REACH Chromates: Next Steps for Boeing's EU Supply Chain Paul Hogben Supply Chain Chemical Risk Management Commercial Airplanes June 23, 2016 Nadcap Chemical Processing Meeting London, UK

Agenda Regulatory Chromates: Risk to Continued Production Introduction Requirements for Processors Regulatory Update Chromates: Risk to Continued Production Substance Timelines Chromates Used in Chemical Processing Options for Users of Chromates Chromate Authorisation Activity Next Steps for Boeing’s EU Processors and Suppliers Boeing Technology Update and Technical Support Summary Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 2 o f 16

Requires understanding chemical composition of materials used REACH: Introduction Registration, Evaluation, Authorisation, and Restriction of Chemicals European Union chemical management regulation (2007) Compliance applies within the EU Covers manufacturing, import, and use of substances: By themselves (e.g., strontium chromate) In mixtures (e.g., paints, sealants) In “articles” (e.g., landing gear assembly) Emphasis on Substances of Very High Concern (SVHCs) Substance use restrictions in the EU are biggest threat to production Includes ban on use of aerospace-critical chromates (unless authorised) Impact of obsolete materials is felt globally Requires understanding chemical composition of materials used Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 3 o f 16

REACH: Requirements for Chemical Processors Not all REACH regulations are explicitly stated here. This summary is not intended to be guidance or legal advice. Manage risks to EU supply chain Trend towards increased reporting/ transparency Current risk to EU production from Authorisation requirement for chromates Chromate use restrictions pose imminent threat to EU production Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 4 o f 16

EU reporting requirements getting more challenging REACH: Regulatory Update ECJ ruling: “once an article always an article” thresholds apply to each article in a complex product ECHA guidance forthcoming Streamlining and simplification of the authorisation process under consideration for legacy spare parts (extension of dates also considered) low volume parts for parts that may require recertification if the composition changes (e.g., aerospace) “Wurstfabrik” – delays Many more SVHCs on the way (EHCA SVHC Roadmap) Annex XIV lists 5 and 6 overdue Sunset dates at least 3 years from inclusion in Annex XIV Borates (incl. boric acid) no longer recommended for inclusion Annex XVII potential restrictions DecaBDE Phthalates (BBP, DEHP, DBP, DIBP) Lead stabilisers in PVC Isocyanates  European Chemicals Agency EU reporting requirements getting more challenging Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 5 o f 16

Systematic and recurring process REACH: Timeline for Substance Bans Substance Nomination SVHCs (Substances of Very High Concern) aka “Candidate List” Annex XIV “Authorisation List” (Substance Use Bans) “Sunset Date” Banned from use (unless your use is authorised) 3+ months 1-2 years ~3 years Restricts use in EU, and placing articles on the EU market Not a systematic process Example: <<Cadmium in plastics>> Annex XVII (Marketing and Use Restrictions) EU Member States + ECHA (Helsinki) + EC (Brussels) Added ~twice per year 168 current SVHCs Not restricted from use at this point… but triggers reformulation and obsolescence (and other compliance requirements) Added ~once per year Will be sunset (banned from use, unless your use is authorised) 31 current substances Phthalates 21-Feb-2015 Others, including chromates 21-Sep-2017 Chromium trioxide Acids generated from chromium trioxide Sodium dichromate Potassium dichromate Potassium chromate Sodium chromate Ammonium dichromate 22-Jan-2019 Strontium chromate Dichromium tris(chromate) Zinc potassium chromate Pentazinc chromate Systematic and recurring process Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 6 o f 16

Chromates are critical to aerospace REACH: Annex XIV Chromates Example Uses in Chemical Processing Chromates are critical to aerospace Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 7 o f 16

All options require significant coordination REACH: Options for Users of Annex XIV Substances A) Implement Alternative Materials and Processes R&D for chromates is ongoing Lack of universal substitutes Engineering validation required Timeline is challenging Check with OEM for available substitute materials and processes or B) Obtain Authorisation to continue using restricted substances Typically obtained by substance manufacturers/importers or chemical formulators If your use is not authorised by an upstream supplier – you will have to obtain your own authorisation 18 month process: no guarantee authorisation will be granted No mechanism for quick review or reapplication (if rejected) if neither, then C) Move/Discontinue Work Will processes/shops be consolidated? Will capacity shift outside the EU? D) Defense Exemptions Possible substance-specific exemptions for national security reasons All options require significant coordination Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 8 o f 16

Authorisation process requires continual support REACH: Chromate Authorisation Activity Chromium Trioxide Authorisation Committee (CTAC) Applications for Authorisation (AfAs) filed: broad coverage for chromium trioxide Use cases and details in press release, status on ECHA website Many downstream uses covered by upstream importers/formulators Next step: RAC/SEAC draft opinion expected by June 30, 2016 Downstream users will need to meet conditions of Authorisation Risk Management Measures (RMMs) and Operating Conditions Exposure and emission monitoring likely to be required Notify ECHA of your uses covered by Authorisation Chromium VI Compounds for Surface Treatment (CCST) AfAs filed: chromates used in metal finishing operations, paints and primers Use cases and details in press release; status on ECHA website Next steps: Trialogue ~June, 2016; draft opinion ~December, 2016 Global Chromates Consortium for Aerospace (GCCA) Formed by International Aerospace Environmental Group (IAEG) to cover gaps AfAs filed: aerospace (and derivatives) use of chromates in surface coatings Next step: Trialogue ~December, 2016  European Chemicals Agency Authorisation process requires continual support Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 9 o f 16

Excellent resource on Authorisation for chromates REACH: Chromate Authorisation Activity AeroSpace and Defence Industries Association of Europe (ASD) “Update on REACH Authorisation for Chromates” Details the Applications for Authorisation filed Describes consequences to the supply chain Provides contacts and resources Excellent resource on Authorisation for chromates Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 10 o f 16

You need to take steps to ensure continued operations Chromates: What Boeing’s EU Processors Can do to Prepare Know where you use chromates in materials and processes Map your supply chain (for formulations containing chromates) Communicate with supply chain to ensure continued availability of process chemicals Are your uses of chromates covered in Authorisation applications? Communicate with Customers/OEMs: Risks in the supply chain? Help needed? Alternative materials and processes available? Contact Boeing with questions. Please respond to Boeing’s targeted inquiries Questions about economics and/or operating conditions:  assists with AfA development/support Prepare for REACH enforcement Ensure conditions of authorisation are met at your facilities Draft Risk Management Measures and Operating Conditions for Chromium Trioxide expected in June, 2016 (in response to CTAC AfA) May require reducing/monitoring exposures and emissions  European Chemicals Agency You need to take steps to ensure continued operations Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 11 o f 16

You and your supply chain are responsible for Authorisation Chromates: What Boeing’s EU Suppliers Can do to Prepare Know where you use chromates in materials and processes Map your supply chain (for formulations containing chromates) Communicate with supply chain to ensure continued availability of process chemicals Are your uses of chromates covered in Authorisation applications? Manage the risk in your EU supply chain Communicate with Boeing: Risks in the supply chain? Help needed? Alternative materials and processes available? Contact Boeing with questions. Please respond to Boeing’s targeted inquiries Questions about uses cases  drives R&D prioritization Questions about economics and/or operating conditions  assists with AfA development/support Prepare for REACH enforcement Ensure conditions of authorisation are met at your facilities Draft Risk Management Measures and Operating Conditions for Chromium Trioxide expected in June, 2016 (in response to CTAC AfA) May require reducing/monitoring exposures and emissions Develop Contingency Plans for Continued production You and your supply chain are responsible for Authorisation Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 12 o f 16

Consult your Boeing representative for applicability REACH: Boeing Technology Update Surface Treatment of Aluminum Technology unlikely to be available before REACH chromate sunset dates Consult your Boeing representative for applicability Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 13 o f 16

Technical Support for Boeing Hardware Information on materials and processes Check engineering drawings, substitution drawings, qualified products lists, etc. Request further information: impacted materials and processes, available substitutes, technology updates, substance Authorisation status, etc. Submit supplier request for change – eELR (external Engineering Liaison Requests) Points of Contact: Direct suppliers  Boeing Procurement Agent Special Processors  Boeing Supplier Quality representative Indirect supplier  your customer (i.e., flow up to Boeing direct supplier) All  Boeing REACH contact as listed in Boeing’s REACH Q&A Boeing, FAA, and EASA don’t consider new products as alternatives until they are developed, qualified, certified AND implemented Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 14 o f 16

REACH and Chromate Authorisation require constant diligence Summary REACH chromate bans pose threat to aerospace production in the EU Some chromate-free substitutes available, R&D ongoing Check with OEM for viability Authorisation needed to continue critical uses of chromates in EU Technical support available Processors and suppliers responsible for continued production Diligence required to engage in, monitor, and respond to Authorisation process Need to meet conditions of Authorisation: risk management measures and operating conditions REACH and Chromate Authorisation require constant diligence Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 15 o f 16

Thanks! Questions? Paul R. Hogben Boeing Commercial Airplanes Supplier Management EHS paul.r.hogben@boeing.com Boeing external REACH Q&A Copyright © 2016 Boeing. All rights reserved. 23-June-2016 Page 16 o f 16

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