Processes and challenges in the substitution of harmful chemicals

Introduction

In May 2015, the OECD convened an expert group to identify where gaps remained in terms of possible missing tools, guidance and research to support stakeholders engaged in alternatives assessment and substitution of harmful chemicals. This expert group was founded with the goal of furthering tools and approaches to support decision making, in order to fulfill the expectation of consumers and societies for greener and more sustainable products and production processes. This report contains their conclusions.

What is the IOMC ?

The Inter-Organisation Programme for the Sound Management of Chemicals (IOMC) was established in 1995 following recommendations made by the 1992 UN Conference on Environment and Development to strengthen co-operation and increase international co-ordination in the field of chemical safety. The Participating Organisations are FAO, ILO, UNDP, UNEP, UNIDO, UNITAR, WHO, World Bank and OECD. The purpose of the IOMC is to promote co-ordination of the policies and activities pursued by the Participating Organisations, jointly or separately, to achieve the sound management of chemicals in relation to human health and the environment.

Is the substitution of chemicals considered a sustainability challenge?

The substitution of dangerous chemicals is now included in both the current strategies to reduce risks of chemicals on human health and the environment, and the industry’s approach to sustainable development. However, finding suitable alternatives to chemicals of concern is not a small challenge. Alternatives should be safer with a lower hazard and risk potential, but still have similar performance than their counterpart, and be economically viable and sustainable. Substituting chemicals also goes beyond finding a drop-in chemical alternative and can include systems, materials, or process changes.

Nervertheless the concept of substitution is now increasingly included as part of policy and regulatory measures for the management of chemicals of concern. For example, substitution has become a central element of the European Union REACH regulation and in the United States, a policy approach has been taken by the U.S. Environmental Protection Agency (U.S. EPA) by promoting the use of safer chemicals through its “Safer Choice Program” (formerly the “Design for the Environment Program Safer Product Labelling Program”), and by conducting several alternatives assessments (e.g., on various flame retardants) through public/private partnerships. The U.S. EPA Alternatives Assessment Program is on its side focused on providing support for and promoting the practice of alternatives assessment, at the national and international levels. For example this Program:

• Identifies and assess potential alternatives for chemicals that the EPA has designated for action; and
• Provides information on functional class, intrinsic hazard, exposure properties, and environmental fate for chemical alternatives.
• Another example is Denmark where the Parliament has agreed, since 2006, on three chemical action plans. As a result, a number of tools have been developed to support substitution. They are a combination of legislative instruments and the “warning” lists of substances under REACH, of information, guidance, and of financial supports, partnerships, economic instruments (e.g., taxes), ecolabels, and voluntary agreements set up with different sectors.

What were the objectives of the expert group?

This expert workshop aimed mainly to:

• Outline the latest advances in substitution and alternatives assessment by giving an overview of the regulatory/policy context in which these latest advances have taken place, and by looking at challenges that may remain for creating an environment favourable to the substitution of harmful chemicals;
• Identify where gaps remain in terms of specific tools that could support substitution and alternatives assessment globally (e.g., sector/industry specific guidance, guidance on specific chemical groups, guidance for risk trade-offs assessment);
• Discuss if harmonisation in specific areas would be useful (e.g., terminology, definitions, and baseline elements of alternative assessments);
• Outline practices for alternatives assessment and the substitution of chemicals of concerns, looking, for example, at:
  
  • Industry incentives to substitute (e.g., voluntary initiatives, response to regulation);
  • How methods and tools available for alternatives assessment and substitution are impacting the pace through substitution of chemicals of concern;
  • The level at which substitution is integrated in business models (e.g., elements of corporate governance for risk management, risk reduction measures).

Are the existing tools and practices appropriate to support substitution and alternatives assessment ?

Various elements were mentioned during the workshop:

• There can be a resistance to change, a reluctance to experiment with the unknown, and fears for regrettable substitution; a company’s policy can be a barrier and there can be a lack of commitment to find alternatives to hazardous chemicals.
• In practice, there is a lack of guidance on how to conduct a “successful” assessment of potential alternatives, there is a need for specific training and education in this area and the development of industry-specific guidance would be very valuable. Guidance and tools to support stakeholders in their efforts is very much needed, in particular following the increasing regulatory requirement for alternatives assessment in some countries/regions (e.g., EU REACH regulation, the California Safer Consumer Products Regulation).
• More clarity is also needed on how to conduct a “successful” substitution process and to reinforce dialogue and partnerships with stakeholders (SMEs, large companies, academics, downstream users, public authorities), in particular to tackle the complexity of communicating along the supply chain. It is also important to determine which sectors are at higher risk in the event of an unsuccessful substitution (e.g., the aircraft industry), and to provide guidance for the consumer market versus the specialised market.
• Furthermore, there are technical, administrative and financial constraints associated with conducting alternatives assessment and substituting chemicals, in particular for SMEs and the complexity of regulatory systems can be a challenge In the case of countries/regions using regulations. SMEs in particular face these challenges when considering the substitution of chemicals that are central in their product or process development. This can directly affect business models and competitiveness and may require the need to invest in new capacities.

Which initiatives have already been taken to support substitution initiatives and what are their main drivers?

Over the past decades, several government initiatives have supported the development of programmes and tools to encourage alternatives assessment and the substitution of chemicals of concern. Various industry sectors are also directly engaging in developing/using alternatives assessment tools during product development and in making substitution a business “good practice.” Non-governmental organisations (NGOs) are very much involved in supporting the substitution of chemicals of concern through the different initiatives. Stakeholders (e.g., public institutions, governments, NGOs, industry) have also been working together to develop key principles of alternatives assessment, frameworks for alternatives assessment, as well as tools and repositories.

A large amount of expertise and experience is being generated from past alternatives assessment and substitution cases. Efforts should be made to collect and compile this “real life” experience. Among other initiatives, the German Environment Protection Agency (Umwelt Bundesamt – UBA) developed a decision tool for substance manufacturers, formulators and end users of chemicals to help them make sustainable choices on chemicals. The guide describes criteria, which can be used for a first assessment of the sustainability of substances and mixtures. The criteria for the selection of sustainable chemicals should enable companies to systematically implement sustainable chemistry in their daily practice.

The two of the main drivers that were mentioned during the workshop are:

• The response to regulatory requirements and more generally the integration of substitution of chemicals of concern as part of the political agenda ;
• Market drivers that include opportunities for companies to generate new patents, new market opportunities to respond to green customers’ demands, the creation of a competitive advantage, the integration of substitution into the corporate strategy of certain companies, in which case there are internal drivers being created for the substitution of substances of concern. All this contribute to the reputation of the company through the engagement in sustainability goals.

Other important drivers may include:

• a combination of the newly-created knowledge on the health, environmental and safety concerns of particular chemicals,
• the technical progress that has been made that can help stop the use/need of a hazardous chemical.
• Economic instruments, in particular, taxes.

The issue of availability of resources necessary to produce certain chemicals can lead to an increase in production costs and as such be also an incentive to substitution.

Are the existing tools and practices appropriate to support substitution and alternatives assessment ?

The OECD report¹, “Current Landscape of Alternatives Assessment Practice: A Meta-Review,” looks at the frameworks and tools developed by a number of groups, with a first attempt at detailing the specificities of each. The most complex step in conducting an alternatives assessment remains to gather the appropriate data to feed into the tools, and guidance would be needed on how to fill-in and make decisions in light of data gaps. Being transparent about the decisions that are made throughout the alternatives assessment and substitution is critical for practitioners to learn from each other’s successes and challenges.

The workshop participants underlined that it is important to be aware of the differences and similarities between the tools considered and that each tool may better correspond to particular purposes. They raised in particular the importance of taking a “full picture” approach for product evaluation taking into account the life-cycle implications of substituting a chemical: from ingredient disclosure, hazard analysis, exposure assessment. There was particular mention made of the need to define what economic feasibility means.

Some of the next generation tools that are being developed for supporting exposure assessment were discussed, such as the High-throughput Exposure Assessment Tool (HEAT Model) of the Dow chemical company that aims to estimate “near field” human exposure for batches of chemicals and multiple use scenarios and exposure pathways.

What actions would further open the way forward in the field of substitution of dangerous chemicals ?

Substitution of chemicals of concern is actually happening but a number of issues still associated with the way alternatives assessment and substitutions are taking place today were identified. To learn from past experiences and strengthen public policy and programmes for substitution, efforts should be made to collect and compile the large amount of expertise and experience generated from past alternatives assessment and substitution cases used by various countries, which includes success stories, pitfalls, regrettable substitutions, specific examples of cost savings, and economic and social benefits. This would serve as a critical source of knowledge to identify and address common challenges, as well as to identify and share good practices and success stories, and to make the business case for new substitution;

Building on existing knowledge will help to make informed decisions on how to overcome some of the challenges faced in alternatives assessment and substitution today in particular for SMEs that have fewer resources to engage in these areas. This could include looking at cost/benefit analyses and economic feasibility studies that have been conducted in the past and further looking at ways to assess and present the long term economic benefits of substitution.

There is a recognised complexity of the alternatives assessment and substitution processes. Providing flexible guidance and best practices to help manage the complexity and uncertainties in the process would support companies, in particular SMESs, to engage into alternatives assessments and substitution processes. The level of complexity of the assessment should fit its purpose and avoid "paralysis by analysis".

Regulations have an important role in the establishement of economic and fiscal incentives as drivers for substitution and in the way hazard and risk trade-offs are being managed in practice. The expert workshop concluded that there is a need for a repository of alternatives assessments (such as the OECD SAAT Toolbox and SubSport) that would compile case studies, a registry of actual substitutions, and in learning from companies that have created internal drivers for substitution to become an integral part of the company strategy.

There was also interest in collecting information on how alternatives assessment are being conducted – how is uncertainty managed, what tools are used and in which context, how the data are being accessed, and how data gap issues are being overcome. There was also mention of the possibility of looking at cost/benefit analyses and economic feasibility studies that have been conducted in the past and further looking at ways to assess and present the long term economic benefits of substitution.

The expert workshop also strongly emphasized the complexity of engaging in an alternatives assessment and in a substitution process more generally, in particular for SMEs to gather the data necessary to feed into the existing alternatives assessment frameworks and tools and to manage knowledge gaps and uncertainties throughout the process. Companies are asking for a targeted/tailored approach with sector-specific guidance, supported by the collection of case studies showing real life examples of substitution, where possible, already achieved in SMEs.

What are the most challenging issues remaining in this process of substitution of dangerous chemicals?

There are three elements in the substitution process that can be considered as remaining particularly challenging:

• the choice of the attributes to be used in the alternatives assessment, according to available knowledge and resources;
• how to define when a “successful” alternatives assessment/substitution has been conducted;
• the criteria to help manage hazard and risk trade-offs.

To simplify the process, there might be opportunities to develop a minimum set of attributes that companies, and in particular SMEs, could easily manage. This minimum set of attributes should be sufficiently flexible, and consider the characteristics of specific sectors and adapt to the specific needs of companies (e.g., sectors at high risk, such as the aircraft industry), in particular to their position in the value chain.

• A short list of questions would help define whether the alternatives assessment was well conducted and "successful", or if weaknesses remain in some areas. For example, questions could ask how uncertainty was minimised during the process, if life cycle implications have been taken into account in the choice made for substitution (e.g., if a chemical is substituted in a mixture, there might be problems arising with another chemical in that mixture; are there other solutions available than substituting a chemical of concern by another chemical ? Has the safest or the cheapest alternative been chosen
• Also, a short set of best practices based on the analysis of case studies and on common current practices would help manage hazard and risk trade-offs. The OECD SAAToolbox, in particular the Tool Selector, are unique compilations of resources that provides access to practical guidance on how to conduct an alternatives assessment. More awareness raising/training activities on the toolbox for stakeholders involved in the field are thus needed.

What is the SAAToolbox (Substitution and Alternatives Assessment Toolbox)?

The OECD SAAToolbox is a first version of a compilation of resources relevant to chemical substitution and alternatives assessments. The toolbox includes a range of resources about chemical substitution and alternatives assessments and practical guidance on conducting them. It increases efficient access to tools and practical guidance on how to conduct an alternatives assessment. A special functionality in the toolbox – the Tool Selector – aims to help identify, through the use of a number of filters, tools of greatest relevance to specific substitution or alternatives assessment goals.

Built upon a literature review focusing on the current landscape of substitution practices in OECD member countries, it discusses definitions, principles, frameworks and tools for alternatives assessment, as well as the key drivers and audiences and the contribution of OECD to the identification of the current landscape of alternatives assessment practice (Stakeholders can submit information to be added in the toolbox and/or general comments on how to improve the toolbox to the OECD by sending an email to ehscont@oecd.org.)

What can be learned to support substitution from existing policy and regulatory approaches across countries?

Cross-country analysis could for example take into account the approach taken by the United States, which might be generally more market driven, with many partnerships engaged between the public and private sectors. This is different from the approach taken in Europe, which is more regulatory driven under the REACH framework. Policy and regulatory instruments experiences that describe the policies in place, their impact and effectiveness, and the context in which they have been developed would be useful and include:

• Providing fiscal incentives or access to finance, to enterprises to support elements of the substitution process such as funding for specific areas of research, taxes, subsidies;
• Creating or supporting networks and partnerships to provide information to stakeholders (including consumers) and engaging in public-private partnerships, for example, for supporting data and knowledge sharing;
• Developing knowledge through R&D investment, investment in skills and education needed in the labour force, and providing supportive frameworks for intellectual property management, safety regulation and guidance on alternatives assessment and substitution;
• Creating demand that drives new product development in the early market e.g., by public procurement policies or purchase subsidies;

How does the EU REACH Regulation contribute to a substitution process?

The REACH legislation has allowed for the development of a large number of real world cases of analysis of alternatives, which make it one of the largest sources of analysis of alternatives in the world and also showed that substitution does happen. Under REACH, a list of substances that require authorisation for their use or placing on the market for a use (Annex XIV - "Authorisation List") has been set up to ensure that the risks from these substances are properly controlled, and that these substances, where it is economically and technically viable, are progressively substituted by alternative substances or technologies. For about 50% of the substances included in Annex XIV that lists the substances of concern, companies did not apply for their registration because they had implemented an alternative substance, and about 50% of the applications received are “bridging applications,” where companies are requesting additional time to switch to an identified alternative.

In addition, the REACH substance evaluation and the Candidate List of Substances of Very High Concern (SVHC), the Public Activities Coordination Tool (PACT) and the Registry of Intentions (RoI), give early warnings of substances of potential concerns, as well as the SVHC Candidate List. However, the quality of the analyses provided varies, and methods to help identify best practices for reporting alternatives assessment are being investigated, such as a scoring system .²

¹/www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ENV/JM/MONO(2013)24&docLanguage=En 
² http://echa.europa.eu/addressing-chemicals-of-concern/authorisation/substances-of-very-high-concern-identification/candidate-list-of-substances-of-very-high-concern-for-authorisation