MarketEye: EU REACH - Candidate SVHC Lists and the Authorization Process - What's Next?

12.14.2009 // Posted by: Mike Kirschner // Posted in: Articles, Supply Chain

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While the European Union’s REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) regulation has been in force for over a year and a half, it is rolling out in a slow and determined fashion. In October 2008 the newly formed European Chemicals Agency (ECHA) produced the first candidate list of 15 substances of very high concern (SVHCs). This spring, at the end of May, seven of those substances were prioritized to be the first to go through the authorization process. This is the next step toward possible future restrictions for these substances. And in early September the second list of 15 proposed candidate SVHCs was issued. What is next and what does all this mean to manufacturers of electronic components and products?

The key concerns for non-EU-based manufacturers of components and discrete products – article manufacturers – are twofold:

1. Understanding which substances must be disclosed to customers downstream in the supply chain if they are present in the product you are selling in amounts greater than 0.1% by weight (of the entire article), and
2. Knowing when restrictions come in to play

EU-based manufacturers must also be concerned with substances that are going through the authorization process and whether their supply chains must replace these substances or apply for an authorization to allow continued use.

We will address these one at a time.

First, all substances on the candidate list must be disclosed directly to your immediate customer in the EU, unless that customer is an end-user/consumer. When the second proposed candidate list is finalized (expected in early January 2010, it will probably include all 15 proposed substances), they will be added to the candidate list of fifteen substances that is currently in force. At that time you will have to disclose the presence of those substances in your products per article 33(1) of the REACH regulation.

ECHA has said it intends to produce new candidate lists of SVHCs twice a year from now on, with the next proposal coming out in the February/March timeframe. It will then go through a 45 day stakeholder consultation process where you can provide technical comments on why substances should or should not be considered for the actual list. Some time after that, some or all of the proposed substances will be added to the candidate list of SVHCs.

Next, importers of articles (functional components, electronics, wires, cables, connectors, etc…nearly everything in the electronics world except individual chemical substances like pure solvents, or formulations such as adhesives, solder, or bar stock) are effectively exempt from the authorization process, so they can still export product to their EU markets that contain sunsetted substances after the sunset date. However, don’t expect this “loophole” to provide indefinite freedom to continue shipping. Article 69 of REACH allows ECHA and the EU Member States to directly apply restrictions to imported articles, so expect that process to be started soon after the sunset dates start occurring.

Finally, the candidate list of SVHCs are candidates for the Authorization process. The authorization process defines a timeline for prioritized SVHCs to be “sunsetted”, or restricted. If a (EU-based) manufacturer wants to continue to use a prioritized SVHC beyond the sunset date, they must identify the source of the substance that (pre)registered it in their supply chain, and have them apply for an authorization for your (and all their other customers’) specific use. The authorization process will not be easy; it will require a fee to be paid, and justifications based either on socio-economic impact (e.g. replacement substance is too expensive or unavailable) or adequate control of exposure during the substance’s lifetime, including and after disposal. Suppliers may decide not to apply in which case the manufacturer may have to find another source or reformulate the product, or move production outside of the EU (though, as pointed out above, that might only delay the inevitable).

While this might seem to be slow in rolling out, do not expect it to stay that way. These are new processes that the EU is essentially running through their paces. Once they identify the resource loads and work out any kinks in the process, expect the lists of candidate SVHCs and prioritized SVHCs to become more voluminous. This does, today, and will tomorrow require a deeper understanding by manufacturers of what substances are in your products, in what quantities, and what their toxicity profiles are. If the meet the definition of SVHCs (see article 57 in REACH) and are generally used in high volume (since it’s likely these will get ECHA’s attention quicker than low volume SVHCs), you can get ahead of the process by prioritizing these substances (based, for instance, on relative toxicity), and reformulating products or designing out offending components as soon as is practical. You’ll then also have a marketing advantage.

DCA is holding an in-depth, 2 ½ hour webinar on REACH for article manufacturers on December 16. Please visit the DCA website for more information and to sign up.

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