EU Studies RoHS Costs & Benefits

Study of the RoHS directive
Directive 2002/95/EC - RoHS

In March 2008, the Final Report of the "Study of the RoHS and WEE Directives" was released by Arcadis/Ecolas. The study is part of the review required by Article 6 of the RoHS directive. It is also part of the European Commission's larger legislative simplification exercise begun in October 2005.

The study's findings of the costs and benefits of RoHS are summarized below. Statistics are for the European Union only, except where noted.

REDUCED USE OF RESTRICTED SUBSTANCES:
	Lead (Pb) use in products has been reduced by 82,700 tonnes in the EU (unit of time not specified). Lead has been reduced in copiers from > 1 kg to > 0.3 kg per product, but there has been no change in TV sets (> 5 kg). Lead in waste streams has been reduced by 58,400 tonnes in the EU (unit of time not specified), or approximately 20%.
	Cadmium (Cd) use in products has been reduced by 14,200 tonnes. Cadmium has been reduced in TV sets, copiers and refrigerators from > 0.1 kg to > 0.01 per product. Cadmium in waste streams has been reduced by 10,000 tonnes, or 63%.
	Mercury (Hg) use in products has been reduced by 9,500 tonnes  due to changes in copiers and fluorescent light bulbs. Mercury in waste streams has been reduced by 6,900 tonnes, or 56%.
	Hexavalent chromium (CrVI) use in products has not been reduced, but it was little used before RoHS (> 0.1% by weight).
	Deca-BDE use in products has not been reduced. Deca-BDE remains at > 1 kg in TV sets, copiers and refrigerators.
	Octa-BDE use in products was previously banned by Directive 76/769/EC. Octa-BDE in waste streams has been reduced by 37,800 tonnes, or 68%.
ENVIRONMENTAL EFFECTS OF LEAD-FREE SOLDER:
	Lead-free solder reduces the toxicity of waste electrical and electronic equipment (WEEE).
	Lead-free soldering increases energy consumption approximately 40%. Factors include the wave soldering process used, the higher melting points of most lead-free solders, and the mining and smelting processes needed for silver and tin.
	Lead-free solders (both paste and bar) have a positive impact on aquatic toxicity and human health, especially non-cancer sources.
	Lead-free solders (both paste and bar) have a negative impact on landfill space use and air quality (photochemical smog, acidification and air particulates). Lead-free bar solders also have a negative impact on resource use (renewable and non-renewable) and climate (global warming and ozone depletion).
	The silver and gold in lead-free solders may increase the rate of recycling by increasing value of recovered materials.
LONG-TERM RELIABILITY OF RoHS SUBSTITUTES:
	There are no substantiated studies which predict the reliability of lead-free solder assemblies 8 to 12 years into the future, but there are studies which demonstrate the possibility of tin whisker growth during that period (Test & Measurement Coalition, 2006).
	Short circuiting and failure from tin whiskers (connective fibers) increase the amount of waste electrical and electronic equipment (WEEE) and is an "unintended consequence of RoHS." Of particular concern are surface mounted components with fine pitch leads (currently RoHS exemption #23).
ECONOMIC COSTS OF RoHS:
	Past costs of complying with RoHS, including R&D and capital costs, averaged 1.9% of annual revenues ("turnover") or €3,185 per employee per year. Costs for small and medium enterprises (SMEs) were considerably higher at 5.2%.
	Future ongoing costs of complying with RoHS are estimated to be 0.4% of annual revenues or €273 per employee per year, with costs to SMEs considerably higher (authors believe estimates are very conservative). The administrative burden consists chiefly of (1) requesting RoHS conformity certificates or material declarations from suppliers and (2) testing components for compliance, typically using handheld XRF analyzers.
	Lead-free solder costs approximately twice as much because it contains metals like silver and gold, even when corrected for the lower quantities (in tonnes) needed and an increased rate of recycling.
	Manufacturing costs increase because (1) lead-free components have higher failure rates during manufacturing and require more re-work and repair, (2) energy costs increase by approximately 19% due to the higher melting temperatures required, (3) throughput decreases by 2 to 7% for some manufacturers.
	Stock management costs increase because (1) not all products are within the scope of RoHS and (2) not all markets have RoHS-like legislation.
	Opportunity costs are hard to quantify but occur when engineering efforts are focused on RoHS compliance to the detriment of product innovation or improved functionality. Statistics on the number of scientific papers and US patents on lead-free solders were used as a proxy for innovation but were not interpreted, perhaps because the regulated market of the EU fares so poorly in comparison with US and Japanese markets. From 1998 to 2004, an average of 21 scientific papers yearly were produced in the US, 17 in Japan and 12 in Europe. From 1993 to 2002, US patents issued to Japanese assignees averaged 7.4 yearly, US assignees averaged 3.7 and European assignees averaged 0.8.
	The exemption process is lengthy (often more than two years) and unpredictable, and therefore costly.
ECONOMIC BENEFITS OF RoHS:
	Increase of communication across the supply chain serves as a platform for the implementation of REACH and other initiatives.
	Tighter process control, overall reduced number of defects and increased production efficiency (contradicts information appearing elsewhere in the report)
	Increased  skill levels in the global workforce due to retraining and the knowledge transfer to Asia and less developed countries (assumes that globalization is driven by RoHS). In addition, "Japanese people and knowledge are seeking inspiration in Europe and the US" (the condescension toward Japan is hard to understand given the statistics on innovation contained within the report).
	Less leaching in landfills because WEEE contains less hazardous material and increased incentives for recycling because lead-free solder contains silver and gold
	Pressure on other sectors (such as aerospace and IT industrial controls) and countries to move to cleaner processes and reduced use of hazardous materials (such as China RoHS and Korea RoHS)
	Competitive advantage for EU manufacturers in markets where RoHS legislation is pending or contemplated

The two overriding conclusions about the effects of RoHS seem to be that (1) toxicity to humans and the environment has been reduced and that (2) RoHS has been a driver (though not the only one) for wider environmental awareness concerning materials use, energy efficiency, ecodesign and sustainable development.

This summary of is designed to provide you with an accurate, easy-to-understand overview of the topic. However:
	We have not attempted to cover the implementation issues that need to be addressed at your company or in your supply chain. For this type of assistance, please email us (include your phone number) to inquire about our services.
	This summary does not constitute legal advice. The actual standard in the original language should be reviewed and used for all business, legal, and product compliance purposes.

This summary of the study of RoHS by Arcadis/Ecolas is designed to provide you with an accurate, easy-to-understand overview of the topic and does not constitute legal advice. The actual standard in the original language should be reviewed and used for all business, legal, and product compliance purposes.

RSJ provides a number of RoHS compliance services that can be tailored to the needs of your company. We provide awareness training, BOM scrub, compliance program implementation, compliance software evaluation, product risk assessment, as well as RoHS reporting services. We are here to help you!
 

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