China RoHS demands more from buyers
China's Restriction of Hazardous Substances law will require suppliers to provide accurate test results of components and materials to buyers to ensure compliance.
By James Carbone -- Purchasing, 2/15/2007 2:00:00 AM
Electronics buyers who think their companies' products will automatically comply with China's new Restriction of Hazardous Substances law because their products already comply with the European Union's RoHS legislation are in for a big surprise.
“The materials that are restricted by the two laws are the same, but that's about where the similarities end,” says Michael Kirschner, president of Design Chain Associates, a San Francisco consultancy that advises OEMs about environmental issues. “The laws are different in a number of ways.”
For one thing, Europe's RoHS is a self-declaration law, meaning a company is taken at its word if it says its products don't contain any of the restricted substances above certain thresholds levels. A company must have the necessary documentation to prove its claim if the product is called into question.
However with China RoHS, a company will have to demonstrate compliance. Test laboratories in China will certify products before regulators will allow them into the Chinese market.
The Chinese law kicks in March 1 with a deceptively simple labeling requirement. In that first phase of implementation, products will have to carry a label, affixed by the manufacturer, that indicates whether they are compliant or not. Compliant products will carry a label with a green E in a circle. Non-compliant products will carry a label with an orange circle with a number in the middle, called an environmental protection use period (EPUP) number. The number would indicate how many years the equipment would last before it starts leaking the hazardous substances or causes other environmental problems. Equipment labeled with a 10, for example, would not cause any environmental problems for 10 years.
 "The materials that are restricted by the two laws are the same, but that’s about where the similarities end," says Michael Kirschner, president of Design Chain Associates. |
A non-compliant label would not at first keep a product out of the Chinese market. Instead, the label is one element of a transition process that will educate consumers and buy time for the government to set up a recycling infrastructure.
“It is completely nonsensical,” says Holly Evans, president of Strategic Counsel, an Alexandria, Va., law firm that advises OEMs about environmental legislation. “But this is the Chinese way of providing consumers with information regarding these RoHS substances.”
No exceptions...for now
The laboratory testing and the labeling requirements are among the differences between China's RoHS and Europe's. Another difference could be the matter of exemptions. Under EU RoHS, there are many exemptions and exclusions, including medical equipment, servers and networking equipment. With China RoHS, there are no exemptions for now. That could change when phase two of China RoHS kicks in sometime in the second half of the year.
“My opinion is that I don't think there will be exemptions,” says Jackie Adams, IBM's integrated supply chain's senior engineering manager for the center of competency for environmental compliance. “You will still have to label your product. Phase two will tell us how to use that EPUP number.”
For example, perhaps manufacturers that put an EPUP number 10 on their products will have to remove the products from the market after 10 years or recycle them.
Adams notes that products have to be labeled on the outside as well as inside in the packaging. Companies will use a table that has the list of the hazardous substances on top and a list of the systems on the side with boxes in the middle. The OEM will have to check the box next to the system that has a hazardous material.
The labeling requirement and the lack of exemptions are posing problems for many OEMs that want to sell into China, says Evans.
For example, laptop computers have lamps that contain mercury, one of the restricted substances. “Mercury lamps are used because they are highly energy efficient. They are excluded from the EU RoHS directive, but China RoHS does not have that exemption,” says Evans.
“All the rules of thumb that were developed to help companies with EU RoHS are completely meaningless with China RoHS,” says Evans. The lack of exemptions means eventually that products allowable in Europe may not be allowable in China.
 "All the rules of thumb that were developed to help companies with EU RoHS are completely meaningless with China RoHS," says Holly Evans, president of Strategic Counsel. |
Wait for phase two
Just when products containing hazardous substances will be prohibited from being sold in China remains to be seen. It should occur when phase two of the law goes into effect, which should be in the second half of the year. However, the Chinese government has not issued a date.
With phase two, the Chinese government will issue a catalog that contains the products that must not contain hazardous materials over the proscribed levels. After the catalog is released, sources believe that the Chinese government will set a date when products will have to be tested by Chinese accredited laboratories to determine if they are compliant with the law. If they contain the hazardous materials, they won't receive the Chinese Certification of Compliance (CCC) label, which is needed for a product to be sold in China.
Some OEMs and suppliers are concerned about testing because of potential intellectual property (IP) issues. “The products will be tested down to the homogenous materials for the six substances,” says Kirschner. There is concern that IP may be compromised.
“China has great IP laws, but terrible enforcement of those laws, so there is a lot of concern about a part when they tear it apart in the lab with test and material analysis gear,” says Kirschner.
It is unknown what products will be included in the first draft of the catalog, but Evans says consumer electronics products are likely candidates, because they are already EU RoHS-compliant.
Such a burden
Many OEMs are finding the China RoHS law burdensome because of the labeling requirements and because China has been slow to release requirements of the law, according to Kirschner.
“China did a poor job of defining the requirements with enough advance notice so companies can comply with the requirements of the law. Defining requirements three months before they go into effect is completely absurd,” he says.
| Labeling requirements |
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| This is the symbol to show that a product does not contain any of the six restricted substances under China RoHS. | This symbol says the product does not comply with China RoHS, but will not be a hazard to the environment for 10 years. |
He says the law is burdensome because materials declarations and certificates of compliances that suppliers gave to their OEMs to prove their parts comply with EU RoHS will be of little use with China, thanks to the Chinese testing requirement.
As a result of China RoHS' test requirements, OEM buyers will require suppliers to provide test results of their products to ensure that components and other materials don't contain any of the covered hazardous substances, says Joe Scala, director of global RoHS compliance for electronics manufacturing service provider Celestica in Toronto.
“Because China RoHS requires OEMs to demonstrate compliance before their product goes on the market, there will be a great need to have test results available from suppliers,” he says. “Rather than an OEM being surprised when the product they have been developing and trying to launch ends up failing at the last step, the OEM will want some compliance assurance up front from suppliers.”
He says China's RoHS will result in suppliers understanding their own supply base and what's going into each component.
While China RoHS may be burdensome, the good news is that it won't be more costly than EU RoHS. Kirschner says the cost of EU RoHS to the electronics industry was “north of $10 billion” because the industry had to re-design systems and change manufacturing and information systems to accommodate new RoHS-compliant parts and new part numbers.
| European RoHS | China RoHS | |
| 1. Restricted substances | Lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls, polychlorinated ethers | Same |
| 2. Exemptions | Many exemptions including servers, networking, infrastructure equipment, storage and arrays systems | None |
| 3. Labeling | No labeling required | Equipment and packaging |
| 4. Testing | No testing | Products must be tested |
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