Chemical ComplianceAs global markets set their sights on a future with greener, more sustainable solutions, equipment manufacturers must evolve, too. This is particularly true in the case of using substances that may be deemed hazardous to the environment.

However, as Josh Inman, director of restricted substances and product disclosure at AEM member company Cummins Inc. explained during AEM’s most recent Product Safety and Compliance Seminar, the issue is more complex than simply removing certain materials from a manufacturing operation.

“When it comes to chemical restrictions, it’s not just prohibition. It’s not just ‘tell me what I can’t have in my product,’” said Inman. “It’s about how is it used in your product. Where is it sold? What’s happening to it at the end of the life? Where did you get it? How much of it is in there?”

These questions can be applied to a number of commonly restricted materials, including flame retardants, plasticizers, cadmium, hexavalent chrome (Chrome VI) and lead. But while these may be on a restricted substance list, these materials have applications in the heavy duty equipment industry.

The goal of substance restrictions is all about disclosure, explained Inman. This includes disclosing the impacts to human health and the environment and from where the materials are sourced. A company can also use these regulations to ensure its in compliance with local laws by avoiding any restricted or outright banned materials.

Some of these restricted materials are contained in metal, which of course makes up a significant portion of the products on the market in the equipment industry.

“And you have these other things like wiring and gaskets and things like that where you don’t have design control over the material – but rather your supplier does,” added Inman. “We need to know from our suppliers what are in those products.”

Compliance Trends

As environmental regulations change, it is becoming increasingly important for equipment manufacturers to adapt quickly.

According to Inman, the transposition time from when a regulation is proposed to the moment it becomes law is getting shorter. This is to enable trade between countries.

An increase in electronic communication is also speeding up processes. Pre-certification of imported goods is becoming more common rather than the more deliberate process of physical paperwork accompanying a shipment.

“There’s been advances in technology. If you have a smartphone, I’m sure everyone does, it has the ability to read QR codes,” said Inman. “We’re seeing that as a means to communicate information from the manufacturer to the consumer, or manufacturer to regulator, in a very short amount of time.”

These trends work toward the goal of global harmonization, spurred by online retailers like Amazon, Inman pointed out. But with global trade, universal standards can help avoid transporting substances that are regulated in one location but not in another.

“If you’re wanting to do business with these sorts of substance restrictions, you need to make sure your country is imposing these regulations so that there’s a good fit and there can be importation of these goods,” Inman noted.

The key to compliance is a company knowing what is in its product and where the materials came from. But for companies making complex equipment, often with many suppliers, this can become a complicated task – especially in an increasingly fast-paced world.

To mitigate this, Inman noted Cummins uses the PPAP Process, which begins in purchasing.

“Anytime a part is materially changed, or a new part is launched, we go ask the supplier for information before we bring the part into our plants,” Inman said.

A system resides behind Cummins’ firewall that acts as a hub; the hub goes out to a spoke of cloud-based systems that collects data from the company’s suppliers. Inman explained Cummins attempts to utilize systems that use industry standard formats to collect the data to make things as easy as possible.

For example, systems that exchange data in IPC-1752A format allow for data to be exchanged electronically. So, a manufacturer can bring in data from the cloud, evaluate the info obtained from suppliers and then send back out this information in the same machine-readable format to its customers.

“Cummins, today, just in the span of one year, has seen a 400% increase in requests from our customers for compliance information. So this is an absolute must for us,” Inman said, noting that with an increasing call for transparency, it would be difficult for a company to manage hundreds of requests per month from customers without a cloud-based system that’s capable of exchanging data in machine-readable formats.

Josh Inman

 “When it comes to chemical restrictions, it’s not just prohibition. It’s not just ‘tell me what I can’t have in my product,’” said Inman. “It’s about how is it used in your product. Where is it sold? What’s happening to it at the end of the life? Where did you get it? How much of it is in there?” -- Cummins Director of Restricted Substances & Product Disclosure Josh Inman

The Regulations

A company being able to adapt with changing regulations and implementing systems to stay compliant with updates is only part of the battle. Understanding the regulations, themselves, is also critical.

When conducting business in the European Union, manufacturers must be familiar with the Registration, Evaluation and Authorization of Chemicals (REACH).

“REACH is very complex,” Inman said. “The closest thing in the U.S. might be TSCA (Toxic Substances Control Act).

“I like to think of it as a horizontal regulation. REACH sits on top of every other regulation that’s kind of a vertical regulation that applies to a specific market,” he continued. “Examples of those that apply to specific markets in Europe are end of life vehicle, restriction of hazardous substances for electrical and electronic equipment, waste for electric and electronic equipment directive, battery directive. All of these things … they have their own individual requirements for those products. But REACH kind of sits on top of that. It applies to anything which is placed in the market in Europe.”

REACH includes three progressive levels of regulation – Candidate, Authorization and Restriction. For a substance to be added to a REACH list, it must meet certain criteria.

“The criteria is that the substance is carcinogenic, mutagenic or reprotoxic. Once it meets that criteria, it’s kind of on this path. So, you can expect, at some point, it will be ultimately restricted,” Inman said. “There are some derogations and exemptions, which are often time-bound.”

At the Candidate list level, there are 205 substances that require a customer be notified that they exist in a product. There are 54 substances on the Authorization list, requiring an authorized use of the substance in a specific application. The Restriction list has 70 substances, which are nearly outright banned.

“It can be expensive and time-consuming if you continue to use substances that progress down this path,” Inman said. “When something gets on the Candidate list, that’s a cue to begin thinking of alternatives.”

Substances of Concern in Products, or the SCIP database, is another regulation in which manufacturers must adhere. The idea, explained Inman, is to enable both consumers and waste operators the opportunity to understand the substances of concern, which are in the article that they are buying or dismantling to recycle.

“The SCIP database is provided within Article 9 of the Waste Framework Directive, so it’s already spelled out in the law that they have to do this,” Inman said. “It’s administrated by the European Chemicals Agency (ECA) and it’s a cloud-based platform so you can identify these substances in these components.”

The SCIP database, which became a legal requirement to comply with in the EU on Jan. 5, 2021, can be a duplicative requirement, according to Inman, because a manufacturer must report at each stage a component is supplied.

Using an O-ring as an example, a company must declare if that part contains a restricted substance. But that O-ring may be put into a water pump, which is then put into an engine, which is then installed on a vehicle.

“Every time that article, in this case an O-ring, is supplied in a way that wasn’t as it was provided to you – in that it was added to another assembly – there can be another requirement to report this. So, you can see it kind of stacks on top of each other,” Inman said.

“There’s a lot more stuff that you have to be aware of and communicate, associated with the SCIP database, then you do as part of fulfilling your Article 33 requirements,” added Inman.

Of concern for members of the industry is the associated expense that comes with such a comprehensive reporting obligation. The automotive industry recently estimated that in order to comply with the SCIP database, costs of up to $8.5 billion could be incurred in labor, IT needs and the infrastructure required to collect the necessary data.

The ECA’s database went live in October to allow companies to begin entering data prior to the legal obligation that began on Jan. 5, 2021. Inman urged manufacturers to begin using the database as soon as possible.

“You don’t have to go and do any sort of in-person audits. You can just look,” Inman said. “The enforcement agencies, they can just look and say ‘OK, is this company entering information into the database or not?’ So, you want to be prepared there.”

Inman also shared information on the EU Circular Economy and EU Enforcement Regulation.

The goal of the EU Circular Economy is to enable sustainable products, supply chains, etc., and provide documentation to back up what is being done. Inman noted this does not entail a wholesale list of new requirements. Rather, in many cases, it is an evolution of existing requirements.

Likewise, the EU Enforcement Regulation does not contain many new requirements. This regulation is designed to enable the enforcement of items that should already be common practice, beginning July 16, 2021.

“We, as manufacturers, are considered an EU economic operator,” Inman explained. “If you’re an importer, you have to define the EU economic operator for the components or the products you sell. You have to have a point of contact for the authorities. And you have to have the documentation available.

“Complying with these regulations often means proving you comply – if it’s a self-certification,” he added.

Working within Restrictions

As mentioned earlier, regulations are more complex that simply prohibition. Highlighting this point are exemptions to the European Restriction of Hazardous Substances (RoHS) Directive.

“RoHS has a number of exemptions, and our industry benefits from about eight of them. These exemptions are all time-bound a maximum of five years. And the process can be quite long,” Inman said, noting these eight key exemptions to the industry expire over the next four years.

Lead, for example, is restricted by RoHS. However, exemptions exist for lead in steel alloys, copper alloys and aluminum.

“Our industry has a specific exemption in allowing the use of lead in electrical solder and allowing the use of lead in bearings,” Inman noted.

“We, as manufacturers benefiting from these exemptions, have an obligation to submit renewal application if there’s still technical reasons we require it 18 months ahead of the exemption expiration,” Inman said, adding the 18-month timeframe is designed to negotiate a seven-step process to obtain a RoHS exemption renewal.

These exemptions can be important as the equipment industry may not be the primary focus of regulators when discussing electronic equipment. According to Inman, consumer equipment with a shorter lifecycle are often considered, and it might be easier to substitute an alloyed lead in the next generation of smartphone than it is for heavy duty equipment products that take many years to design and last decades in the market.

Another example of the industry working to remain compliant with standards and regulation is the efforts led by AEM’s sister association, the Engine Manufacturer’s Association (EMA), to institute universal product labeling. The initiative supports the idea of increased transparency relating to regulation.

Engine emissions labels are big and have a lot of information – info that comes from multiple locations and suppliers. Those physical labels can become damaged, destroyed and painted over. To remedy this, universal product labeling could provide the necessary information via the internet.

“The records are created when an engine is built,” Inman explained of the working theory. “The concept here is the information is stored in two places – one, at the manufacturer itself and the other at a third-party location, so where if the information were to become corrupt, it would be duplicated somewhere else.

“You would have a smaller name plate. It would have things like the manufacture date, it would have the serial number and maybe the manufacturer’s name, and then a QR code on it. Then from the QR code, anyone with a smartphone can go to that engine, you can scan that QR code and get all the information retrieved from the internet that would have otherwise been printed on that label.”

As the regulations continue to develop, Inman urged association members to stay involved to ensure the industry remains compliant and provides the necessary input to prevent regulations from restricting business.

“Those that want to contribute to this ongoing task can work with the AEM Regulatory Compliance Steering Committee and the AEM Sustainability Council to advocate on behalf of the industry,” he added.

On a related topic, AEM recently issued a statement in response to the Environmental Protection Agency (EPA)’s decision to ask for additional public input on an existing rule on phenol isopropylated phosphate (3:1), commonly referred to as PIP 3:1. 

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