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AR226-1914 DuPont Global PFOA Strategy Comprehensive Source Reduction Presentation to EPA January 31, 2005 Company Sanitized Contains No TSCA CBI Purpose Present a comprehensive risk management approach for PFOA based on source reduction - DuPont commitment - Global impact - Voluntary actions - Work in progress for some elements - Open dialogue with EPA on this approach Page 2 January 31,2005 Company Sanitized Contains No TSCA CBI Topics for Discussion Comments on overall approach to mitigation? Should some or all of DuPont's voluntary commitments be made binding? If so, what are the options for making the commitments binding for all parties? Can this approach be used internationally? Page 3 January 31,2005 Company Sanitized Contains No TSCA CBI Challenges Parts of society (customers, regulatory bodies globally, NGOs) are raising questions of safety. There is no nationally established "acceptable level of risk" today; may take years to establish. Routes of exposure not fully understood. TSCA is a challenging statute to achieve timely risk management. The global marketplace is complex. Fluorotelomer products and fluoropolymers present very different issues along the commercial chain. Page 4 January 31,2005 Company Sanitized Contains No TSCA CBI Potential Sources of PFOA Olefin Byproduct of Fluorotelomer Product Manufacture 1970's - present Potential Fluorotelomer Product Degradation? 1970's - present Fluorotelomer Product Manufacture, Industrial & Consumer Use 1970's - present 1950's - present DuPont and others Page 5 January 31,2005 Company Sanitized Contains No TSCA CBI POSF Materials Potential Breakdown to PFOA 1950's - present DuPont PFOA Reductions 1950's - present Page 6 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Fluorotelomer Products Historically 100's lbs em issio n s >85% reduction by 2007 Next generation flu o ro telo m er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs em issio n s >98% reduction by 2007 Page 7 January 31,2005 Next generation dispersion (2005/06) Negligible exposure Company Sanitized Contains No TSCA CBI No known degradation DuPont Manufacturing Emissions Reduction U.S. Fluoropolym er/Fluorotelom er Manufacture (thousand lbs PFOA) Est Air WV H2O WV Air NJ H2O NJ 199 100 31 31 56 49 0.3 0.3 24.9 24.4 101 102 26 15 14 6 0.2 0.1 17.6 14.8 103 >04 YE %Red 6 0.2 99 5 1.5 97 0.2 0.1 67 14.5 2.7 89 Totals 112.2 104.7 57.8 35.9 25.7 4.5 96 106 0.2 0.2 0.1 1.0 1.5 U.S. APFO Manufacture (thousand lbs PFOA) 3M 50 50 00 DuPont 00 0 <0.1 0 <0.1 0 <0.1 0 <0.1 Total U.S. Emissions Reduction 99% (`99-'06); 97% (`99-'04YE) Data as of Dec `04 Page 8 January 31,2005 Company Sanitized Contains No TSCA CBI dm DuPont Manufacturing Emissions Reduction US Fluoropolym er/Fluorotelom er Manufacture (thousand lbs PFOA) 199 M 101 102 103 '04 YE %Red '06 Est Total 112.2 104.7 57.8 35 25.7 4.5 96 1.5 %Red 99 Global Fluoropolym er/Fluorotelom er Manufacture (thousand lbs PFOA) Total 142.6 140.9 78.7 51.3 42.0 15.6 89 7.7 95 DuPont commitment: >98% global emissions reduction by 2007 (vs 1999 base year) Data as of Dec `04 Page 9 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Historically 100's lbs e m issio n s >85% reduction by 2007 Next generation flu orotelom er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs e m issio n s >98% reduction by 2007 Page 10 January 31,2005 Next generation dispersion (2005/06) Negligible exposure Company Sanitized Contains No TSCA CBI No known degradation Fluorotelomer Products: Definition Fluorotelomer derivatives are a family of compounds used as ingredients in making fire fighting foams and coatings because of their unique properties. They are also intermediates, or building blocks, used to manufacture stain, oil and water resistant additives for some textiles, paper coatings and other surfaces. These ingredients and additives are sometimes referred to as "telomers", or "telomer products". For clarity we have referred to them as "fluorotelomer products" throughout this discussion. Page 11 January 31,2005 Company Sanitized Contains No TSCA CBI Fluorotelomer Products: Unique Materials Performance: - The lowest surface energy that can be achieved in a solution or on a surface to repel oil and water at relatively small use levels - Wetting and leveling at concentrations more than 100 times lower than conventional surfactants for smoother and easy-clean finishes - Protection from oil-based stains and soils - Inherent stability: thermal, chemical Page 12 January 31,2005 Company Sanitized Contains No TSCA CBI Fluorotelomer Applications Industrial Fire Fighting Architectural Coatings and Sealers Page 13 January 31,2005 Health Care Company Sanitized Contains No TSCA CBI Grease Resistant Packaging Fluorotelomers Global Economics Market Size $700 Million at Fluorotelomer Producer Level Primary Manufacturers (by Size) : DuPont, Daikin, Asahi, Clariant Total 2004 sales of fluorotelomers from all producers estimated to be 160 million pounds of products, as sold, containing 25-30 million pounds of fluorotelomer active ingredient $20 Billion: Industrial User Level Thousands of industrial customers and retailers worldwide Market___________ Growth Rate Key Growth Region Carpet and Paper <GDP U.S., Europe Texiles > GDP U.S., Europe Hard Surfaces > GDP U.S., Europe Fluorotelomer Source U.S., Europe, Asia U.S., Europe, Asia U.S. Page 14 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Fluorotelomer Sales By Geography Europe Page 15 January 31,2005 Asia Company Sanitized Contains No TSCA CBI Americas Fluorotelomer Products: Key Global Dynamics Fluorotelomer demand is growing globally due to - strong consumer demand for stain protection - end-use article manufacturer demand for the high value added to their products Fluorotelomer consumption is growing most rapidly in Asia due to low labor costs and proximity to textile mills. Fluorotelomer production is likely to follow suit. Page 16 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Market Segment Analysis Industry E m ergency Response H e a lth c a re Textiles C o n s tru c tio n C o n s tru c tio n C o n s tru c tio n Food P a c k a g in g Application Fire Fighting Foams Medical Garm ents and Drapes S uperior rain and stain protection C arpet soil and stain protection A rc h ite c tu ra l Coating and S e a le rs B enefit Saves lives and property. S uperior resistance to petrochem ical and solvent based fires Provides barrier protection from bodily fluids and pathogens Protection from the elem ents, keeps articles looking newer, longer Newness retention, adds to product life cycle Stain Protection - new ness retention, adds to product life cycle. S urface active agents fo r leveling of coatings, reduce use of solvents P o te n tia l A lte rn a tiv e s Hydrocarbon based surfactants Silicone and Hydrocarbon based extenders, plastic lam inates S ilic o n e s S ilic o n e s S ilic o n e s C h allen g es to Alt. Adoption G reater consum ption, potential for greater loss of property and life R educed level of protection and com fort fo r health care providers Does not provide oil based stain protection Inferior stain and soil protection will re su lt in incre ase d in clea ning s and a reduced life cycle Inferior stain and soil protection will re su lt in incre ase d clea ning s and a reduced life cycle. Additional surfactant need (10x) and solvent use Institutional Reduce use of solvents to obtain M aintenance quick drying and leveling of coatings Silicones Additional surfactant need (10x) and solvent use Paper Board and wrap C ost effective, breathable package with grease protection from food contact P la s tic H igher cost. C a n n o t be re cycle d in paper mills. Page 17 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Fluorotelomer Products Historically 100's lbs e m issio n s >85% reduction by 2007 Next generation flu o ro telo m er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs em issio n s >98% reduction by 2007 Next generation dispersion (2005/06) Negligible exposure Page 18 January 31,2005 Company Sanitized Contains No TSCA CBI No known degradation Next Generation Fluorotelomer Products We recognize that some trace by-products can be a potential source of PFOA. We have taken a broad and conservative approach to potential PFOA precursors. Our next generation fluorotelomers will dramatically reduce PFOA and these trace by-products and thus reduce the potential for emissions. Page 19 January 31,2005 Company Sanitized Contains No TSCA CBI Next Generation Fluorotelomer Product Technologies Page 20 January 31,2005 Company Sanitized Contains No TSCA CBI Next Generation Fluorotelomer Product Technologies Page 21 January 31,2005 Company Sanitized Contains No TSCA CBI Next Generation Fluorotelomer Products Significant Reduction of PFOA and Precursors Page 22 January 31,2005 Company Sanitized Contains No TSCA CBI <Mmt> Next Generation Fluorotelomer Product Technologies Page 23 January 31,2005 Company Sanitized Contains No TSCA CBI Next Generation Fluorotelomer Product Technologies Page 24 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Fluorotelomer Products Historically 100's lbs em issio n s >85% reduction by 2007 Next generation flu o ro telo m er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs em issio n s >98% reduction by 2007 Page 25 January 31,2005 Next generation dispersion (2005/06) Negligible exposure Company Sanitized Contains No TSCA CBI No known degradation Fluoropolymer Global Economics Global Fluoropolymers M a rk e t S iz e (exclu d in g F lu o ro e la s to m e rs ) Producer Level Revenues : $2.2B Industrial User Level Revenues : >> $10B G ro w th : In aggregate, products and markets are growing at, or slightly above GDP Some cyclical, but growing applications and markets (e.g., semiconductors in electronics) Some regions/countries are growing faster, such as China (but from a small base) Page 26 January 31,2005 Company Sanitized Contains No TSCA CBI Fluoropolymer Global Economics (Contd.) DuPont Fluoropolymers (Resins and Dispersions) Telecomm Transportation Chem Processing Electronics Cookware Construction Market________ GDP > GDP GDP Cyclical, Growth > GDP GDP Key Growth Region US, AP Global Global AP, US Global, China Global, China DuPont Sources US, Europe US, Europe US, Europe, AP US, AP US, AP US, Europe, AP Page 27 January 31, 2005 Company Sanitized Contains No TSCA CBI DuPont Fluoropolymers Sales by Geography Europe Americas Key Industries Resins Telecommunications Transportation Aerospace/Aircraft Automotive Chemical Processing Military Electronics Asia/Pacific Page 28 January 31,2005 Dispersions Construction Cookware Company Sanitized Contains No TSCA CBI DuPont Fluoropolymers Materials with unique electrical properties, temperature performance, flame resistance, chemical stability and surface release. Sold as resin pellets and in aqueous dispersion form to industrial fabricators. - Resin pellets contain <25 pounds/year PFOA content; > 90% PFOA destroyed in thermal processing into fabricated articles - Aqueous dispersion products contain ~ 23,000 pounds/year PFOA content; ~75% PFOA destroyed in processing dispersion to final products Page 29 January 31,2005 Company Sanitized Contains No TSCA CBI Fluoropolymers Applications - Resins Semiconductor Manufacture High Purity Liquid Handling Telecomm Wire & Cabling Chemical Processing Valves, Lined Piping, Tanks Page 30 January 31,2005 Low Permeable Automotive Fuel Hose Company Sanitized Contains No TSCA CBI Aerospace Materials Hydraulic tubing Wire & Cabling Flares Fluoropolymer Applications - Dispersions Non-stick Coatings for Cookware and Small Electrical Appliances Page 31 January 31,2005 Construction Architectural Fabric Company Sanitized Contains No TSCA CBI DuPont Fluoropolymer Market Segment Analysis Industry Sub-industry T ra n s p o rta tio n Autom otive A e ro sp a ce C onstruction B u ild in g s /B rid g e s Page 32 January 31,2005 Application Fuel Hose Seals & O -R ings H ydraulic Tubing W &C control & pow er W & C in flig h t e n te rta in m e n t W & C spacecraft/satellite A rchitectural Fabric Thread Sealant Tape (TST) Bearing Pads Benefit Potential Alternatives/ Switching Challenges R educed Em issions, Im proved R eliability & Fire Safety Reduced Em issions & Im proved R eliability N o know n polym er substitutes for sam e functionality. M etal tubing w ithout sam e benefits & fu n c tio n a lity . O ther Polym ers w /o equal perform ance(leakage) Im proved Safety & R eliability W eight savings W eight savings and perform ance M etal tubing w ithout sam e benefits & functionality Polyolefin w ith m etal conduit Fire Safety & Reduced W eight R adiation R esistance P olyolefins w ith increase fire ris k O ther Polym ers w ith poorer perform ance Structural D esign Flexibility and Integrity, W eatherability & Fire Safety G lass fabric (poor structural p ro p e rtie s ) Hard C onstruction (w eight) O rganic fa bric (low functionality & fire risk) Leak Prevention & Industrial G as A pplications Pipe dope com pound with increased leak rate Structural Integrity during freeze/thaw cycles, earthquakes Engineering redesign with reduced productivity & safety Company Sanitized Contains No TSCA CBI DuPont Fluoropolymer Market Segment Analysis(Cont'd) Industry Telecom m unications C onsum er Products A p p a re l Sub-industry Application Benefit Potential Alternatives/ Switching Challenges D atacom m /Plenum W &C Fire S a fety Com puters - W &C Bandw idth/H i Speed Data S ecurity System s & M ission C ritical F a il-safe P e rfo rm a n c e Data Facilities Cell Phone T ow e r W & C W ireless Enabler Cookware & SE C onvenience, Low Fat C ooking D ental Floss H ygiene Install cable in co n d u it w ith increased cost & fire hazard No known polym er substitutes fo r sam e functionality. No known polym er substitutes fo r sam e functionality. Polyolefins (unacceptable therm al perform ance) M etal, C eram ic o r G lass cookw are w /o easy clean S ilicone glaze fo r bakew are w ith m arginal durability P o lyeste r thread B rea th a b le P rotective F abric S im ultaneous external protection O ther durable textile fabrics w ith w ith flexibility fo r heavy activity decreased functionality Em ergency Response M ilitary Flares fo r D ecoys fo r H eat-Seeking M issiles Safety o f M ilitary A ssets & personnel None known fo r current or future te c h n o lo g ie s Page 33 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Fluoropolymer Market Segment Analysis(Cont'd) Industry Sub-industry Application C hem ical Processing Tanks, V alves, Lined Pipe Benefit H andling o f hazardous m a te ria ls in a g g re s s iv e environm ents Potential Alternatives/ Switching Challenges E xo tic m etals and glass w ith higher costs and reduced containm ent/safety Industrial Food P re p a ra tio n E le c tro n ic s C onveyor belts fo r ovens C oated glass cloth fo r cooking surfaces S em iconductor F a b ric a tio n Fluid handling fo r silicon w afer processing O ffice A utom ation F user R olls fo r C opiers E a sy C lean leading to better H ealth/H ygiene and increased P roductivity M etal belts w ith poor c le a n a b ility E a sy C lean leading to better H ealth/H ygiene and increased P roductivity M etal or ceram ic cooking surfaces with poor cleanability A bility to handle very aggressive, high-purity chem icals for w afer processing w ithout introducing any im purities None known for current or future technologies Im proved C opy Q uality and Extended S ervice Lifetim e and R eliability R ubber rollers if internal tem peratures reduced requiring redesign. R educed quality, reliability, and C opy speed Page 34 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Fluorotelomer Products Historically 100's lbs e m issio n s >85% reduction by 2007 Next generation flu o ro telo m er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs em issio n s >98% reduction by 2007 Page 35 January 31,2005 Next generation dispersion (2005/06) Negligible exposure Company Sanitized Contains No TSCA CBI No known degradation Next Generation Dispersion Products ReducePFOAcontent by>90% Programontracktomeet 2005milestones - Pilot plant started up in January 2005 - Basic data development in progress - Customer sampling underway Interimmanufacturingfacilitiestobeinstalledin February2005for largesamplesandinterimsupply Commercial facilitiestobeauthorized2Q2005and expected to bestarted up2H2005 Significant customerconversionsplannedfor4Q 2005and2006 Page 36 January 31,2005 Company Sanitized Contains No TSCA CBI Product Stewardship: Cookware Manufacturing Audit Program Ensure that downstream applicators are following proper manufacturing protocols so that: Product Qualityismaintained Point SourceEmissionsareminimized Page 37 January 31,2005 Company Sanitized Contains No TSCA CBI Product Stewardship: Expand Existing Cookware Licensee Program Page 38 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction Manufacturing Industrial Use Consumer Env. Fate Fluorotelomer Products Historically 100's lbs e m issio n s >85% reduction by 2007 Next generation flu o ro telo m er products (2005/06) Negligible exposure DuPont degradation approach Fluoro polymers Historically 10,000's lbs em issio n s >98% reduction by 2007 Page 39 January 31,2005 Next generation dispersion (2005/06) Negligible exposure Company Sanitized Contains No TSCA CBI No known degradation DuPont Proposed Approach on Biodegradation of Fluorotelomer Products Work in Progress It is important to determine if fluorotelomer products contribute to PFOA exposure through environmental biodegradation. DuPont is committed to: - Peer reviewed studies to determine if our new or existing fluorotelomer products biodegrade. - Concurrently, develop and validate exposure models. - If potential for degradation exists, use these exposure models to assess whether degradation contributes to detectable levels of PFOA in the general population. If these models show our new or existing product applications measurably contribute (0.5 ppb or above) detectable human blood levels, DuPont will take mitigation steps such as: - Changing formulation or how product is applied, - Introducing new technologies and products, and/or - Other steps to reduce the impact of continuing sales into these applications. Page 40 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Commitment MANUFACTURING Reduce global fluoropolymer manufacturing emissions by >98% (vs 1999) Reduce global fluorotelomer manufacturing emissions by >85% (vs 1999) FLUOROPOLYMER DISPERSION Reformulate fluoropolymer dispersion products to reduce PFOA content by >90% (vs current products) Test the value of the expanded cookware manufacturing audit program FLUOROTELOMER PRODUCTS Implement new fluorotelomer manufacturing technology to reduce PFOA and PFOA-precursors in our products by >85% Determine whether biodegradation of fluorotelomer products is a significant route of human exposure to PFOA and take defined actions if it is. Page 41 January 31,2005 Company Sanitized Contains No TSCA CBI DuPont Global PFOA Strategy Comprehensive Source Reduction (lbs PFOA) Manufacturing Emissions F luoropolym er M fr F luorotelom er M fr 1999 142,400 (192,400*) 200 2005 <15,500 100 2007 < 2 ,8 5 0 <100 Product Content F luoropolym er D ispersion F luorotelom er U ses*** F luo rop olym e r Resin 1999 2 1 ,5 0 0 ** 5,830 <25 2005 T ra n s itio n in g d o w n w a rd 3,640 <25 2007 < 2 ,0 0 0 ** < 1 ,1 0 0 <25 Fluorotelomer Degradation ? Including em issions from PFO A production by previous m anufacturer ** ~75% destroyed during dow nstream processing *** Also includes flu orote lom er alcohol, iodide and e ster potential precursors Page 42 January 31,2005 Company Sanitized Contains No TSCA CBI ? DuPont approach Discussion Comments on overall approach to mitigation? Should some or all of DuPont's voluntary commitment be made binding? If so, what are the options for making the commitment binding? What are mechanisms to drive similar reductions by other parties so that the total environmental load is reduced? Can this approach be used internationally? Next steps? Page 43 January 31,2005 Company Sanitized Contains No TSCA CBI