Document xd1B10pwXzLRjeBj26J5kM7DQ

PFAS Restriction Proposal Discussion February 7, 2024 Emerson Confidential 1 EMERSON: A GLOBAL LEADER FOUNDED 1890 HEADQUARTERS IN ST. LOUIS, MO USA WORLDWIDE 66,300 EMPLOYEES 130 MANUFACTURING LOCATIONS LIVING OUR PURPOSE We drive innovation that makes the world healthier, safer, smarter and more sustainable. 70% of Emerson sales are tied to sustainability-enabling technologies 65% of 2022 electric vehicles were produced using Emerson solutions IoT ANALYTICS PLATFORM OF THE YEAR IOT BREAKTHROUGH ENERGY STAR Partner of the Year for Energy Management Leadership America's Most Innovative Companies by Fortune Magazine #33 of 300 companies. #181 FORTUNE AMERICA'S 500 LARGEST CORPORATIONS BY REVENUE 60,000 wind turbines worldwide are controlled with Emerson systems 24 of Top 25 life sciences companies use Emerson technology 9 of Top 10 semiconductor manufacturers use Emerson technology Emerson France ID : Emerson France Employees : 1130 Engineering / Manufacturing 338 Sales 1468 p. Emerson Regional Coverage 5 FACTORIES Emerson Sales 2022 273M 2023 286M 4 EDUCATION 74 Armentires - PRV/Francel Amiens - Appleton Cernay - FCV Luc - FLMC/Francel Main Sales Office Lyon Sales Employees : 338 p. 47 Av. Age 15 Av. Seniority Bookings 2023 208M 2024 215M Emerson Confidential ENGINEERING & SERVICES CENTERS 16 SALES OFFICES Bonneville - FLMC 6 Main Autosol Sales Offices Saint Priest- Autosol Industries Served 1%1% 5% 27% 3% 9% 1% FY23 31% 22% Power Chem. / Petro O&G Life Science F&B M&M P&P Other Water Key Customers Market Dynamics Energy Safety: 58M Secure existing facilities Accelerating Energy efficiency Conversion to alternate Nuclear: 38M 6 to 14 new EPR ; SMR 2025 Onward Nuclear Waves Oil & Gas: 67M Accelerated project, Gas First Engineering Copy/Past Increased LNG capacities Decarb. & Sustain.: 18M $11,4B of France 2030 Plan Decarb / Electrification / H2 Life Science: 21M Pandemic to Versatile Supply Plants of Future 3 Emerson's Approach to Materials Compliance Emerson is committed to making products that are safe for our end-users and the environment Emerson is proactively engaging authorities and stakeholders to understand regulations and upcoming requirements to ensure compliance Emerson is committed to helping our customers meet their environmental and sustainability goals As applied to PFAS, Emerson supports a science-based and holistic approach to the regulation of PFAS containing products based on evaluating actual hazards and risks balanced with other priorities and policies, such as the goal of decarbonization 4 Why Are We Here? The competent authorities of the five countries, Germany, Netherlands, Sweden, Norway, and Denmark, submitted a REACH PFAS restriction proposal to ECHA on February 7th The scope of PFAS is defined by its chemical structure, which includes both polymeric (fluoropolymers) and non-polymeric PFAS Time-based derogations, 5 or 12 years, are being considered for 15 use sectors The restriction proposal would ban all PFAS, including fluoropolymers, in all sectors in which a derogation does not exist The objectives of today's meeting are to: 1. Inform you of the consequences of a universal PFAS (U-PFAS) ban in industrial applications 2. Request support for inclusion of a new use sector: Industrial Automation Monitoring & Control (IAMC) and a 12-year derogation of fluoropolymers within IAMC 5 What is PFAS for Emerson? 10K+ PFAS Chemicals Fall Into Two (2) Types 1. Polymeric PFAS 2. Non-Polymeric PFAS Fluoropolymers PTFE TeflonTM, PFA, etc. Used in Liners, Wire Jackets, Electronics Fluoroelastomers FKM VitonTM, FFKM, etc. Used in Seals, Gaskets, etc. Ether-based Lubricants Perfluoropolyether (PFPE), KrytoxTM, etc. Hydrofluoroether Processing Aids Numerous on the market PFOA & PFOS (C8), PFCA (C9-C14) (restrictions) PFHxA & PFHxS (C6) (restrictions coming) Short Chain PFAS (<C6) (compliant today) Hydrocarbon (compliant today) Used to make fluoropolymers Material manufacturers select the processing aid. 6 Key Concerns with the Restriction Proposal Missing Use Sectors Use sectors that are critical to the EU and the world are missing from the restriction proposal, including Industrial Automation and Control (IAMC) Missing use sectors where fluoropolymers are used will be banned 18 months after entry into force Current Use Sectors in the Restriction Proposal 1. Manufacturing of PFAS Processing Aids 9. Medical Devices 2. Textiles, Upholstery, Leather, Apparel and Carpets (TULAC) 10. Transport 3. Food Contact Materials & Packaging 11. Electronics & Semiconductors 4. Metal Plating & Manufacture of Metal Products 12. Energy Sector 5. Consumer Mixtures 13. Construction Products 6. Cosmetics 14. Lubricants 7. Ski Waxes 15. Petroleum & Mining 8. Applications of Fluorinated Gases No PFAS Differentiation No differentiation is made between the different types of PFAS (fluoropolymers and nonpolymeric PFAS) and their toxicological profiles Solids, liquids, and gases are being grouped into one large category No Suitable Alternatives No alternatives exist in most applications without sacrificing performance Alternatives that do not perform at the same level as current fluoropolymers may present safety concerns for humans and the planet 7 The Argument `for' and `against' Banning Fluoropolymers Justification for Banning Fluoropolymers The restriction proposal cites Persistence, Bioaccumulation, and Toxicity (PBT) concerns as the key reason for the broad PFAS ban The restriction proposal cites only persistence concerns as the key reason for banning fluoropolymers The non-polymeric fluorosurfactants, which are used in and consumed during the fluoropolymers manufacturing process, are the PFAS of most concern Justification for Exemption of Fluoropolymers The fluoropolymers used in IAMC equipment are discrete solid plastic parts that meet the OECD's definition of a polymer of low concern - no handling of any non-polymeric PFAS Fluoropolymers are not water-soluble, mobile, or bioavailable Suppliers are making progress on the development of safe fluorosurfactants and our latest update is that ~80% of fluoropolymers can be made without non-PFAS processing aids Emerson believes fluoropolymers can be manufactured safely through responsible manufacturing measures and that End of Life (EoL) actions can be taken to satisfy persistence concerns 8 IAMC's Equipment uses Fluoropolymers that Are Considered Polymers of Low Concern by OECD Source: https://setac.onlinelibrary.wiley.com/doi/epdf/10.1002/ieam.4646 9 Emerson's EU REACH U-PFAS Response Submissions to ECHA Emerson submitted two documents to ECHA: 1. Executive Summary Derogation Request (May 9th, 4042) 2. Full Derogation Request (September 21st, 8375) Requests Emerson made two requests: 1. New Use Sector Request: Industrial Automation Monitoring & Control (IAMC) 2. Derogation Request: 12 years allowing the use of fluoropolymers in IAMC Key Information Provided 1. Introduction / Requests 2. IAMC Description 3. Overview of Relevant Products & PFAS Uses 4. Tonnages of PFAS Used 5. Function Provided & Performance Enabled by PFAS in IAMC Sector 6. Assessment of Alternatives 7. Socio-Economic Implications 8. Emissions (including End-Of-Life) 9. Ending Statement 10 IAMC's Fluoropolymer-Containing Equipment is Key to Fulfilling Many Critical Applications Sustainable Energy: Wind & Solar / Batteries > DCS for control of key parameters such as voltage, frequency, etc. > Sensors for measurements solutions of the anode, cathode and electrolyte batches Water & Wastewater > Measurement equipment and valves in the production of Cl2 > Solenoid valves for control of potable water Pharmaceuticals & Food Processing > Relief valves for pressure vessels > Sensors for measurement solutions > Distributed Control System (DCS) technology Sustainable Energy: Nuclear & Hydrogen > Safety control valves > DCS to control the desalination and electrolyzer units, gas blending and balance of plant equipment, storage and distribution/refueling (valves & regulators) Semiconductor Manufacturing > Pressure regulators to control the pressure of media used in etching and chemical vapor deposition manufacturing processes Example Critical Applications Fulfilled by IAMC Equipment Medical > Solenoid valves to control cryogenic fluids for critical procedures like tumor removal Chemicals > Measurement solutions and DCS to produce highly reactive chemicals that serve as feedstocks for essential goods Minerals & Mining > Radar level measurement devices for solid materials 11 IAMC Equipment and the Fluoropolymers that Enable Performance Types of IAMC Equipment Applications Fluoropolymers Liners Seals Valve Packing PTFE Valve Seats Wire and Cable PTFE, PFA, FEP Electronics PTFE, PFA, FEP, EFTE FKM, FFKM, PTFE, PCTFE PCTFE, PTFE, EFTE PTFE Pressure, Flow, Level and Temperature Measurement Corrosion, Erosion & Heat Trace Monitoring Energy Monitoring & Management Density & Viscosity Measurement Liquid, Flame & Gas Detection Machinery Monitoring, Protection & Maintenance, Test & Measurement Marine Measurement & Analysis Distributed Control Systems Hygienic & Sanitary Measurement Vibration Sensors Electrical Power Distribution & Control Valves Regulators Actuators 12 Importance of Derogation for IAMC Equipment IAMC equipment comprises control systems and associated instrumentation to automate industrial processes, measuring various parameters (e.g., temperature, humidity, pressure, corrosion, density) and include process control items like valves, actuators, flow measurement devices, and regulators. Foundational Role Economic Impact if No Derogation Critical Role in Harsh Environments IAMC equipment is essential for the safe, efficient, and sustainable production of semi-automated or fully automated manufacturing processes. Key enablers of decarbonization initiatives, supporting sectors such as wind, solar, H2, and mobility. Not granting derogation for IAMC equipment may lead to severe economic distress. Potential disruption to EU trade and imports, with a significant impact on Emerson's production in France. No suitable alternatives currently exist that can match the properties required for safe and sustainable operation in the challenging operating environments of IAMC equipment. 113 Socio-economic Implications Most IAMC fluoropolymer products face removal from the EU market within 18 months of the restriction taking effect unless a derogation is granted Implications for Manufacturers Replacing an IAMC product hits manufacturers hard (100k+) and could cost suppliers billions as alternatives appear Impact on Emerson EU Implications for Downstream Users IAMC application loss may increase significantly, hindering competitiveness. Without viable alternatives, critical operations could face reduced performance. Downstream user downtime costs may outweigh IAMC supplier costs. 114 E15merson Confidential To Ensure Uninterrupted Supply of IAMC Equipment to the EU The Industry Ask: incorporation of the industry sector "Industrial Automation Monitoring and Control" into the restriction proposal and a derogation for the use of fluoropolymers in Industrial Automation Monitoring and Control equipment for a period of 12 years 15 EMERSON Save Energy 2 3 Go Use Clean Buy Energy Responsibly Circular 5Accelerate Innovation 6Green Your Diet Mind Your Travel 8Respect Nature 9Learn And Share Thank you! 16