MarketEye: A Quick Look at California's Green Chemistry Initiative

06.09.2009 // Posted by: Mike Kirschner // Posted in: Articles, Supply Chain

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Last year California’s legislature passed, and governor Arnold Schwarzenegger signed into law, two bills that authorized the California EPA’s Department of Toxic Substance Control (DTSC) to develop a framework to regulate chemicals in consumer products. The intent of the resulting regulation, somewhat incongruously termed the Green Chemistry Initiative is to enable the state to predictably and consistently regulate chemicals in consumer products and thereby take a proactive approach to pollution prevention rather than the extensive post-pollution clean-up programs they are now engaged in.

“Consumer products” is defined very broadly – it includes almost everything anyone can buy in California, except food and pesticides. So it could potentially impact electronics manufacturers that manufactures or sells products at the component, material/substance, or system level in California by requiring companies to take actions, including switching substances, disclosing substances in their products, or labeling products.

One of the two pieces of legislation, AB 1879, requires DTSC to produce a regulation by January 1, 2011. It prescribes that the resulting regulation requires identification of chemical substances in consumer products and provides a mechanism to prioritize “chemicals of concern” for consideration. It further requires that manufacturers identify and select replacements for chemicals of concern via an “alternatives assessment” process the regulation is to identify, and details a number of potential regulatory responses the DTSC will have at its disposal (including restriction, labeling, etc.).

The law also directs the DTSC to create a multi-stakeholder advisory body called the Green Ribbon Science Panel (GRSP), which they have done. Three people from the electronics industry are on the 27-member panel, including the author of this report.

The other piece of legislation, SB 509, requires DTSC to create an online “Toxics Information Clearinghouse for the collection, maintenance, and distribution of specific chemical hazard traits and environmental and toxicological end-point data.” Other “relevant data”, such as use information, could also be included. Consider, thought, that such “use information” would have to come from the industries and manufacturers that use the chemicals – disclosure at some level could be a requirement of this regulation. The result, though, might be akin to a “Facebook for Chemicals” as former DTSC director Maureen Gorsen puts it; this could be quite helpful to manufacturers trying to understand where substances are used and what substances could potentially act as replacements in those applications.

While not quite REACH and not quite TSCA which focus on regulating the chemicals themselves, the law will almost certainly build on them, particularly REACH.

The DTSC recently drafted a straw proposal and held the first meeting of the GRSP, at which the straw document was used to guide the discussion. There are a number of areas in the proposed language that should concern electronics manufacturers to a great degree, and others that such manufacturers should embrace. Those of concern include (but are not limited to):

• The definition of “consumer products”, as mentioned above, is essentially anything that any person or company buys in California except for food and pesticides (and some other minor items). Whether it’s a bottle of liquid lens cleaner, a capacitor, a server, or a Boeing 777 aircraft is irrelevant; all are considered “consumer products”. This is extraordinarily broad and, therefore, problematic.
• How “Chemicals of Concern” (CoC) will be defined is up in the air. DTSC seems to desire to define it more broadly than narrowly. For instance, that a substance has inadequate toxicity data available may well put it into that category. The majority of known chemicals (certainly by volume) could meet this definition.
• Manufacturers will be required to run an alternatives assessment to identify safer alternatives to currently used CoC substances. Not only is this process not well-defined or in widespread use, the description in the legislation assumes one-for-one chemical replacement. This is seldom how product development and substance replacement is done. Replacement of one substance often requires other changes in the product. For example, the industry accomplished replacement of lead in tin-lead solder with two new substances – copper and silver – and additional tin (albeit not without problems or controversy and at extraordinary cost). Seldom do we find two substances that have precisely the same functional properties while having wildly different environmental properties: drop-in replacements are essentially pipe dreams.
• The alternatives assessment must be published and available for public review. This could turn the product development process inside out and expose proprietary internal processes to public – and competitor – scrutiny. The competitive implications, as well as the actual value of a process like this, must be assessed. A GRSP member from Dow made the point that telling competitors how you replaced a CoC with a non-CoC and its identify is not a very compelling concept, particularly if you spent tens of millions of dollars and many years to develop it.
• Furthermore, the alternatives assessment process requires a level of Lifecycle Assessment (LCA). LCA can be a very time-consuming process and necessary data can be unavailable or difficult to acquire. They are aware of this challenge and are considering how to make it into more of a guideline than a requirement.
• Some environmental NGOs desire that third parties perform the alternatives assessment on behalf of manufacturers, because they feel they can’t trust industry to produce good results due to a perceived inherent conflict of interest. While this would be a boon for the consulting business, I think it’s far more important to the health of manufacturers’ expertise to build this sort of capability in-house as part of their product development process, rather than outsource it due to a trust issue that could be dealt with in other ways, such as competition, disclosure, or labeling.
• Ingredient disclosure: the state wants to understand where chemical substances are used in products. This could be another titanic battle between the desire to know and confidential business information.

On the other hand, this regulation gives companies an incentive to learn about and actually use the data that REACH, and ultimately this law, will generate regarding chemicals and their environmental impacts. Industry would do well to embrace the need to learn more about green chemistry, how to assess and make environmental impact decisions during product development, and how to improve and compete on the environmental performance of their products. This regulation will address those points, but clarity will be needed on the required carrots and sticks.

Now is the time for manufacturers of electronics and other complex products to contribute to the development of the regulatory language that will impact them in the future. DTSC is drafting the regulation this year – once it’s written the standard public comment process will begin.

So what should manufacturers be doing now? Here are some thoughts:

• You can start by reading the straw proposal mentioned above. It is short, and more of an outline of DTSC’s thoughts than detailed regulatory language.
• If you have insomnia, you can now read the rather lengthy transcripts (!) of the Green Ribbon Science Panel meetings from April 29 and April 30. The straw proposal is in revision now based on the insights DTSC received from that meeting.
• DTSC has a strong desire to find manufacturers and industry associations that want to engage in the process of developing acceptable approaches and regulatory language. They have been frustrated by the lack of industry engagement but are moving forward with little input from this important sector. So we at DCA urge you, your companies, and/or your industry associations to get involved. Contact us for more information on your options for involvement.

In Other News:

The long-awaited update to the Joint Industry Guide (JIG-101A) has finally been released. JIG-101 ed.2 is now available for free. Whereas the previous version parsed substances into two “A” and “B” groups, it now splits them into three buckets:

1. R: Regulated
2. A: For Assessment Only
3. I: For Information Only

It also identifies some “Examples of Use” of substances that can help identify where they may be found. In addition, it explicitly includes batteries in the scope. That was unclear in the previous version.

Unfortunately they chose to not include the entire REACH SVHC candidate list of 15 substances, instead including only 4 of the substances. Granted, the four chosen are the most likely in the list to be found in electrical and electronic products. Cobalt dichloride, a desiccant/humidity indicator, was not selected but it does appear in some electronic products. While certain substances will never appear in electrical or electronic equipment, it’s perhaps presumptuous to assume that others will not too.

JIG-101 will be updated annually and as such immediately runs into problems with currency, since the REACH candidate SVHC list is scheduled to be updated every six months, starting in December 2009. SVHC candidates must, from that time forward, be disclosed through the supply chain.

Our recommendation: Don’t wait for JIG-101 before you decide which substances to request information or report on; track the regulations that will impact your product yourself to ensure that your company stays within the legal requirements.

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