Management of toxic substances: chemical management plan for the automotive manufacturing sector

Canada’s automotive assembling industry is an important part of the Canadian economy and one of the many industry sectors implicated by CMPinitiatives. This sector is fully integrated into the larger North American market for sales and production.  The industry is further evolving in the global economy as materials are purchased from within North America as well as from all over the world. 

The Government is committed to implement the CMP in a cost effective way that achieves the health and environmental outcomes while being mindful of industry competitiveness issues.

These principles, when considered by both the sector and the government, will minimize unintended consequences arising from the chosen risk management instruments, while still achieving the desired outcomes.  The principles will assist the sector’s understanding of program requirements and government context. They will also facilitate the government’s understanding of issues affecting the regulated community prior to moving forward and ultimately influence program implementation.

  1. Coordination
  2. Timing
  3. Service Parts
  4. Alternatives
  5. Confirmation of Elimination
  6. CAS Number
  7. Threshold

1. Coordination

A) CVMA Principle

The automobile assembling industry in North America operates as a single integrated market with common products. This results in two key challenges unique to Canada substance elimination; a potentially significant cost penalty to manufacturers in Canada for technical work to change the substance and a potential additional component cost penalty for any material cost increases, and secondly the challenge of convincing suppliers of the need for change when other jurisdictions aren’t requiring it. This is very time intensive and suppliers may not even be aware they are using the substance until a significant period of time after a change is requested as a result of the data limitations of GADSL.

Principle: Any actions on substances must recognize the highly integrated nature of the automobile assembling industry in North America and globally and should be coordinated with the United States, Canada’s largest trading partner, in both approach and timing.  Where possible, Canada should not be out of sync with the U.S. on the risk management approach.  Any other approach will result in major challenges in implementation.

B) Government of Canada Context

Coordination between the United States and Canada is accomplished, to the extent possible, by maintaining a close relationship with our UScounterparts in order to exchange information on substances and identify opportunities for alignment. However, there are legislative and policy differences that sometimes make coordination challenging.

Under the CMP, substances are assessed and managed much faster in Canada compared to the United States. Canada has committed to address 4,300 substances by 2020, whereas the United States under the TSCA Work Plan for Chemical Assessments has committed to assess about 90 chemicals in the next 6 years. Individual state agencies may also identify substances that may not be part of the TSCA work plan.

Furthermore, substances assessed and declared toxic under CEPA1999, are subject to legislated timelines (i.e., a proposed risk management instrument must be published within 24 months and finalized within 18 months after a substance is found to be toxic under CEPA 1999). Given TSCA does not have similar provisions, opportunities to align on risk management are somewhat constrained. 

As noted in the Cabinet Directive on the Development of Regulations, one of the components of the Regulatory Impact Analysis Statement (RIAS) is an analysis of control measures in place in other jurisdictions.

In some cases Canada and the US may take different approaches to the management of the risks even though both countries may aim to address the same environmental objectives/outcomes. One example is the Volatile Organic Compound (VOC) Concentration Limits for Automotive Refinishing Products Regulations, where Canada has regulated and the US have guidelines in-place. Both have similar limits and objectives.

In addition, Canada also has legally binding international obligations to manage substances under several multilateral environmental agreements (Stockholm, Basel, Rotterdam etc.) to which the United States is not a Party. As such, Canada may need to take action domestically while it is not required in the United States.

C) Moving Forward

Where possible, the government of Canada will continue to co-ordinate CMPactivities with other jurisdictions, such as the US.

Continuing with the progress made under Regulatory Cooperation Council (RCC) initiative phase I, the second phase, launched in August 2014, Environment Canada, Health Canada, and the U.S. Environmental Protection Agency have developed work plans describing medium-term collaboration activities in two areas; 1) Approaches for regulatory reporting requirements for new uses of chemical substances (Significant New Activity provisions in Canada and Significant New Use Rules in the U.S.), and 2) Approaches for chemical risk assessment.  This collaboration will also advance initiatives under the Chemicals Management Plan. Information on the initiatives under the RCC can be found on the Treasury Board website.

The government considers whether there are actions planned/taken in other jurisdictions, particularly in the US, in the development of Risk Management instruments and how it may be appropriate in the Canadian context.

2. Timing

A) CVMA Principle

A vehicle and the associated parts are designed for the full useful life of the vehicle. 

Vehicle designs take 5 years to go from an initial concept to consumer-ready production units.  The “Design Phase” process includes: drawing/sketching; engine/drivetrain availability/layouts; safety & environmental requirements; modeling (computer, clay, full); interior sketching and modeling; materials; colours; dashboard and controls; testing and validation; final modeling; approvals; final engineering and production concept; and sourcing components.  Because this process is complex and very costly, most manufacturers produce models on a 4 to 6 year "remodel cycle" which means they will undergo a major remodeling in look every 4 to 6 years.  With the exception of minor mid-cycle "refreshes", the design and production of a vehicle (i.e., design, engineering, materials, testing, validation, sourcing) is fixed, including associated parts, for its entire 4 to 6 year life.  The average age of the on road vehicle fleet is roughly 9 (or 10) years, and for some models this can be up to 30 years.  Parts for these vehicles were engineered (materials and components selected, tested and validated) during the design phase of the vehicle.  It is very costly to reengineer after this phase.  Significant material changes can only be made during the Design Phase.

Principle: The automobile assemblers typically require at least one full design cycle (approximately 5 years) of lead time to fully eliminate a substance for new vehicle models.  Typically, when a substance is the subject of a future ban, it is already declining in use in the automobile assembling industry and the majority will be eliminated prior to the effective date of the ban.  Typically there will be few parts or materials which may take a little longer to eliminate up to the time of the ban.

B) Government of Canada Context

The nature of the risk (e.g., exposure/source and hazard) determines the key parameters for risk management. The degree to which the automobile assembling sector contributes to the risk impacts the scope and timing of risk management applied to the sector.

Timing may also be linked to Canadian international commitments, where our obligations can drive required domestic actions. For example, when a Persistent Organic Pollutant is listed under the Stockholm Convention, before Canada can ratify, domestic controls must be in place.

Constraints on timing of risk management are mitigated to some extent by early stakeholder engagement during the risk assessment and risk management processes by providing affected sectors an opportunity to provide early input, and raise any potential concerns.

C) Moving Forward

As appropriate, the government will refer to model year in future RM instruments that apply to the auto assembly sector.

When developing risk management instruments, the GoC takes into consideration time required for industry to be able to comply with requirements.  In the case of the auto assembly sector, the lead time for the auto design cycle will be considered.  It should be noted that the scope and timing of control instruments can be different for different uses and applications, and typically include a phase-in period. In addition, permit provisions are often included in CEPAregulations to accommodate unforeseen or unintended situations.

3. Service Parts

A) CVMA Principle

Service (or replacement) parts are available for a minimum of 15 years.  The number of parts maintained in inventory depends on expected consumption and future ability to manufacture.  Parts are produced in response to market demand using original tools, materials and production processes.  If a service part cannot be manufactured to the original specification, it must be redeveloped at extremely higher costs.  The increased costs are related to: 

  • Development of alternative/substitute materials
  • Design/engineering changes
  • Validation and durability testing
  • New suppliers
  • New build of materials, setup and manufacturing costs
  • Part number changes
  • New price calculations

All of which are related to lower volumes with higher costs.

Consumable parts (e.g. windshield wipers, brakes) are those used in vehicle servicing which may be replaced many times over a vehicle’s expected life.  The timescale to influence change in design of these materials may be shorter than components intended to last the full life of a vehicle (e.g. engines, powertrains, and body components).

Service parts are stored at distribution centers in Canada or the U.S. for expedited delivery through the dealer network.  Canadian parts distribution centers do not stock every potential part in sufficient quantities to meet unexpected demand.  The North American marketplace allows for parts to be stored in any N.A. parts distribution center or even globally for delivery to the expected customer based on geographic location.

Principle: Automobile assemblers normally ensure the availability of the Original Equipment (OE) service and replacement parts for a minimum of 15 years after model build out or up to an indefinite time in order to satisfy consumer demand, legal or warranty matters.  Typically, parts may be built and stocked at the time of vehicle production or built to the original specifications, including compositions, in short production runs after the new vehicle production ends.  The cost of replacing a class of substances in a small number of parts is prohibitive.  It could also result in parts being purchased by consumers from jurisdictions where the original can still be obtained.

B) Government of Canada Context

Similar to the consideration regarding timing, the nature of the risk (e.g., exposure/source and hazard) determines the key parameters for risk management.

C) Moving Forward

Where appropriate, the Government of Canada will reference the model year for the phase-out of substances used in the auto assembly sector. The intent is to allow for the continued manufacturing and import of service parts to support the on-road fleet of model years prior to the phase-out of the substance.  The degree to which this approach can be used is tied to the nature of the risk and the auto industry’s ability to identify the use and quantities of the substance during the development of the instrument.

4. Alternatives

A) CVMA Principle

The auto industry has a long history of eliminating substances of concern (for example, mercury from HID lamps, cadmium from paints and electronics, lead in wheel weights and solder, hexavalent chrome from fasteners and brackets, DecaBDE from electronics and electrical systems) and is always seeking safer alternatives where viable ones exist. Viable alternatives for the auto sector are those that meet the severe duty requirements for automotive components, are economical for the customer and are acceptable from a health and environment perspective.

Principle: Industry requires practical alternatives that are viable and can meet both regulatory and non-regulatory standards and specifications in the long-term.  The alternatives need to be available for the full automotive component lifecycle (see Principle 2).   If an alternative is put in place, it should take into consideration restrictions given the auto industry lead time, design cycles, etc.

B) Government of Canada Context

The government recognizes that there may be challenges in selecting potential alternatives due to their uncertainty for future assessment and management. Given the number of industrial sectors, specific applications/uses, and the number of potential alternatives for each, the government expects that industry is best placed to determine suitable alternatives that meet their specifications. 

To facilitate industry identification of alternatives, some substances have been grouped according to their functional use and their physical-chemical properties under CMP 2. By grouping in such a manner, industry has a broader perspective to inform substitution. As the CMP engages across multiple sectors, opportunities to accommodate a particular sector may be constrained.

C) Moving Forward

The government recognizes that industry  may face challenges in selecting potential alternatives due to their uncertainty for future assessment and management.

The Government is consulting industry on the best way to group substances for CMPIII that would facilitate to some extent informed substitution of substances found to be toxic. 

It should also be noted that through the New Substance Program, new alternatives being introduced in Canada are assessed to ensure that they are safe for use in Canada before entering the market.

However, industry is best placed to determine suitable chemical and non-chemical alternatives that meet their specifications that minimize environmental and/or human health risks to the greatest extent possible.  When considering chemical alternatives, industry should consider the overall potential hazard of the substance (e.g. persistence, bio-accumulative, carcinogenic, mutagenic and reproductive and toxicity properties), as well as whether the nature of the risk presented by the alternative substance being considered is similar to that of the substance it will replace.  

5. Confirmation of Elimination

A) CVMA Principle

Automobile assemblers rely on data provided by their suppliers through the supply chain to quantify substances of concern in production components (hard parts). GADSL uses the terminology “no intentional addition”.  The data is loaded into IMDS. Given the huge numbers of components and the complex matrices it is not possible or practical to conduct testing for substances of concern. It is possible that trace amounts of substances could exist as a result of materials recycling or as by-products of making materials. These substances are not deliberately added and fit with the “incidentally present” language used in the PCTSR (Prohibition of Certain Toxic Substances Regulations).

Principle: Elimination of a substance must be based on “no intentional addition”. As GADSL uses the terminology “no intentional addition: and the PCTSRused the term “incidentally present”. The two terms have the same meaning and interpretation for the automotive industry. This means a substance is not deliberately added to a material and individual testing of a component is not feasible.  

B) Government of Canada Context

Mandatory information gathering has been streamlined to the extent possible. This relieves the upfront burden, but can sometimes result in surprises later if some substances/uses are overlooked because of low level presence, particularly relevant in the management of substances subject to virtual elimination. In respect to reporting thresholds, they may be differences between what was initially requested in the S.71 (i.e., 100 kg threshold) for risk assessment and what might be proposed in a risk management instrument.

It should be noted that the majority of the substances found to be toxic do not meet the virtual elimination requirements and as such, the confirmation of elimination is not a key feature of most risk management instruments.

Risk management instruments are designed to address the risks of concern, and concentrations at low or trace levels can be of concern (ecological and human health) for some substances. 

C) Moving Forward

It is understood that the auto assembly sector relies on a complex supply chain and that automotive assemblers will exercise due diligence in communicating with their supply chain to ensure they meet regulatory obligations.

To date, unintentional trace amounts of substances resulting from recycling or as by-products have been excluded from risk management on a case by case basis, depending on the health and environmental risks. This practice will continue.

Where warranted, subsequent information gathering, including S71 or voluntary requests, with lower thresholds may be used to better inform government risk assessment and risk management activities. 

Generally, CEPA RM instruments do not mandate product testing. The methods established in a risk management instrument are to inform stakeholders which methods will be used for compliance verification purposes.

6. CAS Number

A) CVMA Principle

The automobile assemblers’ supply base is so large (>100 K suppliers and millions of components), complex and has so many Tiers and interconnections that automated systems (e.g. GADSLand IMDS) are used to communicate with and capture data from suppliers. The systems use CASnumbers to identify reportable substances because it is the internationally recognized system which all suppliers understand.  The CAS numbers are used to characterize the substances in the automotive manufacturing and this information is used in industry reporting to government, etc.. Without CASnumbers or anything less precise does not generate responses for reporting, etc.

Principle: The automobile assembly industry databases used to track chemicals both for manufacturing aids and manufactured articles rely on CAS numbers.  CAS numbers are essential as they are used to track both manufacturing aids and manufactured articles (hard parts).

B) Government of Canada Context

Risk assessments and risk management instruments typically identify the substance of concern using a chemical structure or name approach.

CAS numbers are used by GoC in CMP to help identify substances.  For example, companies reporting in accordance with S71 Notices often provide company specific data in relation to particular CASnumbers.  Similarly, risk assessors and risk managers consider information related to particular CAS numbers.  However they also consider information related to chemical structures which may apply to broader range of CAS numbers or, in some cases, may not be represented by specific CAS numbers.  In addition, the registry of CASnumbers is dynamic, with 15,000 new entries added every day which makes it difficult to attribute risk to a particular list of CAS numbers.

Indicative lists of CAS numbers have been used on occasion in CMP

C) Moving Forward

When possible, indicative lists of CAS numbers will be made available during risk assessment and management, such as for draft Screening Assessment Reports (dSARs), final Screening Assessment Reports (fSARs) and risk management instruments. 

7. Threshold

A) CVMA Principle

The automotive manufacturing industry has robust internal systems to approve materials and track substances of interest.  For manufacturing aids, the foundation of this system is the information available on Safety Data Sheets (previously called MSDS).  There are disclosure rules for SDS that determines the substance and concentration information available to the material user.  Generally, if a substance has no recognized risks, it will not be required to be disclosed.  Other substances have disclosure requirements at 1% (for non-carcinogens) or 0.1% (for carcinogens).  The composition of most auto parts is disclosed in IMDS but the supplier has some latitude for non-disclosure of substances not listed on GADSL. Placing restrictions beyond substance and concentration levels which need to be declared or disclosed poses challenges for the industry.

Principle: Substance restrictions under CMP risk management tools need to consider the limitation of the SDS and IMDS when restricting substances with respect to timing and risk management.   For manufacturing aids, recognition is required regarding the limitations of users identifying substances beyond the reporting obligations and concentration of the SDS (0.1% for carcinogens and 1% for non-carcinogens). For automotive components or hard parts, the threshold for declaration (0.1% in GADSL) must be given consideration.

B) Government of Canada Context

Thresholds, if used in an instrument, will reflect considerations such as substance risks, technical (potential substance impurities) and economic feasibility, etc. and are developed through consultations with industry. Applications of thresholds are considered on case by case basis.  As such, it is not possible to set a blanket de-minimis concentration or volume threshold for all risk management instruments, such as 0.1% or 1% content concentration (e.g., to align with SDS thresholds).

It should be noted that the scope and timing of control instruments can be different for different sector uses and applications. Typically RMinstruments include a phase-in period to reflect the limitations a sector may have in meeting the regulatory requirements.

C) Moving Forward

Where possible, the GoC will consider the information limitations of the IMDS for articles and components and SDS in the development of regulatory thresholds.

Follow-up information gathering activities, including S71 or voluntary requests, with lower thresholds may be used to better inform government risk assessment and risk management activities. 

Last Revision Date: January 2016

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