Appendix H Current status of the flame retardant industryFootnote 24
SRI Consulting published a report on the current status of the Flame Retardant industry which can be purchased on their website. The summary is freely available on internet. We quote:
“The total market for flame retardants in the United States, Europe and Asia in 2007 amounted to about 1.8 million metric tons and was valued at $4.2-4.25 billion. This market is expected to grow at an average annual rate of about 3.7% per year on a volume basis over the 2007-2012 period.
Regulations and “Green” Procurement
The flame retardant market is affected by regulation in two countervailing ways. First, there are international, regional and national fire safety regulations and flammability standards for the flame retardancy of various products that are used by the construction, transportation, electrical and electronics industries. Fire safety requirements are becoming stricter globally because of the increasing use of plastics in a variety of consumer applications. Government regulations also affect chemical species that are deemed to have deleterious effects on the environment or human health. Flame retardant compounds, especially halogenated compounds and antimony trioxide, increasingly must deal with the second situation.
The flame retardant business has emerged as a result of requirements that manufacturers of plastics, textiles and other materials meet various safety standards and government regulations by improving the flame retardant characteristics of their products. Because most flame retardants contribute no other useful properties to a product (and often compromise other performance characteristics), their use is almost entirely driven by legislation and industry standards. Indeed, growth (or decline) in this business can often be impacted far more dramatically by new regulations than by growth in the end-use markets. Because many flame retardants (e.g., chlorinated hydrocarbons, brominated compounds) are subject to scrutiny either for their own toxicity or for that of their combustion products, current or potential health and environmental regulations are also important determinants of the specific types of flame retardant used. An understanding of current regulations and an awareness of potential new ones is an important requirement for success as a participant. The main new regulations concerning flame retardants include
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REACH, the new regulation for chemicals in the European Union, entered into force on June 1, 2007. Important milestones in the timeline for the implementation of REACH are
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November 30, 2010—Registration deadline for substances in quantities of 1,000 metric tons and above, as well as carcinogens, mutagens and substances toxic to reproduction above one metric ton per year and substances classified as very toxic to aquatic organisms above 100 tons.
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May 31, 2013—Registration deadline for substances in quantities of 100 metric tons and more.
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May 31, 2018—Registration deadline for substances in quantities of one metric ton and more.
Under the REACH regulation the European Chemicals Agency will require chemical producers to submit a plan to substitute safer alternatives for substances that are classified as dangerous or, if no alternative exists, an R&D plan to develop suitable replacements. REACH’s duty of care obligations will affect the entire supply chain of manufacturers, importers, downstream users and distributors. Although REACH applies to the European Union only, it is likely that other jurisdictions will enact REACH-like legislation. China and Japan are considering a similar system while the United States would like to reform its thirty-year-old TSCA (Toxic Substance Control Act).
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The WEEE (Waste Electrical and Electronic Equipment) Directive in the European Union requires the separation of plastics containing brominated flame retardants prior to recycling, energy recovery or disposal as of December 31, 2006.
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The RoHS (Restrictions of Hazardous Substances) Draft Directive in the European Union contains a list of substances that are to be phased out of use in the production of electrical and electronic equipment placed on the EU market after July 1, 2006. Under this directive, deca-BDE was banned for use in electrical and electronic applications as of July 1, 2008. The ban applies to manufactured and imported E&E articles (“placed on the market in the EU”). Beginning in 2007, California’s Electronic Waste Recycling Act bans the sale of some electronic devices in California if they are prohibited from sale in the European Union under RoHS Directive 2002/95/EC because they contain the heavy metals lead, mercury, cadmium, and hexavalent chromium. On February 28, 2006, China published a new law entitled Administration on the Control of Pollution Caused by Electronic Information Products (ACPEIP), which regulates the dissemination of electronic information products (EIPs) that contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBBs) or polybrominated diphenyl ether (PBDE), similar to the European Union’s RoHS Directive. The Republic of Korea issued a legislation similar to RoHS/WEEE called The Act for Resource Recycling of Electrical/Electronic Products and Automobiles to the World Trade Organization (WTO) on March 30, 2006.
- Building cables have to comply with the new European Construction Product Directive CPD EN 13501, which additionally requests testing of acidity, toxicity, and smoke properties. These criteria will adversely affect consumption of PVC and halogenated flame retardants with the main beneficiaries being polyolefins and ATH.
- In the European Union, deca-BDE is banned for use in electronics and electrical applications as of July 1, 2008. The ban applies to manufactured and imported E&E articles (“placed on the market in the EU”). However, the use of deca-BDE is allowed for all other applications. In the United States, Maine and Washington have enacted partial bans on deca-BDE. These bans primarily target the use of deca-BDE in home furniture and consumer electronics. During 2007, several other states (California, Hawaii, Illinois, Michigan, Minnesota and New York) introduced legislation that would phase out or place restrictions on deca-BDE.
- In China, GB 20286-2006—Requirements and Mark on Burning Behaviour of Fire Retarding Products and Subassemblies in Public Places—was implemented on March 1, 2007. The stricter requirements on the burning behaviour of fire retardant materials and products in public places have been put forward in the specification; furthermore, the smoke density and the toxicity of burning products have been especially stressed.
The flame retardant business is highly internationalized. Not only do many companies participate on a worldwide basis, but the impact of regulations in one geographical area often has reverberations throughout the world. Manufacturers of end-use products (e.g., consumer electronics and automobiles), wherever located, must comply with regulations in destination countries for any products they export. Thus, manufacturers will insist that their raw material suppliers (e.g., resin manufacturers, custom compounders or flame retardant producers) help them meet these requirements. Manufacturers with significant exports follow regulatory developments throughout their market area closely. Because of economies in production and distribution, they may not wish to vary their flame retardant formulations within a specific product line (e.g., computer housings), no matter where it’s intended destination. Therefore, they will often utilize flame retardant formulations that meet the most stringent regulations of any region where their product is to be sold.
Flame retardants historically entered the business from a product-oriented view (i.e., manufacturers generally produced similar products for other applications, frequently—at least historically—of much larger volume). Manufacturing companies are meanwhile taking a broader, market-oriented view of the plastics additive business as a whole, but can still be constrained by technology, market access and manufacturing cost considerations when competing with companies that are basic in key raw materials. During the last several years major global producers of brominated compounds have been adding antimony, organophosphorus, zinc/boron and mineral compounds to their product lines, largely through acquisition, but also by adding new manufacturing capacity or through various other agreements.
The plastics industry is the largest consumer of flame retardants, which are sold to basic resin manufacturers, custom compounders or plastics fabricators. However, smaller volumes of flame retardants are also sold to the textile, adhesive, elastomer and paper industries.
The ability to identify and anticipate customer problems and provide solutions is also an essential requirement for a strong competitive position in the flame retardant business. This requires well-directed applied research, highly effective technical service capabilities and a willingness to invest in the facilities and people required to provide them. During the last few years, several main trends have been identified that will direct developments in the global flame retardants industry:
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Consolidation and globalization of the flame retardant industry. Flame retardant manufacturers are either trying to complement their product range of flame retardants/plastics additives, gain market share through acquisitions or exit the business.
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Development and implementation of harmonized and more stringent fire regulations and tests on a global basis. This will lead to flame retardant systems that offer slower heat release rates in fires along with lower smoke generation, toxicity and corrosivity.
- Environmental and human health concerns and ongoing risk assessments regarding brominated and chlorinated compounds. Government regulations and environmental pressures determine trends and drive developments in flame retardant markets and applications and are responsible for the introduction of alternative chemicals and products.
- “Green” procurement and the quest for halogen-free flame retardants. Starting about five years ago, OEMs from various end-use industries announced policies away from halogen-containing components. IKEA was one of the first companies to announce that it would no longer use PBDEs in its furniture; its products have been free of brominated flame retardants since 2002. The global automotive industry has expressed the desire to eliminate halogen-containing materials in vehicles and reduce emissions of volatile compounds from interior parts of the car such as PU foams in car seats. Computer manufacturers are now competing to be viewed as green and halogen-based flame retardants are not perceived as green. At least ten major E&E manufacturers have made announcements about discontinuing or phasing out (by 2009/2010) either PBDEs or all brominated flame retardants; these include Apple, Dell, Ericsson, Hewlett-Packard, IBM, Intel, Motorola, Panasonic, Philips and Sony. Apple plans to completely eliminate the use of PVC and brominated flame retardants in its new products by the end of 2008.
- Replacement of halogenated flame retardants. A variety of alternatives are being offered to replace TBBPA including polymeric phosphonates or cyclic hydrogen phosphinates for use in epoxy resins and metal phosphinates for use in polyamides and polyesters. Typical replacement products for deca-BDE in thermoplastics include bisarylphosphates, organic phosphinates, melamine cyanurate, melamine polyphosphate and MDH. For HBCD, no viable alternatives have been identified for its use as a flame retardant in polystyrene insulation foams. However, major research efforts are ongoing to fill this gap.
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Flame retardant compounds in plastics for higher process and end-use temperatures.
- Continuing price increases for all flame retardant types—in particular for phosphorus compounds—due to increasing costs for feedstock materials, transport and energy.
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Growth of mineral flame retardant markets. Inorganic flame retardants, particularly alumina trihydrate and magnesium hydroxide, belong to the fastest-growing group of flame retardants. Several producers have reported expansions of their ATH and MDH plants recently.
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