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Global Chemical Policy Pains

U.S. manufacturers put their heads together to influence regulations abroad

by Cheryl Hogue
October 23, 2006 | APPEARED IN VOLUME 84, ISSUE 43

The EU's directive on waste electrical and electronic equipment is one of several chemical-related regulations that caught U.S. manufacturers off guard.
The EU's directive on waste electrical and electronic equipment is one of several chemical-related regulations that caught U.S. manufacturers off guard.

Fed up with hand-wringing and last-minute scrambling, U.S. manufacturers taken unawares by European Union directives affecting chemicals are beginning to talk with each other. Companies are pledging to work across industry sectors to learn about plans for chemical-related regulations anywhere in the world. Because regulations abroad could affect their sales or manufacturing, they want to provide technical information early on to governments that are developing new chemical-related polices.

This effort, the companies hope, will prevent a raft of expensive and, for the large part, unanticipated consequences for their businesses. And they definitely want to influence nations or U.S. states that are considering the adoption of regulations similar to the EU's.

Chemical manufacturers, at least for now, are noticeably absent from this new movement.

Many businesses within a wide swath of U.S. industry???from aerospace companies to automakers to the semiconductor industry???feel sandbagged by a series of EU environmental regulations. They have scrambled to comply with a directive (WEEE) on how to handle waste electrical and electronic equipment and another (ELV) on recycling and recovering materials from junked cars, known in the EU as end-of-life vehicles.

RoHS, another EU directive driving some companies to distraction, restricts the use of certain hazardous substances. This regulation bans the sale of new electrical and electronic equipment containing more than specified low levels of lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyl, and polybrominated diphenyl ether flame retardants. Businesses also have concerns about the EU's ecodesign requirements for energy-using products.

U.S. chemical makers have long been concerned about pending EU legislation on the registration, evaluation, and authorization of chemicals (REACH). However, many firms that don't produce these substances have ignored this development. Now, many U.S. manufacturers who are downstream users of chemicals are becoming worried about how REACH will affect goods, such as automobiles and medical devices, that they export across the Atlantic.

To help U.S. businesses address these matters, the National Institute of Standards & Technology held a forum on Sept. 26-27 on strategies to address chemical issues that are emerging around the world and within U.S. states. NIST, part of the Commerce Department, works with industry to foster innovation, trade, and creation of U.S. jobs.

Credit: NIST
Credit: NIST

Chemical policies in other countries often directly affect U.S. chemical manufacturers and also have serious cost and marketing implications for users of commercial substances, Hratch G. Semerjian, NIST's chief scientist, said at the forum. Downstream users of chemicals have had no chance to weigh in with technical and scientific expertise and policy advice as governments, including the EU, began to consider options for meeting a specific environmental, safety, or health goal, Semerjian explained.

"Implementation of flawed policies poses a real threat to manufacturing and may prevent certain products from being sold globally," Patricia Beattie, director of chemical risk management for General Motors, said.

Credit: Cheryl Hogue/C&EN
Credit: Cheryl Hogue/C&EN

U.S. jobs and industrial competitiveness are at stake, said Nina I. McClelland, president of Nina I. McClelland LLC in Ann Arbor, Mich., and former chair of the board of the American Chemical Society.

U.S. firms have, in general, been slow to react to chemical-related regulations abroad that could affect their exports.

"Companies tend to act in crisis mode" rather than taking a strategic approach when a government outside the U.S. moves to restrict the manufacture, use, or disposal of a chemical, Semerjian said. "It seems like [U.S. companies] are always a step behind," he said, and the situation may not change so long as industries try to address these challenges independently.

Credit: Cheryl Hogue/C&EN
Credit: Cheryl Hogue/C&EN

"We always seem to have time to react" to new policies, but not to have a strategic approach to influence their development, agreed Michael A. Taubitz, global health and safety regulatory liaison for GM. It is critical that U.S. scientific, technical, and policy voices come together to be heard in the early part of regulation development, he said.

This problem, he said, cuts across U.S. manufacturing. "We operate in silos," and companies interact only within their sector, Taubitz told the forum.

Meanwhile, the challenge continues to grow. Beattie said the U.S. is no longer driving the chemical regulation agenda across the globe; the EU is. Taubitz said a number of governments in the Asia-Pacific region are considering policies for regulating chemicals in waste or commercial products that are more like the EU's than the U.S.'s.

Environmental, safety, and health regulations abroad often no longer focus on "end-of-pipe" solutions, such as air pollution scrubbers and wastewater treatment technologies, that U.S. firms are familiar with, said Andrea Fava, manager of environmental affairs, taxation, and transportation for the U.S. Council for International Business.

Of particular concern to U.S. companies are regulations that affect chemicals at all stages of a product's life, from manufacture to disposal, she said. These regulations have impacts that reverberate up and down a company's supply chain, Fava said.

To get back into a global leadership position, the U.S. government must move from its current defensive posture on chemical issues where it opposes initiatives such as REACH, Fava said. Instead, the federal government should reach out directly to other countries and through the United Nations to sell the American system of regulating chemicals, Fava said. The EU is already investing in outreach to other nations, urging them to adopt its approach to environmental regulation, she said.

In addition, strategic cooperation across industry sectors is needed for U.S. companies to have early warning about new chemical requirements cropping up and for them to engage with governments early in the regulatory process, Fava said. Taubitz agreed, saying labor and environmental group representatives should also be welcomed to these discussions.

If U.S. companies wish to influence the development of chemical-related regulations in other countries, they must present compelling alternatives to policymakers, said Michael Kirschner, president and managing partner of Design Chain Associates, a San Francisco-based consulting company to the electronics industry. Businesses should not simply fight a planned regulation by arguing that it is too costly, he said. Policy alternatives presented by U.S. companies must produce environmental improvements because "green is important," he said.

For instance, Kirschner argued that the billions of dollars being spent on RoHS implementation might have had a bigger positive impact on the environment had the directive required a reduction in the use of virgin materials in electronics manufacturing.

RoHS, WEEE, and ELV are particularly challenging for U.S. companies to abide by, Kirschner said. U.S. manufacturers never previously had to determine or ask their suppliers about the chemical attributes of the materials they build their products from, he said. In the past, manufacturers have focused on the mechanical, electrical, and performance characteristics of materials and had no requirements for listing the chemicals they contain. Kirschner urged industry to build up a knowledge base of the environmental features of materials, adding to information about other attributes.

Simply determining what chemicals are in materials can be problematic, too.

Finding out the constituents of bulk chemicals is difficult, Beattie said. But, she said, to comply with REACH, it will be brutally hard to get this information for manufactured parts that are components of U.S.-made goods exported to the EU.

Speakers at the forum generated a variety of suggestions for addressing these and related issues.

McClelland suggested that ACS's Chemical Abstract Service could become a source of information about chemicals in commercial materials. CAS could compile a database on chemicals found in materials and serve as a respected third party for providing this information, she said.

Madeleine Jacobs, ACS executive director and chief executive officer, endorsed greater use of green chemistry, the design of chemical products and processes that reduce or eliminate the use and generation of hazardous substances, as well as green engineering, industrial processes that are economically feasible and reduce risk to health and the environment. These "unleash the creativity and innovation of our scientists and engineers" to boost performance and value while protecting and enhancing health and the environment, she said.

Frances E. Schrotter, senior vice president and chief operating officer of the American National Standards Institute (ANSI), said her organization could serve as a neutral forum for companies from all sectors as well as other concerned parties, including labor unions and federal agencies, to share information about emerging chemical regulation issues. An ANSI panel could foster collaboration; provide a vehicle for U.S. science and technology voices; promote trade and commerce; and work to protect health, safety, and environment, she said.

William H. Kojola, an industrial hygienist for AFL-CIO, was somewhat skeptical about turning to ANSI, which is best known as the venue for the development of voluntary industry standards, including those on workplace safety and health. He said organized labor has long favored mandatory governmental regulations that level the playing field for all companies over voluntary standards that a employer can choose to adopt or not.

Brainstorming sessions among forum participants generated other possibilities for addressing emerging chemical regulation issues. Options included creation of an international, and not just U.S.-based, forum for sharing information, one involving manufacturers, suppliers, and labor and environmental groups. A related thought was that using established trade associations and professional societies—including the U.S. Chamber of Commerce, the National Association of Manufacturers, the U.S. Council for International Business, or ANSI—might be better than founding a new, global forum.

Another suggestion was for industry to get a jump on potential regulatory programs by adopting voluntary programs for addressing chemical-related issues. A similar recommendation was for governments and industry to work together to anticipate which materials might adversely affect health or the environment and identify substitutes, a course of action that could include green chemistry.

And some participants thought that the U.S. government needs to beef up its outreach to China by describing to government officials there the benefits of the U.S. style of chemical regulation. This step would counterbalance efforts by the EU to promote its system.

Several participants pointed out that the American Chemistry Council and the Synthetic Organic Chemical Manufacturers Association were conspicuous at the forum by their absence.

James Cooper, SOCMA senior manager for chemicals policy, told C&EN that the forum was heavily slanted toward standard-setting bodies, including NIST and ANSI. "We usually don't deal with standard-setting organizations" unless the topic is process safety or engineering, Cooper said. "It's not that we're not interested in discussing chemicals policy with downstream industries."

ACC did not return calls for comments by deadline.

Taubitz told C&EN that chemical producers are welcome to join the effort begun at the forum, but he said other manufacturers would not delay their efforts. "We have to move forward," he said.

According to Taubitz, plans are under way for a 2007 conference to follow up on the NIST forum, and discussions are beginning within ANSI on the possible creation of a new panel to address emerging chemical regulations.

By working together on chemical-related issues emerging across the globe, Semerjian said, a broad array of industries along with the federal government can preserve U.S. jobs and enhance the competitiveness of U.S. enterprises.



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