The main concern with lead in the waste stream is the potential of drinking water contamination and thus ingestion by the population. However, according to the OECD, "since elemental lead and lead compounds are stable, health concerns are minimal for a properly managed landfill with runoff and leachate controls." [Id., p. 63] As for incineration, lead emissions from lead-containing materials could constitute the potential health risk. However, the OECD opines that "lead emissions from combustible and non-combustible components of municipal solid waste can be controlled with 99 per cent or greater efficiency."  The OECD report further reviews measures taken by OECD members to reduce risks from exposure to lead.  No OECD country has banned the use of lead in electronics as a means to counter-act a "potential" risk arising from the disposal of electronic goods.  Furthermore, in all of the European countries reviewed, the average concentration of lead and lead discharges to air, water and soil has decreased in recent years. Thus, the OECD study (1) not only does not constitute a valid risk assessment to support DG XI’s proposal to ban lead, but (2) would in fact rebut DG XI’s assertion that the risks posed by the disposal of lead-containing electronic products would require the phasing-out of this material from electronics."  

Section 4.2 makes general comments related to substance phase-out with regard to the practice of incineration. While figures are given for emissions from waste incineration for mercury and cadmium, no figure was provided for lead.

2.      Where is the lead and how much? 

Lead is highly pervasive in electrical and electronic equipment (EEE), with estimates that lead is contained in around 90 percent of components. However, the electronics manufacturing sector accounts for only 0.6 percent of the annual consumption of lead.[2] 

The explanatory memorandum states in Section 5.2 that "consumer electronics constitute 40% of lead found in landfills" yet provides no reference to the source of this information. 

Lead is predominantly used in solders for component attachment on card assemblies (PCB), as a surface finish for active, passive and optical electronic components and is found in integrated circuits, power supplies, motors, cables, coils and fans. The substitution of lead in EEE sold in the EU would impact, and require efforts from, the global EEE manufacturing and component supply industries. 

3.      What are the alternatives? 

Lead and lead-based solders are used in a variety of applications. Each has specific temperature, stress, strain, cycling, compatibility and mechanical property specifications that must be met. Despite the studies carried out thus far, there is no absolute drop-in replacement for tin-lead solder with identical melting temperature, cost, wetting and strength properties. Specificity of solder material and processes is limiting the number of current lead-free applications and there is currently no replacement for high lead, high melting point alloys. 

The numerous issues relating to the implementation of lead-free soldering include: 

• Availability of components with lead-free finishes 
• Lack of reliable data for alternatives  
• Lack of understanding for implications of the changes within the global SME domain  
• Quantification of the additional energy consumption requirements of higher melting point, lead-free alternatives  
• Incompatibility of materials, components and equipment with higher melting point, lead-free alternatives  
• Quantification of the change in environmental impact between lead and lead-free  

The following comments made in Section 11.2 of the explanatory memorandum clearly illustrate the extent to which DG XI underestimates the scale of the issues involved:  

"The only issue where more substantial problems have been claimed by industry is lead in solders."  

"Generally, it is perceived that the transition process to lead-free solders is...an issue of fine-tuning of the quality of the solder."  

4.      What time scale are industry estimates?  

Based on current research and likely substitutes, it is believed that the lead content of electronic products could be reduced significantly over the next 7–10 years. However, there are some applications for lead where substitutes are not available today, and will not likely be found in that timeframe. Additionally, since few lead substitutes have been thoroughly evaluated for their environmental impacts, there is no guarantee that lead reductions during this timeframe will result in any substantial environmental improvements.  

5.      What does lead-free mean?  

It is widely recognized that there is no such thing as an analytical zero so totally lead-free EEE is unrealistic. A reasonable lower limit must be set regarding permissible lead content. However, even allowing relatively low levels of lead would require the replacement of certain steels and all brasses from EEE.  

6.      What are the cost implications?  

The industry consensus view is that lead-free implementation costs will be extremely high, yet are virtually incalculable at this moment due to uncertainty posed by the current wording of the Directive.  Studies indicate that the cost in the US for increased materials alone would be in the range of $140–$900 million and that additional infrastructure, materials evaluation and qualification costs would likely run into the tens of billions.[3]  

However, Section 11.2 of the explanatory memorandum paints a completely different picture to that given by industry, which is also self-contradictory. For example, it states that "A number of manufacturers already [have] phased out lead...in many uses." It is, therefore, surprising to then find the comment "one major manufacturer of electrical and electronic equipment plans to stop using lead solder completely by 2001 while others have announced substantial reductions within the next few years." Furthermore, the explanatory memorandum then states, "[t]his suggests that the costs of [phasing out] are, at least for applications not contained in Annex II, quite limited. It is nevertheless the opinion of the Commission that a phase out of lead-containing solders is possible at reasonable cost within the given time frame of January 1, 2004."  

The (roughly) estimated cost, provided in Section 11.2, of 150 million Euro/yr. relates to the additional material costs involved in using tin-silver/tin-copper solders in place of tin-lead solders. Industry wishes to make DG XI aware that tin-silver/tin-copper solders are NOT universal substitutes for tin-lead solder — other substitutes of indium or bismuth are considerably more expensive. In addition, the estimated costs only reflect the consumption of lead solders in the EU-15. Non-EU costs associated with tin-lead substitution are ignored.  

DG XI is internally inconsistent. On the one hand, it states that "[t]his amount (150 million Euro/yr) does not include R&D costs as well as additional investments needed for which figures are difficult to obtain." On the other hand, it states "[i]t can, however, be assumed that both (R&D and additional...) are fairly low since most of the R&D has already been performed and production lines need only minor adjustments to adapt for new solders."  

The belief of DG XI that the R&D and associated costs "are fairly low" while referenced sources⁷⁸ claim that these costs "run into the tens of billions" is both a major disparity and a significant cause for concern.  The industry view is that Section 11 does not constitute a satisfactory economic assessment and, through unfounded assumptions and ignorance of the global consequences, significantly underestimates the actual cost to industry.

7.      What are the risks in phasing-out lead?  

The risks are manifold and include, but are not limited to, the following:  

• Alternatives may be banned in the future despite considerable industry investment. 
• The ban may not be considered as the least trade-restrictive measure under international trade law
• Many key implementation issues need to be addressed and no universal drop-in replacement has been identified. 
• There is little evidence that the substitution of tin-lead solders with lead-free solders will decrease environmental impact. The majority of substitutes for tin-lead solder have higher melting points which will significantly increase energy consumption and associated emissions of CO2, NOX, SOX, etc.  
• Product reliability and consequential in-service failure and premature end-of-life issues may result from the higher temperature processes.  
• Problems may result from the geographical shift in environmental burdens associated with alternative raw material sources.  
• The limited supply of lead-free alternative materials may limit industrial output.  
• Efficiency impact on recycling/recovery operations such as smelters and precious metal recoverers as presence of lead is important.  
• There are health and safety implications of lead-free alternatives.
• SME’s inability to provide financial investment may lower employment and economic well-being.  

8.      Is a lead phase-out consistent with other legislation?  

Article 4.2 of the EC proposal for a Directive on End of Life Vehicles provides an exemption for lead used as solder in electronic circuit boards. Industry questions why lead solder used in vehicle electronics is treated differently from that used in electrical and electronic equipment. If the inference is that the long term reliability of vehicle electronics would be impacted by substitute materials, then industry would argue that this would be the case for other electrical and electronic equipment subjected to the same operating conditions.  

Industry would also point out that none of the current/proposed European national legislative measures on electrical and electronic equipment contain a lead phase-out requirement. In addition, only Denmark has proposed legislation, applicable to a wide range of products including electrical and electronics, which bans lead but gives an exemption ‘until further notice’ for lead solder.  

9.      What are the alternatives to a lead phase-out?  

Any proposal to phase-out lead should:  

• Be dealt with by existing EC legislation on hazardous substances  
• Be based on scientific evidence, establishing risk assessment procedures  
• Comply with international trade rules

The substance bans, including the ban on lead, should be removed from the draft waste directive.  The Commission’s chemicals unit, not the waste unit, should be responsible for reviewing, pursuant to the directive on restrictions and use of dangerous substances, whether any of the substances as used in the economy as a whole merit regulation.  In reviewing the use of such substances, it would be necessary to conduct a risk assessment of intrinsic hazards, exposure routes and exposure levels, as well as risks from feasible alternatives.  If these analyses suggest need for focused regulation of certain applications, the Commission would then need to evaluate the benefits and costs of imposing such restrictions. A deliberate approach would likely result in a sound legal framework, both environmentally and economically, and avoid the trade law problems of the current draft directive.  

Industry believes that alternative approaches are practical and achievable and should be considered. The sensible starting point is to establish the problem statement and then solve the problem with measures that will maximize the environmental benefit yet minimize the cost incurred. If the ban is predicated by concerns that most of the lead contained in products will be landfilled or incinerated, with subsequent potential or actual impact on the environment, then industry questions the rigidity of existing EU Directives covering both of these forms of waste disposal. This concern seems to be shared by DG XI in Section 4.2.1. The explanatory memorandum comments on incineration, "even in the ninth year after the deadline for implementing the directives (89/369/EEC and 89/429/EEC) various incinerators in the Community do not comply with the emission limits of these directives." Section 4.2.2. states that "significant impacts could be prevented in those cases where WEEE is put on controlled landfills respecting environmentally sound technical standards" as opposed to "...when WEEE is put on uncontrolled landfills, which still takes place to a significant extent in certain Member States." A phase-out of lead in EEE is analogous to treating the symptoms rather than the illness.  

Industry suggests that an enhanced product recovery and reclamation facility infrastructure in Europe could reduce the environmental impact of lead both through reduced risk of pollution and reduced consumption of raw material. The provisions under Annex III of the proposed directive require components containing lead to be removed from any waste electrical and electronic equipment. This requirement, coupled with the reuse and recycling targets in Article 7, should achieve a significant reduction in the potential quantity of lead being disposed through landfill or incineration. Industry believes that the cost of removing the remaining lead is disproportionate to the unquantifiable environmental benefit provided.  

The current European Commission Integrated Product Policy initiative proposes a toolkit of instruments, including compulsory information, economic and voluntary instruments, and direct regulatory instruments, and we understand this to be the new model for future EC proposals.  

Conclusion 

Governments and industry must ensure that the overall environmental impact of WEEE is not increased by the substitution of lead by other materials. They must also pose the question whether the costs incurred would be better invested elsewhere to yield far greater returns of environmental benefit. Industry hits the nail on the head in Section 11.3 of its explanatory memorandum:  

"Although there is general awareness about the problems associated with waste electrical and electronic equipment, very little research exists which could give a quantitative evaluation of the benefits of the proposal."

APPENDIX IV
Draft Directive on Waste Electrical and Electronic Equipment (WEEE)

Dear Commissioner, 

We would welcome a Commission initiative to harmonize and improve national legislation on WEEE. In this vein, we call your attention on the following issues: 

A market-driven approach through individual, future-oriented responsibility

After the directive is activated, all companies, producers as well as importers, should take individual financial responsibility for recycling their household products. This will encourage competition in design, product development, and recycling operations, and will benefit the environment. Companies should of course be allowed to work together to manage the recovery of products. This does not conflict with basic individual financial responsibility. 

Retroactivity — products sold before the directive has come to effect

Industry should not be responsible for historic waste. However, we recognize the importance of historic waste and believe a satisfactory solution can be found. 

Competition on equal terms — preventing ‘free-rider’ companies from escaping their responsibility  The directive should ensure that Member States enforce all producers and importers to meet their individual responsibilities, thus avoiding problems with free riders. 

Substances reviewed under horizontal legislation, pursuant to roadmaps

Substances should be dealt with under separate, horizontal legislation and not included in the WEEE Directive. We are committed to working with the Commission to deal with problematic substances, in the light of sound science, product understanding, and customer needs. A roadmap, developed by the companies and the Commission, would define responsibilities and set deadlines for such steps as data submission, risk assessment definition and preparation, decisions on voluntary agreements and regulatory measures. 

Our companies stand ready to contribute to the Commission’s work on the draft WEEE Directive along the lines discussed in the attached proposals. In the meantime, we would like to thank you for considering our concerns. 

Sincerely,

APPENDIX V 

November 17, 1999 

Mr. Jim C. Sanford
Director, Technical Barriers to Trade
Office of Europe and the Mediterranean
Office of the U.S. Trade Representative
600 Seventeenth Street, NW
Washington, DC 20508 

Dear Mr. Sanford: 

On behalf of the Amiercan Coalition Electronics Industry (ACEI) and the Electronic Industries Alliance (EIA), we would like to provide you with recommendations concerning the development of a common set of regulatory Principles and Guidelines, which would support bilateral cooperation on Early Warning issues within the Transatlantic Economic Partnership (TEP).  

In 1998, the $62.5 billion in two-way trade of electronics equipment[4] accounted for one-fifth of all transatlantic trade.  U.S. exports of electronics products to the European Union (EU) totaled $40.6 billion, while imports to the U.S. of European electronics products reached $21.9 billion.  We appreciate the efforts of USTR and their European counterparts to work within TEP to bolster this important trade relationship. 

In July 1999, the European Commission's Directorate-General (DG) Environment circulated the third draft proposal for a directive on waste electrical and electronic equipment (WEEE), which would apply to virtually all electronic and most electrical products, impose unjustified substance bans, and require producers to assume cumbersome and costly collection and recovery obligations for used products, including "historical" products.  In its present form, the draft directive will negatively affect both U.S. and EU industries working in the information technology and electronics sector, while also failing to enhance the protection of the environment.  The draft proposal is under consideration within the Commission, and may be formally proposed to the Council and Parliament by the second quarter of 2000. 

Given the significant commercial relationship in this dynamic sector and the importance of early input on draft regulation in the EU, ACEI and EIA believe it is appropriate that the draft proposal for an EU directive on WEEE be addressed by governments in the context of Early Warning discussions in the TEP.  Trade and environment confrontations are often difficult, sometimes divisive, and potentially destructive to both the causes of expanded trade and of an improved environment.  Thus, developing workable mechanisms for preventing or avoiding such confrontations should be a high priority in the TEP process. 

We recognize that the U.S. raised the draft proposal on WEEE as an Early Warning issue in July 1999; however, we understand the Commission has not responded.  We expect and strongly urge the Commission to support the TEP Action Plan goals to "[consult] whenever possible in the early stages of drafting regulations and to…[rely] on each other’s technical resources and expertise."[5] 

To this end, in the development of a set of TEP Guidelines and Principles on regulatory cooperation — which will serve to support the TEP Early Warning mechanism of avoiding trade conflicts — ACEI and EIA recommend that the USG and EU Commission commit to:

1.       Ensure transparency at the earliest possible stage in regulatory development by systematically allowing access to counterpart regulators and the public of draft regulation; 

2.       Allow interested stakeholders a meaningful opportunity to provide input on draft regulations; 

Provide a published response to input received, with an explanation of why different opinions are or are not incorporated in the regulatory approach adopted.  ACEI and EIA suggest that the relevant parameters for regulatory development be based on:

(a)    An examination of the life-cycle environmental impacts of the proposal, including an assessment of the risks, based on scientific evidence;

(b)    Consideration of the costs to industry and/or the consumer, as well as an explanation of the net benefit to the environment, including:

-          An impact analysis of draft regulation on international trade and investment;

-          An examination of the least trade-restrictive means to achieve regulatory aims;

-          An impact analysis of draft regulation on small- and medium-sized businesses;

(c)    The prospective application of regulation;

(d)    The use of international standards in product design and material choice requirements. 

ACEI and EIA believe that the adoption of these criteria for bilateral cooperation on regulatory development will assist governments in realizing regulatory objectives and avoiding trade conflicts, without compromising environmental protection or public safety, or distorting the market. 

The electronics industry is committed to the environmentally sound, economically efficient management of end-of-life electronics products in order to minimize waste and promote sustainable development.  In pursuit of these goals, the electronics industry is the global leader in research and innovative design to eliminate or reduce, wherever feasible, substances of concern from electronics products and to promote the recovery, reuse and recyclability of electronics products.  In addition to these design initiatives, ACEI and EIA member companies are recycling, recovering and reusing large volumes of electronics products through voluntary programs, and are working in partnership with governments and other relevant stakeholders in Europe and the United States to expand the recycling, recovery and reuse infrastructure for electronics products.

ACEI and EIA respect a sovereign government’s right to regulate to its own high standards of environmental protection and public safety.  Indeed, ACEI and EIA endorse the goal of sustainable development and share the desire of the Commission to minimize adverse environmental impacts from electronic products, including efforts to increase the recycling, recovery and reuse of products.  While supporting these shared objectives, ACEI and EIA, along with our European and Japanese industry counterparts, are concerned with the means outlined in the draft proposal to achieve these goals. 

Unfortunately, we are concerned with the means in the draft proposal, in part, because the Commission did not follow these sensible procedures recommended above.  For example, ACEI and EIA are concerned with the lack of scientific evidence to support the proposed substance bans.  In its current draft, the proposed directive would ban use of lead, mercury, cadmium, hexavalent chromium and certain flame retardants (PBB and PBDE) as of 2004, subject to an exemption list to be revised through an obscure technical adaptation committee process.  The Commission would, in the future, allow exceptions only where a material’s use is, in its view, "unavoidable" and would not need to consider performance, economic viability or even environmental impact.  DG Environment did no risk assessments of the substances as used in electronics before proposing bans, nor did it do a comparative analysis of risks of feasible alternatives.  DG Environment’s cost/benefit analyses are partial for lead (e.g., excluding R&D and capital investment costs), and non-existent for other substances.  Therefore, we believe the substance restrictions should be removed from the draft proposal, and the Commission should regulate substances pursuant to the regulatory process recommendations above.

In addition, ACEI and EIA are concerned with the lack of true transparency in the development of the draft proposal and in the proposed process for determining exemptions to the substance bans in the draft proposal.  Therefore, in order to avoid potential trade conflicts and enhance environmental protection, the Commission should adopt a more transparent legislative and regulatory development processes, ensuring open, meaningful stakeholder input to all levels of government.  

ACEI and EIA appreciate and recognize the on-going attention your office has paid to this matter.  We look forward to working with you in the months ahead to ensure that any EU proposal results in a net benefit to the environment and to transatlantic trade and investment 

Sincerely, 

Jennifer Guhl                                                   David Isaacs
Director, International Trade Policy                      Director, Environmental Affairs
Amiercan Coalition Electronics Industry                 Electronic Industries Alliance