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Ricardo plc 2021 WEBINAR EFCTC Risk Management Options Analysis of F-gases for PFAS restriction 3 November 2022 The European Chemical Industry Council, AISBL - Rue Belliard, 40 1040 Brussels - Belgium Transparency Register n6487914232390 Confidential - Client Only: EFCTC DRAFT - CONFIDENTIAL March 2022 1 cefic COMPETITION LAW DO Ensure strict performance in areas of: Oversight / Supervision Have a Cefic/Sector Group Secretariat representative at each meeting Consult with appropriate counsel on all questions related to competition law, Limit meeting discussions to agenda topics; Provide each attendee with a copy of this checklist and have a copy available for reference at all meetings. Record keeping Have an agenda and minutes which accurately reflect the matters which occur; Ensure the review of agendas, minutes and other important documents by appropriate staff or counsel, in advance of distribution; Fully describe the purposes, structures and authorities of the groups. Vigilance Protest any discussion or meeting activities which appear to violate this checklist; ask for those activities to be stopped so that appropriate legal check can be made by counsel; dissociate yourself from any such discussion or activities and for the attendees, leave any meeting in which they continue (and have it minuted). This checklist is for the conduct of Cefic-sponsored meetings. Prohibited discussion topics apply equally to social gatherings incidental to those meetings. The checklist is not exhaustive. In case of doubt, contact Quentin Silvestre, Senior Legal Advisor at La cefic.be European Chemical Industry Council - Cefic aisbl Rue Belliard 40 b.15 B-1040 Brussels Belgium Tel. +32.2.436.93.00 mailcefic.be www.cefic.org EU Transparency Register n 64879142323-90 DON'T Do not, in fact or appearance, discuss or exchange information not in conformity with competition law, including for example on: Prices, including Individual company/industry prices changes, price differentials, discounts, allowances, credit terms, etc; Individual company data on costs, production, capacity (other than nameplates capacities), inventories, sales, etc. Production, including Plans of individual companies concerning the design, production, distribution or marketing of particular products, including proposed territories or customers Changes in industry production capacity (other than nameplates capacities) or inventories, etc. Transportation rates Rates or rate policies for individual shipments, including basing point systems, zone prices, freight, etc. Market procedures, including Company bids on contracts for particular products; company procedures for responding to bid invitations; Matters relating to actual or potential individual suppliers or customers that might have the effect of excluding them from any market or influencing the business conduct of firms towards them, etc; Blacklist or boycott customers or suppliers. ca,,erninstry About us The European FluoroCarbons Technical Committee is a sector group of the European Chemical Industry Council (Cefic) and represents the companies Arkema, Chemours, Daikin Chemical Europe, Honeywell and Koura. 3 Creating a world fit for the future WEBINAR: Consultation for the Regulatory Management Option Analysis in the context of a REACH restriction proposal on all PFAS including F-Gases Inge Kukla 3 November 2022 Ricardo plc 201272 Agenda 1. Study context and Structure of the RMOA 2. Example questions 3. Q&A Ricardo plc Ricardo Confidential 5 The proposed restriction on PFAS and F-gases Ricardo has been commissioned by EFCTC to undertake a Regulatory Management Option Analysis (RMOA) of certain fluorinated gases (Fgases) in the context of a proposal to restrict all PFAS, that would ban the manufacture, use and import of F-gases. Some of these F-gases have been identified as key inputs to your production. Our RMOA will be used to support a response to the European Chemicals Agency's (ECHA) consultation on the proposal to restrict PFAS that includes F-gases; the extent of this restriction is yet to be entirely defined and can still change along the consultation process. If restricted, your production would lose a key input, and alternatives would have to be used. We aim to find out the extent of this loss and of possible alternatives with this consultation, and use that as supportive evidence to define the best policy action for each F-gas in the RMOA to be submitted to ECHA. Objectives of the RMOA: Identify alternatives to each of the F-gases in each of their critical applications and analyse their technical feasibility, performance and costs compared to the current situation with the use of F-gases, thanks to your contribution to this consultation Outline the net economic and societal benefits generated along the downstream value chain from the use of F-gases or their alternatives in various critical applications or sectors; your production is one of such critical applications of F-gases Conclude about the suitability of a restriction for each of the F-gases in scope, and/or recommend an alternative regulatory management option (RMO) if deemed more appropriate (e.g., derogation). Key Tasks: Data gathering/literature review of relevant market & PFAS Data gathering strategy Stakeholder Consultation (Survey & Interviews) Analysis of Alternatives per use Socio-Economic Assessment per use RMOA Initial tasks started on Identification of the 19th of September evidence gaps Review of CSRs, RDs, Design of a survey etc. for consultation The stakeholder consultation With stakeholders' contributions to is expected to run from w/c consultation activities and surveys 14 Nov - 9 Jan (8 weeks) The final report will be provided by August 2023 Ricardo plc Ricardo Confidential 6 1. Structure of the RMOA report Study context and objectives of the RMOA To collect additional evidence to submit to ECHA as part of the restriction consultation process. The recently finalised SEA provided joint conclusions on the impacts of a restriction of a group of ten relevant F-gases. It was concluded that without derogations of the restriction to some of the lowest GWP F-gases, GHG emissions could increase in comparison to the current scenario established by the F-gas regulation. Additionally, safety and hazard profiles of alternatives to Fgases were also identified as an issue. RMOA: Case-by-case analysis for each F-gas in scope of the study with detailed information of: - Hazard profiles, performance, risk considerations to human health and the environment, and socioeconomic assessment of each F-gas and their blends and for each of their uses - Analysis of alternatives for each F-gas/blend in scope in each of their uses - A SEA for each F-gas in scope in each of their uses - The goal is to conclude on the most appropriate risk management measure for each of the F-gases in scope in the context of the REACH consultation: E.g., evaluation, CLH, REACH restriction/authorisation, candidate listing, other regulatory measures, etc., and including `no action' as option Ricardo plc Ricardo Confidential 7 1. Structure of the RMOA report Substances and uses in scope The assignment focuses on the following F-gases, which have been identified of relevance for EFCTC as potentially included under the proposed new definition of PFAS at risk of a REACH restriction: Substances in scope Uses potentially in scope HFC-125 HFC-134a HFC-143a HFC-227ea HFO-1234yf HFO-1234ze HFO-1336mzz HCFO-1233zd Their blends Commercial refrigeration Stationary air conditioning / heat pumps Mobile air conditioning Foam blowing agent (closed cell) Industrial refrigeration Transport refrigeration Fire protection Propellants (non-MDI) Foam blowing agent (open cell) Domestic refrigeration Solvents Cover Gas for magnesium casting Metered Dose Inhalers (MDIs) Foam products Skin coolers used in beauty shops Ricardo plc Ricardo Confidential 8 1. Structure of the RMOA report Overview of tasks Task 1 - Inception / Confirmation of methodology and scope based on the guidance developed by Eurometaux, and of suggested timescales Task 2 - Data gathering on F-gas and alternatives-related data - Task 2.1 - Literature review on relevant PFAS-related literature - Task 2.2 - Stakeholder consultation to EFCTC members and F-gas DUs Task 3 - Mapping information of substances and mixtures in scope and their uses Task 4 - Analysis of Alternatives (AoA) per use (following ECHA guidance) Task 5 - SEA per use Includes consultation to producers / importers and downstream users Task 6 - Regulatory Management Option Analysis (RMOA) per F-gas Task 7 - Conclusions and recommendations Ricardo plc Ricardo Confidential 9 1. Structure of the RMOA report RMOA in practice RMO Synthesis: HFC125 AoA HFC125, RMO 1 RMO 1 SEA HFC125, RMO 1 Proportionality RMO 1, HFC125 AoA HFC125, RMO 2 RMO 2 SEA HFC125, RMO 2 Proportionality RMO 2, HFC125 ... ... AoA HFC125, RMO N RMO N SEA HFC125, RMO N Proportionality RMO N, HFC125 Score 1 Score 2 ... Score N Use 1 Use 2 ... Use M AoA HFC125 AoA HFC125, Use 1 AoA HFC125, Use 2 ... AoA HFC125, Use M Use 1 Use 2 ... Use M SEA HFC125 SEA HFC125, Use 1 SEA HFC125, Use 2 ... SEA HFC125, Use M Proportionality analysis for HFC125 Effectiveness of RMO 1 RMO 1 Necessity of RMO 1 Proportionality of RMO 1 Effectiveness of RMO 2 RMO 2 Necessity of RMO 2 Proportionality of RMO 2 ... ... Effectiveness of RMO N RMO N Necessity of RMO N Proportionality of RMO N Ricardo plc Ricardo Confidential 10 1. Structure of the RMOA report Structure of the RMOA report 1. Executive Summary 2. Introduction and objectives of the RMOA 3. RMOA per substance 3.1. HFC-125 3.1.1. Screening and mapping of substance information 3.1.2. AoA per use of HFC-125 3.1.3. SEA per use of HFC-125 3.1.4. Synthesis of RMOs and proportionality assessment 3.1.5. Conclusions and recommendations 3.2. HFC-134a ... 3.8. HCFO-1233zd 4. Summary of conclusions Ricardo plc Ricardo Confidential 11 1. Structure of the RMOA report 1. Screening and mapping of substance information The screening process is mainly based on the REACH Registration Dossiers (RDs). It allows identifying substances that have a `profile' that is relevant or about which there is insufficient information in the RD. The screening focuses mainly on the following information: Physico-chemical properties and hazard profile Volumes or Tonnage Uses, Exposure and monitoring data (environment and workplace, consumers if relevant) Risk Characterisation Ratios (RCRs) Recommended risk reduction measures Most of this evidence is not public. Hence, we are asking for Chemical Safety Reports This process is unavoidable and industry is highly encouraged to take some proactive actions. Industry should consider to provide or complete some key data provided in the Registration dossiers, such as: An up-to-date Hazard profile that identifies the most relevant endpoints, and its impurities of relevance for the hazard profile Tonnages indicated by registrants, separated between intermediate and non-intermediate uses, and considering trade Uses and exposure of relevance at present and emerging ones; volumes per use if possible, most significant use sectors for exposure, monitoring data, challenges to derived no-effect levels (DNELs) RCRs, recommended risk reduction measures, up to date and robust; challenges, sensitivity End of life, final fate and recycling Ricardo plc Ricardo Confidential 12 1. Structure of the RMOA report 2. AoA per use It should reflect the state-of-the-art to avoid future challenges during public consultations. 1. Identification of key functional requirements may force to split the analysis into different functionality groups. 2. Among the questions to address in stakeholder consultation: a) Drivers for substitution: potential exposure, cost (relative prices), and market pressure. - Special case for blends: can they be reformulated, removing the restricted substance(s)? b) Drivers for continued use: could be the cost of the alternative (unit price, performance-related cost), technical considerations related to functionality, process complexity or the production of additional impurities/waste and market conditions (technical specifications or consumer preference) c) Likelihood of an alternative becoming available: documenting known ongoing trials (from most likely to yield success to `plan B alternatives', at a less mature stage) and timeframe d) Other criteria such as Hazard profile of the alternative (an issue if alternatives have similar hazard profiles) Operational constraints linked to the process, such as: Is the substance sustainable? E.g., it may become unavailable or depleted, be energy intensive, energy inefficient, emit and/or leak GHG, etc. Life cycle: is the problem displaced to a later stage? E.g., disposal. Key economic elements, e.g., cost of the alternative substance, process implications, etc. e) Credibility: An AoA should stand the test of a peer review Ricardo plc Ricardo Confidential 13 1. Structure of the RMOA report 3. SEA per use 1. Market impacts: On top of economic and technical feasibility, the SEA may identify consumer preferences that will drive the market response (price elasticity, opting for imports if the articles affected are not available anymore) or loss of competitiveness, etc. These aspects are particularly interesting to explore when alternatives have already been made available to consumers for some time. Loss of jobs are also a part of the SEA. 2. SEA refinement at the RMO stage will vary according to the RMO type: - Indicative Occupational Exposure Limits (OEL): requires few if any socio-economic arguments - Binding OEL: involves examination of compliance costs - Restriction: socio-economic impact, preferably via a Cost-Benefit Analysis - Authorisation: socio-economic impact via a Cost-Benefit analysis based on likely scope and duration of Authorisation The criterion of sustainability or resilience may be interesting to explore, especially in the EU: there are several regulatory initiatives and policy targets aimed at stimulating economic growth and job creation, or to protect the environment (e.g. climate change, circular economy, etc.). Ricardo plc Ricardo Confidential 14 1. Structure of the RMOA report 4. Synthesis of RMOs and proportionality assessment (I/II) The RMOA is based on an initial concern regarding hazard properties and/or potential exposure from a substance. The purpose is to clarify whether risk management activities are required for a substance based on existing hazard and/or risk information and to identify the most appropriate instrument to address a concern. Available risk management measures include: Evaluation (e.g., the RMOA may come to a conclusion that additional information needs to be generated) Harmonised classification and labelling (CLH) Restriction under REACH Inclusion on the Candidate list (i.e., selection as SVHC), the first step toward prioritisation for Authorisation under REACH Other regulatory options, such as Occupational Exposure Limits (OEL), Environmental Quality Standards (EQS), etc. Ricardo plc Ricardo Confidential 15 1. Structure of the RMOA report 4. Synthesis of RMOs and proportionality assessment (II/II) This will imply using the information from the AoA and the SEA and assessing the RMOs considered for each Fgas in terms of: Effectiveness: ability to eliminate/reduce risk, measurability/monitorability, proven technology available. Practicability: easy to implement by Industry, by Regulators, and time to implementation Necessity and regulatory consistency with other EU legislation, initiatives and policy objectives Obtaining a multidimensional ranking of RMOs in which they can be assessed, recommended and/or discarded considering their proportionality. 5. Conclusions and recommendations Conclude about the suitability of a restriction for each of the F-gases in scope, and/or recommend an alternative regulatory management option (RMO) if deemed more appropriate (e.g., derogation). Ricardo plc Ricardo Confidential 16 Agenda 1. Study context and Structure of the RMOA 2. Example questions 3. Q&A Ricardo plc Ricardo Confidential 17 2. General description of both surveys 1 Online survey Kick-off in Nov 14th during eight weeks ~20 queries for previous participants, ~70 for new ones, between qualitative and quantitative. First questions filter the information that needs to be filled in later. Targeting a diverse range of members (SME, large companies, different DU sectors, etc.) Anonymity (all submitted data will be covered by NDA to be confirmed before completion of the survey). Cefic/EFCTC will not have access to the data submitted. 2 Best guesses/ expert input Multiple choice questions primarily Ranges, where relevant, will be provided for ease/ reference Input from associations will be valuable also outside the survey; incomplete responses are also appreciated. 3 Multidisciplinary collaboration Contacting colleagues and teams from across the business will be needed to develop best guesses/ expert opinion For example, colleagues in the regulatory affairs teams, finance/ strategy units, product development/ R&D, pricing, etc. Extensive guidance included in all questions Ricardo plc Ricardo Confidential 18 2. Structure and questions in the Producers/Importers survey Basic questions: - Turnover or revenue attributed to the sales of each of the F-gases in scope in the EEA, in 2019, including sales of blends containing them. - Applications or uses to which each of the F-gases in scope are sold to. - Key function(s) that each of the F-gases in scope provides in each of the applications that they are sold to. Analysis of Alternatives, for each F-gas in scope in each of its applications/uses: - Awareness of existence of other chemical alternatives to F-gases and their blends; material changes within the chemicals sphere; ongoing research and broad status of any known developments; willingness to produce alternatives within current business scope - Cost of alternatives, ability to meet current demand, entirely different technologies or systems and their cost - Performance, energy consumption, GWP assessment (i.e., lower, higher or equal to F-gases) - Human hazard, physical hazard and environmental hazard profile (i.e., lower, higher or equal to F-gases) Exposure assessment for each F-gas in scope in each of its applications, during manufacture and use: - Exposure pathways (human health, environment) and mitigation measures to reduce exposure. - Exposure monitoring, room for improvement, exposure incidents in the past. Ricardo plc Ricardo Confidential 19 2. Structure and questions in the DU survey Basic questions: - Turnover or revenue attributed to the sales of products, mixtures and articles containing the F-gases in scope or blends containing them in the EEA, in 2019. Proper indication to what blends should be considered is included under each of the F-gases in the list. - Applications or uses in which your products, mixtures and/or articles are sold, that contain each of the F-gases in scope or their blends. Proper indication to what blends. - Key function(s) that each of the F-gases in scope or their blends provide in each of the applications that they are sold to. Analysis of Alternatives, for each F-gas in scope in each of its applications/uses: - Awareness of existence of other chemical alternatives to F-gases and their blends in your products; material changes within the chemicals sphere; ongoing research and broad status of any known developments; willingness to produce alternatives within current business scope - Cost of alternatives, ability to meet current product demand, availability of entirely different technologies/systems and their cost - Performance, energy consumption, GWP assessment (i.e., lower, higher or equal to F-gases) - Human hazard, physical hazard and environmental hazard profile (i.e., lower, higher or equal to F-gases) Exposure assessment for each F-gas in scope in each of its applications, during manufacture and use: - Exposure pathways (human health, environment) and mitigation measures to reduce exposure. - Exposure monitoring, room for improvement, exposure incidents in the past. Ricardo plc Ricardo Confidential 20 2. Example questions in both surveys 7. What is the turnover that can be attributed to the sales of products, mixtures and/or articles containing each of the F-gases in scope or their blends? Please consider for this question the sales volumes from 2019 in the EEA. Please consider both sales containing F-gases in their basic form and within blends that you may formulate yourself or just use as input (i.e., the full turnover value from sales of products, mixtures and/or articles containing the F-gases in scope in any form). If a product, mixture and/or article contains more than one of the F-gases in scope, and all of them are necessary for the viability of that product, mixture and/or article, please repeat the value of the sales of that product, mixture and/or article across all of the F-gases that are used to produce it. We will be assessing the impact of the restriction of each F-gas separately. You may explain these overlaps, if any, in the comment box below. Specific to DU survey: - Given the importance of blends from the point of view of downstream users, each of the F-gases under analysis will have an indication of what blends they are used in next to its name. E.g., HFC-125 is used in blends R448A, R449A, R452A Ricardo plc Ricardo Confidential 21 2. Example questions in the Producers/Importers survey 8. Please, select all the applications/uses in which you sell products, mixtures and/or articles containing F-gases, including in the form of blends, to the extent that you are aware. Please, do so by each of the F-gases in scope that you use in the EEA. Ricardo plc Ricardo Confidential 22 2. Example questions in the Producers/Importers survey Ricardo plc Ricardo Confidential What are the exposure pathways of concern for the Fgases during manufacture and use of products containing these chemicals? What mitigation measures are taken to prevent exposure? 23 2. Example questions for new participants Baseline o What was your annual turnover, in total and from the sales of products, mixtures and/or articles containing the F-gases in scope (both in basic form or in mixtures or blends) in the EEA in 2019? o If the REACH restriction on the manufacture, placing on the market and use of the F-gases in scope were not implemented, how would you expect these sales to evolve over the next 10 years (starting 2022)? Regulatory impacts and costs o Identify the percentage of your affected product portfolio (in turnover value ) that would require the following actions over the next 10 years in the EEA: substitution of F-gas, removal of F-gas, etc. o How much would you expect overall capital investment in the EEA to change, on average over the 10-year period after the implementation of the potential REACH restriction on the manufacture, placing on the market and use of the F-gases in scope, when compared to 2019? o How much would you expect overall turnover from sales in the EEA to change, on average over the 10-year period after the implementation of the potential REACH restriction on the manufacture, placing on the market and use of the F-gases in scope, when compared to 2019? Ricardo plc Ricardo Confidential 24 Agenda 1. Study context and Structure of the RMOA 2. Example questions 3. Q&A Ricardo plc Ricardo Confidential 25 Summary Stakeholder survey 14 November `22 - 9 January '23 2 questionnaires (manufactures/producers & Downstream users) REQUEST THE QUESTIONNAIRE NDA to be signed between respondent and Ricardo (if you have signed it for the SEA, you won't need to sign a second one) Respondents to the SEA will have less questions to answer (e. g. on the company/association information) Ricardo plc Ricardo Confidential 26 Contacts ApILb-t EFCTC Na RICAR DO If you have an further questions and would like to contact the project team, please reach out to: ricardo.com and/or Elisa Consoli from EFCTC: Mgcefic.be. Please note if you do choose to participate in the engagement activities we will handle any confidential information appropriately and will be covered by NDAs. If your request includes confidential information, please contact only ericardo.com.