TAIEX Programme INFRA 23402 Polish Steel Association Seminar, Katowice, Poland Monday 11th December 2006

1. TAIEX Programme INFRA 23402  Polish Steel Association Seminar, Katowice, PolandMonday 11th December 2006 REACH � New European Chemical Legislation: Downstream User Involvement Arnie Vetter & Dr Paul Becker Caleb Management Services Ltd arnie@calebgroup.net Good afternoon L&Gs & thanks for inviting me to speak at your seminar I�m standing in for PB who usually covers REACH issues for our company Talk about REACH implementation and how this legislation impacts on your industry Will talk for approx 30 mins and then happy to take Qs from you. Good afternoon L&Gs & thanks for inviting me to speak at your seminar I�m standing in for PB who usually covers REACH issues for our company Talk about REACH implementation and how this legislation impacts on your industry Will talk for approx 30 mins and then happy to take Qs from you.

2. This Presentation What is REACH? Differences introduced by REACH Who is affected? Implementation timetable Downstream user obligations/issues REACH & the Steel Industry Steel Industry responsibilities Key issues summary In this presentation will outline what REACH is, how it differs from the chemicals safety regimes to date Will then explore who is affected and the outline implementation timetable for registrations After that I�ll outline issues and obligations that will commonly arise for Downstream users of chemicals, before describing my understanding of how REACH will impact on your industry I�ll spend a little time addressing what I believe to be your industry�s responsibilities relating to REACH before drawing some conclusionsIn this presentation will outline what REACH is, how it differs from the chemicals safety regimes to date Will then explore who is affected and the outline implementation timetable for registrations After that I�ll outline issues and obligations that will commonly arise for Downstream users of chemicals, before describing my understanding of how REACH will impact on your industry I�ll spend a little time addressing what I believe to be your industry�s responsibilities relating to REACH before drawing some conclusions

3. What is REACH? �replaces current legislation on �new� and �existing� chemicals Is Registration, Evaluation & Authorisation of Chemicals � and is due to replace current legislation as relates to new and existing chemicals Intention is to Protect humans and the environment Improve competitiveness of the European Chemical Industry Ensure greater transparency Limit the use if animals for testing of chemicals Is Registration, Evaluation & Authorisation of Chemicals � and is due to replace current legislation as relates to new and existing chemicals Intention is to Protect humans and the environment Improve competitiveness of the European Chemical Industry Ensure greater transparency Limit the use if animals for testing of chemicals

4. What does REACH do? Levels playing field � applies to pre/post 1981 substances Better risk characterisation of substances Mandates better information flows in supply chain Initially designed for organic chemical management rather than inorganic chemical management Replaces existing/complicated regulations Puts chemical substances produced before 1981 and the once since then on an equal footing from perspective of data requirements and risk/exposure management Designed to involve the whole supply-chain in management of chemical risk and information Doesn�t fit the steel industry particularly well; not surprising � given that it was initially conceived around the needs/pressures emanating from organic chemical uses (rather then the inorganic chemical uses typical in the steel industry) Various iterations have sought to rectify this, however and the common position now achieved is a bit more balancedReplaces existing/complicated regulations Puts chemical substances produced before 1981 and the once since then on an equal footing from perspective of data requirements and risk/exposure management Designed to involve the whole supply-chain in management of chemical risk and information Doesn�t fit the steel industry particularly well; not surprising � given that it was initially conceived around the needs/pressures emanating from organic chemical uses (rather then the inorganic chemical uses typical in the steel industry) Various iterations have sought to rectify this, however and the common position now achieved is a bit more balanced

5. What are the implications of REACH? Major implications for chemical production and downstream users Extra costs & workload involved in testing & registration before new substances are manufactured/imported Companies need to be strategic � go beyond �How do I comply?� to �how does REACH affect my product & where are the opportunities & threats� Total cost estimated (EU Commission) over a 11 -15 year period is �2.8 - �5.2 bn across all sectors, of which downstream users are likely to bear �1.7 - �2.9 bn Nevertheless, REACH implementation will have major implications for the chemicals supply-chain � not least because there will be an additional workload and source of financial cost to go through registration and improved management processes One key response for the industries affected will need to be to approach the strategic implications � going beyond compliance and focusing on the opportunities and threats for a variety of product ranges Total cost has been estimated by the EU to be up to 6 bn euros; attempts have been made by various actors to also assess the financial benefits � but this has been hard to achieve; According to WHO data the health benefits amount to about 50 bn euros over about 30 yearsNevertheless, REACH implementation will have major implications for the chemicals supply-chain � not least because there will be an additional workload and source of financial cost to go through registration and improved management processes One key response for the industries affected will need to be to approach the strategic implications � going beyond compliance and focusing on the opportunities and threats for a variety of product ranges Total cost has been estimated by the EU to be up to 6 bn euros; attempts have been made by various actors to also assess the financial benefits � but this has been hard to achieve; According to WHO data the health benefits amount to about 50 bn euros over about 30 years

6. Differences introduced by REACH�. There a re some significant differences between the current approach to chemicals management and what REACH proposes � Responsibility shifts� Management processes tighten � Data flows are freed up� From the point of view of chemicals suppliers there clearly is the imperative to generate/improve the required exposure and safety data � and work with the supply-chain to develop and maintain this � as otherwise there may be an issue about continued �license to operate� in particular marketsThere a re some significant differences between the current approach to chemicals management and what REACH proposes � Responsibility shifts� Management processes tighten � Data flows are freed up� From the point of view of chemicals suppliers there clearly is the imperative to generate/improve the required exposure and safety data � and work with the supply-chain to develop and maintain this � as otherwise there may be an issue about continued �license to operate� in particular markets

7. Who is affected? Manufacturers, Importers, Downstream Users ( defined as a legal entity within the community who uses a substance in its own right or as part of a preparation in the course of his industrial or professional activities) Distributors or consumers are not affected RPA � Risk Policy Analysis � consultants to EC on REACH have identified a potential distribution of Registrations/Phase Outs as shown; The Steel Industry � if acting as Downstream Users are unlikely to be involved in direct registrations in the upper volume bands that are typical for them..Manufacturers, Importers, Downstream Users ( defined as a legal entity within the community who uses a substance in its own right or as part of a preparation in the course of his industrial or professional activities) Distributors or consumers are not affected RPA � Risk Policy Analysis � consultants to EC on REACH have identified a potential distribution of Registrations/Phase Outs as shown; The Steel Industry � if acting as Downstream Users are unlikely to be involved in direct registrations in the upper volume bands that are typical for them..

8. Registration timing�. The initial timeline for Registrations shows that for high volume uses (eg Steel Industry) � the Registration requirement is front-loaded over a 3.5 year period from 2007 Other Registrations kick in further down the line All actors will be able to draw on specific guidance on how to deal with REACH. The initial timeline for Registrations shows that for high volume uses (eg Steel Industry) � the Registration requirement is front-loaded over a 3.5 year period from 2007 Other Registrations kick in further down the line All actors will be able to draw on specific guidance on how to deal with REACH.

9. Downstream User concerns Lack of expertise in (and money for) supporting testing & registration Potential cost/workload of supporting data sharing, testing, registration � short term effect on innovation Chemical product rationalisation/lack of diversity (esp. niche applications) � Potential reformulation costs Downstream Users have a new and important set of roles/obligations under REACH. They also have a set of concerns � To do with lack of internal resources/funding for supporting any testing & registration efforts � leading on to much valuable management time being taken up with supporting efforts under REACH � therefore not available elsewhere/for other tasks Another concern is the structural changes that may be driven by the REACH regime � particularly in the upstream industries; Rationalisation among suppliers, resulting in reduced diversity/reduced choice and possibly higher prices � may be particularly hard to absorb for downstream users who operate in niche markets DUs who are experiencing supply-side problems may also be required to reformulate preparations � using less competitive alternatives/resulting in lower performance preparationsDownstream Users have a new and important set of roles/obligations under REACH. They also have a set of concerns � To do with lack of internal resources/funding for supporting any testing & registration efforts � leading on to much valuable management time being taken up with supporting efforts under REACH � therefore not available elsewhere/for other tasks Another concern is the structural changes that may be driven by the REACH regime � particularly in the upstream industries; Rationalisation among suppliers, resulting in reduced diversity/reduced choice and possibly higher prices � may be particularly hard to absorb for downstream users who operate in niche markets DUs who are experiencing supply-side problems may also be required to reformulate preparations � using less competitive alternatives/resulting in lower performance preparations

10. Downstream User obligations (1) DU checks that registration is made by suppliers for all materials DU implements risk control as indicated in supplier SDSs DU uses supplier information to complete risk assessments on own products for next use down the chain DU prepares own CSA/R if confidentiality is a concern; if supplier doesn�t support substance or if substance is directly imported from outside EU25 DU notifies any new relevant information upstream Downstream users will need to work �hand-in-glove� with suppliers during any registration process; furthermore DUs will also need to implement any risk controls as identified by their suppliers In cases where suppliers discontinue production/import of substances, the downstream user will also have to prepare Chemical Safety Assessments and Reports � latter delivered to the newly established European Chemicals Agency; this also applies, if downstream users source their chemicals from outside the EU25 � from suppliers not covered by REACH Downstream users have an active duty to feed any new relevant information on use patterns and exposures to their suppliers � for further incorporation into CSRsDownstream users will need to work �hand-in-glove� with suppliers during any registration process; furthermore DUs will also need to implement any risk controls as identified by their suppliers In cases where suppliers discontinue production/import of substances, the downstream user will also have to prepare Chemical Safety Assessments and Reports � latter delivered to the newly established European Chemicals Agency; this also applies, if downstream users source their chemicals from outside the EU25 � from suppliers not covered by REACH Downstream users have an active duty to feed any new relevant information on use patterns and exposures to their suppliers � for further incorporation into CSRs

11. Downstream User obligations (2) Chemical Safety Assessments/Reports are required for all registrations above 10 tonnes/pa � to be completed by Manufacturer/Importer within EU25 & Downstream User if supplied directly from elsewhere. DU to share use and exposure data with Registrant Basic requirements of a CSA/R include: human health hazard assessment physico-chemical hazard assessment environmental hazard assessment persistent, bio-accumulative & toxic (PBT) & very persistent, very bio-accumulative (vPvB) assessment If evidence as �dangerous� or PBT/vPvB then exposure assessment and characterisation of risk required Companies can write own CSA or share common document with supply-chain The CSA/CSRs need to cover a range of requirements as follows�The CSA/CSRs need to cover a range of requirements as follows�

12. REACH & the Steel Industry How REACH views Steel: - Steel or other Alloys are special preparations under REACH & don�t have to be registered Their component metals (e.g. Nickel) must be registered if manufactured/imported > 1 tonne/pa Guidance related to preparations (esp. as relates to SDS that include exposure scenarios) will be provided prior to entry into operation of the Regulation Steel and Alloys are not classified as substances and are therefore not to be registered under REACH. HOWEVER, their component metals must be registered if manufactured/imported above a volume threshold � this is the job of the manufacturer/importer � working in partnership with DUs Safety Data Sheets should be updated, but there is no need to produce CSRs if concentration in a preparation is below� The ECB/ECA will provide appropriate guidance related to steel alloy preparations prior to REACH entry into forceSteel and Alloys are not classified as substances and are therefore not to be registered under REACH. HOWEVER, their component metals must be registered if manufactured/imported above a volume threshold � this is the job of the manufacturer/importer � working in partnership with DUs Safety Data Sheets should be updated, but there is no need to produce CSRs if concentration in a preparation is below� The ECB/ECA will provide appropriate guidance related to steel alloy preparations prior to REACH entry into force

13. REACH & the Steel Industry Steel Industry Value Chain

14. REACH & the Steel Industry Impact on the Industry: - The Steel Industry is affected as Manufacturer (M) possibly as Importer (I), & Downstream User (DU) Substances in steel M/I Substances used in the steel process M/I/DU Substances used on steel products M/I/DU Substances as by-products M/I/DU Steel Industry is likely to be active on various levels � as a manufacturer, as importer and as downstream user As such REACH will affect the industry differently, depending on what role is undertaken and which stage in the value-chain is �in play� As follows�Steel Industry is likely to be active on various levels � as a manufacturer, as importer and as downstream user As such REACH will affect the industry differently, depending on what role is undertaken and which stage in the value-chain is �in play� As follows�

15. REACH & the Steel Industry Examples of substances used by the steel industry as DU: Minerals exempted from Registration, if not chemically modified Ores exempted from Registration, if not chemically modified Ore concentrates exempted from Registration, if not chemically modified Scrap metal to be registered, CSA*, CSR** Coal exempted from Registr., if not chemically modified Coke exempted from Registr., if not chemically modified Pickling Acids Components of preparations to be registered, CSA*, CSR** Stains Components of preparations to be registered, CSA*, CSR** Slag formers Components of preparations to be registered, CSA*, CSR** Lubricants Components of preparations to be registered, CSA*, CSR** Additives Components of preparations to be registered, CSA*, CSR** Emulsifiers Components of preparations to be registered, CSA*, CSR** Paints Components of preparations to be registered, CSA*, CSR** Coatings Components of preparations to be registered, CSA*, CSR** * CSA = Chemical Safety Assessment**CSR = Chemical Safety Report Regarding the substances that are typically used by the industry, different assessment, reporting and registration requirements apply depending on whether they are found in nature or man-made as follows - Regarding the substances that are typically used by the industry, different assessment, reporting and registration requirements apply depending on whether they are found in nature or man-made as follows -

16. REACH & the Steel Industry Examples of substances/preparations produced:- Steel alloys Individual components to be registered, CSA, CSR Coke [exempted from Registration] Byproducts from coke production - tars to be registered, CSA, CSR  - Benzenes to be registered, CSA, CSR may require Authorisation if supplied as feedstock to third parties Process gases exempted from Registration Slags Not a substance or preparation falling under REACH fall under Waste Directive 2006/12/EC Scrap metal to be registered, CSA, CSR

17. Steel Industry responsibilities Scenario 1: No Safety Data Sheet is provided by supplier of a chemical product: Assess the risk scenario for workers and environment Report to the European Chemicals Agency (ECHA) Manage the risk for workers and environment In order to have a chain of responsibilities, downstream users should be responsible for: - Assessing the risks arising from their use of substances if those uses are not covered by a safety data sheet received from the supplier or if a safety data sheet is not supplied. In that case, the assessments of risks to worker and environment need to be undertaken, managed and reportedIn order to have a chain of responsibilities, downstream users should be responsible for: - Assessing the risks arising from their use of substances if those uses are not covered by a safety data sheet received from the supplier or if a safety data sheet is not supplied. In that case, the assessments of risks to worker and environment need to be undertaken, managed and reported

18. Steel Industry responsibilities Scenario 2:A Safety Data Sheet (SDS) is provided by supplier of a chemical: Check, if the use of the chemical in steel production application is properly described in the SDS. If yes: Manage the risk for workers and environment according to SDS recommendations If no: - Contact supplier - Make Chemical Safety Assessment (CSA) - Make Chemical Safety Report (CSR) - Manage the risk for workers and environment according to CSR Where a SDS is provided by the supplier, the DU needs to check that the use has been properly described and that the recommendations are taken on board If the SDS doesn�t cover use correctly, then supplier needs to be informed and an CSA/R needs to b e initiatedWhere a SDS is provided by the supplier, the DU needs to check that the use has been properly described and that the recommendations are taken on board If the SDS doesn�t cover use correctly, then supplier needs to be informed and an CSA/R needs to b e initiated

19. Key Points Start Communicating with Suppliers of chemical products Recognize that the impact of REACH is an important strategic issue as well as management issue Address worker exposures and emission scenarios Source ECB/ECHA guidance (RIPs) on CSA/CSR process & management of exposure scenarios

20. Further Information For REACH Implementation Plans (RIPs) go to: http://ecb.jrc.it/REACH/ For REACH Common Position and other updates go to: http://ecb.jrc.it/home.php?CONTENU=/DOCUMENTS/REACH/REACH_PROPOSAL/ For news on the European Chemicals Agency go to: http://ec.europa.eu/echa/ For Extended Impact Assessment & several background documents go to: http://europa.eu.int/comm/environment/chemicals/background/impact_assessment_intro.htm

21. Thank You!

22. Scope of REACH