion control have already been prioritized for Annex XIV, which will require authorization for their use in Europe.
Weapons systems of all kinds – aircraft, vehicles, ships, submarines, munitions – require a whole pharmacy of chemicals to keep them operational (lubricants, fuels, paints, solvents, plating chemicals). Keeping them in fighting shape will become increasingly difficult and will .
There are major concerns over the fact that REACH has no Defense Exemptions as RoHS has. This means that all chemical substances used in them, including the chemistry of stealth paints and composites, must be reported to EChA if they are to be used in Europe. This makes it very difficult for US defense contractors to have defense equipment produced by European companies if the product requires the use of a classified material or process.
It is uncertain whether manufacturers of defense equipment sold in Europe must respond to requests from EU citizens for information on the chemicals used in defense equipment sold or used in Europe.
REACH does present an opportunity, however, for companies outside Europe to manufacture those items that can no longer be produced in the EU. We expect to see increasing loss of manufacturing industry from Europe to surrounding areas and other locations in the world. Even such businesses as aircraft repair (MRO) are likely to move out of the EU zone because of the difficulty of using the necessary maintenance chemicals under the REACH regulations.
One of the primary coatings used in all manufacturing industries, hard chrome plating, is now endangered as it is based on chromic acid, which is now on Annex XIV, with a sunset date of September 2017. Since hard chrome plating is used on most dies for stamping metal, molds for plastic, and rollers for primary metals production, the difficulty and cost of manufacturing in Europe will increase, especially for operations such as primary metals manufacture, which require frequent replating of manufacturing tools. This presents opportunities:
1. Because of the REACH emphasis on salts, this will tend to drive the use of vacuum and thermal spray coatings. Since using these coatings presents major difficulties and costs, replacement coatings will need to be far more effective.
2. It will add to the competitiveness of industries set up on the European periphery, just as environmental regulations in California help drive companies to produce in Mexico.