Federal Register - September 17, 2021
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Source: Federal Register
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Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Rules and Regulations
articles in responding to public comments on the January 2021 final rule, there is little evidence to suggest that PIP 3:1 is present in articles which may be available to consumers, and outside of activities excluded from the prohibition, little evidence to suggest it is necessary or present in commercial and industrial articles as well Ref. 26.
2. Comments on the challenges associated with determining whether articles contain PIP 3:1. Commenters described in detail the challenges associated with determining whether a particular article contains PIP 3:1, especially for complex goods that contain thousands of individual parts.
For example, commenters from the consumer electronics sector noted that articles that are components for their complex goods are sourced on a worldwide market and a manufacturer may have upwards of 5,000 suppliers for potentially 100,000 or more component articles across all product lines Ref. 19. These commenters note that manufacturers do not receive a list of every chemical within each part or component article that ultimately goes into a finished electronic article because ingredient lists are highly proprietary and confidential. Rather, companies provide functionality, performance, safety and quality specifications of a part or component article to their supply chain, including specifications regarding chemical restrictions.
According to these commenters, suppliers are provided lists of restricted chemicals on at least an annual basis, or more frequently if there is a triggering event, such as a new government restriction. Suppliers are notified of the lead time for the restriction of the chemical and any testing that may be required, and the suppliers communicate that information upstream to their own suppliers.
According to these commenters Ref.
19, the task of determining whether PIP
3:1 is used in a component article in a finished electronic good is further complicated by the many article manufacturers being unable to identify or confirm the PIP 3:1 content of articles, such as supplied parts, components or commercial and consumer goods, without laboratory testing. Laboratory testing can run up to $5,000 per product and take up to one 1 month. As a result, companies must rely on material declarations by suppliers as a more practicable and reliable approach to determine the usage of PIP 3:1 within an article.
Other commenters echo these concerns. Comments from the heating, ventilation, air conditioning, and refrigeration industry note that
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manufacturers are currently working their way through tens of thousands of stock-keeping units SKUs, each having hundreds of associated component articles and spare parts Ref. 20. They contend that their suppliers have generally not been forthright about the presence of PIP 3:1 in their component articles and parts, even after receiving notification that the use of PIP 3:1 in component articles must be disclosed.
According to these commenters, some suppliers continue to claim that they will not disclose the chemical makeup of component articles as the composition is confidential intellectual property. In response, some of the larger manufacturers have started testing component articles to compensate for this lack of transparency, but testing is time-consuming and costly and most smaller businesses do not have the resources to undertake testing.
The semiconductor industry and the testing and measurement industry noted that their industries differ from the consumer electronics industry and the automotive industry, in that their industries are high-mix, low-volume industries, meaning that manufacturer portfolios are typically comprised of a large number of unique goods with relatively low unit sales Refs. 14, 21.
Their equipment is primarily custom built to order and sold directly to professional and industrial customers by the manufacturers Ref. 21. The semiconductor industry typically places only 600 to 6,000 units of semiconductor manufacturing and related equipment into U.S. commerce each year and it is not uncommon for small groups of model units to be customized to an end users particular needs Ref. 14. According to this commenter, this is in stark contrast to most consumer goods, in which individual similar model units are placed into U.S. commerce in much greater number, and to the automotive and aerospace sectors, in which goods are manufactured in lower quantities but which are quite similar from model unit to model unit Ref. 14. The semiconductor industry further noted that their sectors ability to obtain material composition data from across their supply chain is limited due to three factors: 1 The length and complexity of the supply chain; 2 the preponderance of suppliers located outside of the U.S.; and 3 the tens of thousands of parts incorporated into each article eventually manufactured or distributed in commerce within the U.S.
EPA generally recognizes the challenges described by these commenters in determining whether and where PIP 3:1 is present in articles
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in their supply chains and how long it may take to clear those PIP 3:1containing articles through the channels of trade. As to comments relating to testing, as most commenters note, there are a number of alternative steps to testing that an importer or a domestic manufacturer can take to ensure that an article does not contain PIP 3:1. The customer can include a specification in their purchase contracts with suppliers that articles be made without PIP 3:1.
The customer can also request that their suppliers provide them with a written statement or certification that the purchased or supplied goods are made without PIP 3:1. Of course, testing is always an option, but EPA recognizes that this may be a more expensive option.
3. Comments on compliance date considerations for PIP 3:1-containing articles. Nearly all of the industry commenters responding to EPAs March 2021 notification and request for comment Ref. 3 stated that they needed several years to phase PIP 3:1
out of their articles. Many contended that they needed much longer, up to fifteen years Refs. 14, 18 assuming that it is even feasible to do so. Commenters identified a number of steps that would be needed in order to complete a phaseout of PIP 3:1 in articles. These steps include: 1 Identifying where PIP 3:1
is present; 2 identifying and testing substitutes; 3 testing and re-certifying as needed the replacement article; and 4 distributing the replacement article throughout the supply chain. Many commenters provided detailed timelines for the steps needed to replace PIP 3:1.
For example, the consumer electronics industry noted that, while companies had begun to survey their suppliers as soon as the final rule was published, because of the large number of parts and suppliers involved for most manufacturers, they anticipated that completing the survey would take between six and twelve months Ref.
19. They also noted that, because PIP
3:1 is not regulated in other international markets, there is a general lack of awareness regarding the chemical throughout the supply chain and the industry expects the surveys to take closer to twelve months than six.
According to the consumer electronics industry commenters, once PIP 3:1 is identified in a particular part by a particular supplier, the supplier must identify and investigate alternatives to PIP 3:1 that can meet regulatory requirements and manufacturer requirements with respect to functionality, performance, safety and quality Ref. 19. Given that PIP 3:1 is typically used in electronic component
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