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Legislative & Regulatory Product-Related Environmental Policy Developments to Watch
April 3, 2013 |Estimated reading time: 13 minutes
Editor's Note: This article originally appeared in the March 2013 issue of SMT Magazine.As 2013 begins, one thing is certain: The electronics industry will have significant international, federal, and state environmental policy developments to track, assess, and manage for the remainder of the year. The electronics industry is at the forefront of a trend toward product-focused environmental policies that seek to reduce the environmental impacts of products during their key life cycle stages: Design, manufacture, use, and disposal.
This trend has triggered the growth of legislation and regulations that aim to restrict the use of toxic chemicals in electronic products, curb the energy consumption of consumer electronics, and hold electronic producers financially responsible for managing discarded products at end-of-life. This trend, which has been evolving and expanding for more than a decade, has produced a complicated “patchwork quilt” of international, federal, and state environmental requirements.
This trend is not expected to diminish and the complexities associated with tracking, managing and meeting these requirements will continue to grow. This article is designed to provide a status report of these requirements--both those in effect, as well as those on the immediate horizon. It will largely cover U.S. developments although international developments will be briefly addressed.
Chemical Regulation
California Safer Consumer Product Regulations
Chemicals regulations that may impact the electronics industry are expected to increase in 2013. The California Department of Toxic Substances Control (DTSC) formally released its Revised Proposed Safer Consumer Product Regulations January 29, 2013. The rules are mandated by AB 1879, a bill enacted in 2008 that requires the DTSC to adopt regulations to establish a process by which chemicals or chemical ingredients in consumer products are classified as “chemicals of concern” and a process by which those “chemicals of concern” (and their potential alternatives) are evaluated to determine whether regulations are warranted to limit consumer exposure to such chemicals. Possible restrictions may include labeling, limiting potential exposures, end-of-life management requirements, or prohibitions on the continued use of such chemicals in consumer products sold in California.
Once final, the rules, also known as the California “Green Chemistry” rules, will require producers of “priority products” to conduct alternative assessments for “chemicals of concern” present in certain products and possibly phase-out the use of those substances. The DTSC is expected to issue a final rule in early 2013. Although the electronics are unlikely to be identified as initial “priority products,” the electronics industry is actively watching and commenting on these rules as they will likely establish regulatory precedent that will be followed by other states and possibly the federal government.
TSCA Reform
The Toxic Substances Control Act (TSCA) is the federal law that regulates the manufacture, import, processing, or distribution of chemical substances in the United States. Originally passed in 1976, TSCA provides the U.S. Environmental Protection Agency (EPA) with the authority to review and regulate chemicals in commerce. For the last several years, bills have been introduced in the United States Congress to reauthorize and reform TSCA. Last July, the Senate Environment and Public Works Committee approved a bill (S.847) that would have required chemical producers to bear the burden of proving that chemical substances are safe before they enter the marketplace. The final vote was decided on party lines with ten Democrats voting in support of the bill and eight Republicans voting in opposition. Due to the political stalemate in the 112th Congress, the bill failed to advance.
The 113th Congress, which convened in January, remains divided with a Democratic-controlled Senate and a Republican-controlled House of Representatives. Any TSCA reform and reauthorization bill, therefore, will need to attract bipartisan support to advance. Both the chemical industry and environmental/public health advocates agree that TSCA reform is needed; however, both groups differ on the means to that end. As a result, it is unclear whether viable bipartisan TSCA reform legislation will emerge in 2013.
One thing is clear, however. Recognizing that federal chemical regulatory reform may not be viable, environmental and public health advocates will continue to lobby for aggressive chemical reform bills at the state level. These advocates may develop model state chemical reform legislation and lobby for its enactment on a state-by-state basis. Such legislation would likely follow the California Green Chemistry model and impose greater testing, assessment, and data disclosure requirements on chemical producers and chemical users.
Chemical Specific Regulation
The chemicals that are specifically used in electronic products have come under regulatory scrutiny since 2006 largely due to the European Union’s Restriction of the Use of Certain Hazardous Substances (RoHS) Directive (as amended by recast). The RoHS Directive restricts the use of lead, mercury, cadmium, hexavalent chromium and polybrominated biphenyls (PBBs), and certain polybrominated diphenyl ethers (PBDEs) in virtually all electrical and electronic equipment placed on the European market. The RoHS Directive, although an EU law, has triggered worldwide substitution away from the regulated heavy metals and brominated flame retardants and toward alternative materials and substances. Despite this trend, legislation proposals to restrict these substances in electronic products may be introduced in the U.S. at both the federal and state levels.
The electronics industry will need to continue to watch federal and state legislative and regulatory developments that seek to restrict certain substances--namely cadmium, flame retardants, and phthalates, in children’s products. Although the electronics industry supports efforts to protect children from exposure to heavy metals and potential endocrine disruptors, the definition of “children’s product” is often broad and could inadvertently cover consumer electronics, such as mobile phones, computers, and handheld devices.
Energy Efficiency Mandates
Federal Energy Conservation Standards
The U.S. Department of Energy (DOE) has the authority to establish federal energy conservation standards for certain appliances and equipment, including consumer products that are listed in Section 6292 of the United States Code, Title 42, Chapter 77, Subchapter III, Part A--Energy Conservation Program for Consumer Products Other Than Automobiles. That Section lists “television sets” and “any other type of consumer products which the Secretary classifies as a covered product.” The U.S. Congress added battery chargers and external power supplies to the list of potentially covered products when it enacted the Energy Policy Act of 2005. Congress enacted the Energy Independence and Security Act in 2007 that set energy efficiency limits for Class A external power supplies. Those limits went into effect for Class A EPSs manufactured after July 1, 2008.
The DOE has been slow to implement its authority to establish energy conservation standards for potentially covered electronic devices. The DOE issued a notice of proposed rulemaking for a federal television test procedure (the first step in an energy conservation rulemaking) January 19, 2012; however, since then, there has been no recent update. The DOE issued a notice of proposed rulemaking regarding energy conservation standards for battery chargers and external power supplies March 27, 2013; however, the final rules have not been published. Finally, the DOE issued a Request for Information regarding possible energy conservation standards for set top boxes and networking equipment on December 16, 2011, signaling DOE’s interest in adding set top boxes and networking equipment to its list of covered products. DOE published a notice of proposed rulemaking for a test procedure for set-top boxes January 23, 2013--action that indicates that the DOE may develop energy conservation standards for these devices.
DOE’s slow pace to establish energy conservation standards for electronic devices has frustrated federal and state legislators, state energy agencies, and energy efficiency advocates which view the growth of electronic devices as a significant contributor to global energy demands and a source of increased carbon emissions. Because of DOE’s perceived inaction, these legislators, agencies and advocates have been urging DOE to act at the federal level, but also working to establish energy conservation standards at the state level. Although federal energy conservation standards preempt state specific requirements, energy efficiency advocates see value in establishing interim state specific requirements, largely to accrue immediate efficiency benefits but also to influence the development of federal rules.
California Energy Commission Appliance Efficiency Regulations
This strategy has been successfully implemented in the State of California where the California Energy Commission (CEC) originally established energy conservation standards for external power supplies in 2005. The CEC largely acted because of DOE’s failure to establish federal standards (CEC standards for Class A EPSs were later preempted by the federal Class A EPS standards that were established by EISA). Since then, the CEC has effectively led the development of energy conservation standards in the U.S. The CEC’s 2012 Appliance Efficiency Regulations currently include efficiency requirements for televisions, compact audio products, DVD players and recorders, and battery chargers as well as other appliances. In March 2012, the CEC held a scoping workshop to hear feedback regarding possible energy conservation standards for displays, game consoles, computers, set top boxes, servers, and imaging equipment.
The impact of these state-specific energy efficiency mandates must not be overlooked. Although the CEC standards only apply to products that are sold in California, producers often redesign their entire U.S. product line to meet CEC requirements, recognizing that California-only sales are impossible to manage. Furthermore, certain states such as Washington, Oregon, and New York often follow the lead of the CEC and enact legislation that establishes identical efficiency standards on covered products that are sold in their states. These state requirements pose compliance challenges for covered producers and often prompt them to request the DOE to establish federal energy conservation standards to preempt all state requirements for covered products.
Recycling Obligations
U.S. State Recycling Laws
Twenty-five U.S. states and one U.S. territory, Puerto Rico, have enacted laws that require producers of certain electronic products to participate in programs to recover and recycle used electronics. The vast majority of these laws require producers to fund the collection, transportation, and recycling of covered devices either through manufacturer-led programs or through state-run plans. The products covered by each law differ although most laws cover computers, televisions, and increasingly printers. The mechanics of each law also differ greatly with some programs requiring only registration and the payment of a fee while other laws require the establishment of “convenient” collection locations, the achievement of aggressive recycling rates, and the payment of penalties if recycling targets are not met.
As 2013 began, numerous bills had already been pre-filed in various state legislatures, indicating that 2013 will likely to be a busy year for the consideration and possible enactment of new state electronics recycling laws. States where electronics recycling legislation may be considered include Arizona, Colorado, Hawaii, Iowa, Missouri, Nebraska, Oklahoma, Wyoming, and Mississippi.
U.S. Federal Recycling Bills
A comprehensive federal electronics recycling law has never been proposed in the U.S. Congress. Although bills have been introduced to establish federal programs to encourage and promote electronics recycling, no effort has been made to attempt to establish a federal framework to address electronics recycling. This is largely due to the fact that solid waste management is a matter of state jurisdiction in the U.S. and the federal government lacks significant authority to manage municipal solid waste.
There is recognition that the federal government could play a role in helping facilitate the movement of electronic waste across state boundaries and also help curb the illegal export of waste electronics; however, beyond those incremental improvements, federal solutions have been slow to emerge. As a result, compliance is largely driven by state requirements. Producers must meet state-specific e-waste obligations that pose registration, payment, and recordkeeping challenges given differing deadlines, program years, and program requirements.
International Issues to Watch
Although these U.S. federal and state chemical initiatives, energy efficiency mandates, and producer recycling obligations combine to form a very complex “patchwork quilt” of compliance obligations, they are not the only issues to watch. Governments around the globe are simultaneously proposing and enacting legislation and regulatory requirements that add to this confusing legal and regulatory maze.
Canada
Most Canadian Provinces have electronics recycling programs in place that cover a broad segment of electrical and electronic equipment. In 2013, a New Brunswick program may come on line. Canada is also considering the establishment of energy conservation for battery charger. The country is waiting for the U.S. DOE to finalize its rule before its proceeds with Canadian rulemaking. British Columbia is assessing whether or not energy efficiency standards for set top boxes are warranted.
Europe
In Europe, chemical regulation will continue to develop via the European Chemical Agency’s (ECHA) implementation of the REACH regulation. Energy efficiency mandates will also continue to cover more electronic and electrical products through expansion of the Ecodesign Directive and its Implementing Measures. The European Commission’s 2012-2014 Work Plan identified enterprise servers, data storage and ancillary equipment as potential priority products for further evaluation. Also, the recast of the RoHS Directive, which brings new electrical and electronic products into scope of the law’s substance restriction and new CE marking requirements, will present new challenges for producers that want to sell their products in the European Union.
China and India
Policy developments in Asian countries will emerge to address electronics recycling, substance restrictions, and energy efficiency mandates. China will continue to be a country to watch as it establishes rules for the recycling of electronic products and it makes revisions to its RoHS law. China is expected to issue new energy efficiency standards for electronic products, including the implementation of labeling mandates for computers. India will develop electronics recycling rules as well as a RoHS-type program for covered electrical and electronic equipment. Korea will continue its work to develop energy efficiency standards for server products.
Latin America
Over the last several years, we have seen several Latin American countries establish programs to address electronics recycling and consumer product energy consumption. This trend is expected to continue in 2013. Mexico recently approved a regulation that will require producers of electronic products to submit and implement waste management plans. Mexico has also proposed standby power limits for certain products sold in the country. We also may see expansion of existing energy efficiency programs in Brazil and Chile to cover new consumer electronic products. E-waste initiatives, at the federal, state, and city levels, are likely to continue in Argentina, Brazil, Chile, Costa Rica, and Peru.
Green Procurement and Marketing Initiatives
Finally, it is important to recognize that legal product-related environmental requirements are not the only developments for electronic producers to watch. There are new market-based initiatives, such as the Electronic Product Environmental Assessment Tool, UL Environment Sustainability Standards, and the Sustainability Consortium, that producers must track to ensure that they remain competitive in government procurement and retail markets. These market-based initiatives often go beyond legal requirements in terms of eco-design, energy efficiency, end-of-life management, and corporate performance and often have registration, certification, and other costs that must be considered.
Conclusion
For electronic producers, there are many product-related environmental policy developments and initiatives at the U.S. and international level to watch, monitor, assess, and meet. This may appear to be an overwhelming and impossible task to manage; however, many tools, strategies, and resources are available to help address this challenge. As an environmental lawyer and consultant who has worked for and with the key trade associations engaged in the development of these initiatives and the large and small companies that are facing the challenges of these developments, my best advice is to take a “big picture” systematic approach. Know your products, assess your markets, evaluate your exposure, identify any possible competitive advantages, and understand your supply chain. Once an accounting of these key factors has taken place you will be in the best shape possible to address your relevant compliance obligations and possible market opportunities.
Holly Evans is the president and founder of Strategic Counsel, LLC, a full service environmental law and policy firm located in Washington, D.C. Holly has more than 15 years’ experience, representing members of the global electronics industry on environmental, health, and safety issues. Evans previously served as deputy general counsel and director of environmental programs for the Electronic Industries Alliance (EIA). She also served as director of government relations for the IPC and a congressional fellow for Senator Joseph Lieberman (I-CT). She can be reached at hevans@strategiccounsel.org.