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Chemtura Manufacturing UK Ltd

Feasibility Study on substituting HBCD with polymeric flame retardant

Final report

July 2014

AMEC Environment & Infrastructure UK Limited

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purpose other than the purpose indicated in this report.

The methodology (if any) contained in this report is provided to you in confidence and must not be disclosed or copied to third parties without the prior written agreement of AMEC. Disclosure of that information may constitute an actionable breach of confidence or may otherwise prejudice our commercial interests. Any third party who obtains access to this report by any means will, in any event, be subject to the Third Party Disclaimer set out

below.

Third Party Disclaimer

Any disclosure of this report to a third party is subject to this disclaimer. The report was prepared by AMEC at the instruction of, and for use by, our client named on the front of the report. It does not in any way constitute advice to any third party who is able to access it by any means. AMEC excludes to the fullest extent lawfully permitted all liability whatsoever for any loss or damage howsoever arising from reliance on the contents of this report. We do not however exclude our liability (if any) for personal injury or death resulting from our negligence, for fraud or any other matter in relation to which we cannot legally exclude

liability.

Document Revisions

No. Details Date

1 First draft report 13509i1 for client comment

29 November 2013

2 Final Report 14045i1 31 January 2014

3 Final Report 14045i2 19 February 2014

4 Final Report 140513 15 May 2014

5 Revised draft report for client comment taking into account authorisation application

25 June 2014

6. Updated report taking into account client comments

30 June 2014

7 Final Report 20140703 3 July 2014

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i

© AMEC Environment & Infrastructure UK Limited July 2014 Doc Reg No. 34972 Final Report 20140703

Executive Summary

Scope

Hexabromocyclododecane (HBCD) (CAS No 3194-55-6) has been placed on the REACH

Authorisation list (Annex XIV)1, as a Substance of Very High Concern (SVHC) and the latest application date for authorisations under REACH was 21 February 2014. HBCD will be

included on the list of substances for global elimination under the UN Stockholm Convention on Persistent Organic Pollutants2 (POPs) on 26 November 2014.

This study has examined the feasibility of substituting HBCD with an alternative polymeric

substance, marketed by Chemtura under the trade name Emerald Innovation 3000. Both substances are used as flame retardants in expandable polystyrene (EPS) and extruded

polystyrene (XPS) insulation foam.

The report also contains an assessment of the information contained within the socio-economic assessment (SEA) and the analysis of alternatives (AofA) parts of the HBCD application for

authorisation published on 14 May 2014. For ease of reference the consortia of companies who comprise those applying for authorisation are referred to as “the applicants”.

Alternative Identification and Properties

Benzene, ethenyl polymer with 1,3 butadiene (brominated) (CAS 1195978-93-8) is the chemical name for Emerald Innovation 3000 (hereafter referred to as the polymeric flame retardant).

Building insulation currently accounts for over 99% of its use in Europe. The remaining

volumes are used in high impact polystyrene, which was not considered in this report. Based on information presented on 14 October 2013 at the UN POPRC meeting by Chemtura, the global

market size for HBCD in 2011 is assessed at some 31,000t per year. Of this, the EU market represents some 12,400t per year, a value that has been cross-checked using several different

sources. This compares to global figures estimated by the applicants of some 33,600t per year; with European demand of 14,483t per year. The difference reflects assumptions made by the

applicants on the extent of European demand – all other data used by the applicants are consistent with that presented by Chemtura on 14 October 2013. The value in the authorisation application – both for European and global demand – is seemingly inconsistent with the

published information available.

If HBCD was replaced with this alternative flame retardant, the overall structure of the supply

chain in Europe is not expected to change. At present there are three global companies who manufacture and/or import HBCD for the European market; the same three companies are

licensed to manufacture the polymeric alternative.

1 http://echa.europa.eu/addressing-chemicals-of-concern/authorisation/recommendation-for-inclusion-in-

the-authorisation-list/authorisation-list

2 http://chm.pops.int/TheConvention/ThePOPs/tabid/673/Default.aspx

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Technical Feasibility

HBCD is effective as a flame retardant at concentrations of c.0.7% in White EPS, c.1.1% in Grey EPS and c.1.75% in XPS3. The polymeric flame retardant has a lower bromine content

than HBCD (~ 64% vs ~ 74%) meaning that around 15% more is needed per unit of EPS and XPS. (Note that the analysis in this report considers the economic feasibility and availability

implications of an increase of 20%, based on levels being used by downstream users consulted). At these higher concentrations, technical performance characteristics are comparable.

Presentations made by industry at a side event to the UN POPRC meeting held on 14 October

2013 demonstrated that industry had found no fundamental issues with technical feasibility in the use of the polymeric flame retardant in XPS and EPS processes. The conclusion on the

product’s technical feasibility, from the majority of industry participants, was positive.

The technical feasibility of the polymeric flame retardant is not disputed by the applicants, based on the results of trials with samples of the polymeric flame retardant. The applicants state

that further testing and confirmation of technical feasibility is required by pellet and article producers, alongside marketing and certification. However, we note that, despite this statement,

the polymeric flame retardant is commercially available and is being sold; much of this work has already been undertaken by several companies.

The polymeric flame retardant is used in a similar way to HBCD. There is no need for major

capital infrastructure investment, training or additional health and safety measures amongst the users of the substance (though of course the manufacturers of the substance have had to invest

in new plant to produce it). The reformulation of the polymer recipe is the key technical change. The manufacturers of the polymeric flame retardant and major downstream users have

together demonstrated that this reformulation can be undertaken within a relatively short period of time (up to one year). Moreover, the applicants’ analysis of alternatives states that the

‘optimum’ and ‘most likely’ timings for product confirmation from commercial availability may be rather than less than this, between 6 months and 10 months, respectively4.

The applicants provide details of estimated timescales to substitute HBCD with the polymeric

flame retardant. Commentary on these assumptions is provided within the main body of the report. The overall conclusions appear inconsistent with the evidence seen in the preparation of

this study and it is unclear how the total time required for substitution (between 4 years and up to 11 years) was calculated. Whilst it is recognised that the process of optimisation is ongoing,

some companies will have fully substituted during 2014 and are selling product based on the polymeric flame retardant, and we understand that some of the applicants have also replaced

HBCD in some of their grades.

Economic Feasibility

The economic feasibility of the polymeric alternative is not disputed by the applicants. Emerald Innovation 3000 currently costs more than HBCD on a weight by weight basis and greater

quantities will be required in order to meet fire safety standards. Taking these factors into account the applicants “assume [the polymeric flame retardant] is economically feasible as EPS

producers have the intention to switch from HBCD to the Polymeric flame retardant”5.

3 Based on discussions with Chemtura.

4 HBCD AofA Figure 5.3 Page 101 and 102.

5 HBCD SEA Page 17

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An assessment of economic feasibility of the polymeric flame retardant in comparison with

HBCD was undertaken within this study. The detailed step-by-step calculations are not shown, given that economic feasibility of the polymeric alternative is not disputed and that much of the

analysis is based on commercially confidential data (e.g. market prices).

Overall, the assessment indicates that Emerald Innovation 3000 is an economically feasible alternative to HBCD. The analysis suggests an increase in the final product price (whether per

tonne or per board of EPS) of around 1%. Such a change should be considered in light of the low proportion of the flame retardant is used in the polystyrene foam formulation and that price

of the major raw material in both EPS and XPS (the styrene monomer) has varied to a much greater extent than the price changes identified in switching from HBCD to the polymeric flame

retardant. The ability of companies to pass any costs on to the consumer (and hence not incur potentially significant costs themselves) is in part dependent on the extent of wider market

switching from HBCD.

Hazards and Risks of the Alternative

The US EPA has reviewed alternatives to HBCD, including the polymeric flame retardant. The main conclusion of that review was that the polymeric flame retardant is a substance that is safer

than HBCD for both human health and the environment. This conclusion took into account a PBT assessment of both products. Unlike HBCD, the polymeric flame retardant is not expected

to be classed as a PBT substance under REACH or as a Persistent Organic Pollutant (POP) under the UN Stockholm Convention.

As the polymeric flame retardant is likely to be used in a similar way to HBCD, occupational

exposure and releases to the environment are likely to be similar, although the flame retardant is not easily emitted from the body of the foam once it is formed. The risks associated with the

polymeric flame retardant are expected to be lower.

Availability

A key issue in substitution is whether the polymeric flame retardant is likely to be available, in

sufficient quantities to meet demand, by the sunset date for HBCD. To examine this, a number of demand/capacity scenarios were considered, to test the implications of changing key

assumptions. The two main scenarios, a ‘best estimate’ and a scenario intended to mirror key assumptions from the application for authorisation are considered in detail within the report. Both suggest there is likely to be sufficient capacity from the sunset date to supply the European

EPS and XPS market with polymeric flame retardant as a replacement for HBCD in the event that authorisation is not granted.

Additional scenarios are considered. Even under those using pessimistic (and probably unrealistic) assumptions regarding demand outside the EU (and factoring in growth in demand,

which was not assumed in the authorisation application), there is expected to be sufficient capacity available for the whole EU market to completely replace current HBCD volumes

within a year or so of the sunset date. The supply assumptions made in AMEC’s analysis are considered to be conservative, with estimated capacity online at the end of 2014 somewhat lower than the 25,000 tonnes estimated recently by the licensor of the polymeric flame

retardant..

The outputs of the analysis for the best estimate scenario are shown in the figure below.

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Demand and supply of Polymeric FR using best estimate values

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2014 2015 2016 2017 2018 2019 2020

Qu

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fla

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re

tard

an

t as

po

lym

eri

c F

R (

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ne

s)

Estimated global pFR capacity at end of year

Remaining global pFR capacity once non-EU demand met

Sunset date

EU pFR demand assuming total replacement of HBCD (EPS + XPS) (less XPS replaced with other alternative)

The conclusions of our analysis differ substantially from those reached in the application for

authorisation. We are unclear how some of the estimates in the AofA were derived and some estimates are seemingly based on outdated data6 which may benefit from corroboration with

other sources. This is particularly important given that the deficit between expected supply and demand is the main driver for the high social and economic cost estimates within the application

for authorisation.

Overall conclusion

The polymeric flame retardant appears to be a technically and economically feasible alternative. Sufficient production capacity is predicted to exist to supply the EU market, in the event that

companies require it, before the REACH sunset date, or very soon after if the most pessimistic assumptions are used, even after expected demand from outside the EU is taken into account.

6 EU demand data in particular were based on scaling from 2007 estimates using assumed (high) growth

rates. The 2007 data themselves were derived from assumed concentrations in EPS/XPS and proportion

of FR board used in construction, rather than direct HBCD sales.

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Contents

1. Introduction 1

1.1 Purpose of this Report 1

1.2 Status of this report 1

1.3 Methodology 2

1.4 Contents 2

2. Alternative Identification and Properties 3

2.1 Identification of the Substance 3

2.2 Manufacture and Uses 4

2.2.1 Overview of uses 4

2.2.2 Market Size 4

2.3 Classification and Labelling 7

2.4 HBCD Application for Authorisation: Commentary on the SEA and AofA 8

2.4.1 Scope of Application 8

2.4.2 Market Size 8

2.4.3 Industry Structure 9

3. Technical Feasibility 10

3.1 Introduction 10

3.2 Substance Function and Requirements for the Alternative 10

3.2.1 Requirements of the alternative 10

3.2.2 Standard production process for EPS 10

3.3 Technical Stages in Substitution 11

3.4 Implications of Substitution 12

3.5 Wider Industry Experience with Substitution 12


4. Economic Feasibility 19

4.1 Introduction 19

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5. Hazards and Risks of the Alternative 22

5.1 Introduction 22

5.1.1 Overview 22

5.1.2 PBT assessments 22

5.2 Assessment of the Polymeric Flame Retardant and HBCD 24

5.3 Hazard and Risk Assessments 28

5.3.1 Use of the flame retardants 28

5.3.2 Occupational Exposure 28

5.3.3 Environmental Release 29


6. Availability 31

6.1 Introduction 31

6.2 Demand and Production Capacity Analysis 31

6.2.1 Overall demand and production capacity 31

6.2.2 Presentation of the scenarios 36

6.2.3 Scenarios 37

6.3 Key differences from the authorisation application 42

6.3.1 Overview 42

6.3.2 HBCD demand requiring replacement 42

6.3.3 Global supply of the polymeric flame retardant 43

6.3.4 Estimates of demand for polymeric FR from non-EU regions 43

6.3.5 Other differences in approach 44

6.4 Overall conclusions on availability 45

7. Conclusion on Suitability and Availability of the Alternative 47

List of tables

Table 2.1 Physical data for Emerald Innovation 3000 Product 3 Table 2.2 Estimated Global HBCD Market (2011) 4 Table 2.3 Estimated European HBCD Market (Based on VECAP Survey data) 9 Table 3.1 Industry Experience with the polymeric flame retardant (POPRC Meeting, October 2013) 13 Table 3.2 Applicant’s assumption on timing for commercialisation of a FR Alternative 18 Table 5.1 Assessment of polymeric flame retardant and HBCD 26 Table 5.2 Process codes for HBCD taken from published dossier 28 Table 6.1 Key input data for availability analysis 32

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Table 6.2 Capacity Assumptions for Polymeric FR 34 Table 6.3 Key input parameters for scenarios 1 and 2 37 Table 6.4 Picture of supply versus demand using applicants’ estimates of EU pFR demand 39 Table 6.5 Comparison of estimated global HBCD demand in 2011 (tonnes) 42 Table 6.6 Comparison of estimates of global supply of polymeric flame retardant 43 Table 6.7 Estimated non-EU demand for the polymeric flame retardant 44

List of figures

Figure 2.1 Building Permits in the EU 28. 2007 to 2013 (Number of dwellings). Index: 2011=100 5 Figure 2.2 EU Supply chain: HBCD in EPS and XPS 7 Figure 4.1 Unit Price of Styrene relative to all other raw materials (Emerald Innovation 3000) and

HBCD (US Dollars per Kilogram) August 2008 to December 2012 – Note the data refers to EPS 20

Figure 6.1 Scenario 1: Demand and supply of Polymeric FR using key assumptions from the AfA 38 Figure 6.2 Scenario 2: Demand and supply of Polymeric FR using best estimate values 40

Appendices

Appendix A: IVH Press Release on HBCD Substitution Appendix B: Demand and Production Capacity Scenarios – Assumptions and Outputs

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Final Report 1


1. Introduction

1.1 Purpose of this Report

This report has been prepared by AMEC for Chemtura Manufacturing UK Ltd (Chemtura). Chemtura manufacture and supply hexabromocyclododecane (HBCD) (CAS No 25637-99-4

and 3194-55-6). The company is also one of three global licensees for a polymeric flame retardant (CAS No 1195978-93-8) which is sold under the trade name Emerald Innovation™

3000 (hereafter referred to as ‘Emerald Innovation 3000’ or ‘polymeric flame retardant’ given that other licensees will use different trade names).

The report examines the feasibility of substituting HBCD with the polymeric flame retardant.

Both substances are used as flame retardants in XPS and EPS foams. The study has been prepared taking into account relevant guidance on SEA under REACH and an assessment of the

economic feasibility of alternatives7.

HBCD has been placed on the REACH Authorisation list (Annex XIV)8, and the latest application date for authorisations under REACH was 21 February 2014. HBCD is also on the

list of prohibited substances under the Stockholm Convention on Persistent Organic Pollutants9.

The assessment follows the European Chemicals Agency (ECHA’s) suggested format for submission of information on alternatives as part of the public consultation on authorisation

applications10.

1.2 Status of this report

This report was originally prepared to examine the feasibility of substituting HBCD with the

polymeric flame retardant, with “Availability” as the key criterion. The report has subsequently been updated throughout based on an assessment of the information contained within the socio-

economic assessment (SEA) and the analysis of alternatives (AofA) parts of the application for authorisation. For ease of reference the consortia of companies who comprise those applying

7Guidance on the preparation of socio-economic analysis as part of the application for Authorisation:

http://echa.europa.eu/documents/10162/13643/sea_authorisation_en.pdf

See also: ECHA’s supplementary guidance on ‘How the Committee for Socio-Economic Analysis will

evaluate economic feasibility in applications for authorisation’:

http://echa.europa.eu/documents/10162/13580/seac_authorisations_economic_feasibility_evaluation_en.p

df

8 http://echa.europa.eu/addressing-chemicals-of-concern/authorisation/recommendation-for-inclusion-in-

the-authorisation-list/authorisation-list

9 http://chm.pops.int/TheConvention/ThePOPs/tabid/673/Default.aspx

10 http://echa.europa.eu/documents/10162/13555/instructions_third_parties_afa_en.pdf

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for authorisation are referred to as “the applicants”. This assessment is contained at the end of

each chapter.

1.3 Methodology

The study is based on a review of publicly available information on the implications of

substituting HBCD, produced in the context of REACH, the POPs Convention and work by the US EPA. This has been supplemented by interviews with Chemtura technical and commercial

staff and interviews with companies involved in the production of EPS beads (and XPS foam boards).

1.4 Contents

Following this introduction:

• Section two identifies the alternative and its properties, based on the ‘guidance for

identification of substances under REACH and CLP’.11

• The technical feasibility of the polymeric flame retardant to fulfil the same function

as HBCD as a flame retardant in EPS applications is assessed in section three.

• The economic feasibility of the polymeric flame retardant is examined in section

four.

• Section five evaluates the hazards and risks of HBCD compared to the polymeric

flame retardant.

• Section six examines the availability of the polymeric flame retardant, based on

scenarios of expected production capacity and demand in the EU and elsewhere. Detailed outputs and assumptions from the scenarios assessed are in Appendix B.

• Study conclusions are provided in section seven.

11 http://www.echa.europa.eu/documents/10162/13643/substance_id_en.pdf

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2. Alternative Identification and Properties

2.1 Identification of the Substance

Benzene, ethenyl polymer with 1,3 butadiene (brominated) (CAS 1195978-93-8) is the chemical name for the polymeric FR. It is a high molecular weight co-polymer of polystyrene and

brominated polybutadiene. It provides the flame retardant characteristics of the product needed to meet EU flame retardant standards. Table 2.1 provides a breakdown of general physico-

chemical properties of the product.

The polymeric FR is a compacted white powder, which like HBCD is used as an additive during the production of EPS and XPS insulation foams. Its large polymeric structure reduces bio-

availability.

The REACH Regulation contains a number of exemptions from the requirement to register substances. This includes the manufacture and use of polymers, such as the polymeric flame

retardant. However, this exemption does not extend to the monomer units within the polymer, which have already been registered by Chemtura.

Table 2.1 Physical data for Emerald Innovation 3000 Product12

Characteristic Description

Chemical name Benzene, ethenyl -polymer with 1,3 butadiene brominated

Chemical Abstract Service (CAS) number

1195978-93-8

Chemical Structure

Physical appearance Compacted white powder

Typical bromine content 64%

Solubility Insoluble in water

Specific gravity (water:1.0) 1.9

Log Octanol – water coefficient 2.0 (calculated)

12 Physical properties data provided by Chemtura, 2013

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2.2 Manufacture and Uses

2.2.1 Overview of uses

The use of XPS and EPS insulation foam containing HBCD flame retardant is primarily in building insulation. This use accounts for over 99% of the EU market of some 12,000 tonnes

per year. The remaining volumes, less than 1%, are used in high impact polystyrene, which is not considered further in this report13. The use of HBCD for textile back coating has largely

ceased.

The benefits of XPS and EPS insulation foam include their thermal insulation capacity, which reduces heating energy consumption/costs. The foams are lightweight and can be formulated in

a wide range of sizes/thicknesses, with excellent mechanical properties and water resistance14. The use of a flame retardant in these products protects lives and property from fire.

2.2.2 Market Size

The market size for HBCD in 2011 was estimated at some 31,000 tonnes globally, per year. Europe constitutes some 40% of this, at around 12,400 tonnes per year (Table 2.2). Import and

export volumes of finished EPS/XPS boards are minimal, given the low density/high transport costs, although some cross border trade in EPS beads is known to occur occasionally15.

Table 2.2 Estimated Global HBCD Market (2011)

World Region Volume (Tonnes) % of global demand

Europe 12,400 40%

China 12,100 39%

Japan 2,500 8%

South Korea 1,500 5%

Americas 2,500 5%

Total 31,000 100%

Source: Chemtura, 14 October 2013 (presentation at UNEP POPRC meeting). Note numbers have been rounded.

Given its use in building insulation, demand for HBCD is strongly linked to rates of

homebuilding, alongside the ‘retrofitting’ of existing housing. As such, European demand for HBCD has declined in comparison with levels of demand seen before 2009, given the economic

13 Chemtura, 18th October, 2013.

14Huntsman (2006), General Introduction to Expandable Polystyrene. and http://www.greenbuildingsolutions.org/Main-Menu/Home/Modern-Materials-Archive/Energy-

Efficiency/Performance-Across-The-Board.Designer.

15 Chemtura, 18th October, 2013.

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downturn. As reported in the VECAP data (summarised below), demand was around 11,000

tonnes in 2007, decreasing by some 15% to 20 % in 2008 and 2009 before recovering thereafter. Figure 2.1 illustrates the number of residential building permits issued in the EU28 between

April 2007 and September 2013. Building rates are indexed and compared with those of 2010 (annual average) which appear as 100. It shows that house building was falling significantly

across 2007 and 2008, with no recovery seen in building rates in the subsequent three years. It is noted that the applicants’ SEA assumes demand growth between 2015-2019 being driven by

building energy efficiency targets for 2020 and beyond and increased fuel costs, making insulation more cost effective16. The three businesses consulted as part of the study are not

optimistic about prospects for a sustained recovery in demand for flame retardant for this sector, driven by large increases in construction activity, in the short to medium term.

Figure 2.1 Building Permits in the EU 28. 2007 to 2013 (Number of dwellings). Index: 2011=100

0

50

100

150

200

250

Source: Eurostat. Building permits - number of dwellings. Gross data.

Industry Structure

Figure 2.2 shows the supply chain for HBCD in Europe (based on the 2011 volume data described above). If HBCD were to be replaced, the overall structure of the supply chain is not

expected to change, because the polymeric flame retardant is used in largely the same way as HBCD. The supply chain below has been used to examine the effects of a substitution to the

polymeric flame retardant in the analysis. There are presently three global companies who manufacture/import HBCD in Europe; the same three companies are licensed to

manufacture/import the polymeric flame retardant.

16 HBCD SEA Page 25 and 45.

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The EPS and XPS supply chains differ somewhat. Of the 12,400 tonnes of HBCD used in the

EU, some 99% (12,400t) are used in polystyrene foam (EPS or XPS)17. Of this some 65% (8,100 tonnes) are used in the manufacture of EPS. There are two types of EPS: white EPS

(some 65% to 70% of the market or around 5,400 tonnes in Europe, per year) and Grey EPS (some 30% to 35% of the market, or around 2,600 tonnes per year, in Europe).

The flame retardant is sold to EPS bead producers (around 15 companies) who sell EPS beads

to converters (some 60 companies) who then sell the finished EPS board to building contractors/wholesalers and some major retailers18.

The remaining 35% (4,300 tonnes) is used in XPS, where HBCD is sold to masterbatch/compounding firms, of which there are up to 20 in the EU. The compounds are sold to XPS board producers (of which there are between 20 and 40 companies across Europe)

and then to the same types of end users.

17 Note that a small volume - less than 1% are used in other applications, for the purpose of the analysis

this small volume has not subtracted from the total volume identified. Note that numbers have been rounded.

18 Note that we have largely considered numbers of companies within this analysis. The number of sites

is larger, as several companies operate multiple sites across Europe.

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Figure 2.2 EU Supply chain: HBCD in EPS and XPS

EU Manufacturers of HBCDCompanies: (3)

EU Volume: 12,400 t

Bead producers EU Companies: (12-15)

Building Contractors / Wholesalers / DIY Retail

Converters EU Companies:(50-70)

Masterbatchers/Compounders

EU Companies: (17-20)

XPS Board ProducersEU Companies: (20-40)

EPS65% of market

EU Volume: (8,100 t)

XPS35% of market

EU Volume (4,300 t)

Source: Chemtura 18 October, 2013, based on 2011 data for HBCD volumes

2.3 Classification and Labelling

The EU regulation on the classification, labelling and packaging of substances and mixtures (CLP) EC 1272/2008 was introduced on 20 January 200919 as part of a wider initiative towards

a global harmonised system (GHS) for the way that chemical hazards are identified and communicated. The introduction of CLP in Europe repealed the existing dangerous substances

directive (DSD) (67/548/EEC) and dangerous preparations directive (DPD) (EC 1999/45) and included the adoption of the newly created H and P statements (replacing risk and precaution

phrases), signal words and changes to hazard symbols.

For any company that places commodities on the European market, either directly as a manufacturer/retailer or indirectly as an importer, there is a legal requirement to assess chemical

goods against the classification criteria in CLP and label and package the goods accordingly.

19 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:353:0001:1355:en:PDF

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This includes the creation of a REACH-compliant safety data sheet (SDS) providing all relevant

information. Emerald Innovation 3000 has been assessed both against the CLP regulation and its predecessors under DPD and DSD. The substance will not require any specific hazard

symbols or phrases to be used on packaging or SDS.

2.4 HBCD Application for Authorisation: Commentary on the SEA and AofA

2.4.1 Scope of Application

The applicants are seeking continued use of EPS in building applications only. An application for authorisation for continued use of HBCD in XPS was not submitted (to our knowledge). This implies that technical and economic feasibility and availability of alternative(s) for the XPS market is accepted by the XPS market. The applicants also note that import of the final articles is not considered to be viable20.

2.4.2 Market Size

The applicants estimate demand for HBCD in both 2007 and again in 2011. This is used as a

basis for estimating demand for the polymeric flame retardant. Total demand for HBCD in Europe in 2007 is estimated by the applicants at 12,625 tonnes based on a confidential CMAI

study from 200921. Total European and global demand in 2011 is subsequently estimated, based on several assumptions and two data sources, discussed below:

• To estimate 2011 demand for HBCD in Europe, the applicants assume a 4% annual

growth rate in demand for EPS and 3% for XPS and apply this to the 12,625 figure

above. The applicants state this would equate to demand in Europe in 2011 of some 14,483 tonnes. This is based on an estimate of annual growth from the

consortium members themselves, rather than on published sales data.

• In relation to HBCD demand arising from outside of the EU, the applicants quote

data from Chemtura’s presentation at the UNEP POPPRC of 14 October 2013. The HBCD demand figures presented in the application for authorisation, in all non

EU regions (Japan, Americas, China and Korea) are the same as those presented by Chemtura.

• The applicants estimate can be compared to data published under the Voluntary

Emissions Control Programme (VECAP), which suggests EU sales of HBCD of between 10,000 and 12,500 tonnes in 2011 and in 2012, along with an earlier drop

in sales between 2007 and 2009 (Table 2.3)22. The data below appears consistent with the assumptions made in this study (set out in Table 2.2 above).

20 HBCD SEA Pages 9 and 57.

21 HBCD SEA Page 25. This figure was derived by taking the volume of EPS and XPS in 2007, and factoring in the estimated amount used in construction, the assumed amount that is flame retarded, and

the average HBCD content.

22 Chemtura, personal communication, June 2014. It should be noted that VECAP surveys include

HBCDD sales to Norway, Switzerland and Turkey. Imports from non EFRA companies to the EU are not

Final Report 9


Table 2.3 Estimated European HBCD Market (Based on VECAP Survey data)

Volumes sold by EFRA Members (tonnes)

2007 2008 2009 2010 2011 2012

Total 10,897 [1] 8,913 [2] 9,280 [2] 10,000 -12,500 [3]

10,000 -12,500 [3]

10,000-12,500 [3]

Sources:

[1] http://www.vecap.info/uploads/VECAP_report_22%2001.pdf

[2] http://www.vecap.info/uploads/VECAP_2011_light.pdf

[3] http://www.vecap.info/uploads/VcapLayout34_WEB.pdf

Overall, the applicant’s assumptions in terms of EU demand for HBCD are much higher than the published data above, in Figure 2.1 and the assumed level of growth is not consistent with information from the three companies consulted as part of this study who have reported a fall in demand, reflecting weaker economic conditions in Europe. The 2011 European HBCD demand figure assumed by the applicants (14,483 tonnes) is some 15% higher than that used in this analysis (12,400 tonnes) and between 16% and 45% higher than that assumed by VECAP.

2.4.3 Industry Structure

The applicants identify a total of 22 sites in 2007 (with a further 4 later identified) that produce flame retardant EPS beads and a total of 587 flame retardant bead converter facilities in the EU23. A total of 56 XPS ‘production facilities’ are identified in the (enlarged) EU24. This differs from the approach taken in this study, which uses number of companies, rather than sites. It is understood that many companies have several sites/facilities.

included. In the absence of publicly available data for both of these aspects, it is understood that these

volumes are likely be broadly equal so that the figures represent a reasonable estimate of the EU market.

23 HBCD SEA Pages 33 and 35.

24 HBCD SEA page 105.

Final Report 10


3. Technical Feasibility

3.1 Introduction

This section details the technical feasibility of Emerald Innovation 3000 in terms of its ability to provide equivalent functionality to the existing flame retardant product HBCD. It provides a

background to EPS production and examines technical aspects of substitution. No assessment of substitution associated with XPS has been undertaken. Statements made by a number of

companies at a Stockholm Convention POP Review Committee (POPRC9) meeting held in October 2013 relating to the technical feasibility of the product are also summarised.

3.2 Substance Function and Requirements for the Alternative

3.2.1 Requirements of the alternative

To remain compliant with EU and national regulation on fire-resistant properties within

building materials, it is necessary for EPS (and XPS) insulation products to contain flame retardants. HBCD is effective at concentrations of c. 0.7 % in White EPS25, c.1.1% in Grey

EPS and c.1.75% in XPS, meeting physical and fire resistance requirements.

The two key elements for substance function are therefore that it:

i) allows EPS products to meet the required flame resistance limits; and

ii) must not alter the physical properties of the product, particularly density (which affects

costs), mechanical strength and lambda value (i.e. thermal conductivity)26.

Both HBCD and Emerald Innovation 3000 are ‘additive’ flame retardants. They are solids that are added to the polystyrene products during manufacture and blending. A brief description of

how EPS is manufactured is below.

3.2.2 Standard production process for EPS27

Production of Expanded Polystyrene (EPS) is a batch process that centres around two stages:

i) Manufacture of EPS beads. EPS beads are produced in a thermal process where styrene

monomer, additives and flame-retardant are mixed within a water solution in a pressurised

25 These are the loadings assumed in the analysis which are based on consultation with Chemtura and

other HBCD users. They are indicative, the precise formulation for flame retardant (and other additives)

is the manufacturers’ proprietary information.

26 http://www.ecotherm.co.uk/rigid_insulation/thermal_conductivity.aspx

27 Posner et al, 2010, Exploration of Management Options for HBCD – report for the UNECE

Final Report 11


vessel at 65-145 degrees Celsius. During this closed-cycle mixing phase, the styrene

monomer polymerises to form polystyrene incorporating the additives (including flame-retardants) and pentane into its matrix (HBCD is not chemically bonded to the polystyrene).

The polymer is then collected from solution using centrifuge and dried to form hard beads of polystyrene compound.

ii) Expansion to manufacture boards. In the second phase, EPS beads are heated with steam,

causing the pentane component to volatise and spur expansion of the bead up to 50 times its

original size. This produces a light-weight product with high thermal insulation properties. The expanded beads are then steam-heated to melt them, and allow moulding into boards or

sheets for construction of the final product. The boards can then be cut to shape as required.

3.3 Technical Stages in Substitution

The use of flame retardant chemicals occurs during the manufacture of the beads for EPS

products. A delicate mixture of compounds is blended with styrene/polystyrene to derive optimal performance in the final goods. Emerald Innovation 3000 would be used (substituted)

within this part of the process. It can be used in a similar fashion to HBCD with few requirements for new infrastructure or capital investment in equipment.

The main technical issues faced for substitution will be reformulation of the blends needed to

produce EPS. The relevant product recipes need to be modified which requires research and development work. This can involve relatively minor modifications in each case, but a fair deal

of experimentation28. The revised recipe(s) also require testing in downstream users’ equipment and this has required some technical support.

Emerald Innovation 3000 contains less bromine content (per kg) compared to HBCD (64% vs

74% in HBCD), which means that more Emerald Innovation 3000 is needed within the mixture (typically c.15% more however assessments in the present study on economic feasibility and

availability are based on a conservative figure of 20%) to reach the required fire performance. However, quantities required are still low. Products containing Emerald Innovation 3000

passed both the EN class E and German B2 flammability tests29. Reformulation of blends for EPS requires pilot trials and assessments of product, before scaling up to full operational

production.

This process can take up to 1 year to complete successfully. The applicants’ analysis of alternatives states that the ‘optimum’ and ‘most likely’ timings for product confirmation from

commercial availability was between 6 months and 10 months, respectively30. However, as Emerald Innovation 3000 has been commercially available on the market for some time (up to

three years) much of this work has already been completed, by several companies.

28 Interview with downstream user, 11 November 2013.

29 Based on discussions with Chemtura.


Final Report 12


3.4 Implications of Substitution

Research carried out by the Industry Foam Association, European Association of Polystyrene

Producers and Research Institute for Thermal Protection (FIW) presented to the German Institute for Building Technology (DIBT)31 demonstrated that there were no performance

concerns for the polymeric flame retardant and that the heat insulating, fire performance and physical properties of the EPS products analysed were unaffected.

The most significant implication for substitution from a technical perspective is the

reformulation of blends. HBCD has been used for many years with sufficient industrial experience to fully optimise production and minimise waste. The work to integrate Emerald

Innovation 3000 into the market place has already been underway for some time with commercialisation of the product already in place (by several companies), albeit not at full

capacity. Further expansion of the market is not expected to cause any serious concerns for further optimisation of blends and production, overall, although this is an ongoing process.

3.5 Wider Industry Experience with Substitution

During the ninth Stockholm Convention POP Review Committee (POPRC9) meeting held in October 2013, a side event was held on ‘alternatives to HBCD - state of play’32. During the side

event, presentations from across the industry were made, providing information on the alternatives available and feedback on experience with alternative substances, to date.

Presentations were made from all three licensees for the polymeric alternative: Chemtura, Albermarle and ICL, with a further presentation made by the manufacturers of a non polymeric

alternative with the trade name ‘BDDP’. User feedback was provided by a number of companies such as Ineos Styrenics, BASF, DOW, Synthos SA, Isochemicals, Kaneka

Corporation (Japan), Knauf Insulation and Flint Hills Resources USA33. There was not complete agreement between all industry members and some challenges have arisen and

concerns were aired at the meeting; however a summary of the key findings is presented in Table 3.1 below. The information is taken directly from the respective company presentations,

with minor edits provided for clarification.

31 IVH press release, 2013, “Industry is striving for EPS flame retardant exchange by mid-2014”

(translation).

32 http://chm.pops.int/TheConvention/POPsReviewCommittee/Meetings/POPRC9/Overview/tabid/3280/mctl/ViewDeta

ils/EventModID/871/EventID/407/xmid/10326/Default.aspx

33 Source: programme for the HBCD side event, Monday 14-10-2013.

Final Report 13


Table 3.1 Industry Experience with the polymeric flame retardant (POPRC Meeting, October 2013)

Industry body/group or company Written Comments

BASF “Chemically, we can transition [from HBCD] tomorrow”.

KNAUF insulation [Information relating to XPS application],

An industrial trial was performed with the polymeric flame retardant in a large twin extruder (110/400mm), using 12% greater quantity of polymeric flame retardant compared to HBCD on a 50mm product (with CO2 standard recipe).

For the Euroclass “E” fire standard: All tested master batches passed the test with a P-FR content around 10% higher compared to HBCD

Application Related Requirements

B1/B2 (German) – P-FR content around 12-15% higher compared to HBCD, most tests were passed

M1 (France) – not sufficient trials / currently under review

[Information relating to EPS application],

Industrial Trials were performed on Polystyrene (including infrared absorbers) manufactured with Emerald 3000 as Flame Retardant

Industrial size Trial:

Fire Behaviour

All fire tests (B1/B2/Euroclass E) were passed

Processing

During the steaming process the pressures need to be increased which increases the energy consumption around 8%

Other Technical specifications

Cohesion between beads is 5-10% less compared to standard HBCD based products (this decrease can be compensated by adapting the process parameters)

Current results show a slight decrease in compressive strength (CS). These parameters are currently under review

“Technically the Polymeric FR can replace the existing HBCD solution in most applications“

The HSE profile [of the polymeric flame retardant] is the most promising between all alternative solutions.”

“It will be a challenge to absorb the additional cost for the polymeric, but [we] will start with the introduction of HBCD free products (in high end applications) from the begin[ning] of 2014”.

Ineos Styrenics “pFR has been identified as a sustainable alternative to HBCD. This is the only viable alternative identified so far.”

Note, concerns were expressed by the company over the timescales for supply, and the potential for delays in the commercialisation process. These issues are examined later, but the comments are reproduced below.

Final Report 14



“[3 companies have] announced new capacities by 2015 to give in total 30kt globally. This is insufficient to meet all global current HBCD use in PS foams.”

“Large construction projects are often late, Chemtura was 15-18 months behind schedule from their initial announcement” (NOTE that Chemtura dispute this claim).

“For each supplier and each user there is an iterative process to optimise product/process between FR producer and PS raw material manufacturer. Plant trials need to be accommodated with on-going business, if there are no issues then testing can take 6-9 months and this can take considerably longer if there are issues.

Only once plants have steady state and consistent product can downstream raw material producers finalise their production ”

Kaneka Situation of HBCD (Japan)

EPS : Already switched HBCD to alternative flame retardant

XPS: Not yet. Switch HBCD to alternative flame retardant by April 2014

Compared with HBCD, the thermal stability is poorer and has poorer light proofness (N.B. it is assumed this means performance or colour fades in contact with sunlight. Kaneka indicate they are considering using a UV absorber in the product [to counteract the effects]).

[The company is currently] Optimising the manufacturing processes & foam property.

“Switching has been “seamless” without major issues.”

“In Japan, for the alternative flame retardant (FR),

Polymeric type FR and non-polymeric type FR both available

Both FR [are] OK for EPS & XPS”

They conclude the unit price is ‘higher but acceptable’

Flint Hills Resources “Flint Hills Resources, LLC, announced today [25th July 2013] that its polymer plant in Peru, Ill., will soon begin manufacturing its expandable polystyrene (EPS) resin with new polymeric flame retardant technology as an alternative to the flame retardant additive Hexabromocyclododecane (HBCD). The company’s transition to Emerald Innovation™ 3000 flame retardant is planned to start in August for some resin grades, with the full product slate expected to include the additive by late September [presumably this refers to 2013].”

“We believe our customers will find it an attractive sustainable alternative to the HBCD flame retardant additive commonly used today.”

“Flint Hills Resources’ newly modified resin has successfully passed rigorous third-party testing and is listed by Underwriter Laboratories, Inc., classified by Underwriter Laboratories Canada, and accepted by the International Code Council Evaluation Service for use in building and construction applications.

Customers should not see any difference in their operations due to the additive change”.

“We have carefully engineered our EPS resin to ensure consistency with our standards for high-quality products offered to the market.”

IVH IVH a major converter’s association (IVH) has endorsed EI 3000’s wide scale use within its members products.

Final Report 15



ICL “...the introduction of FR-122P [trade name for the polymeric flame retardant} to the market continues according to the plan and time table. FR-122P was developed to replace the HBCD FR which is currently the standard used in EPS/XPS insulation foams. Commercial quantities of FR-122P are already available at a level of several thousands of metric tons per year.

Previously, ICL-IP supplied customers with pilot quantities to conduct testing and evaluation processes. Tests conducted to date confirm FR-122P’s suitability for use in the full range of EPS and XPS insulation foams.”

Synthos “...Large amount[s] of own research over last years has been deployed to identify and develop a viable alternative to HBCDD. Synthos checked the 12 most promising alternatives from different suppliers. Synthos spent over €5.7 million for development of alternative flame retardant (costs without investment) – [presume this means research costs i.e. without capital investment] The most promising alternative substances were found to be brominated polymer products proposed by chemicals manufacturers Chemtura, Albemarle and ICL&IP, based on a technology developed by the Dow Chemical Company.”

“Problems that have to be solved in the coming years:

Stable quality from alternative suppliers. At present only one supplier start full scale production. Even small changes in the recipe can lead to unstable polymerisation and dramatic drop in the final quality of EPS.

Big difference in performance amongst individual supplier. Some Pfr [polymeric flame retardant] products are not viable for EPS production.

At this stage we have implemented pFR into one [of three] products grades.

Strong resistance in some downstream markets [requires] downstream education and certification of each EPS construction application on some markets.

Synthos will ask ECHA for continued use of HBCD until 2019.

Albermarle Albemarle wants to reaffirm its commitment to support its customers’ transition from HBCD to a more sustainable alternative in due course and with appropriate regulatory frameworks.

In April 2012 announced a technology license agreement with DOW for a new polymeric flame retardant for use in EPS and XPS foam. This year we are running the sampling campaign of our GreenCrest TM polymeric fire safety solution for commercial qualification in EPS and XPS applications and sampling will begin now. The company expects to commercialise GreenCrest TM in 2015, before the REACH sunset date (i.e. 21 August 2015).

GreenCrest TM has been successfully registered in several countries and regulatory frameworks.

As a polymer, GreenCrest TM represents a more sustainable alternative to HBCD. Due to its high molecular weight it won’t be absorbed by the body if ingested. This characteristic also provides a favourable ecotoxicity profile.

We are confident that the steps we take will make this transition as effective and smooth as possible.

Sources:

BASF: Verbal Statement, Giorgio Greening BASF.

Final Report 16


KNAUF insulation: HBCD Replacement by Brominated Butadiene-Styrene Polymer (BrBDS). Mr Kurt Muender.

Ineos Styrenics POPRC9 HBCD Side Event: A European perspective.

Kaneka: From HBCD to the alternative flame retardant.

Flint Hills: Flint Hills Resources Press Release: Flint Hills resources will manufacture expandable polystyrene with new flame retardant technology.

ICL: ‘ICL IP Commercial availability of sustainable polymeric flame retardant, October 9th 2013.

Synthos: Transitioning from HBCD to an alternative FR form PS building and construction products.

Albemarle: General statement by Albemarle at the HBCD Alternatives Information Session organised aside the POPRC9 meeting on October 14, 2013


The technical feasibility of the polymeric flame retardant is not disputed by the applicants, who

are committed to the complete substitution of HBCD. The applicants state that trials have been undertaken by all EPS producers in small quantities based on samples provided by the

polymeric flame retardant suppliers and these trials have indicated technical feasibility34.

The applicants state that further testing and confirmation of technical suitability will need to be carried out by the pellet and article producers, alongside marketing and certification35.

However, as noted above, the polymeric flame retardant is already commercially available – and is being sold. As noted above, much of this work has already been completed, by several

companies. The experience of such companies suggests, whilst acknowledging the process of optimisation is ongoing, that the process of substitution has taken approximately one year. The

applicants’ analysis of alternatives states that the ‘optimum’ and ‘most likely’ timings for product confirmation from commercial availability may be rather than less than this, between 6

months and 10 months, respectively36.

In relation to fire certification, footnote 15 of the applicants’ SEA acknowledges that testing is currently being carried out on behalf of IVH to allow a ‘generic approval of the pFR as a

replacement for HBCD’37. We understand that this testing is now complete.

A press release dated 26 May 2014, from IVH (translated from German and reproduced in Appendix A) recommends that industry switch from HBCD in mid 2014 and that a complete

switch takes place by late 2014. It notes products have already been successfully brought to market using the polymeric flame retardant.

Table 1.4 of the applicants’ AofA provides further assumptions on timescales required to substitute HBCD with the polymeric. This is reproduced in Table 3.2, along with relevant

34 HBCD SEA Page 17.




Final Report 17


commentary based on our own analysis and discussion with companies who have started using

the polymeric flame retardant38.

38 HBCD AofA Page 15.

Final Report

18

© AMEC Environnent & Infrastructure UK Limited July 2014 Doc Reg No. 34972 Final Report 20140703

Table 3.2 Applicant’s assumption on timing for commercialisation of a FR Alternative

Applicants description of step/Action Assumed timing Applicants’ Comment AMEC Comments

13. Initiate toxicity testing for REACH registration – if testing OK go to step 14 (note step 14 is marked as ‘done’, so not included) - if testing not OK, repeat steps 5 to 13 until a technically and HSE suitable alternative is found

n X 12 months On-going (alternative substance is not a polymer so not currently under REACH)

The polymeric does not require REACH registration. The monomers have been registered under REACH. Not required.

16. Obtain product and process orientated research and development (PPORD) exemption from REACH registration for each country and customer where the product will be tested.

3 months On-going (alternative substance is not a polymer so not currently under REACH)

As above. Not required.

17. Application pilot and industrial trials at partners 6 months To be initiated The product is commercially available at present. Several companies have completed these trials and are selling products based on the polymeric flame retardant (including some of the applicants).

18. Technical and organisational modifications of EPS production plants (e.g. equipment changes, tuning of process control and production parameters, training of personnel).

6 months To be initiated The product is commercially available at present. Substantive changes/investments to plant or production equipment are not necessary (discussed further in the Economic Feasibility chapter).

19. Build plant and start up 12-18 months To be initiated In terms of FR manufacture, Chemtura’s plant has already been built.

We understand that new plant is not required by EPS bead and board manufacturers (i.e. the polymeric FR can be used in the same plant as HBCD).

20. Contingency for unexpected delays/problems and product tuning. Chemtura experience for pFR indicates that this could be 15-18 months.

15-18 months To be initiated Chemtura have provided information on the delays as part of their initial submission on alternatives (21 June 2014). This step is no longer considered relevant given that nameplate capacity has already been demonstrated.

21. Iteration between pFR and EPS formulators and between EPS formulators and converters – necessary to ensure product commercial viability.

2 x 6 months To be initiated The product is commercially available at present. It is recognised that a process of optimisation is ongoing.

This step seems to double-count steps 17 and 18.

22. Commercialisation after full registration in each Country (e.g. 24 month IVH programme in Germany).

24-36 months Initiated (In Germany to date)

The product is commercially available at present. Appears to contradict footnote 15 in applicants’ SEA (discussed above).

Total time for initiated and on-going tasks ca. 4-6 years.

Total time for all steps ca 7 - >11 years

The information above appears inconsistent with evidence seen in the preparation of this study. The process for arriving at the total figure is unclear to us. Some companies will already have substituted fully within 2014.

Source: Applicants SEA and AofA. Additional commentary draws from that presented elsewhere in the report. Note: Not all steps are reproduced in this table.

Final Report 19


4. Economic Feasibility

4.1 Introduction

An assessment of economic feasibility of the polymeric flame retardant in comparison with HBCD was undertaken. First, direct costs incurred to the EU EPS insulation foam market

arising through a transition from HBCD to the polymeric flame retardant were assessed. Second, costs to individual companies were examined, based on two approaches: the number of

companies in the supply chain and estimated typical production volumes. Third, the affordability of the costs identified was examined, for businesses of different sizes, based on typical margins for the sector as a whole. Fourth, the effects of these costs on final product

prices were evaluated.

The analysis was based on interviews with major EPS and XPS producers noted in the

introduction and with Chemtura, alongside publicly available data on market characteristics and prices. The detailed step-by-step calculations are not shown; given that economic feasibility of

the polymeric alternative is not disputed by the applicants and is not the subject of the central analysis within the SEA / AofA in the Authorisation Application, which relates to availability.

Overall the assessment indicates that the polymeric flame retardant is an economically feasible

alternative to HBCD. The analysis suggests an increase in the final product price (whether per tonne or per board of EPS) of around 1%. This takes account of additional volumes of the

polymeric flame retardant likely to be required and the higher units costs, in comparison with HBCD alongside fire recertification and testing costs.

Any increase in costs should be considered in light of the following factors. First, a low

proportion of the flame retardant is used in the polystyrene foam formulation. Second, in recent years the price of the major raw material in both EPS and XPS (the styrene monomer) has

varied to a much greater extent than the price changes identified in using the polymeric flame retardant. Third, the analysis has assumed a stable price for Emerald Innovation 3000. . It is

possible that its unit price will decrease, over time.

There are no effects on production speeds anticipated and substantive changes/investments to plant or production equipment are not necessary39. It is understood, from consultation carried

out as part of the study, that a price increase of the scale estimated above is not expected to result in EPS foam losing ground to functional insulation competition (mineral wool, for

example)40.

Whether using HBCD or the polymeric as the flame-retardant in EPS or XPS, there are several other raw materials which also affect the end price for EPS/XPS insulation board. For EPS

these are styrene, benzyol peroxide, t-butyl per benzoate, dicumylperoxide and pentane. Of these, the major raw material is styrene, used in approximately equal quantities in EPS and XPS

39 Interview with downstream users on, 5 November 2013, 6 November 2013; and Chemtura, 18 October

2013.

40 Source: Chemtura 4 February 2014 (based on discussions with major FR-polystyrene producers).

Final Report 20


board, irrespective of which flame retardant is used. Figure 4.1 shows that the price of styrene

has been relatively volatile since 2008, from some $2 US dollars per kilogram in April 2008 (and again in December 2012), to less than $1 dollar in October 2008. The figure also shows

the comparative costs of all the other the other raw materials, whether using HBCD or the polymeric flame retardant41. Whilst the costs of flame retardant are significant, (as is the

increased cost of the polymeric flame retardant compared to HBCD), the data indicates it is likely to be much less significant than changes in the styrene price in the market over the last

five years.

Figure 4.1 Unit Price of Styrene relative to all other raw materials (Emerald Innovation 3000) and HBCD (US Dollars per Kilogram) August 2008 to December 2012 – Note the data refers to EPS

0

0.5

1

1.5

2

2.5

Styrene (US$/kg)

All raw materials (excl. styrene monomer HBCD (US$/kg EPS))

All raw mterials (excl. styrene monomer, EI3000 (US$/kg EPS))

Source: Data provided by Chemtura, 17 October 2013


The economic feasibility of the polymeric alternative is not disputed by the applicants. The

applicants note that the polymeric alterative will cost more than HBCD on a weight by weight basis and that greater quantities of the polymeric flame retardant are likely to be required in

order to meet fire safety standards.

41 Note these are shown for comparative purposes, some price changes in the other raw materials are

likely to have occurred in the time period shown, but this has not been researched further.

Final Report 21


Taking these factors into account the applicants “assume [the polymeric flame retardant] is

economically feasible as EPS producers have the intention to switch from HBCD to the Polymeric flame retardant”42.

Although no price data was available, the applicants note that some EPS producers who are not

part of the HBCD consortium are thought to have secured contracts in place for initial supplies to be available43.

The applicants provide an analysis of the effects on the EU EPS sector’s economic competiveness of insufficient quantities of the polymeric flame retardant being available. This

issue is analysed in section 6. Most if not all of the costs quantified in the applicants’ SEA are predicted to occur as a result in lack of availability of the polymeric flame retardant to the applicant and not due to the relative costs between HBCD and the polymeric FR. If there is no

shortfall between available quantities and EU demand, then we assume these costs – estimated to be in the order of between €740 million and €1,175 million at present values between 2015

and 201944 – would not be incurred.

42 HBCD SEA Page 17


44 HBCD SEA Page 129

Final Report 22


5. Hazards and Risks of the Alternative

5.1 Introduction

5.1.1 Overview

This section provides information regarding the hazards and risks of both the polymeric flame retardant and HBCD within the REACH context. The key themes within REACH are to

improve the safe use of chemical substances through the provision of health, safety and environmental data and the control of substances deemed to be of particularly high concern.

For the standard use of chemical substances it is necessary to review applications as part of a chemical safety assessment (CSA) which is then reported through the chemical safety report (CSR) as exposure scenarios in the registration dossiers, and subsequently in the extended

safety data sheet (E-SDS). This is intended to demonstrate the relationship between hazard and risk and control of those risks.

Authorisation is used to control the use of Substances of Very High Concern (SVHC). Identification of a SVHC substance and addition to the SVHC candidate list is based on

nomination by member state competent authorities (MSCAs) or ECHA based on a weight of evidence surrounding qualifying criteria of ‘Persistence, Bioaccumulation and Toxicity’ - PBT

the latter relates to Carcinogenic, Mutagenic or toxic to Reproduction – CMR properties.

HBCD has already been identified as a SVHC substance with listing on the Authorisation list (Annex XIV of REACH). During this review process it was also being assessed under the

UNEP Stockholm Convention on Persistent Organic Pollutants (POPs) for addition to the Convention annexes which can include banning substances from sale or severe restrictions on

use. Under the latter, HBCD will be included on the list of substances for global elimination on 26th November 2014, with exemption for its use in polystyrene foams for buildings.

The remaining sections of this chapter compare the polymeric flame retardant against the PBT

criteria for REACH and HBCD’s properties, as well as an overview of the likely hazards and risks during use, including a discussion of risk management measures (RMMs).

5.1.2 PBT assessments

Annex XIII of the REACH regulation sets out the specific criteria for assessment against PBT characteristics. These are detailed as follows:

Final Report 23


Persistence

Persistence is a measure of how long a given substance survives in the natural environment in order to cause effect as that substance. Consideration is not given to breakdown products in this regard. The key measure to assess persistence is therefore what is termed ‘half-life’, which is the period of time required for 50% of the substance to have decayed or been broken down into different products. Half-life will vary depending on the natural environment (air, water, soil) and the breakdown processes available to remove a given substance from the environment in that form.

• Annex XIII of the REACH regulation considers a substance meets the ‘persistence’ characteristic if:

• Marine half-life >60 days

• Fresh water half-life >40 days

• Marine sediments half-life >180 days

• Fresh water sediments half-life >120 days

• Soil half-life >120 days

Bioaccumulation

Bioaccumulation is a measure of a given substances ability to accumulate up the food chain where toxic effects can become magnified. Typically substances capable of bioaccumulation concentrate within the fatty tissues of the body where metabolism and excretion are more difficult. Therefore the existing measures for a substance’s ability to bioaccumulate will relate to solubility within both water and oil. Under the REACH regulation the chosen measure is ‘Bio-Concentration Factor (BCF)’ which is a ratio between the quantity of substance within the body tissues of an effected species (usually fish) and the quantity of substance remaining within the water.

Annex XIII of the REACH regulation considers a substance meets the ‘bioaccumulation’ characteristic if:

• BCF >2000

Toxicity

Toxicity within the REACH regulation includes both human health but also environmental affects, particularly to the aquatic environment. The key measure for toxicity affecting human health relates to the ‘Carcinogenic, mutagenic or reproduction toxicity (CMR)’ of a given substance, which is assessed by the International Agency for Research on Cancer (IARC). IARC uses differing categories to indicate the level of potential effect a substance will have with the lowest numbered categories being of the highest hazard.

Annex XIII of the REACH regulation considers a substance meets the ‘toxic’ characteristic if a substance is included in:

• IARC Cat. 1 or 2 carcinogen

• IARC Cat. 1 or 2 mutagen

• IARC Cat.1,2 or 3 Reproduction Toxicity

Other classifications:

• T,R48 or Xn,R48 under 67/548/EEC

Equally, the REACH regulation considers toxic effects for the natural environment, particularly aquatic environment, where the key measure is what is termed ‘No Effect Concentration NOEC’, this is a threshold value above which harmful effects to the aquatic eco-system may start to present.

Annex XIII of the REACH regulation considers a substance meets the ‘toxic’ characteristic if the substance causes harmful effects below the NOEC which is:

• NOEC (marine and freshwaters) 0.01mg/l

Final Report 24


5.2 Assessment of the Polymeric Flame Retardant and HBCD

Through the REACH SVHC process HBCD has been confirmed as having PBT characteristics and was added to the REACH Authorisation list in the spring of 2011. Alongside the REACH

process the UNEP Stockholm Convention also confirmed the identity of HBCD as meeting the ‘POP’ classifying criteria and it was provisionally added to Annex A of the convention (in

summer of 2013) requiring a full ban from sale, with specific exemptions, allowing continued use of HBCD for application as a flame retardant in expanded polystyrene (EPS) and extruded

polystyrene (XPS) insulation products in buildings. . Members of the Convention have one year from the provisional addition to ratify at which point it is fully adopted and enters into force.

The POPs Convention Review Committee recognised that replacements for HBCD may take several years to develop and implement; the exemption for EPS and XPS is set at 5 years from

full listing but may be reduced or extended depending on progress with development of alternatives.

One of the key functional characteristics of HBCD’s role as a flame retardant is a high level of

stability. This stability lends itself to the persistent ‘criteria’ under PBT assessment.

A United States EPA review of alternatives to HBCD included the polymeric flame retardant,

amongst others. It assessed all of the alternatives in terms of their health and environmental impact. This assessment included comparison to HBCD as part of the review. Its key

conclusion was that the polymeric flame retardant presented a lower risk to both health and environment than HBCD45.

Table 5.1 provides a summary of the PBT data for both HBCD and the polymeric flame

retardant. This demonstrates HBCD has a bio concentration factor (BCF) in the range between 13,100 – 18,100 (PBT threshold for BCF is 2000), with the latter value accepted by the

European Commission. This suggests that HBCD has a high potential for bioaccumulation. The assessment of evidence related to potential health effects has led to the categorisation of

HBCD as category 2 reproduction toxicity (discussed below). In terms of environmental effects, a number of studies highlight the deleterious effects of HBCD on aquatic species

particularly its role in aquatic toxicity.

As both the REACH and UNEP Stockholm Convention processes have run in tandem, industry has responded by looking to identify viable alternatives to HBCD. In this respect the core

issues have been to locate a substance which has similar or better performance capabilities, viable cost base and essentially does not breach the PBT or POP assessment criteria thereby

replacing one PBT or POP substance with another.

The polymeric flame retardant is a high molecular weight (>100,000 g/mole; Moore, 201346) co-polymer with a high degree of thermal stability and similar flame retardancy performance

levels as HBCD.

45

USEPA, 2014, Flame retardant alternatives for HBCDD, Final Report http://www.epa.gov/dfe/pubs/projects/hbcd/hbcd-full-

report-508.pdf

46 Marshall Moore (Chemtura), 2013, Presentation at the ninth UNEP POP Review Committee (POPRC)

held on 14th October 2013

Final Report 25


The review of the polymeric flame retardant substance against the PBT qualifying criteria is

summarised in Table 5.2 and illustrates a low level of solubility and high levels of stability within the natural environment. This high stability, low solubility (as with HBCD) meant that

half-life testing for aquatic environments was difficult, but it did meet the qualifying criteria to be assumed ‘Persistent’ under the REACH process.

The other qualifying criteria, however, differ from HBCD. While the polymeric flame retardant

has a very low solubility, the high molecular weight and size of the molecule reduces bioavailability, meaning that in assessment the potential for bioaccumulation was low, with a

BCF <100. Equally in toxicity testing and assessment for CMR properties, the high molecular weight reduces bioavailability and the potential for the substance to interact with the body in a

deleterious manner. The US-EPA review concluded that the polymeric flame retardant was unlikely to have ‘C’ or ‘R’ characteristics while Ames testing confirmed that it was unlikely to

be mutagenic. Eco-toxicity testing confirmed that toxic effects on aquatic species were also less likely.

CONFIDE NTIAL

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Table 5.1 Assessment of polymeric flame retardant and HBCD

Description Polymeric flame retardant HBCD Meets/Fails qualifying criteria.

Persistence:

Marine half-life >60 days

Fresh water half-life >40 days

Marine sediments half-life >180 days

Fresh water sediments half-life >120 days

Soil half-life >120 days

The polymeric flame retardant is a large molecular weight polymer and so has very solubility making half-life studies in water difficult. USEPA47 estimates quote:

>1 year in water (all types)

Testing in soil showed no degradation after 62 days.

HBCD has very low solubility in water making half-life studies difficult. One study by Schaefer (1996)48 showed no degradation after a period of 28 days in fresh water.

Aerobic Soils : 191 – 214 days49

Anaerobic soils: 80 – 210 days4

HBCD: Persistent

EI 3000: Persistent

Bioaccumulation:

BCF >2000

BCF <1001 due to large molecular weight BCF 13,10050 - 18,10051

(Log KOW 5.62552)

HBCD: Potential to bioaccumulate

EI 3000: Unlikely to bioaccumulate

47 USEPA, 2014, Flame retardant alternatives for HBCDD Final Report http://www.epa.gov/dfe/pubs/projects/hbcd/hbcd-full-report-508.pdf 48 Schaefer et al, 1996, “Hexabromocyclododecane (HBCD): Closed bottle test.” 439E-102. Easton, Maryland, USA, Wildlife International Ltd. 49 Davis et al 2004 quoted within ECHA SVHC nomination dossier 50 Drottar KR, MacGregor JA, Krueger HO 2001, “Hexabromocyclododecane (HBCD): An early life-stage toxicity test with the rainbow trout (Oncorhynchus mykiss),” Final report. Wildlife International, Ltd., Easton, Maryland, USA. p. 102. 51 Assumed European Commission value quoted within ECHA SVHC nomination dossier 52 Hayward et al 2006 quoted within ECHA SVHC nomination dossier

CONFIDE NTIAL

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Description Polymeric flame retardant HBCD Meets/Fails qualifying criteria.

Toxicity pt 1 human health:

Cat. 1 or 2 carcinogen

Cat. 1 or 2 mutagen

Cat.1,2 or 3 Reproduction Toxicity

Other classifications:

T,R48 or Xn,R48 under 67/548/EEC

Large molecular weight (with low residual monomer) restricts bio-availability unlikely to be carcinogenic or affect reproduction toxicity

1

Ames test found the polymeric flame retardant not to have mutagenic properties

Not classified under IARC, USEPA1 suggest data

exists to qualify HBCD as cat.3 carcinogen with moderate effects for reproduction and development

53

Ames test found HBCD not to have mutagenic properties54

HBCD: Non-Toxic (see footnote)

EI 3000: Non-Toxic (based on qualifying criteria)

Toxicity pt 2 Environmental:

NOEC marine/fresh water > 0.01mg/l

LC50 >1000 mg/l Daphnia Magna1. Unlikely

to reach NOEC threshold NOEC 3.1µg/l (0.003mg/l) based on Daphnia Magna. Other studies show effective concentrations between 2.5 µg/l – 40 µg/l

HBCD: Toxic to aquatic environments

EI 3000: Non-Toxic to aquatic environments

53 Since the publication of the US EPA study, a harmonised classification of HBCD as a category 2 reproductive toxin has been in the EU. This is based on the 3rd ATP to the CLP Regulation (EU 618/2012) and

applies as of December 2013.

54 ECHA SVHC nomination dossier

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5.3 Hazard and Risk Assessments

5.3.1 Use of the flame retardants

As well as the PBT assessment for substances it is also a requirement of the REACH registration process to consider the risks and exposure during operational use of a given

substance.

In practice the polymeric flame retardant is likely to be used in the same fashion as HBCD.

Overall the likely points of exposure are likely to be similar. Table 5.2 provides the process use codes from the published dossier which goes someway to highlight where potential exposure

can occur (i.e. for EPS PROC 3, 4, 5, 8b, 14 and 21 and for XPS PROC5,12, 14).

Table 5.2 Process codes for HBCD taken from published dossier55

Manufacture of HBCD

PROC3 Use in closed batch process (synthesis or formulation)

PROC4 Use in batch and other process (synthesis) where opportunity for exposure arises

Use in manufacture of XPS

PROC 5 Mixing or blending in batch processes for formulation of preparations and articles (multistage and/or significant contact)

PROC 12 Use of blowing agents in manufacture of foam

PROC 14 Production of preparations or articles by tabletting, compression, extrusion, pelletisation

Use in manufacture of EPS

PROC 3 Use in closed batch process (synthesis or formulation)

PROC 4 Use in batch and other process (synthesis) where opportunity for exposure arises

PROC 5 Mixing or blending in batch processes for formulation of preparations and articles (multistage and/or significant contact)

PROC 8b Transfer of substance or preparation (charging/discharging) from/to vessels/large containers at dedicated facilities

PROC 14 Production of preparations or articles by tabletting, compression, extrusion, pelletisation

PROC 21 Low energy manipulation of substances bound in materials and/or articles

5.3.2 Occupational Exposure

The polymeric flame retardant is a non-toxic, non-sensitising, non-reactive substance with the potential to cause mild irritation to eyes and skin56. Assuming that the polymeric flame

55 ECHA database of published dossiers for REACH. http://echa.europa.eu/information-on-

chemicals/registered-substances

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retardant has the same mode of use as HBCD (see Table 5.2 above) the key issues for exposure

relate to controlled use and storage of the product and prevention of creating dust clouds. Key exposure routes will be to eyes, skin and inhalation, with ingestion only a minor exposure route

for occupational settings.

One additional exposure point seen during the use of the polymeric flame retardant/HBCD for manufacture of XPS/EPS products is during ‘sizing’ operations where XPS/EPS boards are cut

to shape. Cutting of final product can also generate fine dusts which will contain both the flame-retardant product but also the polystyrene goods and other additives used in manufacture

of the board. In this instance inhalation is a key exposure route with eyes and dermal deposition of product secondary routes of exposure.

Control of these exposure points, particularly inhalation risks, would require automated / closed

processes where batching/cutting takes place if possible; or if not possible suitable extraction ventilation to minimise air-borne particle concentrations. Secondly the use of gloves and

goggles by operatives working with the product to avoid contact with skin and eyes would be recommended. In practice these levels of Personal Protective Equipment (PPE) and safety

practices will already be in use where HBCD is used for XPS/EPS products. Switching to polymeric flame retardant therefore is not expected to cause any significant changes in safety

practices or costs in revising infrastructure and training to manage the use of the alternative product.

5.3.3 Environmental Release

The production of polymeric flame retardant will involve both closed and open batch processes where risk of environmental release is minimal. During use of the product for manufacture of

XPS and EPS it will be necessary to store the product on site prior to use, including moving product from storage to in-use areas. Storage of goods within warehouse or factory units does

present an expected environmental release, where operatives and equipment move from inside to outside on a frequent basis. The key risk in this case would be a spillage or loss of

containment which was then not suitably managed allowing product to be ‘walked’ from inside to outside environments. The key management measure in this case is good warehouse practice

including alerting staff to spillages as soon as spotted, isolation of the area while a spillage is cleaned up and suitable wash-down and cleaning of the area prior to being re-opened. This

applies whether HBCD or the polymeric flame retardant is being used.

The industry’s voluntary emissions control action program (VECAP, www.vecap.info) has been in place since 2004 as a tool to assist with reducing emissions of flame retardants, including

HBCD. The VECAP will also apply to control of emissions of the polymeric flame retardant, and as such should help to ensure that there is no increase in emissions following replacement of

HBCD.

56

http://www.chemtura.com/msd/external/e/result/report.jsp?P_LANGU=E&P_SYS=6&P_SSN=5540&P_

REP=00000000000000000079&P_RES=728

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The applicants’ AofA concludes that the polymeric flame retardant has been selected by the industry as the replacement for HBCD in EPS and XPS57. It further concludes that during the

HBCD alternative evaluation research programme “there was a progressive abandoning of non polymeric alternatives in favour of the polymeric one as the polymer presented the best HSE

profile and a low risk of PBT classification”58.

The AofA evaluates the reduction of overall risk due to transition to the polymeric flame retardant59. The SEA contains an assessment of the environment and human health effects

arising from existing uses of HBCD and use projected four years into the future (in line with the requested authorisation duration). The conclusion is that only a small reduction (1.98 tonnes) in

emissions of HBCD into the environment is expected. The applicants assume that a shortage of the polymeric flame retardant may lead to an increase in emissions arising from increased

imports (due to an estimated lack of availability of the polymeric flame retardant). This issue is analysed in section 6.

57 HBCD AofA Page 45.

58 HBCD AofA Pages 52.

59 HBCD AofA Pages 64 – 81.

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6. Availability

6.1 Introduction

This section examines whether the polymeric flame retardant is likely to be available to meet demand in Europe, assuming HBCD is unavailable due to a refused Authorisation. It includes

considerations on whether the alternative is available (in the required quantity) without undue delay, taking into account the sunset date of 21 August 2015.

Production capacity and demand for the substance are compared under different scenarios. The

assessment is based on discussions with Chemtura and the companies noted earlier, alongside a number of commercially confidential and publicly available documents and press releases.

Appendix B contains more detailed model outputs and assumptions for all of the scenarios, with only the most relevant scenarios included in the present section.

The section includes commentary on the information in the application for authorisation, along

with analysis of the reasons for differences in the estimates.

6.2 Demand and Production Capacity Analysis

6.2.1 Overall demand and production capacity

Demand for replacement of HBCD

Potential demand for the polymeric flame retardant (Emerald Innovation 3000 or equivalent trade name of other companies) is set out in the table below. The starting assumption is that

there would be a need for total replacement of HBCD in Europe (i.e. the highest level of demand is assumed), but potential for some other flame retardants to be used to replace HBCD in certain markets is also discussed under some of the scenarios60.

Demand for the polymeric flame retardant is calculated based on HBCD consumption at a global level and the assumed split of demand by region (Europe, Japan, Americas, China and

Korea). The quantity assumed to be used in EPS and XPS is included (HIPS and textile applications are assumed to be <1% and are not included).

A greater quantity of the polymeric flame retardant is expected to be needed per unit quantity of

foam produced. We have conservatively assumed that 20% more of the polymeric flame retardant would be needed compared to HBCD, though in practice the actual amount required is

60 As set out in the applicants’ analysis of alternatives, Pyroguard SR-130 (CAS No 97416-84-7) is

understood to be used in Japan as an alternative to HBCD. A combination of BDDP (CAS No 21850-44-2) and dicumene is expected to be used to some extent to replace HBCD in XPS. The authorisation

applicants assumed that 50% of XPS demand could be replaced with another (non-polymeric) FR

between 2015 and 2019. (The applicants noted that this 50% assumption for XPS was optimistic.)

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likely to be less61, once product formulations have been optimised. Some EPS/XPS producers

have reported using more than this, though it is understood that this was done on a precautionary basis to ensure that flame retardancy tests were passed62. An assumed growth in

demand for EPS/XPS thermal insulation is also included, based on market research reports. Key data included sources of information are shown below.

Table 6.1 Key input data for availability analysis

Central Low High Units Notes

HBCD consumption by region in 2011 Chemtura, 14 October 2013

- Europe 12,400 t

- Japan 2,480 t

- Americas 2,480 t

- China 12,090 t

- Korea 1,550 t

- Total 31,000 t

Use of HBCD in EPS and XPS

- Total use in XPS 35% % Interview with downstream user, 18 October 2013

- Total use in EPS 65% % Interview with downstream user, 18 October 2013

- Of which White EPS 68% 65% 70% % Interview with downstream user, 5 November 2013

- Of which Grey EPS 33% 30% 35% % Interview with downstream user, 5 November 2013

Concentration of HBCD used

- XPS 1.75% 1.50% 2.00% % Low (1.5%) Interview with downstream user 11 November 2013, High ‘(2.0%) interview with downstream user 18 October 2013. Average value used.

- White EPS 0.70% 0.50% 0.70% % Industry study gave average 0.67%, AfA used 0.7% and values confirmed by consultation for current study.

- Grey EPS 1.10% % Interview with downstream user, 05/11/2013.

Concentration of polymeric FR needed

Additional amount of polymeric FR needed (all types)

20.0% 15.0% 10% interview with downstream user 11/11/2013 (assumed to be too low for analysis of the sector as a whole). 15% Knauf 15/10/ 2013 and Chemtura 2014. Taken as best estimate based on

61 The main reason why more polymeric flame retardant is needed per unit mass of EPS/XPS is the lower bromine content: 64% compared to 74 % in HBCD.

62 Based on discussions with Chemtura and major EPS/XPS producers who are already using the pFR.

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Central Low High Units Notes

equivalent bromine content.

20% high estimate based on amounts being conservatively used by some companies in trials. This figure has been used for the assessment.

Growth rate for insulation market

Assumed growth rate for thermal insulation

2.20% 4.40% IAL (2013). Assume 2x this as high estimate.

The estimated EU consumption of HBCD for 2011 correlates well with published figures, which

indicate that EU demand was in the range 10,000t and 12,500t for 2010, 2011 and 201263.

It is noted that the published application for authorisation makes reference to a maximum total quantity of HBCD required by the applicants of 8,000 tonnes per year for the review period

from 2015 to 2019. It is unclear how this estimate was derived and we have not been able to find this figure in the AofA or SEA. However, the present study considers total EU demand,

rather than that specifically of the applicants.

Potential supply based on production capacity

Demand is then compared with the expected (potential) production capacity of the polymeric

flame retardant, in order to estimate whether sufficient capacity would exist to supply the EU market in the event of non-authorisation of HBCD.

There are three main licensees for the polymeric flame retardant. In terms of potential supply,

the total capacity for Chemtura, as well as the capacity, start of commercial supply and time required to reach full production capacity for ICL and Albemarle have been assessed. The most

likely (‘best estimate’) scenario – which is based on information provided directly by Chemtura and public press releases from ICL and Albemarle – incorporates the following information.

Supporting data is summarised in Table 6.2.

• For Chemtura, the start of commercial production was in Q3 2012. Nameplate

capacity was achieved in April 2013. There were already substantial sales in 2013, with significant growth in sales expected in 2014.

• Chemtura’s nameplate capacity is 10,000t.64

• ICL is assumed to have a similar capacity (10,000t under the best estimate scenario). The assumption made is that ICL reach a production capacity of 10,000t

63 Data are from VECAP (www.vecap.info). It is understood from Chemtura that these data include sales to Norway, Switzerland and Turkey but do not include imports into the EU from non-member companies.

Chemtura estimate that these are approximately equal, indicating that these figures represent sales

volumes to the EU27.

64 However we understand actual production could be achieved above nameplate capacity without the

need for investment in new plant, subject to agreement from the licensor.

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by the end of 2014, following the start of production in Q3 201465. The main

scenarios in the present analysis conservatively assume that ICL’s overall capacity is limited to 10,000t, though additional scenarios assume both facilities can supply

the substance.

• Albemarle intends to commercialise in 2015, before the sunset date66, and the

capacity is assumed to be the same (10,000t). A more conservative assumption is made, that it takes three years to reach full production capacity, given that there is

less certainty regarding when production will commence based on publicly available data.

Table 6.2 Capacity Assumptions for Polymeric FR

Capacity by end of ... Chemtura ICL Albemarle Total Global

2012 3,000 0 0 3,000

2013 10,000 0 0 10,000

2014 10,000 10,000 0 20,000

2015 10,000 10,000 3,333 23,333

2016 10,000 10,000 6,667 26,667

2017 10,000 10,000 10,000 30,000

2018 10,000 10,000 10,000 30,000

2019 10,000 10,000 10,000 30,000

2020 10,000 10,000 10,000 30,000

Source: Calculated by AMEC based on data from Chemtura (directly) and from ICL/Albemarle (press releases).

Notes:

Chemtura: Start of commercial production Q3 2012 (Chemtura, 18 October 2013, 14 January 2014). Production at nameplate capacity April 2013 (Chemtura, 12 November 2013).

ICL: Commercial quantities already available at a level of several thousand tonnes per year (ICL, 9 October 2013). Anticipates increasing production levels to 10,000t in 2014.

Albemarle: 2013 running sampling campaign (Albemarle, 14 October 2013). Expects to commercialise in 2015, before the sunset date (Albemarle, 14 October 2013). Assumed to take 3 years to reach production at capacity (conservatively).

Note that the capacity assumptions have not been adjusted for assumed utilisation rate (e.g. 95% was used in the AfA). This is because in practice the actual capacity of the existing plant could supply more than the nameplate capacity, so we have assumed that the nameplate capacity itself could be supplied.

65 In practice, ICL are expected to have two sites: one already operational in the Netherlands (and understood to have a capacity of 2,000 to 3,000 tonnes) and one in Israel, expected to be operational later

in 2014. According to their press release, ICL was producing commercial quantities of the substance its plant in the Netherlands (the press release was dated April 2014), and was completing preparations to

start up a 10,000t production facility in Israel whose commencement is scheduled for the third quarter of

2014.

66 General statement by Albemarle at the HBCD alternatives information session organised aside the

POPRC9 meeting on October 14, 2013.

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The above estimates are in reasonable agreement with an announcement from Dow (the licensor

of the polymeric flame retardant to the three companies) in February 2014, which suggests that the three international licensees had built commercial production capacity for the new polymeric

flame retardant amounting to more than 14,000 tonnes at the end of 2013 which will be expanded to more than 25,000 tonnes by the end of 201467.

It is understood that no authorisation application has been made for use of HBCD in XPS. Since some or all of XPS producers also expected to use the polymeric flame retardant, their use

could reduce the amount of the global supply potentially available to the EPS market.

Some of the HBCD use in XPS may also be replaced by BDDP, produced by GreenChemicals.

In terms of the wider global context, a move away from use of HBCD is most advanced in Japan, and they have notified the WTO that manufacture and import of HBCD are prohibited

without an authorisation as of May 2014, with a total ban on import of EPS beads containing HBCD as of October 201468. The faster move to replace HBCD in Japan will use up some of

the global polymeric FR production capacity and hence reduce the amount of the polymeric FR available on the global market for use in Europe. As a worst case, it is assumed that the whole

Japanese market would switch to the polymeric FR, limiting the amount available for the EU market. However, in practice, it is understood that there will be some use of another alternative

(in particular Pyroguard SR-130, which it is thought could be used at up to around 1,000t per year in Japan).

After Japan, replacement of HBCD is expected to occur next in the EU, followed by other

regions. Demand in other regions is expected to be relatively modest in the near future.

There have been some significant recent developments in terms of substitution of HBCD (not all of which have been taken into account in the application for authorisation). These include:

• We understand that no applications for authorisation have been submitted for use in XPS, suggesting that replacement of HBCD will take place in that use before

August 2015.

• There is rapid transition away from HBCD in several countries, highlighted by EPS

trade associations (for example IVH in Germany69) and announcements from a number of companies such as Swisspor in Switzerland70 and BASF (the latter

intends to replace HBCD in XPS and EPS by the end of 201471).

67 Dow Styrofoam to switch to HBCD FR alternative, http://www.eppm.com/materials/dow-styrofoam-

to-switch-to-hbcd-alternative/.

68 WTO Technical Barriers to Trade Notification, 2 December 2013,

http://ec.europa.eu/enterprise/tbt/tbt_repository/JPN447_EN_0000.doc).

69 IVH press release of 26 May 2014 (www.ivh.de).

70 http://www.swisspor.ch/?section=news&cmd=details&newsid=123.

71 http://www.basf.com/group/pressrelease/P-14-268.

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Chemtura has undertaken some internal analysis of the extent to which the EPS market is

expected to switch from HBCD to the polymeric FR. This suggests that around 45% of the EU EPS market is expected to have switched to the polymeric FR by the end of 2014.

6.2.2 Presentation of the scenarios

Appendix B contains the outputs of the analysis for the various supply and demand scenarios considered in this report. This includes information on total flame retardant (FR) demand,

based on the existing market size/demand for HBCD assuming no replacement, and based on this, the equivalent amount of potential demand for the polymeric flame retardant. It includes

information on expected European demand, as well as the estimated global production capacity. It also assumes growth in the market for thermal insulation of some 2.2% per year, as noted

above.

Information is also included on the estimated global production capacity of the polymeric FR in 2015, to allow an analysis to be made of whether sufficient quantities could be available by the

sunset date. Clearly, in practice, the amount supplied will depend on there being sufficient demand.

As no authorisation applications have been made for XPS use, this will mean less polymeric FR

potentially available in the EU for EPS use. Replacement of HBCD in XPS is therefore considered in order to estimate the amount of polymeric FR remaining for use in EPS (i.e. the

subject of the authorisation applications).

There are two main scenarios considered in this report, with a number of other scenarios developed to test the implications of changing some of the key assumptions. The two main

scenarios are:

• “Scenario 1: Mirroring key AfA assumptions”. In this scenario, we have

attempted to apply some of the key assumptions used in the application for authorisation. In particular, we have applied the assumptions regarding

substitution of HBCD with the polymeric FR in non-EU regions72. The assumed quantity of HBCD to be replaced in the EU and elsewhere is not the same as that in

the AfA as more robust data are available.

• “Scenario 2: Best estimate”. In this scenario, we have assumed that the

substitution of HBCD in XPS is less than that assumed in the AfA (at 25% compared to 50% assumed in the AfA). We have assumed substitution in the

Americas is less than the 50% assumed in the AfA (40% in 2015) and also that substitution in Korea is less than that assumed in the AfA where 100% substitution

in 2015 was assumed (based on consultation for the current study)73. Similarly, unlike the AfA, we have not assumed that China would substitute 50% of HBCD

from 2019.

The table below presents some of the key assumptions used in the two scenarios.

72 Commentary on the validity of these key assumptions and whether they reflect the latest and/or most

accurate data is contained elsewhere within this section of the report.

73 Note that the assumption in the AfA of 100% substitution in Korea seemed to be based on

information from only one company (BASF), whereas there are several other companies operating in

Korea.

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Table 6.3 Key input parameters for scenarios 1 and 2

Scenario parameters Scenario 1 Mirroring AfA

Scenario 2 Best estimate

Growth rate for thermal insulation from 2011 2.2% [Note 1] 2.2%

Additional amount of polymeric FR needed 20% w/w [Note 2] 20% w/w

Capacity assumptions for global supply of polymeric FR As per Table 6.2 As per Table 6.2

Uptake of other alternatives (not pFR) for XPS 50% 25%

Estimated replacement of HBCD in non-EU regions:

- Japan 100% from 2015 100% from 2014

- Americas 50% in 2015 increasing linearly to 100% in 2019

[Note 3]

10% from 2014 40% from 2015 increasing linearly to 100% in 2019

- China 0% from 2014 to 2018 50% from 2019

0% from 2014 to 2018 50% from 2019

- Korea 100% from 2015 50% from 2014

Notes:

1. The growth rate is not the same as that in the AfA as this scenario is not intended to mirror all aspects of the AfA (it primarily mirrors assumptions on demand in non-EU regions and uptake of other FRs for EPS). However, we calculate that the overall global growth rate used here is actually higher than that used in the AfA.

2. As per note 1, this assumption does not correspond exactly with that in the AfA but is considered more realistic, based on consultation with Chemtura and companies in the EPS and XPS sectors who are already replacing HBCD with the alternative.

3. The AfA assumed 50% from 2015-18 and 100% thereafter (SEA page 28, Table 2.6).

6.2.3 Scenarios

The two main demand/capacity scenarios are summarised below. More detailed graphic outputs

and details of assumptions are documented in Appendix B.

Scenario 1: Mirroring Key Elements of Application for Authorisation

The approach and assumptions made are summarised above, which suggests a 23,300t global supply in 2015 (or 17,100t if expected use in non-EU regions is subtracted), which compares to

EU demand of 13,400t, and is thus more than sufficient to replace all use in EPS and XPS (Figure 6.1 below).

Once expected demand for use in XPS in the EU (2,800t) is subtracted, there remains 14,300t,

which compares to an expected potential demand of 10,600t if all use of HBCD in EPS were to be substituted with the polymeric FR.

As indicated above, the February 2014 statement made by the licensor of the polymeric flame retardant technology and which is also a major user (DOW) stated that the company had

converted its three XPS plants in Japan to the new polymeric flame retardant with the EU and North America to follow. In the press release the company announced production capacity

figures, of 14,000t annually at the end of 2013 which will be expanded to more than

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25,000t/year by the end of 201474. The values are higher than those estimated in this report.

(which deliberately used a conservative interpretation of public statements from ICL/Albemarle), but this information further supports the conclusion – that there is likely to be

sufficient capacity to meet EU demand by the sunset date. Moreover, no allowance has been made for a reduction in the additional volume of polymeric FR required reflecting production

optimisation (i.e. the actual volumes are expected to be lower than 20% greater following optimisation).

Figure 6.1 Scenario 1: Demand and supply of Polymeric FR using key assumptions from the AfA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2014 2015 2016 2017 2018 2019 2020

Qu

an

tity

of

fla

me

re

tard

an

t as

po

lym

eri

c F

R (

ton

ne

s)



Sunset date


The relatively small shortfall in remaining capacity after 2018 comes from the assumption that China substitutes 50% of HBCD use in 2019. Clearly if growth in demand for EPS/XPS

insulation is significantly higher than that assumed here, there is potential for some shortfall between supply and demand. However, it is expected that actual supply could be increased above the assumed nameplate capacity, without need for investment in new plant, subject to

agreement from the licensor.

As indicated above, we believe that the estimates for EU demand used in the current study (i.e.

around 12,400t) are more appropriate than those used in the application for authorisation (since they are based on more recent data and cross-checked by using three sources of data). However,

to test the implications of using the applicants’ assumptions on EU demand, the table below provides a summary of the overall supply and demand picture. Note that the table includes our

own estimates of non-EU demand (see Section 6.3.4 for rationale) and our own estimates of available capacity (which are broadly similar to those in the application for authorisation).

74 http://www.plasticstoday.com/articles/dow%E2%80%99s-japanese-xps-plants-first-world-use-new-

polymeric-flame-retardant

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Table 6.4 Picture of supply versus demand using applicants’ estimates of EU pFR demand

2015 2016 2017 2018 2019

EU demand (AfA Table 2.9) 17,747 18,560 19,145 18,014 18,456

Non-EU demand (AMEC scenario 1) 6,200 6,700 7,200 7,800 16,100

Total demand 23,947 25,260 26,345 25,814 34,556

Available capacity (AMEC scenario 1) 23,300 26,700 30,000 30,000 30,000

Deficit / surplus (600) 1,400 3,700 4,200 (4,600)

Note that the above EU demand estimates are considered to be an overestimate compared to the figures derived by AMEC.

Using these data suggests that there would be a shortfall of around 600 tonnes between demand

and supply in 2015, but not thereafter until 2019 (when Chinese use is assumed to begin, and presumably more global capacity would be required). However, as noted above, the EU

demand figures are considered to be an overestimate, so this data is not considered realistic.

Scenario 2: Best estimate

Under this scenario, the key differences compared to scenario 1 are the lower assumed

substitution with other (non polymeric FR) alternatives in XPS, as well as the lower penetration of alternatives to HBCD in China, the Americas and Korea.

Again this scenario suggests a 23,300t global supply in 2015 (and 18,100t if expected use in

non-EU regions is subtracted). This compares to expected EU demand of around 14,800t, which is higher than under scenario 1 because of the lower uptake of other alternatives.

However, the expected available supply capacity is again more than sufficient to replace all use in EPS and XPS (Figure 6.1 below).

Once expected demand for use in XPS in the EU is subtracted (4,300t), there remains 13,800t,

which compares to an expected potential demand of 10,600t if all use of HBCD in EPS were to be substituted with the polymeric FR.

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Figure 6.2 Scenario 2: Demand and supply of Polymeric FR using best estimate values

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2014 2015 2016 2017 2018 2019 2020

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Sunset date


Scenarios 3 and 4: Pessimistic supply assumptions

These scenarios are the same as scenario 1 with the following exceptions:

• In scenario 3, it is assumed that ICL’s 10,000t capacity plant takes two years to reach production at nameplate capacity.

• In scenario 4, it is additionally assumed that Albemarle’s plant does not come on line until 2016, rather than 2015 as they have currently indicated.

Under scenario 4 in particular, potential supply capacity (after non-EU demand is met) is only just sufficient to meet EU demand for the polymeric FR at the end of 2015, taking into account

growth in demand in other regions. However, supply capacity is sufficient thereafter.

Scenario 5: Higher demand growth assumptions

This scenario is the same as scenario 2, with the exception of the assumed growth rate for thermal insulation use (and hence for FR demand), which is doubled from 2.2% to 4.4%. Under

this assumption, remaining supply capacity once non-EU demand is taken into account is sufficient to meet EU demand from 2015 onwards. Supply capacity is only just sufficient for

2014, reflecting the higher assumed growth in demand between 2011 and 2014, and thereafter.

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It should be noted that even the 2.2% growth rate used in other scenarios is calculated to

represent a higher growth in global demand than that assumed in the application for authorisation75.

Scenarios 6 and 7: Higher supply assumption

Under these scenarios, it is assumed that Chemtura could supply 12,000t per year if a license for

the extra capacity is obtained and that ICL could supply 12,500t by operating both of its plants76.

Scenario 6 is based on scenario 2 (best estimate) in all other respects, and scenario 7 is based on scenario 1 (mirroring AfA) in all other respects.

Importantly, what these scenarios show is that the potential increase in supply (without the need

for construction of any new production plant) could offset the possible increase in demand from China around the 2019 deadline under the Stockholm Convention.

Scenario 8: No use of other alternatives in XPS

This scenario mirrors key aspects of the application for authorisation, as in scenario 1. The key

difference is that it is assumed there is no replacement of HBCD with other flame retardants (i.e. only the polymeric FR is used as an alternative).

Of particular relevance, this scenario indicates that potential non-EU demand for the polymeric

FR could be around 6,900 tonnes in 2015, if no other alternatives are used and if the same assumptions as in the AfA are applied for demand from different regions. This compares to

estimated global supply capacity of around 23,300 tonnes.

Under this scenario, it is estimated that there could be a small shortfall in supply around the sunset date, but that supply capacity would be sufficient to meet EU (and non-EU demand) soon

afterwards (within less than a year). It should be noted that other assumptions are more conservative than in the best estimate (scenario 2), particularly the level of demand from outside

the EU.

Details of all of these scenarios are provided in Appendix B.

75 Assumed demand growth rates in the AfA are set out in Table 2.8 of the SEA. We estimate that these

values equate to a cumulative growth in EU demand for EPS of 37% over the period 2011 to 2019

(equivalent to 3.5% per year) and 30% for XPS (equivalent to 3.0% per year). No growth is assumed for either EPS or XPS outside the EU. Factoring in the share of HBCD demand in the EU (12,400t in 2011)

and non-EU (18,600t) and the assumed 65% to 35% split between EPS and XPS (Table 6.1), we estimate that these correspond to an overall global growth of 14% over the period 2011 to 2019, equivalent to

around 1.4% per year.

76 ICL’s existing plant is understood to have a capacity of 2000-3,000t (assumed 2,500t) and the new

plant in Israel is understood to have a capacity of 10,000t. In the other scenarios, it is assumed that total

supply from ICL would be a maximum of 10,000t per year.

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6.3 Key differences from the authorisation application

6.3.1 Overview

A commentary on some of the key data and assumptions used in the application for authorisation is provided below, as a basis for comparison with the scenarios analysed by

AMEC.

6.3.2 HBCD demand requiring replacement

The AfA assumes a significantly higher demand for the polymeric FR than in AMEC’s analysis,

as shown below for 2011.

Table 6.5 Comparison of estimated global HBCD demand in 2011 (tonnes)

Region AfA AMEC

Europe 14,483 12,400

Japan 2,480 2,480

Americas 2,480 2,480

China 12,090 12,090

Korea 1,550 1,550

Total 33,595 31,000

Both AMEC’s estimates and those in the AfA were largely based on data from Chemtura77. The key difference is that in the AfA, a different approach was used to estimate EU demand, giving

a much higher figure (around 17 % ) for 2011 demand78. A number of key points deserve comment here:

• The method used to derive European demand means that the global total is inconsistent with the 31,000t used in both sources. It is not clear from the AfA

how this global total was verified.

• The estimated Europe figure for 2011 represents significant growth compared to

2007 (the base year used for extrapolation in the AfA). This does not seem to correspond to other figures for HBCD sales in the public domain, such as the

VECAP data referred to above79.

77 Presentation by Marshal Moore at 9th meeting of the POP Review Committee, 14 October 2014.

78 Estimated HBCD use in EPS and XPS in 2007 was taken from a Cefic/EBFRIP study, deriving HBCD use from the estimated proportion used in construction applications, the amount that is flame-

retarded and the average HBCD content of EPS and XPS. An annual growth factor of 4% for EPS and 3% for XPS (based on consortium best estimates) was applied to uplift 2007 data to 2011.

79 The VECAP data indicate figures of 10,897t in 2007, 8,913t in 2008, 9,280t in 2009 and a range of 10,000 to 12,500t in 2010 through to 2012. We understand that the range was used in later years due to

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• Chemtura’s estimate for 2011 (used in AMEC’s analysis) of 12,400t compares

reasonably well with the VECAP data (10,000 to 12,500t) and has also been cross-checked against other sources80.

Overall, the estimate of demand in Europe and globally within the AfA seems higher than

estimates derived from other (more up-to-date) sources.

6.3.3 Global supply of the polymeric flame retardant

AMEC’s calculated estimates of global supply are in reasonable agreement with those in the

application for authorisation, as shown below.

Table 6.6 Comparison of estimates of global supply of polymeric flame retardant

Supply of the pFR (tonnes) 2015 2016 2017 2018 2019

Application for authorisation (SEA p30) 23,350 29,850 31,350 31,350 31,350

AMEC estimates (scenario 1) 23,300 26,700 30,000 30,000 30,000

The main differences arise from:

• The assumption in the AfA that both of IAL’s plants could operate and supply in

parallel, whereas this was not assumed in AMEC’s best estimate scenario.

• In the AfA, a utilisation rate of 95% was assumed, whereas this was not

incorporated into AMEC’s analysis (instead the actual capacity was assumed to be the nameplate capacity, given that we understand capacity of existing production

facilities could be increased e.g. at Chemtura’s plant, without substantive changes to the existing plant).

Overall, the figures are in reasonable agreement.

6.3.4 Estimates of demand for polymeric FR from non-EU regions

There are significant differences between the estimates in the AfA and AMEC’s estimates regarding expected demand in non-EU regions, as shown below.

confidentiality concerns. However, it is clear that there was a substantial contraction in sales in the years following 2007, presumably as a result of the financial crisis.

80 Based on a market analysis report (IAL consultants) giving estimates of EPS and XPS supply to Europe, Chemtura estimated HBCD usage based on the assumed concentration in each type. Data for

sales to Turkey and Russia were excluded, giving an estimate for European HBCD demand of 12,450t in

2012 and 12,850t in 2013.

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Table 6.7 Estimated non-EU demand for the polymeric flame retardant

Demand for the pFR (tonnes) 2015 2016 2017 2018 2019

Application for authorisation (SEA p30) 13,091 13,091 12,958 12,290 17,393

AMEC estimates (scenario 1) 6.200 6,700 7,200 7,800 16,100

AMEC estimates assuming no use of other alternatives in XPS (scenario 8)

6,900 7,500 8,100 8,700 17,900

It is clear that there is a significant discrepancy in the two sets of figures (between 2015 and 2018 in particular), which has a substantial impact on the overall conclusions on availability of

polymeric flame retardant for the EU market. This is the case even if AMEC’s estimates assume substitution only with the polymeric FR and not other alternatives (both the AfA and

AMEC’s main estimates assumed some use of other alternatives for XPS – at 50% of HBCD replaced81).

Based on the information contained in the non confidential version, it is not possible to follow

how the figures in the AfA were derived. However, the figures presented appear to be inconsistent with the assumptions stated earlier in the AfA and this point seems to merit further

investigation82.

6.3.5 Other differences in approach

There are a number of other differences in analytical approach between AMEC’s estimates and

those in the AfA. These have a smaller impact on the overall results but are nonetheless worth mentioning. They include:

• AMEC assumed that 20% more polymeric FR (by weight) is needed to achieve the

same fire safety performance as HBCD. This was based on information on experiences of large companies that have already substantially replaced HBCD

with the polymeric FR. (The actual figures were less than this but 20% was conservatively assumed.) In comparison, in the AfA it was assumed that 30%

more is needed in EPS (range 25% to 50% based on experience of the consortium members – p29 of the SEA) and that 10% more is needed in XPS83.

81 See notes to Table 2.7 of the SEA, p 28.

82 Table 2.6 of the SEA (p 28) indicates that it was assumed that the proportion of the main regions likely

to continue using HBCDD in 2015 were as follows: Japan = 0% (100% substitution), Americas = 50%,

China = 100% (0% substitution) and Korea = 0%. Applying these percentages to the assumed HBCD demand in these regions in 2011 (18,600t from Table 2.5 of the SEA) gives 5,270t. By then applying the

stated assumptions regarding the additional amount of polymeric used in EPS (assumed 1.3 times the

quantity, with EPS representing 80% of the market – p 29 of the SEA) and XPS (assumed 1.1 times the quantity, with XPS representing 20% of the market), one still only derives a figure of 6,640t for non-EU

demand in 2015 (no growth between 2011 and 2015 was assumed according to Table 2.8 of the SEA). This is before partial substitution with other alternatives is taken into account.

83 The XPS figure was reportedly based on figures of 1-5% from one consortium member, and 10% from a Knauf presentation at the 9th POPRC meeting in October 2013. Note that the Knauf presentation

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• AMEC assumed an annual growth rate in demand for flame retardants in EPS and

XPS of 2.2% between 2011 and 2020, for the EU and non-EU regions, based on a market research figure for thermal insulation as a whole. In the AfA, no growth

was assumed for non-EU regions, but growth in EU demand from 2015 onwards was assumed to be between 3% and 7% p.a. for EPS and 3% to 6% p.a. for XPS

(driven by fire safety regulations, EU energy efficiency policies and rising heating fuel costs leading to more use of insulation). This is assumed to lead to

significantly higher demand estimates in later years (e.g. 2019)84.

• AMEC’s study has not investigated in detail the time needed by EPS and XPS

companies to switch from HBCD to the polymeric flame retardant. However, information from a number of large EU companies who have already committed to

switching indicates that substitution takes around 6-12 months, given the availability of the alternative. This is considerably less than the timescales set out

in the AfA, which requests a bridging authorisation until 2019 (implying 5-6 years from when the AfA was drafted). However, it is noted that a number of the

substitution steps mentioned in the AfA may no longer be relevant, given recent (2014) increases in assumed supply and other factors85.

Note that AMEC assumed that 35% of HBCD is used in XPS and 65% in EPS (in the EU). The

AfA estimated non-EU sales as 80% for EPS and 20% for XPS – the same assumption is made in AMEC’s analysis – see details for all scenarios in Appendix B.

6.4 Overall conclusions on availability

The majority of scenarios examined in AMEC’s analysis suggest that there is likely to be sufficient capacity (from the sunset date) to supply the European EPS and XPS market with

polymeric flame retardant as a replacement for HBCD in the event that authorisation is not granted. In particular, this is the case for the ‘best estimate’ scenario, along with the scenario

intended to mirror key parameters from the application for authorisation.

Even under scenarios with pessimistic (and probably unrealistic) assumptions regarding demand outside the EU (and factoring in growth in demand, which was not assumed in the authorisation

application), there is expected to be sufficient capacity available for the whole EU market to

indicates that Euroclass “E” tests were passed with a 10% higher concentration, with 12-15% higher

content to pass (most) German B1/B2 tests.

84 It is also noted that there is an apparent fall in EU demand between 2017 and 2018, with a subsequent

increase in 2019 in Table 2.9 of the SEA (p 30). It is unclear what accounts for this fall in demand.

85 In particular, Table 5.1 in the AofA includes a number of steps where the timescales may no longer be

relevant. In particular Steps 13 (n x 12 months) and 16 (3 months) relate to toxicity testing for REACH, and obtaining a PPORD exception, whereas the polymeric FR is understood to be not covered by these

requirements as it is a polymer (this is acknowledged in the AfA). Step 19 relates to plant build and start-

up (12-18 months) which seems to be superseded as at least two pFR production plants are expected to be in operation by later in 2014. (Note that the pFR itself can be used in the same EPS/XPS production plant

as HBCD based on experience from companies that have substituted so far.) The basis for steps 20 (contingency for unexpected delays/problems/product tuning 15-18 months), 21 (iteration between pFR

and EPS manufacturers and with converters, 2 x 6 months) and 22 (commercialisation after full

registration, 24-36 months) is also not fully understood.

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completely replace current HBCD volumes within a year or so of the sunset date. The

assumptions in AMEC’s analysis regarding supply are also considered to be conservative, with estimated capacity online at the end of 2014 somewhat lower than the 25,000 tonnes estimated

recently by the licensor of the polymeric flame retardant.

These conclusions differ substantially from those reached in the application for authorisation, primarily because the estimates of EU demand for HBCD (and thus potential demand for the

polymeric FR) and also non-EU demand are substantially higher within the AfA. We are unclear how some of the estimates in the AfA were derived (particularly non-EU demand) while

some estimates are seemingly based on outdated data86, and we suggest that these may benefit from corroboration with other sources. This is particularly important as the estimated deficit

between expected supply and demand within the application for authorisation is the main driver for the high social and economic cost estimates derived therein.

86 EU demand data in particular were based on scaling from 2007 estimates using assumed (high)

growth rates. The 2007 data themselves were derived from assumed concentrations in EPS/XPS, rather

than HBCD sales.

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7. Conclusion on Suitability and Availability of the Alternative

This study examined the feasibility of substituting HBCD with an alternative chemical substance, a polymeric flame retardant, marketed by Chemtura under the trade name Emerald

Innovation 3000. Both substances are used as flame retardants in expandable polystyrene (EPS) and extruded polystyrene (XPS) insulation foam. The work was undertaken prior to and then

during the public consultation on the application for authorisation for use in EPS.

If HBCD was replaced with the alternative flame retardant, the overall structure of the supply chain in Europe is not expected to change. At present there are three companies

manufacturing/importing HBCD in Europe; the same three companies are licensed to manufacture/import the polymeric alternative. The polymeric flame retardant can be used in

largely the same way as HBCD, in the same plant.

HBCD is effective as a flame retardant at concentrations of c.0.6 to 0.7% in White EPS, c.1.1% in Grey EPS and c.1.75% in XPS87. The polymeric flame retardant has a lower bromine content

than HBCD (64% vs 74%) meaning that around 15% more is needed per unit of EPS/XPS to achieve the same level of fire safety performance. In order to be conservative, it is assumed that

the additional amount required is 20%, reflecting the higher quantities typically being used to provide a safety margin in passing fire retardancy tests. When using the polymeric flame

retardant within XPS and EPS based on the additional quantities noted above, the technical performance characteristics of the products are comparable.

Presentations made by the polystyrene industry at the Stockholm Convention Review

Committee (POPRC) meeting held in October 2013 demonstrated that industry had found no fundamental issues with technical feasibility in the use of the polymeric flame retardant in XPS

and EPS-based products. The conclusion on the product’s technical feasibility, from the majority of industry participants, was positive.

The polymeric flame retardant is used in a very similar way to HBCD. There is no need for

capital infrastructure investment or additional health and safety measures amongst the users of the substance (though of course the manufacturers of the substance have had to invest in new

plant to produce the substance). The reformulation of polymer blends is the key technical change required and the manufacturers of polymeric flame retardant and major downstream

users have shown that this reformulation can be undertaken within a relatively short period of time (up to one year, and sometimes less).

The applicants’ socio-economic analysis recognises that the polymeric flame retardant costs

more on a weight by weight basis and that a greater quantity will be required to fulfil the same function. The economic feasibility of the polymeric is not questioned in the application: it is

assumed to be economically feasible, given the intention of EPS producers to transition to the use of the polymeric flame retardant.

87 Based on discussions with Chemtura and users of the flame retardants in EPS and XPS. Note that a

concentration of 0.7% in white EPS has been assumed in the analysis in the present report.

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A detailed assessment of economic feasibility of the polymeric flame retardant in comparison

with HBCD has been undertaken for the current study.

The analysis suggests an increase in the final product price (whether per tonne or per board of EPS) of around 1%.

Any increase in costs should be considered in light of several factors. First, a low proportion of the flame retardant is used in the polystyrene foam formulation. Second, in recent years the

price of the major raw material in both EPS and XPS (the styrene monomer) has varied to a much greater extent than the price changes identified in using the polymeric flame retardant.

Third, the analysis has assumed a stable price for Emerald Innovation 3000.. It is possible that its unit price will decrease, over time.

Overall the assessment indicates that the polymeric flame retardant is an economically feasible

alternative to HBCD.

It is also noted that the major costs estimated in the application for authorisation are based on the assumption that there would be a shortfall between supply and demand of the polymeric

flame retardant, potentially disadvantaging EU EPS companies. The analysis within the current report does not suggest a shortfall in demand, so no such cost estimates are provided.

The US EPA has reviewed alternatives to HBCD, including the polymeric flame retardant. The

key conclusion of that review was that polymeric flame retardant is a substance that is safer than HBCD for both human health and the environment. This conclusion took into account a PBT

assessment and occupational exposure routes from manufacturing and use of both products.

A key issue in substitution is whether the polymeric flame retardant is likely to be available, in sufficient quantities to meet demand, by the sunset date for HBCD. To examine this, a number

of demand and production capacity scenarios have been considered, taking into account current and likely future demand for HBCD (without an authorisation requirement), as well as

manufacturers’ stated production capacities. Eight scenarios are considered, with the two main scenarios including one intended to mirror key aspects of the application for authorisation

(particularly concerning likely non-EU demand for the polymeric flame retardant) and the second representing our best estimate of availability of the alternative over the period 2014 to

2020. These scenarios suggest that a significant shortfall in polymeric flame retardant production capacity versus demand is unlikely.

Our estimates (which is based on the three manufacturers’ stated production intentions) suggest

a global capacity of polymeric flame retardant in 2015 of 23,300t. This is considered to be a conservative assumption (based on data from Chemtura and press releases from the other

licensees), and the licensor for the polymeric flame retardant has suggested that commercial production capacity will be more than 25,000t by the end of 2014.

There will be demand for the polymeric flame retardant from regions outside the EU, and this is estimated at around 5,700t in 2015 under the scenario intended to mirror key elements of the application for authorisation (scenario 1) and around 5,100t based on the best estimate (scenario

2). This suggests that the potential amount available for the EU market (remaining supply capacity) could be around 17,600t under scenario 1 or 18,300t under scenario 2.

The remaining capacity is estimated to meet all expected demand for replacement of EPS and XPS in the EU, under both scenarios. Once demand for use in XPS in the EU is subtracted (to

our knowledge no applications for authorisation have been received for XPS), the amount remaining for EU EPS is potentially 14,800t compared to expected demand to completely

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replace HBCD of 10,600t, under scenario 1 (the corresponding figures are 14,000t remaining

and 10,600t demand for EPS under scenario 2).

This conclusion differs from that in the application for authorisation, for the following main reasons:

• Estimated European demand for the polymeric flame retardant is lower than the applicants assumed, because of a different estimate of recent HBCD use (our

estimates were based on published market data from Chemtura/UNEP and published data under the VECAP programme, cross-checked against 2012 data for

EPS/XPS use).

• Much lower estimated demand from outside the EU in the shorter term, even when

the stated assumptions in the application for authorisation are applied88.

• A lower value for the additional amount of polymeric flame retardant needed to

replace HBCD per unit of EPS (20% compared to 30% in the AfA), though a higher value than that for XPS was used. Our estimates are based on information

from Chemtura as well as companies who have already replaced HBCD with the polymeric flame retardant in both EPS and XPS.

Several other scenarios are considered, which suggest that, even with very pessimistic

assumptions, the amount expected to be available for the EU market should be sufficient to completely replace current HBCD volumes within a year or so of the sunset date.

Given that the polymeric flame retardant is already commercially available and that many

companies – within the EU and elsewhere – have already switched or are in the process of switching, the transition does not need to be a lengthy process in the EU (e.g. can be done

within a year or less).

Overall, the polymeric flame retardant appears to be a technically and economically feasible

alternative and sufficient production capacity exists to supply the EU market, in the event that companies require it, before the REACH sunset date, or very soon after if, the most pessimistic

assumptions are used.

88 As noted in the ‘availability’ section of this report, the figures presented in the (non-confidential) AfA

on non-EU demand appear to be inconsistent with the assumptions included in that document.


Appendix A: IVH Press Release on HBCD Substitution

IVH-Presseinformation 26.05.2014

Maaßstraße 32/1 D-69123 Heidelberg Telefon +49 6221 77 60 71 Fax +49 6221 77 51 06 [email protected] www.ivh.de

Registergericht Amtsgericht Heidelberg VR 1037 ® Eingetragenes Verbandszeichen des IVH

Qualitätszeichen der Bundesfachabteilung

Qualitätssicherung

Der Industrieverband Hartschaum e.V. (IVH) bestätigt die Empfehlung

an seine Mitglieder, die Produktion von Styropor ab Mitte 2014 voll-

ständig auf das neue polymere Flammschutzmittel umzustellen

Heidelberg. Im Oktober 2013 hat der IVH gemeinsam mit dem Fachverband Wärmedämm-

Verbundsysteme e.V. sowie mit dem Industrieverband Werkmörtel e.V. eine Absichtserklärung

seiner Mitglieder zur Umstellung von HBCD auf das polymere Flammschutzmittel (Polymer-FR) mit

besseren Umwelteigenschaften bis Mitte 2014 herausgegeben. Diese Erklärung hat in erheblichem

Maße dazu beigetragen, Verbrauchern und Handwerkern eine nachhaltige Entwicklung der polysty-

rolbasierten Dämmstoffindustrie trotz HBCD-Verbots aufzuzeigen.

Zwar sieht der REACH-Autorisierungsprozess als Stichtag, ab dem Herstellung, Verarbeitung und Ver-

marktung von HBCD verboten sein wird, den 21.08.2015 vor. Allerdings hat ein Konsortium aus EPS-

Rohstoffherstellern nun europaweit eine verlängerte Autorisierung zur weiteren Nutzung von HBCD als

Flammschutzmittel in EPS-Dämmprodukten bei der zuständigen EU-Behörde ECHA beantragt. Es ist aus

heutiger Sicht unklar, ob und unter welchen Auflagen eine solche Autorisierung gewährt werden wird.

Obwohl eine auch längerfristige Nutzung von HBCD als Flammschutzmittel im EPS grundsätzlich gesund-

heitlich unbedenklich wäre (Umweltproduktdeklaration nach ISO 14025, geprüft vom Institut Bauen und

Umwelt e. V., bescheinigen die Übereinstimmung von Polystyrolhartschaum/EPS mit HBCD mit den Krite-

rien des Ausschusses zur gesundheitlichen Bewertung von Baustoffen (AgBB)), hält der IVH unabhängig

vom Ausgang dieses Antragsverfahrens an der Empfehlung an seine Mitgliedsunternehmen fest, bis Mitte

2014 auf die Verarbeitung von EPS mit dem neuen Polymer-FR umzustellen, welches eindeutig bessere

Umwelteigenschaften bei gleicher Flammschutzwirkung bietet.

Der vollständigen Umstellung ab dem zweiten Halbjahr 2014 steht nichts entgegen: EPS-Rohstoff-

hersteller haben ihre Unterstützung beim Umstellungsprozesses zugesagt, es sind heute schon EPS-

Produkte mit Polymer-FR erfolgreich am Markt eingeführt und stehen für eine vollständige Umstellung in

ausreichenden Mengen zur Verfügung. Die Autorisierung zur verlängerten Nutzung der Substanz HBCD

könnte bei Bauherren und Handwerkern zu Irritationen und Verunsicherungen führen. Zusätzlich wird die

Komplexität der gesamten Wertschöpfungskette (z.B. beim Recycling, der Etikettierung und Qualitätssi-

cherung) mit der konsequenten Einführung von Polymer-FR deutlich reduziert.

Daher empfiehlt der IVH seinen Mitgliedern erneut die konsequente und frühzeitige Umstellung auf das

neue Flammschutzmittel Polymer-FR.

Seite 2

Registergericht Amtsgericht Heidelberg VR 1037 ® Eingetragenes Verbandszeichen des IVH

Qualitätszeichen der Bundesfachabteilung Qualitätssichewrung

Kontakt:

Ute Hagmann

Referentin Presse- und Öffentlichkeitsarbeit IVH Industrieverband Hartschaum e.V.

Telefon +49 6221 77 60 71 Fax +49 6221 77 51 06 Mobil +49 160 96 24 68 57 [email protected] www.ivh.de

Der Industrieverband Hartschaum e.V. (IVH), Heidelberg, ist der Dachverband der Hersteller von Dämmstoffproduk-

ten aus EPS-Hartschaum/Styropor. Der Verband wurde im November 1973 in Frankfurt gegründet. Seine Mitglieder sind die führenden Hersteller von EPS-Hartschaum als Dämmstoff für die Wärmedämmung und den Schallschutz. Als Gastmitglieder gehören auch der europäische Rohstoffherstellerverband sowie Maschinenhersteller dem IVH an. Der IVH arbeitet eng zusammen mit wichtigen Organisationen wie dem Fachverband Wärmedämm-Verbundsysteme, dem Industrieverband Werkmörtel, dem Bundesverband Ausbau und Fassade sowie dem Bundesverband der Maler und dem Bundesverband der Flächenheizungen.


Appendix B: Demand and Production Capacity Scenarios – Assumptions and Outputs


Scenario analysis outputs - Scenario 1 - Mirroring AfA assumptions

Key scenario assumptions:

Global HBCD consumption in 2011 (t) 31,000

European HBCD consumption in 2011 (t) 12,400

Growth rate for thermal insulation from 2011 (/yr) (surrogate for FR demand) 2.2%

Share of use in EPS in EU (rest = XPS) 65%

Share of use in EPS in non-EU (rest = XPS) 80%

Additional amount of polymeric FR needed compared to HBCD (per unit mass) 20%

Assumed Chemtura supply capacity for polymeric FR (t) 10,000

Chemtura global supply estimate 2015, assuming sufficient demand (t) 10,000

(note Chemtura achieved production at nameplate capacity in 2013)

ICL (Israel) maximum supply level 10,000

Start of commercial supply 2014

Time to reach capacity (years) 1

ICL (Netherlands) maximum supply level 2,500



Possible for ICL to supply more than 10,000t total? N

Albemarle maximum supply level 10,000



Percentage of non-EU countries replacing HBCD in 2015 (both EPS and non-EPS) - Japan 100%

- Americas 50%

- China 0%

- Korea 100%

Proportion of FR use in XPS replaced with other alternatives e.g. BDDP (GreenChemicals) in EU and non-EU 50%

Scenario outputs:

Potential maximum global demand for polymeric FR in 2015 assuming total replacement of HBCD and no use of other alternatives (t) 40,600

Potential maximum non-EU demand for polymeric FR in 2015 assuming total replacement of HBCD and no use of other alternatives (t) 24,300

Actual estimated non-EU demand taking into account uptake in different regions and some use of other alternatives in XPS (t) 6,200

Potential maximum EU demand for polymeric FR in 2015 assuming total replacement of HBCD and no use of other alternatives (t) 16,200

Actual estimated EU demand taking into account partial replacement by other alternatives in XPS (t) 13,400

Estimated EU demand for pFR in XPS (t) 2,800

Global supply capabil ity of polymeric FR in 2015 (t) 23,300

Remaining supply capabil ity for polymeric FR in 2015 assuming expected non-EU demand for pFR is met (t) 17,100

(this is the amount assumed to be potential ly available for the EU market)

Remaining potential supply for EU use in EPS once EU use in XPS replaced (t) 14,300

Expected EU demand in EPS for comparison (t) 10,600

Note: Al l calculated figures have been rounded to the nearest 1000t.

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Scenario analysis outputs - Scenario 2 - Best estimate demand assumptions






















- Americas 40%

- China 0%

- Korea 50%


Scenario outputs:







Global supply capability of polymeric FR in 2015 (t) 23,300

Remaining supply capability for polymeric FR in 2015 assuming expected non-EU demand for pFR is met (t) 18,100





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Scenario analysis outputs - Scenario 3 - Pessimistic supply assumptions v01






















- Americas 40%

- China 0%

- Korea 50%


Scenario outputs:













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Scenario analysis outputs - Scenario 4 - Pessimistic supply assumptions v02






















- Americas 40%

- China 0%

- Korea 50%


Scenario outputs:







Global supply capability of polymeric FR in 2015 (t) 20,000

Remaining supply capability for polymeric FR in 2015 assuming expected non-EU demand for pFR is met (t) 14,700





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Scenario analysis outputs - Scenario 5 - High growth assumptions






















- Americas 40%

- China 0%

- Korea 50%


Scenario outputs:













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Scenario analysis outputs - Scenario 6 - High supply assumptions (from existing plant)

















Possible for ICL to supply more than 10,000t total? Y





- Americas 40%

- China 0%

- Korea 50%


Scenario outputs:













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Scenario analysis outputs - Scenario 7 - AfA assumptions but with higher supply levels (from existing plant)

















Possible for ICL to supply more than 10,000t total? Y





- Americas 50%

- China 0%

- Korea 100%


Scenario outputs:













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Scenario analysis outputs - Scenario 8 - Mirroring AfA assumptions with no use of other alternatives






















- Americas 50%

- China 0%

- Korea 100%


Scenario outputs:













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