OVERVIEW

Materials compliance is critical in Indirect Procurement and Supply Chain Services as it ensures that businesses align with environmental, health, and safety regulations across various regions.

• Adhering to these standards helps companies avoid penalties, protect public health, and reduce environmental impact.

• Global regulations on substances like PFAS, conflict minerals, and hazardous chemicals continuously evolve, requiring proactive strategies to stay compliant.

• Compliance minimizes risks, enhances corporate responsibility, promotes sustainability, and supports seamless operations in international markets.

SEVEN KEY REGULATORY UPDATES

OECD List of PFASs

• Per- and poly-fluoroalkyl substances (PFASs) are a broad class of chemicals recognized for their unique properties and widespread use in consumer and industrial applications. Due to their persistence in the environment and their tendency to accumulate in the human body and food chains, PFASs have raised global concerns.

• Many countries have developed their PFAS lists to support the transition to safer alternatives. These lists vary depending on each country's understanding of the health and environmental risks posed by PFASs. The Organization for Economic Cooperation and Development (OECD) has created a comprehensive list of PFASs to facilitate global information exchange. The list contains various chemicals with fluorinated carbon chains.

• Harmonizing PFAS lists according to OECD guidelines is a key step towards effective global regulation and management. This effort involves coordinating definitions, aligning regulatory frameworks, sharing data, and promoting international cooperation. A standardized approach enhances public health and environmental safety worldwide. The OECD PFAS list complements other inventories such as the US EPA TSCA Inventory, Canadian DSL, and EU Registered Substances Dossiers, helping to harmonize regulations and risk assessments across borders.

New EU Battery Regulation

The global demand for batteries is predicted to increase 14-fold by 2030, with the EU accounting for up to 17% of the market. Since 2006, the EU has regulated batteries and waste batteries under the Batteries Directive. However, a new regulation was adopted on 12 July 2023 due to evolving market conditions and technological advancements.

• The new regulation (EU) 2023/1542, which came into force on 17 August 2023, will repeal the Batteries Directive by 18 August 2025.

  • Its primary objectives are strengthening the internal market by creating a level playing field with common rules, promoting a circular economy, and reducing battery's environmental and social impacts throughout their life cycle.

• From a hazardous perspective, the regulation continues to restrict mercury and cadmium in batteries and introduces a lead restriction in portable batteries starting 18 August 2024.

  • Beginning in 2025, the regulation will implement declaration requirements, performance limits, and carbon footprint restrictions for batteries used in electric vehicles, light transport (e.g., e-bikes), and rechargeable industrial batteries. The regulation will also set recycling efficiency and recycled content targets.

• By 2027, consumers will be able to remove and replace portable batteries in electronic products, extending product life, promoting reuse, and reducing post-consumer waste.

New Reporting Feature in IMDS for MCCPs

• The International Material Data System (IMDS) has introduced a new reporting feature for medium-chain chlorinated paraffins (MCCPs), synthetic chemicals used as plasticizers, flame retardants, and lubricants. This enhancement in the IMDS Regulation Wizard (Chemistry Manager) requires two main fields:

  • "T"e substance contains" "ptions for MCCPs.

  • "H" card statements" "according to the Globally Harmonized System of Classification and Labelling of Chemicals (GHS).

• IMDS marks MCCP substances as SVHC (Substances of Very High Concern) when no regulatory information is provided or when "≥"0% [...]” "s selected. Automotive manufacturers and suppliers should use this feature to ensure MCCP substances are declared according to the correct regulations.

4. EU Conflict Minerals Regulation and Responsible Sourcing
The EU Conflict Minerals Regulation, effective 1 January 2021, regulates sourcing tin, tantalum, tungsten, and gold (3TG minerals) to prevent human rights abuses in supply chains. Developed in collaboration with the OECD, the regulation outlines due diligence obligations for EU importers, including:

• Establishing strong management systems.
• Identifying and assessing supply chain risks.
• Implementing strategies to mitigate identified risks.
• Conducting independent third-party audits.
• Reporting annually on due diligence efforts.

Although this regulation doesn't directly apply to all EU economic operators, many companies are sourcing minerals responsibly due to their corporate social responsibility (CSR) objectives and customer demands.

• Recent regulations such as the German Supply Chain Act and the EU Forced Labor Regulation reflect the growing emphasis on responsible sourcing, encouraging businesses to keep their due diligence processes up to date.

EPA Proposes Ban on 1-BP

On 31 July 2024, the U.S. Environmental Protection Agency (EPA) proposed banning all consumer uses of 1-bromopropane (1-BP) and several industrial and commercial uses where safer alternatives are available. Exposure to 1-BP is linked to severe health risks, including cancer and damage to the liver, kidneys, and reproductive systems.

• If finalized, the Ban on consumer uses would take effect within six months, and industrial and commercial bans would be fully enforced within 15 to 18 months.

• Consumer uses exempt from the Ban include insulation, which the EPA determined does not contribute to unreasonable risk.

• Other prohibited uses include dry cleaning, automotive care products, adhesives, and arts and crafts materials.

• Worker protections will be required for specific industrial uses of 1-BP that will remain legal.

Navigating EPA CDX Reporting for Importing Articles Containing PFAS

The EPA has implemented new reporting requirements for PFAS under TSCA Section 8(a)(7). Since January 2011, manufacturers and importers of PFAS or PFAS-containing articles must report their activities through the EPA's Central Data Exchange (CDX) portal. The portal opens on 12 November 2024, with submissions due by 8 May 2025. Small manufacturers have an extended deadline until 10 November 2025.

• TSTSCA'sew List of Substances Prioritized for Risk Evaluation: On 24 July 2024, the EPA proposed designating five High-Priority Substances under TSCA for risk evaluation: vinyl chloride, acetaldehyde, acrylonitrile, benzenamine, and MBOCA. These chemicals, commonly used in plastic production, have been linked to cancer.

• The risk evaluation process typically takes three to 3.5 years to determine whether these chemicals pose an unreasonable risk to human health or the environment. Industries involved with these substances should monitor supply chains and ensure compliance with future regulatory changes.

KEY TAKEAWAYS

• PFAS Compliance: The OECD's standardized list of PFAS substances facilitates global regulatory alignment, supporting environmental protection and public health.
• EU Battery Regulation: New rules strengthen the circular economy, reduce environmental impacts, and introduce restrictions on hazardous substances like lead, with full implementation by 2027.
• IMDS MCCP Reporting: Automotive and related industries must now report medium-chain chlorinated paraffins (MCCPs) to ensure compliance with evolving safety standards.
• EU Conflict Minerals Regulation: Companies must follow due diligence to responsibly source minerals and comply with EU regulations to prevent human rights abuses in supply chains.
• EPA 1-BP Ban: The U.S. EPA is moving to ban the use of the solvent 1-bromopropane (1-BP) in various industries due to health risks, pushing companies to adopt safer alternatives.
• PFAS Reporting via EPA CDX: Manufacturers and importers of PFAS-containing articles must report usage starting in 2011; submissions are required by 2025.
• TSCA Chemical Prioritization: The U.S. EPA has proposed five high-priority chemicals for risk evaluation, with potential regulatory impacts on industries such as electronics and plastics.